The document discusses the application of EU competition laws to various sectors including nuclear energy, military equipment, agriculture, coal and steel, transport (inland, maritime, air), regulated industries, electronic communications, and postal services. For each sector, it outlines relevant EU legislation, substantive competition rules from Articles 101 and 102 TFEU, and examples of cases where the Commission has applied competition law principles to activities in that sector. It also discusses sector-specific regulations in the UK for some industries like utilities and communications.

1. Particular sectors in
relation to EU
Competition laws

2. Introduction
European Competition law ensures fair competition among enterprises. It prevents
large enterprises from creating a condition which would curb the opportunities for
suppliers and customers to do business with its competitors. Treaty any Functioning of
the European Union (TFEU) deals with internal market competition. Articles 101 to
109 of TFEU contains rules for internal market competition and prohibits agreements
between undertakings which are anti-competitive. Sector specific objectives and a
smooth working of market sector can ensured by applying rules of Competition law on
the sectors.

3. Nuclear energy
Nuclear energy accounts for approximately one- third of all of Europe’s electricity. The
market supports 8 million jobs with €70 billion turnover per year.
Rules regarding the aid for nuclear industry has been put down in Euratom Treaty
under Article 106a (3) and in TFEU under Article 107.

4. Military equipment
Military equipment sector is a large industry with a turnover of approximately
EUR 97 billion. The industry gives direct and indirect employment to 1.2 million
people.
The defense equipment sector is governed by the EU on the basis of Article 352
of the Treaty and Article 173 of TFEU consists of EU industrial policy.
the internal market rules that is (single market rules of EU) cannot be applied in
military equipment sector as it has been restrained under Article 346(1) of TFEU.

5. Agriculture
There are about 11 million farms and 44 million people engaged in food supply
chain in European Union. The food supply chain along with added value of
employment, food processing and manufacturing industry, wholesale trade, and
sales distribution sector accounts for 12 percent of EU value. On average each
household spends approximately 15 percent of their budget on food. Farming and
food sector alone generates about 6 percent of European gross domestic product
and is the largest exporter and importer of food products in the world.

6. Council Regulations 1184/2006 and 1308/2013:
A) Application of EU competition rules to agricultural products:
It consists of the rules in respect to Articles 101 to 106 of TFEU. It is stated that the Article 101(1) and 102 of the
TFEU is applied in relation to production of or trade in agricultural products that are produced or traded in the
agricultural sector. All the agricultural products are covered under this regulation except for those which are
included in Regulation (EU) no. 1308/2013 and Regulation (EU) no 1379/2013.
Regulation 1184/2006:
Article 1 of the Regulation lays down that Article 101 and 102 subject to Article 2 will be applied to production or
trade in the products listed in Annex 1 of the Treaty. Article 2 lays down that Article 101(1) would not apply to
those agreements which forms an integral or vital part of a national market organization or which are necessary
for the attainment of the objectives which are provided in Article 39 of TFEU.

7. Regulation 1308/2013:
The regulation lays down a common organization of agricultural markets for the sectors which are mentioned in
Annex 1 of the Treaties. It adopts a similar approach for application competition laws as Regulation (EU) no.
1184/2006.
b)Annex I products
In case a product is not mentioned in Annex 1 of the Treaty, then that product cannot take the benefit of
exemptions which were given in Article 2 of Regulation (EU) no. 1184/2006 and would only be subject to
competition rules as an industrial product.
c) The first derogation: national market organizations
It is provided by Article 2 of Regulation (EU) no. 1184/2006 that Article 101 would not be applied those
agreements which forms an integral part of national market organisation whereas, Regulation 1308/2013
laid down a common organisation for many agricultural products, and so in turn most of the national
marketing organisation ceased to exist. The Commission deduced and interpreted this derogation of
Article 101(1), strictly.

8. d) The second derogation: common market organisation
Article 2 and Article 209 of Regulation (EU) no. 1184/2006 and Regulation (EU) no. 1308/2013 respectively enables
agreements that are necessary for attainment of the objectives laid down by common agricultural policy. Article 39
of the Regulation lays down the objectives of agricultural policy as following;
•To increase agricultural productivity
•To ensure a standard of living for the people related to the agricultural sector
•To stabilize the agricultural markets
•To ensure that the supplies are available
•To ensure consumers pay a reasonable price for agricultural products.
The objectives which are laid down by Article 39 of the Regulation is both social and economic in nature with the
aim of securing the interests of both producers and consumers in the market sector.

