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— The relevant geographical market I-8119 — Dominant position on the relevant market I - 8120 — The relevant market as a substantial part of the common market I-8121 (b) Paragraph 18(3) of the RettDG 1991 and potential abuses of a dominant position I-8124 — Situation in which dominant undertakings are manifestly not in a position to satisfy demand I-8125 — Creation of a conflict of interest I-8128 (c) Effect on trade between Member States I - 8129 VIII—Justification under Article 86(2) EC I-8132 IX — Conclusion I-8135

5. 'Patient transport' is the transport of persons ill, injured or otherwise in need of help who are not emergency patients. It consists of administering medically appro- priate care and of transporting the patients at the same time as monitoring their 9. The RettDG 1991 does not apply to the condition. 4 conveyance of patients not in need of qualified help or supervision, in vehicles other than ambulances (Krankenfahrten). 9

6. Both emergency and patient transport services must be provided by ambulances (Krankenkraftwagen) 5of which there are essentially two types. 2. The public ambulance service (Rettungs- dienst)

10. According to Paragraph 2(1) of the 7. Emergency transport is normally to be RettDG 1991 the public ambulance service provided by emergency ambulance (Rettungsdienst) consists in the provision to (Rettungswagen). 6An emergency ambu- the population whenever necessary lance must be equipped with special appa- (bedarfsgerecht) and throughout the terri- ratus. The person taking care of the emer- tory (flächendeckend) of both emergency gency patient during the transport must be and patient transport services. Contrary to a qualified rescue service assistant what the referring court appears to assume (Rettungsassistent). 7 it follows from documents submitted to the Court that patient transport (and not only emergency transport) was also covered by 3 — Paragraph 2(2) of the RettDG 1991. 4 —Paragraph 2(3). 5 —Paragraph 21(1). 6 — Paragraph 21(2). 8 — Paragraph 22(3)(1). 7 — Paragraph 22(3)(2). 9 —Paragraph 1(2)(3).

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15. The referring court states that in almost 12. Responsibility for the public ambu- all cases the competent districts and towns lance service lies in principle with the Land, have assigned the public ambulance service the administrative districts at provincial to the recognised medical aid organisations, level (Landkreise) and the towns which are namely the Deutsches Rotes Kreuz (Ger- man Red Cross), the Arbeiter-Samariter

10 — Paragraph 4(1). 11 — Paragraphs 4(3) and 7. 14 — Paragraph 3. 12 — Paragraphs 4(3) and 8. 15 — Paragraph 5(3). 13 — Paragraph 8(2). 16 — Paragraphs 10, 11.

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Bund (Workers Samaritans' Federation), 3. The financing of the public ambulance the Johanniter-Unfall-Hilfe (St. John's acci- service dent assistance) and the Malteser-Hilfs- dienst (Maltese aid service). The town of Trier however — more precisely the town fire brigade — operates the public ambu- lance service itself. 18. The public ambulance service is financed partly by the State, partly through user charges.

17 — Paragraph 8(1). 18 —Paragraph 7(4). 19 — Paragraph 11.

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ments on the sums to be paid as user federal law applicable throughout Ger- charges. Those agreements must be many. That law regarded the provision of approved by the competent minister. The ambulance services as a mode of convey- reason the associations representing the ance of persons by hired car. Providers of health insurance sector play such an impor- ambulance services needed an authorisa- tant role in the determination of the user tion to engage in that occupation. The charges is that those charges are ultimately grant of authorisation was subject to guar- to be paid by public and private health antees as to the safety and efficiency of the insurers. operation and to assurances as to the reliability and professional qualifications of the operator. Authorisation to operate an ambulance service — unlike a taxi service, for example — did not however depend on an assessment of need. Within that legal framework the public ambulance service, 22. User charges must be fixed uniformly with its obligation to be available through- for the Land. They are thus identical for- out the territory 24 hours every day, ambulance services provided in towns and coexisted with private independent opera- in remote areas. tors who were mainly engaged in non- emergency transport of patients during day-time.

4. Authorisations for the provision of independent ambulance services 25. In 1989 — apparently at the request of the Länder — the federal law in question was amended in such a way as to remove the sector of ambulance services from its 23. In parallel with the rules on the public scope. The way was thus clear for legisla- ambulance service there are general rules tion of the Länder — in Rheinland-Pfalz governing authorisations for the provision the RettDG 1991. of ambulance services.

