On 30 January 2013, the Administrative Jurisdiction Division of the Dutch Council of State (Afdeling Bestuursrechtspraak Raad van State, "ABRvS") handed down an interesting judgment (LJN: BY9933) in which it answered the question whether an education by the Open Universiteit Nederland ("OUN") could be considered as an economic activity.
OUN is an independent institute for distance learning at university level. It had obtained permission from the Minister of Education, Culture and Science to provide a Bachelor programme in Dutch Law. The companies LOI and NTI, both providing a similar programme, objected to the decision by which the Minister granted this permission. The Minister rejected this objection and the matter ended up in court.
LOI and NTI argued that the decision to grant permission amounted to unlawful state aid. To this end, the parties relied on the Communication from the Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest, the "Communication 2012" (OJ 2012 C 8/02). More specifically, LOI and NTI claimed that the Bachelor programme provided by OUN qualifies as an economic activity due to the existence of competing private organisations.
The ABRvS turned to the European Commission for advice on this matter. It is noteworthy that in its advice the Commission shifted its focus to the Communication 2012 in which it set out that "[in] certain Member States public institutions can also offer educational services which, due to their nature, financing structure and the existence of competing private organisations, are to be regarded as economic". The Commission went on to consider that the Bachelor programme appears not to qualify as an economic activity, in as far the Dutch State by funding the Bachelor programme from the public purse, was fulfilling its duties towards its own population in the social, cultural and educational fields. In this respect, the Commission referred to the case law relating to the freedom of services.
This was sufficient for the ABRvS to conclude that the Dutch State, by funding the Bachelor programme, was fulfilling its duties towards its own population and that the programme could not be regarded as an economic activity.
Last year, the Dutch competition authority NMa announced that it had closed its investigation into two Dutch universities who allegedly had concerted on their tuition fees. That case concerned the tuition fees for students who already successfully completed an academic degree and wished to enrol in a second academic programme. The universities were free to determine the amount of these tuition fees. Pending the investigation, the universities committed to refrain from coordinating the tuition fees for such second academic programmes. This led the NMa to terminate its investigation.
The judgment of the ABRvS reconfirms that the question whether universities act as an undertaking in the sense of competition law can only be answered on the basis of a careful assessment of the specific context within which the programme is offered.