Economic Activity, Market Failure and Services of General Economic Interest: It Takes Two to Tango

摘要

As the title of this paper suggests, Article 106(2) TFEU applies where there is both economic activity and ademonstrable market failure in the provision of that economic activity.The concept of economic activity has, in our view rightly, a wide scope. Nonetheless, there are objective limits upon that scope if it is to be distinguished from any activity whatsoever. Since in theory almost any activity is capable of generating an economic return, one solution could be to exclude from that definition activities provided without any, or any adequate, consideration therefor passing to the provider, thereby being incapable of generating any return. The provision of goods and services by the State on such a basis usually comes at a high price for the public purse.As we have also seen, Member States that opt to provide for SGEIs in a given economic sector must demonstrate the existence of market failure. This is a logical outcome of a system based upon an internal market operating under the principle of undistorted competition. This onus is not so difficult to shift as to make Article 106(2) TFEU a dead letter, particularly in view of the margin of discretion Member States enjoy in this context.