On 2 October, about 100 experts met in Bonn at the invitation of the Bundeskartellamt to discuss the role of competition and competition law in the context of state entrepreneurial activities.

The Working Group on Competition Law meets once a year to discuss current issues of competition policy. This year's meeting was held under the topic "The State as entrepreneur - (re-) municipalization from a competition law point of view". It was attended by many university professors from law and economics faculties, high-ranking representatives of national and European competition authorities and ministries, as well as judges from the cartel divisions of the Düsseldorf Higher Regional Court and the Federal Court of Justice.

Dr Peter Klocker, Vice-President of the Bundeskartellamt: "The increasing re-municipalization of private companies, in particular in the energy and water supply and waste management sectors, raises a number of issues with relevance for competition law and policy. The double function of the State as a market participant and a sovereign power makes discrimination against private competitors easier. Numerous abuse of dominance proceedings of the Bundeskartellamt relating to the award of gas and electricity concessions bear witness to this. Current trends to slacken competition law control over municipal enterprises are the wrong approach. On the contrary, it is imperative that the same competition rules apply to entrepreneurial activities of the State that apply to the private sector, and that these activities are subject to strict competition control."

The meeting was chaired by Dr Klocker. It was opened by brief introductory statements by the panelists Prof Dr Heike Schweitzer, Free University of Berlin, Prof Dr Christoph Brüning, University of Kiel, Prof Dr Holger Mühlenkamp, University of Speyer, and Prof Achim Wambach, PH.D., University of Cologne.

The debate revolved around two issues in particular. On the one hand, it was debated how state entrepreneurial activity, the market economy and competition can be reconciled with one another. Key issues in this respect were the effects of state entrepreneurial activity on competition and the efficiency, or inefficiency, of public sector companies. The financial incentives for municipalities to engage in entrepreneurial activities were the subject of critical discussion. It was agreed that a transparent appraisal of all the advantages and disadvantages as well as the financial risks was required in this context. In the view of the meeting's participants, the financial difficulties of a vast number of municipal utilities proved, in particular, that municipalities tend to underestimate the entrepreneurial challenges of a dynamic market environment.

The second issue discussed concerned the question of to what degree competition law should be applied to public sector companies. Issues debated in this respect were the exemption from competition control of public-service fees as decided in the 8th Amendment to the German Act against Restraints of Competition, and current endeavours to exempt the in-house award of energy concessions from the obligation to tender.

The working paper of the meeting, which formed the basis for discussion, and the individual statements of the conference participants are available (in German) on the Bundeskartellamt's website.