'Authorisation shall be refused if it would be likely to have an adverse effect on the general interest in the operation of an III — The main proceedings effective public ambulance service as defined in Paragraph 2(1). In establishing the plan of the Land for the public ambulance service ... regard shall be had in particular to the reserve capacity of the public ambulance service throughout the 30. The plaintiff Firma Ambulanz Glöck- territory and the actual use made of the ner ('Ambulanz Glöckner') is a private public ambulance service within the opera- undertaking established in Pirmasens which tional area concerned; planning should also provides ambulance services outside the be based on the number of operations, on public ambulance service. It appears from arrival times and on the duration of the file that it owns and operates two operations, as well as on expenditure and patient transport ambulances and one revenue ...' emergency ambulance. Under a framework

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agreement which it has concluded with two 34. Both organisations stated that the major health insurers it may request a comprehensive provision of the public reimbursable remuneration for its services ambulance service was in any event not which appears to be considerably lower being operated in such a way as to cover than the user charges for the public ambu- costs, so that the addition of a further lance service. operator would either require user charges to go up or the basic availability of the public ambulance service to be reduced.

31. As regards its emergency ambulance, it was granted in 1990 — thus before entry 35. Thereupon the Landkreis refused the into force of the RettDG 1991 and still renewal of the authorisation on the basis of under the previous federal legislation — Paragraph 18(3) of the RettDG 1991. It an authorisation to provide patient trans- stated that in the relevant area the public port services which was due to expire in ambulance service was operating in 1993 at October 1994. only 26% of its capacity.

sought to enable private operators to undertakings with 'special or exclusive provide ambulance services in parallel with rights' within the meaning of Article 86(1) the public ambulance service. The legisla- EC. Moreover, the adoption of Paragraph ture therefore implicitly accepted that there 18(3) of the RettDG 1991 by the legislature may, to a certain extent, be concomitant of the Land may be regarded as a 'measure' increases in costs. Since the applicant had prohibited by Article 86(1) EC. That is operated ambulance services for more than because the disputed provision creates seven years, it was clear that its activity had monopolies on the market fór ambulance not put at risk the operational capacity or services in violation of the general objec- the existence of the public ambulance tives of the Treaty and the prohibition service. under Article 81(1)(c) EC of sharing mar- kets. In its view, the disputed provision cannot be justified under Article 86(2) EC. Since the pre-existing situation was entirely satisfactory it was unnecessary to create a service monopoly. 38. The Landkreis lodged an appeal against that judgment before the referring court, which joined the medical organisations concerned, namely the ASB and the DRK, as parties to the proceedings. Under the applicable procedural rules the Vertreter des öffentlichen Interesses (representative 41. Referring to a number of judgments of of the public interest) also participates in the Court the national court is however in those proceedings. doubt about two issues, namely whether the grant of an exclusive right as such may be regarded as incompatible with the Treaty and whether the disputed measure 'may affect trade between Member States' within the meaning of Articles 81 EC et 39. According to the referring court the seq. case depends on the applicability of Para- graph 18(3) of the RettDG 1991. In its view, if that provision is to be applied, the authorities had to refuse the renewal of the authorisation since the organisations entrusted with the public ambulance ser- vice have spare capacity available, and the 42. In the light of those considerations it appeal would therefore succeed. If however referred the following question for a pre- Paragraph 18(3) were found to be incom- liminary ruling: patible with Community law and thus not applicable, the appeal would fail.

47. It is however evident from the observa- tions of the parties to the main proceedings and in particular from the text of the Law in force before 1991 22 that the public IV — The scope of the present preliminary ambulance service already comprised both ruling procedure emergency transport and patient transport before 1991. The pre-existing Law exclu- ded from its scope (as does the RettDG 1991) only the conveyance of patients not 45. One of the difficulties in the present in need of qualified help or supervision, in case is that those submitting observations vehicles other than ambulances (Kranken- tend to disagree with the referring court fahrten). 23 and amongst themselves not only on the interpretation of the relevant provisions of the EC Treaty, but also on the interpreta- 21 — See paragraph 10 above. tion of the national provisions at issue, on 22 — G VISI. 1986, p. 60. The text of that law was helpfully submitted to the Court. the factual background and on the scope of 25 — See Paragraph 1(3) of the pre-existing Law and above at the question referred. Before starting the paragraph 9.

