Recalibrate Compass : Towards Effective Competition Law Enforcement on Mixed Markets

This article argues that while EU competition law rightly takes a functional approach to its subject—the undertaking and its economic activity—a string of cases has been developing leading to what this article coins as the Compass doctrine: economic activity of a public entity falling outside of the scope of competition law altogether when connected to the exercise of public authority. This Compass doctrine has two adverse consequences: (1) because it undermines the functional approach to the undertaking as the subject of competition law, it impedes effective enforcement; (2) it enables public entities to behave anticompetitively on mixed markets. The CJEU never foresaw the advent of commercial behavior by public entities on mixed markets, who with the Compass doctrine in hand can infringe competition law with impunity. These consequences are not hypothetical, as testified by enforcement practice in the Netherlands. Therefore, it would be appropriate for the CJEU to reconsider the Compass doctrine in future cases, and (re)emphasize that once an entity is engaged in economic activity, it can no longer escape competition law scrutiny by being connected to the exercise of public authority