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15.5.5.  State monopolies of a commercial character and the EU

    Article 37 of the Treaty on the functioning of the EU (ex Article 37 EEC, ex Article 31 TEC) adds to the general provisions of Article 106 of the TFEU (ex Article 86 TEC) on public undertakings the  provision that the Member States should adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States. These provisions apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States. Member States must refrain from introducing any new measure which is contrary to these principles or which restricts the scope of the articles dealing with the prohibition of customs duties and quantitative restrictions between Member States. If a State monopoly of a commercial character has rules which are designed to make it easier to dispose of agricultural products or obtain for them the best return, steps should be taken in applying the rules contained in this Article to ensure equivalent safeguards for the employment and standard of living of the producers concerned.

    At the outset virtually all commercial monopolies in the Community presented problems with regard to Article 37 (EEC). The Commission accordingly, as from 1962, initiated a series of proceedings against Member States, which refused or neglected to carry out the progressive adjustment of their monopolies. For a long time those Commission efforts came up against the unwillingness of Member States which administered lucrative monopolies, such as the tobacco and alcohol monopolies, or monopolies regarded as important for national security, like the French oil monopoly. In 1980, some ten years later than the timetable envisaged in Article 37 (EEC), the final stage of the adjustment of State monopolies of a commercial character was reached, but some Member States are still fighting a rearguard action to protect some of the privileges of their monopolies, such as the exclusive import and export rights for gas and electricity [See e.g. Commission Recommendations 83/403, 88/90 and 87/390].

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