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48. Since that misunderstanding is manifest to a closed group of organisations. It and concerns the pre-existing legal situa- merely considers that the provisions gov- tion, which is not directly in issue in the erning authorisations for the provision of present case, the Court should in my view independent ambulance services and in proceed on the basis that the public ambu- particular Paragraph 18(3) of the RettDG lance service always comprised both emer- 1991 might be incompatible with Commu- gency and patient transport. Where an issue nity law. manifestly does not arise, it would be unwise for the Court to try to resolve it.

50. It follows however from the facts giving rise to the main proceedings and from the order for reference that the provisions on the assignment of the public ambulance service as such are not at issue. 52. The defendant Landkreis and the ASB Ambulanz Glöckner did not request to be maintain by contrast that Paragraph 18(3) entrusted with the public ambulance ser- must be interpreted as precluding the grant vice in a given area. It asked only for an of authorisations to independent providers authorisation to provide independent only where it is likely to have considerable ambulance services in parallel with and adverse effects on the public ambulance outside the public ambulance service. Nor service. They rely on the judgment at first does the referring court appear to be instance of the Verwaltungsgericht Neus- concerned with the fact that the public tadt an der Weinstrasse 26 and a passage in ambulance service is in principle reserved

25 — See paragraph 29 above. 24 — See paragraph 13 above. 26 — See for an account of that judgment paragraph 37.

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the travaux préparatoires of the Law. The Article 86(1) EC read in conjunction with ASB therefore suggests reformulating the Articles 81 EC et seq. and 249 EC (by question referred accordingly. virtue of a breach of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts 27).

53. It is true that the interpretation of Paragraph 18(3) of the RettDG 1991 suggested by the referring court is not easy to reconcile with the fact that the RettDG 1991 introduced in its Paragraphs 14 to 27 a comprehensive set of provisions govern- ing not only the conditions for the grant of 56. In its view, the public authorities authorisations for the provision of ambu- responsible for the public ambulance ser- lance services, but also the obligations of vices and the medical aid organisations authorised operators and the remuneration entrusted with those services must both be for independent ambulance services. Many regarded as undertakings with special or of those rules would appear to be without exclusive rights within the meaning of practical relevance if the referring court's Article 86(1). interpretation of Paragraph 18(3) were to prevail.

60. In the first place, Article 86(1) EC is, in their view, not applicable because the medical aid organisations concerned can- not be regarded as undertakings with 'special or exclusive rights'. Article 81(1)(c) — Article 249 EC is infringed since the EC and the Directive on procedures for the public authorities did not respect the award of public service contracts are also Directive on procedures for the award not applicable. of public service contracts when entrusting the medical aid organisa- tions with the public ambulance ser- vice.

61. Furthermore, Article 86(1) EC in con- junction with Article 82 EC is not infringed because

58. The Commission adopts in essence a similar line of reasoning. In its view how- ever the Court is not sufficiently informed to decide whether the medical aid organi- sations' position on the market for ambu- — the operational area of each medical lance services concerns 'a substantial part aid organisation does not correspond of the common market' and whether the to a substantial part of the common disputed measure might lead to behaviour market, which 'may affect trade between Member States' within the meaning of Article 82 EC. With regard to those points the Com- mission suggests leaving the necessary assessments to the referring court and giving merely general guidance.

— trade between Member States is not 28 — Case C-41/90 Höfner and Elsar [1991] ECR I-1979. affected to an appreciable extent, I - 8106

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— the mere creation of a dominant posi- — the alleged infringement of Arti- tion is not caught by those rules, cle 86(1) read in conjunction with other Treaty provisions, and

(a) Medical aid organisations as undertak- — within those operational areas they set ings up, staff and maintain the central control units and ambulance stations,

66. As regards, first, the medical aid orga- nisations in issue, none of the parties has argued that they should not be regarded as — the infrastructure costs of the public undertakings for the purposes of competi- ambulance service are financed mainly tion law. We are informed that through direct public funding and the operating costs mainly through user charges,

— in the Land concerned there are four recognised medical organisations,29 of which the DRK (German Red Cross) is — under the principle of full cost coverage apparently the most important one, the user charges must be calculated so as to guarantee that they cover all the costs of the public ambulance service which are not financed through other sources of funding.