9. Coal and steel
Coal and Steel market sector was previously controlled by the Treaty of Paris of 1951.
The Treaty of Paris established European Coal and Steel Community for the sector.
The Community established dealt with rules for competition in the market sector. The
rules were similar to that of Articles 101 and 102 TFEU except for some significant
differences. The Treaty of ECSC expired on 23 July 2002. After expiration of the
Treaty, the coal and steel market sector is governed and is now subject to Articles 101
and 102 TFEU and the EUMR. To explain the consequences of the expiry of the Treaty
of ECSC on coal and steel sectors, a Communication was published by the
Commission.

10. Transport
Article 90 to 100 of TFEU includes provisions for transport. Under this Treaty road, rail, inland waterway
transport and sea transport, air transport are dealt differently under different Articles. Provisions
regarding road, rail, inland transport are included in Article 90(1) and regarding sea transport, air
transport in Article 90(2). The sole reason of distinction between the categories is that the latter is
subject to international laws and arrangements. Articles 101 and 102 applies to the transport sector.
a) Inland transport
1) Legislative regime
Council Regulation 1017/68 provides for exception for certain agreements. There are some technical
agreements which do not infringe Article 101 and there are also some cooperation agreements between
small and medium size undertakings that benefits from Regulation of block exemption. The said
Regulation was then repealed in 2009 by a new Council Regulation 169/2009. After Regulation 169/2009,
the exception of certain technical agreements was included in Article 2 and for block exemption in
Article 3.

11. 2) Practical application of the competition rules to inland transport
In the case of EATE Levy, the agreement between French waterway carries and French
forwarding agents was condemned for imposing a levy of 10% on freight charges for boat
to the destinations which were outside France, as it was discriminatory for French carriers;
the Court of law upheld the Commission on appeal.
In case of Tariff Structures in the Combined Transport of Goods, the criteria of Article 101(3)
had been considered to be satisfied by the commission in case of a tariff structure
agreement between two or more rail companies of European Union for the sail of rail
haulage in the international combined transport of goods.
In European Night Services case, the Commission observed that the criteria of Article 101(3)
is satisfied in a case where a joint venture is established by five rail operators for the object
of providing night sleeper services between the UK and continental Europe through the
Channel tunnel.

12. b) Maritime transport
1) Legislative regime
Procedural rules
The Commission got the power to enforce Articles 101 and 102 by Regulation 17. The Regulation did not apply to the maritime transport
market sector. The power to enforce Articles 101 and 102 with relation to international maritime transport sector was provided to the
Commission by Council Regulation 4056/86. Regulation 1/2003 repealed these special procedural rules. The Commission is not
empowered to enforce competition rules by Regulation 4056/86 in case of cabotage. the Commission has the power to competition rules
to the entire maritime transport market sector under Article 101 and 102.
Substantive rules
Article 2 of Regulation 4056/86 excluded the exception of ‘technical agreements’ from Article 101. Article 3 and 4 of Regulation 4056/86
provides for block exemption for linear conferences.
Guidelines were provided by the Commission for application of Article 101 TFEU to maritime transport services. It included the extent to
which the competitors may exchange of information by infringing Article 101.
Block exemption for shipping consortia
Commission gets the authority to grant block exemption to some of the shipping consortia by Council Regulation 246/2009. The
Commission adopted Regulation 906/2009. It confers block exemption on shipping consortia when they are for international liner shipping
services. In a circumstance where consortium includes restrictions like price fixing to third parties, the block exemption does not apply.

13. 2) Practical application of the competition rules to maritime transport
The Commission and operators in maritime transport market sector do not always maintain harmonious
relationship. In several judgments, the Commission has found a violation of Articles 101 and 102. In case
of Secretama, first time a fine was imposed on an operator under Article 16(3) of Regulation 4056/86 for
giving an incorrect information to Commission when it was requested.
The Commission is also entitled to impose fines when operators fail to submit to investigations under
Article 18 of Regulation 4056/86.

14. c) Air transport
1) Legislative regime
Regulation 2343/90 was issued for air carriers so they can access scheduled intra-EU routes. In 1991, the
Regulation 249/91 was adopted by the Council. It provided for air cargo services between Member States.
Regulation 295/91 which was later replaced by Regulation 261/2004 was regarding compensation to passengers
who were denied to board for air transport. Regulation 2407/92 included provisions regarding license of air
carriers and Regulation 2408/92 provided for the provision for EU air transport carriers to have an access to
intra-EU routes. Regulation 2409/92 establishes that the air transport carriers of EU can decide on and set their
own fares. Regulation 95/93 provides a common set of rules on airports for allocation of slots to ensure that
they are made available on an open and non-discriminatory basis. Regulation 2299/89 established a Code of
Conduct for Computerized Reservation Systems.
2) Practical application of the competition rules to air transport
Many cooperation agreements have been reviewed by the Commission under Article 101 in air transport sector.
Individual exemptions were granted by the Commission to cooperate agreements for the cases which were
before Regulation 1/2003.

