The role of EU competition law in health care and the ‘undertaking’ concept

Abstract

Part of the controversy surrounding competition and health care stems from the complexity connected with delineating the applicability of competition law – encompassing both the provisions governing anticompetitive agreements and abuse of dominance and the state-aid rules. Cases determined at the European Union (EU) level within the past 30 years have developed a broad framework, and notable trends have emerged – for example, a distinction between health care providers and managing bodies (purchasers). The former have been subject to an ‘abstract’ test and the latter to a more sophisticated ‘concrete’ test. In this paper, we chart the development of the EU courts’ approach to developing the ‘undertaking’ concept in health care and examine the current EU competition law framework with a view to identifying future directions. van de Gronden has recently identified a ‘three-prong’ test of exemption from competition law in connection with the recent CEPPB case: firstly, where the supply of services is predominantly dependent upon public financing; secondly, the public funding aims to achieve a public interest goal and thirdly, the activities concerned are closely related to this public interest goal. We examine this test in a health care context, drawing on our findings regarding Dutch competition reforms.

Re‐establishing needed limits: European competition policy's role in European healthcare systems and the lessons of the Dôvera case

“…The presence of the risk equalisation scheme in Slovakia, as the CJEU noted, also undermined the GC's attempts to dismiss these social solidarity characteristics of the regime. As some have noted however (Nikolić, 2020; Van de Gronden & Guy, 2021), the Commission's approach does contrast with its findings with Dutch healthcare system where it found this to be competition ‐orientated. In this similarly SHI‐type Slovak case, the Commission appeared intent to emphasise the social solidaristic elements.…”

“…For this reason, the 'undertaking' principle is the core focus of this article as its 'balancing' function has now clearly emerged in the CJEU's Dôvera decision and the approach of the Commission.The Treaty however does not clearly define the 'undertaking' term, leaving this task to EU institutions (Craig & de Búrca, 2011, p. 961). As a general competition law principle, the CJEU, in Höfner, took the broader approach and defined an undertaking as an entity engaged in an 'economic activity' that offers goods and services on the market 16 (ibid., Van de Gronden & Guy, 2021;Sauter, 2016;Sauter, 2015, p. 117).…”

“…For this reason, the ‘undertaking’ principle is the core focus of this article as its ‘balancing’ function has now clearly emerged in the CJEU's Dôvera decision and the approach of the Commission.The Treaty however does not clearly define the ‘undertaking’ term, leaving this task to EU institutions (Craig & de Búrca, 2011, p. 961). As a general competition law principle, the CJEU, in Höfner , took the broader approach and defined an undertaking as an entity engaged in an ‘economic activity’ that offers goods and services on the market 16 (ibid., Van de Gronden & Guy, 2021; Sauter, 2016; Sauter, 2015, p. 117). However, the CJEU carved out a clear exception or carve‐out from the Höfner ‘standard line’ definition for healthcare bodies in the FENIN (2006) 17 and AOK Bundesverband 18 (2004), emphasising that they were clearly not ‘profit‐seeking’ entities despite any ‘economic activity’ they may be engaged in Sauter (2015, p.119).…”

“…The questions concerning the presence of an ‘undertaking’, funding streams and the broader regime are logically tied together, a process that became more complicated when the GC decided to broaden the definition of what constituted an undertaking to include non‐profit based entities, thus expanding the forms of funding streams that came with these entities. This represents the core disagreement between the European Commission and the GC in Dôvera , with the former seeking a narrower interpretation of the undertaking concept and the latter a broader definition where any ‘economic’ activity that may exist is emphasised (Nikolić, 2020; Van de Gronden & Guy, 2021). Again, the Commission also took issue with the GC's assertions over the distortions to competition.…”

“…In the example of the EU free movement law's intervention into national healthcare, an engagement between social policy researchers and European level law‐based subject matter was at the centre of an influential political science literature (Greer, 2006, 2008; Greer & Rauscher, 2011; Martinsen 2005, Martinsen & Vrangbæk, 2008, Vollaard et al, 2016). Such political science and social policy‐based engagement into this potentially problematic intervention from EU competition policy however has not yet materialised, so by implication leaves the subject to legal scholars (Hancher & Sauter, 2012; Nikolić, 2020; Sauter, 2015; Szyszczak, 2009; Syzszczak, 2015, 2017; Van de Gronden & Guy, 2021). This legal scholarship has been substantial as well as hugely important, but a renewed focus on healthcare as a social policy question is required so that key questions of social provision and distribution can be emphasised.…”