— they are organised as non-profit-mak- ing associations,

68. In the present case, it is clear from the be borne in mind that public service facts of the main proceedings that non- obligations may render the services provi- emergency patient transport has in the past ded by a given operator less competitive been carried out in Germany by private than comparable services rendered by other undertakings with a view to making profits. operators and thus justify under certain Moreover, it appears from the file that conditions the grant of special or exclusive Ambulanz Glöckner has in the past also rights or of State aid. It follows however provided emergency transport services. from Articles 86(1) and (2) and 87 EC that Nothing therefore suggests that the nature public service obligations, special or exclu- of either emergency or patient transport is sive rights, or State financing cannot pre- such that those services must necessarily be vent an operator's activities from being carried out by public entities. 33 Whether regarded as economic activities. 37 emergency or patient transport generates profits will depend exclusively on the remuneration which the operator obtains for his services. Furthermore, the referring court states that under German civil law, too, the relationship between ambulance service provider and patient is viewed as an Ordinary' service contract. The provision 70. I conclude therefore that in respect of of ambulance services therefore constitutes the provision of ambulance services the an economic activity within the meaning of medical organisations in issue must be the Court's case-law. viewed as undertakings within the meaning of Article 86(1).

72. I consider that a differentiated approach is necessary. It is settled case- law that public bodies engaging in eco- nomic activities may be regarded as under- takings. 38 On the other hand, activities in the exercise of official authority are shel- 75. Where the authorities assign the public tered from the application of the competi- ambulance service to the medical aid orga- tion rules. 39 Furthermore, the notion of nisations, it is more difficult to classify the 'undertaking' is a relative concept in the nature of that assignment. It might be sense that a given entity might be regarded argued that the transfer of responsibility as an undertaking for one part of its for a given economic activity from one activities while the rest fall outside the (public) entity to another (private) entity competition rules. 40 must itself also be considered as an eco- nomic activity. Conversely it might be argued that in such a situation an authority acts in its capacity as public authority and therefore not as an undertaking within the meaning of Articles 81 EC et seq. 41 Since the present preliminary ruling procedure 73. Within the regime established by the does not directly concern the assignment of RettDG 1991 the public authorities per- the public ambulance service to the medical form three different functions: first, they aid organisations 42 it is not necessary for are the entities primarily responsible for the me to express a definitive view on that public ambulance service and on that basis difficult question. they operate that service themselves in some areas; secondly, in most areas they assign the public ambulance service to medical aid organisations; and finally, they decide on authorisations for independent operators. 76. As regards the activity at issue in the main proceedings, namely the grant or 38 —Case 118/85 Commission v Italy [1987] ECR 2599, paragraphs 6 to 16 of the judgment and Höfner and Elser, refusal of authorisations for the provision cited in note 28. of independent ambulance services, it will 39 — See, for example, Commission v Italy, cited in note 38, paragraphs 7 and 8 of the judgment; Case C-343/95 Call and Figli [1997] ECR I-1547. 40 — See, for example, the Amministrazione Autonoma dei Monopoli di Stato in Commission v Italy, cited in note 38, 41 — Case 30/87 Bodson [1988] ECR 2479, paragraph 18 of the paragraph 7 of the judgment and the Bundesanstalt für judgment. Arbeit in Höfner and Etser, cited in note 28. 42 — See above at paragraph 50.

77. The fact invoked by Ambulanz Glöck- ner that the public authorities are potential competitors on the market for ambulance services is in my view irrelevant for the classification of their decision-making 80. It is true that the Court's case-law activities. requires that a State body with regulatory powers over a given market should be independent from any undertaking operat- ing on that market. 44 That case-law does not however establish that the authorities' regulatory activities must be viewed as economic activities, but concerns only the compatibility with the Treaty of the result- 78. First, I do not think that Article 81 EC ing conflict of interest. et seq. apply to potential undertakings.

44 — See, for example. Case C-202/88 France v Commission 43 —Case C-364/92 SAT Fluggesellschaft [ 1994] ECU I-43, [1991] ECR I-1223; Case C-18/88 CB-INNO-BM [1991] paragraph 30 or the judgment. ECR I-5941.

