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It seems that in this regard the Court put basic postal service to the position of the ‘core’ of postal service of general economic interest and thought of the basic postal service as the essential element to satisfy universal service obligations and justification of the exclusivity in dispute to exclude competition in the sector of basic postal service. Furthermore in order to keep basic postal service to be operated in economically acceptable conditions, the operator of basic postal service can not only hold a monopoly to offset losses in the unprofitable basic postal sectors by profits in the more profitable basic mail sectors, but also can extend its monopoly into value-added service more than basic postal service in so far as such extension is necessary to keep economic equilibrium. It can be obviously noted of such discriminative treatment of the Court when dealing with basic service and value-added service. Consequently by exploiting universal service obligations the basic service of general economic interest can, in my view, automatically get justification for its exclusivity on the basis of Article 86(2). Nevertheless the value-added services cannot fortunately win such priority. They can be reasonably entrusted with exclusivity in so far as they can be subsidiary to make the basic service economically viable.
Then the following question would be how to distinct the ‘basic’ service of general economic interest from value-added services. As regards this issue, in Corbeau the Court drew a comparison between the basic postal service and value-added postal service, which are valuable for us to explore the Court’s deliberation. Such comparison aims to recognize the difference between basic postal service and value-added postal service in that value-added postal service can meet only special needs of economic operator and provide additional services outside the basic postal service. Therefore value-added postal service is not a service of general economic interest and can not automatically justify themselves on the authority of Article 86(2). According to such comparison it seems that the Court narrowly explained the concept of basic postal service, or services of general economic interest, in the sense of universal service. In order to better understand the concept of basic services, we had better examine the definition of universal service by the Commission.
Universal service aims to guarantee every citizen can have access to a specified quality of services at affordable price. According to the principle of affordability excessive price and discriminative price would be manifest errors and cannot get exception from the Court. Nonetheless, the more inexplicit point is what the specified quality is. Based on the comparison between basic postal service and value-added postal service in Corbeau, the Court seemed to simplify the specified quality in postal sector as traditional postal services which are collection, carrying and distribution of mail. Thus the Court substituted the concept of traditional quality for the content of specified quality. And the Commission alleged that universal service should take into account of different traditions and specific circumstances. Therefore apparently tradition plays an important role in universal services. The tradition herein points to, in my mind, the services which have been operated by statutory monopolies for a long time and then is so tough as not to be easily liberalized. The approach of the Court implies that the Court intended to slow down the process of such traditional universal services with a flexible explanation of proportionality principle.
Conclusively universal service obligations can proportionately justify the exclusivity of traditional or basic services of general economic interest to exclude competition for the reason of escaping cross-subsidization problem. However the Court is still hostile to the existence of statutory monopoly in the context of Article 86(1) and therefore it can not tolerate extension of statutory monopoly into other sectors outside traditional services. Then the non-traditional or value-added services will be subject to a strict proportionality explanation , economic equilibrium principle which will be discussed in the following part.
But such analysis concerning universal service obligations is just a value judgment only through the practices in postal sector and too simple to apply every case in every sector. We would further take a sector specific approach to examine the applicability of this principle in other sectors. After a preliminary investigation basic postal services , mooring operation , establishment and operation of the public telephone network and electricity distribution and importation , but not limited to these, were regarded as universal services by the Court.
4.3 Economic Equilibrium Principle: a Strict Approach
Economic equilibrium principle is a general principle which has been used in almost, if not all, every ECJ case concerning 86(2). But in many cases, especially related to universal services, the Court just mentioned it and did not actually put it into implementation. Regarding the universal service obligations principle above the Court more inclined to take a value analysis than an economic approach. In fact the Court did not require the operators of universal service in question to further prove no less restrictive means to achieve the same aim. So this principle looks like a very flexible approach employed by the Court to apply Article 86(2). Therefore in term of such loose approach performers of universal services have much possibility to escape the effectiveness of competition law.
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