In its judgment of 3 March 201120, the Court of Justice gave further guidance in which circumstances a compulsory scheme for supplementary reimbursement of healthcare costs can be held compatible with articles 101, 102 and 106 TFEU.

The facts of the case can be summarised as follows: In France, healthcare costs incurred by employees in the event of illness or accident are reimbursed in part by the basic social security scheme. The part borne by the employee can be covered by a supplementary health insurance. The French Social Security Code provides for the possibility to conclude collective agreements by the employers and employees’ respective representatives for the affiliation of persons employed in a given occupational sector with such a supplementary scheme. These collective agreements can be made compulsory by a ministerial decree for all the employers and employees active in the given occupational sector. In accordance with these provisions, the employers and employees’ representatives of the traditional bakery sector concluded a collective agreement which provides for the affiliation of the employees in this sector with AG2R for supplementary reimbursement of healthcare costs. This collective agreement was made compulsory by a ministerial decree. Beaudout Père et Fils (‘Beaudout’), a traditional bakery, refused to be affiliated with AG2R because it was already affiliated with another insurance company. Hence, AG2R instituted proceedings against Beaudout, seeking an order that would declare that Beaudout must regularise its affiliation and pay outstanding contributions. The judge who heard this case , felt the need to ask a preliminary question to the Court of Justice in which the judge essentially wanted to know whether a provision making affiliation with a scheme for compulsory healthcare cover compulsory is compliant with Articles 101 and 102 TFEU.

The Court of Justice started by reformulating the question asked by the national court. Although the question of the national court only asked for the interpretation of Articles 101 and 102 TFEU, the Court of Justice noted that the question in essence sought to determine whether a decision by the public authorities to make compulsory, at the request of the organisations representing employers and employees within a given sector of activities, an agreement resulting from collective bargaining which provides for compulsory affiliation to a scheme for supplementary reimbursement of healthcare costs managed by a designated body, without possibility of exemption, is compatible with European Union Law. The Court of Justice deemed it necessary to construe the question as concerning the interpretation of Articles 101 and 102 TFEU, read together with Articles 4 (3) and 106 TFEU, respectively.

The Court of Justice then began by examining whether the decision is compatible with Article 101 TFEU, read in conjunction with Article 4 (3) TFEU. In order to answer this question, it was first of all necessary to determine whether the decision of the employers and employees’ representatives in appointing AG2R falls within the concept of agreements between undertakings as prohibited under Article 101 TFEU. The Court reminded that it already held21 that agreements entered into within the framework of collective bargaining between employers and employees and intended to improve employment and working conditions must by virtue of their nature and purpose be regarded as not falling within the scope of Article 101 TFEU. The agreement in this case was clearly the result of collective bargaining, and the purpose of the agreement was to improve employment and working conditions by ensuring that employees were insured for sickness and work-related accidents at a better price than when they would be insured without the collective agreement. The nature and purpose of this agreement prevented that the agreement from falling within the scope of Article 101 TFEU. The fact that the agreement has made affiliation compulsory and does not therefore provide for exemptions, cannot call this finding into question. Consequently, the fact that the agreement is made compulsory by the public authorities for persons who are not formally bound by it, does not infringe Article 4 (3) TFEU that read in conjunction with article 101 TFEU prohibits Member States to introduce or maintain in force measures which may render ineffective the competition rules applicable to undertakings. As the agreement itself does not fall under Article 101 TFEU, the decision making this agreement compulsory does not require or encourage the adoption of an agreement contrary to article 101 TFEU, nor does it reinforce the effect of such an anti-competitive agreement. Therefore, the collective agreement and decision of the Minister of Labour are not in violation of Article 101 TFEU read in conjunction with Article 4 (3) TFEU.

The Court of Justice then turned to the question whether the collective agreement and decision of the Minister of Labour is compliant with Article 102 TFEU, read in conjunction with Article 106 TFEU.  

Therefore it first needs to be established if AG2R can be considered as an undertaking within the meaning of Article 102 TFEU. In line with previous case law, the Court of Justice reminds that: (i) an undertaking, in the context of European competition law, covers any entity engaged in an economic activity, irrespective of its legal status and the way it is financed; (ii) any activity consisting in offering goods and services on a given market is an economic activity; and (iii) the fact that an insurance scheme pursues a social objective is not sufficient to preclude this activity from being classified as an economic activity, but instead it needs to be examined whether the scheme applies the principle of solidarity and to what extent it is subject to control by the State. The Court of Justice continued and found that the scheme was in fact based on the principle of solidarity as (i) the nature of the services and the scope of coverage is not proportional to the amount of contributions paid, and (ii) the services are, in certain cases, supplied irrespective of whether the contributions due have been paid. The question whether the State’s control is sufficient to preclude a qualification as economic activity is left open and is for the national court to determine based on the assessment of the circumstances in which AG2R was designated and the margin of negotiation of AG2R with the details relating to its appointment and the repercussion of those factors on the functioning of the scheme.

Secondly, if the national court were to consider that AG2R was an undertaking under Article 102 TFEU, such undertaking could be considered one holding exclusive rights within the meaning of Article 106 (1) TFEU. As a consequence of these exclusive rights AG2R has a dominant position in a substantial part of the common market. An abuse of this dominant position and a violation of Article 106 TFEU exist when the public authority grants exclusive rights to an undertaking and puts it in a situation where the undertaking is manifestly not in a position to satisfy the demand prevailing on the market. This is not the case in the present case, as the Court of Justice noted that there were no documents in the file that would suggest that the services supplied by AG2R do not meet the requirements of the undertakings concerned. The Court explained that in those circumstances, it is still to be determined whether AG2R is entrusted with services of general economic interest within the meaning of Article 106 (2) TFEU. Beaudout argued that a mechanism authorising exemptions from affiliation would not endanger the financial balance or economic viability of AG2R and thus there is no service of general economic interest. The Court clarified that it is not necessary for the financial balance or economic viability of the undertaking entrusted with the services to be endangered in order to fulfil the conditions of Article 106 (2). Instead, it is sufficient to demonstrate that the exclusive rights are necessary for the undertaking to perform the services entrusted, and are at least necessary in allowing the company to perform the tasks under economically acceptable circumstances. The Court held that if the scheme were not compulsory for all companies covered by it, there would be a risk that AG2R would be left over with only the high risk companies. This would lead to a situation in which AG2R would no longer be able to offer coverage of the same quality at an acceptable price. Therefore, the exclusive rights granted to AG2R comply with Article 102 TFEU, when read in conjunction with Article 106 TFEU