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81.1 conclude therefore that the authorities 84. In the area of telecommunications the cannot be viewed as undertakings where Court partially annulled in 1991 and 1992 they grant or refuse authorisations for the two Commission Directives which required provision of independent ambulance ser- the Member States to withdraw special or vices. exclusive rights conferred on incumbent operators. As regards special rights, the Court held that the Commission failed to specify 'the types of rights which are actually involved and in what respect the existence of such rights is contrary to the various provisions of the Treaty'. 45

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— designates, otherwise than according to which are granted by the authorities of a such criteria, several competing under- Member State to an undertaking or a takings as being authorised to provide limited number of undertakings otherwise a service or undertake an activity, or than according to objective, proportional and non-discriminatory criteria, and which substantially affect the ability of other undertakings to provide or operate tele- communications networks or to provide telecommunications services in the same geographical area under substantially equivalent conditions.' 47

— confers on any undertaking or under- takings, otherwise than according to such criteria, legal or regulatory advan- tages which substantially affect the ability of any other undertaking to 87. The four essential elements of that provide the same telecommunications definition are that the rights in question service or to undertake the same activ- must ity in the same geographical area under substantially equivalent conditions.'

— be granted by the authorities of a Member State,

86. In 1996 the Court adopted, for the purposes of the interpretation of several other Directives in the telecommunications — be granted to one undertaking or to a sector, a definition which covers both limited number of undertakings, special and exclusive rights and which is clearly inspired by the Commission's defi- nition:

90. In the light of the arguments of the parties three distinct State measures — two of a regulatory and one of a decisional nature — might potentially be viewed as 88. I consider that the first three elements the grant of special or exclusive rights, of that definition can also be used to define namely the concept of special or exclusive rights in Article 86(1) EC, whilst the fourth element should not be transposed to that different context. That fourth element — namely that the rights in question must be granted otherwise than according to objective, — Paragraph 5 of the RettDG 1991 under proportional and non-discriminatory cri- which the public ambulance service teria — is designed to apply the liberal- must be assigned with priority to the isation process in the telecommunications 'recognised' medical aid organisa- sector to only those rights the grant of tions, 48 which is not justified. It is therefore designed to distinguish between 'legitimate' and 'illegitimate' special or exclusive rights. In Article 86(1) EC, however, the concept of special or exclusive rights serves only the — the actual assignment to a medical aid purpose of determining the scope of appli- organisation of the public ambulance cation of that provision. The separate and service for a given geographical area, further question whether those rights are and legitimate is to be determined according to the Treaty provisions to which Arti- cle 86(1) EC refers and according to Arti- cle 86(2) EC. — the introduction of Paragraph 18(3) of the RettDG 1991 which, according to the referring court's interpretation, pre- cludes authorisations for independent operators. 49 89. Special or exclusive rights within the meaning of Article 86(1) EC are thus in my view rights granted by the authorities of a Member State to one undertaking or to a limited number of undertakings which 91. As regards, first, Paragraph 5 of the substantially affect the ability of other RettDG 1991 it must be recalled that undertakings to exercise the economic activity in question in the same geographi- cal area under substantially equivalent 48 — See above at paragraph 13. conditions. 49 — See above at paragraphs 51 to 54.

94. It is thus Paragraph 18(3) of the RettDG which grants special or exclusive rights to the medical aid organisations entrusted with the public ambulance ser- vice. Only Paragraph 18(3) and its applica- tion by the authorities affect the ability of 92. I consider, secondly, that the actual other undertakings to exercise the eco- assignment of the public ambulance to a nomic activity in question in the same given medical aid organisation as such does geographical area as the medical aid orga- not grant special or exclusive rights to that nisations. organisation since it does not in itself affect the ability of competing operators to offer ambulance services in the area in question. In that regard it must be borne in mind that before 1991 the assignment of the public ambulance service to certain recognised 95. I therefore conclude that the introduc- medical aid organisations had no influence tion of Paragraph 18(3) of the RettDG whatsoever on the possibility for indepen- 1991 granted the medical aid organisations dent operators to apply for an authorisa- concerned special or exclusive rights within tion to provide ambulance services. the meaning of Article 86(1) EC. They must consequently be viewed as undertak- ings falling within the scope of that provi- sion.

93. That leads me, thirdly, to Paragraph 18(3) of the RettDG 1991. Before entry VII — Infringement of Article 86(1) EC into force of that rule independent opera- read in conjunction with other provisions tors could obtain the necessary authorisa- of the Treaty tions for the provision of ambulance ser- vices relatively easily. The grant of those authorisations was subject only to guaran- tees as to the safety and efficiency of the 96. In the case of undertakings with special operation and the reliability and profes- or exclusive rights Article 86(1) EC prohi-

50 — See above at paragraph 55. 52 — See paragraph 50 above. 51 — See above paragraph 55 and note 27. 53 — See paragraphs 33 to 35 above.

