In the “Express Bus” case the National Competition Commission (“NCC”) determined how competition law applies to public bodies. This case involved an unfair practice complaint against the Madrid City Council and the Autonomous Region of Madrid due to the Municipal Transport Consortium (“MTC”) setting a reduced bus fare for the bus route connecting the city of Madrid to Madrid’s Barajas Airport. The Council of the NCC decided to shelve the proceedings on the ground that the new tariffs set by the MTC were not subject to competition law, since the MTC was not acting as an independent economic operator.
In its decision, the NCC referred to European Court of Justice case law that makes a distinction between public authorities acting as economic operators in the market and those exercising their public powers (ius imperii) as regulators. According to this case law, competition law only applies to public bodies when they act as economic operators in the market, that is, when they are not exercising their public powers. The NCC therefore held that the MTC’s setting of prices for transport services did not fall within the scope of the competition authorities’ sanctioning powers, as this action was intrinsically linked to the public powers granted to the MTC to provide services.
The Council of the NCC adopted a more restrictive approach in this case than in the controversial “Sherry Producers” decision in relation to whether public authority actions can be subject to competition law. We will have to wait for future decisions to find out if this position is upheld.