15. Regulated industries
1) Demonopolization, liberalization and privatization
The introduction of economic reforms and competition laws in the market sector resulted in privatization and demonopolization. In
order to make the introduced initiatives effective, it was important to implement those initiatives within a sound framework of
competition law. Competition law provides for the policies within which these initiatives can work effectively.
in the 1990's there was an increase in private sector enterprises. It was seen that the private enterprises reduced costs and increased
supply in the competitive market scenario and therefore, reduced the fiscal burden which was imposed by the market sector.
Simultaneously, it was recognized by the governments that the interventions which are imposed must be more liberal and explicit so
that the possibility of misguided interventions is reduced.
b) EU law and the liberalisation of markets
Considerable steps have been taken by the EU Commission towards liberalisation of utilities and the development of a single market.
Directives were adopted in the sectors of electronic communications, post and energy markets in order to enhance competition in the
market sectors. EU Commission also applies the principles of competition law to the sectors. The market sectors can also be
liberalised removing unjustified public restrictions of competition. The regulatory rules can also be removed to make the market
sectors liberal.

16. c) Regulatory systems in the UK for utilities
Regulatory regimes were provided for the enterprises which were established as private enterprises in the 1980’ and 1990’s in sectors
like telecommunications, gas, electricity, water, aviation and rail transport. The regimes provided guidelines on various matters along
with guidelines for price control.
The operation of Regulated enterprises are subject to licenses which imposes obligations on them and checks on the conduct. If the
subjection is removed, Regulated enterprises can be discriminatory and exploitative and can hinder fair competition in the market
sectors.
D) Price caps
One of the problems which is faced by regulated industry is price control. A central proposition of competition policy is that the price
should be determined by the workings of the market and not by the state or an agency of the state.
Competition authorities can take action against excessive price. One method of capping prices is to fix an upper limit on the rate of
return which is permissible on the capital invested in an industry.
In the UK there is a formula to control price function. The price control function is exercised through the RPI minus X formula. Over a
period of time this formula leads to reduction in prices in real terms, thereby benefiting the consumers and forcing the privatised
industry to increase efficiency in so that they can continue earning profit.

17. Electronic communications
a) EU Law
1) Legislation
There are two ‘streams’ or ‘sets’ of Directives in relevance with the electronic communications sector. The first
consists of Directives adopted by the Council of Ministers and the European Parliament under Article 114 TFEU to
bring about harmonization necessary for the establishment of an internal market. the telecommunications, media
and information technology sectors was converged to a single regulatory framework. The regulatory framework
was then called to be electronic communications and it should cover all transmission networks and services.
This led to the adoption of second set of directives; a package of five Directives and one Decision in 2002. The
package which was adopted was amended in 2009 by two further Directives. Under this regulatory framework,
national regulatory authorities are required to impose regulatory obligations on enterprises which are in the
electronic communications market sector and has a significant market power.

18. b) Application of EU competition law
In 1991, the Commission published Guidelines on the Application of EEC (European Electronic Communication)
Competition Rules in the Telecommunications market sector. Part I is entitled ‘Framework’, and discusses the
relationship between the competition rules and sector-specific regulation. Part II deals with market definition, and Part
III provides detailed analysis of the application of the principles of competition law to access agreements.
c) UK Law
Prior to OFCOM (Office of Communications), the Director General of Telecommunication had powers to regulate media
and communications industry. The position of the Director General of Telecommunications has now been abolished,
and his powers have been transferred to OFCOM. OFCOM is a single regulator for the media and communications
industries and has considerable regulatory powers under the Communications Act 2003. OFCOM is required by the EU
regulatory framework to review certain markets to determine whether the market is ‘effectively competitive’. If OFCOM
determines that a market is not effectively competitive it must identify enterprises and impose specific regulatory
obligations or maintain or amend such obligations where they already exist. OFCOM has concurrent powers with the
OFT to apply Articles 101 and 102 TFEU.

19. Postal sector
a) EU Law
1) Legislation
Development of EU competition law and policy in the postal sector has come about because of the initiatives which were
taken by the Council of Ministers and the Commission.
The Postal Services Directive (97/67/EC) is the Directive which established a regulatory framework for EU postal market
sector and The universal service obligation (USO) is the core of the Directive (97/67/EC). The Directive provides flexibility
to EU Member States and also allows them to adapt elements of domestic postal services according to their own needs.
2) Application of EU competition law
Cases and decisions:
The Corbeau case and the universal obligation
In the case of Spanish International Courier Services, it was held by the Commission held that it was unlawful for Spain
to reserve to the Spanish Post Office as the country already has a monopoly on the basic postal service which is an
ancillary activity of international courier services.