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101. In my view Article 81 EC does not contrary to Article 82. The latter provision apply since the RettDG 1991 does not lead is however addressed only to undertakings, to agreements between undertakings within not to Member States. The two rules read the meaning of that provision. in combination must thus be understood as prohibiting State measures which would deprive the prohibition in Article 82 EC of its effectiveness.

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(a) Dominant position of one or more 109. I am not fully convinced by those undertakings within a substantial part of arguments. 'Relevant product market' may the common market be defined as follows:

— The relevant product market 'A relevant product market comprises all those products and/or services which are regarded as interchangeable or substituta- ble by the consumer, by reason of the products' characteristics, their prices and their intended use.' 55

107. The Commission argues that there are two different product markets, namely the market for emergency transport and the market for patient transport.

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vehicle in question is free. Legal require- cerned are involved in the supply and ments as regards the medical equipment of demand of products or services, in which the respective vehicles and the qualification the conditions of competition are suffi- of the aid personnel are also different. ciently homogeneous and which can be Because of its special nature, efficient distinguished from neighbouring areas planning of emergency transport is consid- because the conditions of competition are erably more difficult than the planning of appreciably different in those areas.' 56 non-emergency transport. As a conse- quence of those fundamental differences the costs of emergency transport services are much higher.

114. It might be argued that the relevant geographical market for the provision of ambulance services is confined to one 111. There are thus, in my view, two operational area (Rettungsdienstbereich) relevant product markets, namely the mar- and thus in the main proceedings the ket for emergency transport and the market Rettungsdienstbereich Pirmasens. It is at for non-emergency patient transport. that level that the decisions on authorisa- tions are taken, that medical aid organisa- tions are heard and that the effects on the public ambulance service are assessed.

— The relevant geographical market

115. I tend however to agree with the Commission and consider that the Land 112. The Commission contends that the of Rheinland-Pfalz must be seen as the relevant geographical market is the Land of relevant market. The legislative framework Rheinland-Pfalz. for the provision of independent ambulance services and the organisational structures of the public ambulance service are identical throughout the Land. The user charges for the public ambulance service are fixed uniformly at the level of the Land. 57 113. 'Relevant geographical market' may Ambulanz Glöckner could therefore exer- be defined as follows: cise its activities and apply for authorisa- tions for its ambulances in other geogra- phical areas of the Land under exactly the same conditions.

— Dominant position on the relevant market

122. In the final analysis the question of 119. It follows from the referring court's dominance will also have to be resolved by interpretation of Paragraph 18(3) of the the referring court. If that court were to RettDG 1991 that a medical aid organisa- find that the DRK alone is not in a

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dominant position it would have to exam- dominant position in a substantial part of ine the hypothesis of a collective dominant the common market. 59 position held by the recognised medical aid organisations.

125. The Landkreis and the ASB contend that there is no dominant position over a 'substantial part of the common market'. 123. For the purposes of the Opinion I will That criterion is in their view intended to assume that the DRK holds a dominant exclude from the scope of Community position in Rheinland-Pfalz. competition law undertakings in a domi- nant position on local or small regional markets since their dominance does not threaten effective competition in the com- mon market. The medical aid organisations in issue do therefore not fall within Arti- cle 82 EC.

127. That test emphasises the economic million inhabitants. 62 It is thus larger or importance of a given territory. In some has more inhabitants than some Member cases the Court has considered even geo- States. graphically small areas to be a substantial part of the common market. The decisive element in those cases was the particular economic importance of the area in ques- tion. In Merci Convenzionali Porto di Genova for example the Court relied on 130. The Court has already held that the the volume of traffic in the Port of Genoa 'southern part of Germany' and thus an and that port's importance in relation to area falling short of the territory of a maritime import and export operations as a Member State could constitute 'a substan- whole in the Member State concerned. 61 tial part of the common market'. 63 A That reasoning cannot in my view be similar statement can be found in Bodson transposed to the present case. Ambulance where the group of undertakings controlled services in Rheinland-Pfalz are neither by Pompes funèbres générales held an particularly important nor particularly exclusive concession in less than 10% of unimportant for the German economy. communes in France, the population of which accounted however for more than one third of the total population. The Court ruled in that case which presents many features similar to the present one:

