COMPETITION : EUROCONTROL: NO BREACH OF COMPETITION RULES.

• Position: Case by SELEX Sistemi Integrati SpA against Eurocontrol

Europe is all for harmonisation, the fixing of Europe-wide standards, ensuring everyone works to the same rule-book. But could this policy at times infringe the Union's own rules respecting the rights of free competition?

This was the question considered by the Court of First Instance in a judgment of 12 December 2006 in relation to the activities of Eurocontrol, the European air traffic control organisation. The court, however, decided that the Commission had been correct in its finding that there was no breach of EU rules on competition.

The facts

Eurocontrol is an international organisation made up of European states and, since 2002, the European Community itself. Its raison d'etre is to harmonise systems for air traffic management (ATM). As such it is involved in the development of ATM systems such as radar and other specialised equipment. So far so unexceptional. But what if this harmonisation leads to the setting of technical specifications which impede competition? What if Eurocontrol, in its capacity as a driver for research and development, influences tendering procedures for contracts in a way which effectively creates intellectual property monopolies?

These were the arguments raised by SELEX Sistemi Integrati SpA, a manufacturer of ATM systems in a complaint to the Commission in 1998 alleging a breach of the abuse of dominant provisions of Article 82 of the Treaty. The Commission rejected the complaint and it is this decision which was contested in the European Court.

Arguments in the court

The findings of the court turned on two points:

Is there an undertaking' under article 82?

The Commission's contested decision argued that Art 82 did not apply as Eurocontrol was not an "undertaking" because its activities are not of an economic nature'. The court looked in detail at all Eurocontrol's activities where there were complaints. It found that the standardisation activities of Eurocontrol were essentially legislative in nature and were therefore public activities. It also ruled that Eurocontrol's research and development activities and its production of technical standards was not an economic activity. It said:

"In the field of standardisation, Eurocontrol is only a forum for concerted action which those States established in order to coordinate the...