Jurisdiction(s):
United Kingdom

EU competition law constraints on state measures and public bodies: Articles 4(3) TEU, 106 TFEU, SGEI derogation, special/exclusive rights, state compulsion and enforcement

Published by a LexisNexis Competition expert

Practice notes

State action in the economy can intersect with EU Treaty duties, in particular the principle of loyalty in Article 4(3) TEU and Article 106 TFEU. A state may face responsibility under Article 4(3) TEU or Article 106(1) TFEU where its conduct brings about, or is liable to cause, an undertaking to breach the competition provisions in Articles 101 or 102 TFEU. Article 106(2) TFEU provides a narrow derogation from the TFEU rules for undertakings tasked with services of general economic interest (SGEI) or possessing the features of a revenue‑producing monopoly. There are instances too in which the public authority is itself carrying on economic activity, so that it amounts to a relevant ‘undertaking’ for competition law purposes.

State intervention in the economy and liberalisation

The ownership and provision of public services, including energy, postal services, telecommunications and transport, have undergone substantial structural transformation, and the European Commission has been pivotal in opening these markets up to competition across the EU. At the same time, the speed and configuration of this ‘liberalisation’ differ by sector and between the Member States. In practice, the extent, methods and timelines adopted can vary across different markets and jurisdictions. In some areas, such as telecommunications,...

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Web page updated on 21/05/2026

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