20. In Slovakian postal Legislation v Commission case, the Commission held that Slovakia had infringed Article 101 of
TFEU as the country extended the monopoly of Slovakian Post Office over the basic letter service to hybrid mail
services.
In Deutsche Post case, a fine of Euro 24 million was imposed by the Commission on the incumbent operator in
Germany for offering loyalty rebates to customers of its business parcels service, and it also observed that the
business was guilty of predatory pricing.
In the case of New Postal Services, the business was in Italy and it guaranteed delivery in Italy on Day-or-Time
basis. The Commission observed that the Italian Decree was excluding market competition for a specific type of
hybridized electronic mail service and thus, was contrary to Article 106(1) in conjunction with Article 102.
In Reims II case, the Commission observed that when there is an agreement between the postal operators of the EU
and other operators for payment of an amount when a letter is posted to be delivered in the territory of other
operators then in such cases, criteria of Article 102(3) is satisfied.
B) UK Law
UK postal services competition law is similar to that of EU competition rules on the postal sector. OFCOM regulates
competition law in the territory. On issues relating to fair access, commercial terms, universal service, and
competition law are dealt with by OFCOM. A number of Acts is applied by the UK for the postal market sector. Under
the Postal Services Act 2011, it is the primary duty of OFCOM to carry out functions to secure the postal service
sector.

21. Energy
Energy Sector in European Union was a monopoly and it was only after mid 90’s that the Member States decided to open the
market sector to competition.
a) EU Law:
Competition law works for the protection of competition between different market participants in the market sector. The main
motive is to avoid harmful competitive practices of companies and to achieve effective competition in the market sector.
1) Legislation:
Antitrust:
Through this instrument the European Commission can impose fines within its powers on companies which are dominant and
is exercising anti competitive behavior.
Merger control:
This instrument is used by European Commission to make sure that companies don’t merge up to become dominant as it may
impede effective competition in the market sector.

22. State aid control:
Companies which receive state aid i.e. government support usually has an advantage over its competitors. Through this instrument state aid is
prohibited unless there is a reason to provide it and it should only be for economic development. European Commission ensures that the prohibition
of aid is complied with effectively and applied only where it is required.
2) Application of EU competition law
The Commission has investigated a number of agreements in the energy sector. The privatisation of the electricity industry in Great Britain led to a
decision that the Article 10 (3) applied to the Scottish Nuclear, Nuclear Energy Agreement. In 1995 the Commission gave its approval to a joint
venture established by nine gas companies to construct and operate a gas interconnector between the UK and Belgium. The Commission has also
approved a number of long term agreements for supply of gas and electricity.
The Commission has investigated several mergers involving undertakings in the energy sector. The Commission prohibited proposed acquisition by
EDP, the existing electricity company in Portugal, of GDP, the existing gas company; the Commission’s decision was upheld on appeal to the General
Court.
b) UK Law
The regulatory regimes for the gas and electricity sectors are respectively contained in Gas Act 1986 and the Electricity Act 1989. Both sectors are
regulated by the Gas and Electricity Markets Authority (GEMA), which is assisted by the Office of Gas and Electricity Markets (OFGEM). GEMA has
concurrent powers with the CMA to apply Articles 101 and 102 TFEU. A Guideline has been adopted under the Act, the Competition Act 1998.

23. Water
The Water Industry Act 1991 established a Community called Water Services Regulation Authority
in the UK. The community was regulated by the Office of Water Services (OFWAT). The Water
Services Regulation Authority (WSRA) fixes the prices for providing water to the households. The
competition in the market sector was increased after Water Act 2003 was introduced as it provided
for water services to non-household users and increased opportunities for the market
participants. The Water Act 2014 further increased opportunities for market participants in
England as the retail and wholesale competition was introduced in relation to supply of water.
WSRA has powers to apply Article 101 and 102 of the TFEU in the market sector. A guideline was
established for managing the Water and Sewerage sectors under the Competition Act 1998

24. Conclusion
The European Union competition law deals in different sectors of the
European Territory. EU Commission looks on and investigates
anti-competition practices, mergers and state aid in order to ensure equal
opportunities for all market participants in different sectors. The sectors
like nuclear energy, military equipment and agriculture are completely or
partly excluded from EU competition law. The coal and steel market sector is
dealt under European Coal and Steel Community treaty. EU competition
rules apply to the transport sector, electronic communication sector, postal
sector and energy sector.