128. I consider none the less that the Land 'Article [82 EC] applies in a case in which a of Rheinland-Pfalz must be regarded as a number of communal monopolies are substantial part of the common market. In granted to a single group of undertakings the absence of particular economic char- whose market strategy is determined by the acteristics of a given area, geographical parent company, in a situation in which factors become more significant. those monopolies cover a certain part of the national territory ...' (emphasis added). 64

133. It is true that in la Crespelle the regional monopolies covered the entire territory of a Member State whilst in the present case the legal regime in issue covers only the territory of the Latid of Rheinland- 135. The above survey of the case-law Pfalz (even if Ambulanz Glöckner claims suggests that there is no single formula for that the situation is essentially the same establishing whether a dominant position throughout Germany). It is also true that in exists 'in a substantial part of the common la Crespelle the monopolies were clearly market'. It also shows why there is no such conferred by national legislation. In the single formula: the range of possible cases present case Paragraph 18(3) of the RettDG is too diverse, and each case must therefore 1991 protects the undertakings entrusted be analysed on its own facts. However, the with the public ambulance service only survey also leads to the conclusion that, if indirectly. the dominant position in the present case extends to the whole of the Rheinland-Pfalz (and of course a fortiori if it should be found that the situation is replicated across the whole of Germany), then the dominant position exists in a substantial part of the common market. 134. There is however another difference between the two cases which pleads in favour of applying Article 82 in the present case. It appears that in la Crespelle the regional monopolies in issue were held by different economic actors. On a national scale each of those actors was consequently relatively small. In the present case the DRK appears to be entrusted in most areas 136. Accordingly, I will assume the follow- ing: the relevant markets are the markets 65 — See his Opinion in Case 77/77 BP v Commission [1978] for emergency and for patient transport in ECU 1513, at p. 1537. Rheinland-Pfalz. The DRK is dominant on

137. Ambulanz Glöckner argues essentially 140. Recently the Court has restated its that the provision at issue is contrary to position on that issue as follows: Article 86(1) EC in that it leads to two types of infringements of Article 82 EC. In its view, the disputed provision favours a situation in which the medical aid organi- sations are unable to satisfy consumer demand for qualified ambulance services at acceptable prices 66 and empowers the public authorities and the medical aid organisations jointly to limit access of '[T]he mere creation of a dominant position competing operators to the market. through the grant of exclusive rights within the meaning of Article [86(1) EC] is not in itself incompatible with Article [82 EC]. A Member State will be in breach of the prohibitions laid down by those two provi- sions only if the undertaking in question, merely by exercising the exclusive rights granted to it, is led to abuse its dominant 138. The other side argues essentially that position or where such rights are liable to the mere creation of a dominant position is create a situation in which that undertaking not caught by Articles 86(1) and 82 EC and is led to commit such abuses ...' 69 that the medical aid organisations have always provided satisfactory services at acceptable prices. 67 — La Crespelle, cited in note 59, paragraph 18 of the judgment. 68 — France v Commission, cited in note 44, paragraph 22 of the judgment. 66 — Höfner and Eiser, cited in note 28. 69 — Pavlov, cited in note 31, paragraph 127 of the judgment.

71 — Ambulanz Glockner has submitted to the C o u r t several press reports about delays or emergency transport services in some areas of Rheinland-Pfalz; in one case a person apparently died as a consequence of such a delay. 72 — Ambulanz Glockner bas submitted to the Court a reply of 143. The parties strongly disagree on whe- a secretary of state in the federal ministry of health to a ther that is the case in the present proceed- written question put by a member of the federal parlia- ment. She states that the public ambulance service winch ings. falls within the exclusive competence of the Lander suffers from inefficiency which i s inherent in the system. T h e reasons are i n her view in particular the monopolistic structures of supply, the principle of full cost coverage and the limited influence of the health insurance sector on user 70 — Case C-41/90, cited in note 28. charges.

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and thus profit-oriented operators are — as regards delays in the field of non- much less expensive; emergency transport, Ambulanz Glöckner has not presented any evi- dence for its contention;

— since the introduction of rules such as Paragraph 18(3) of the RettDG 1991 the costs of the public ambulance service in Germany have risen dispro- — the higher user charges of the public portionately; the costs of patient trans- ambulance services can be explained by port in Germany rose from DEM 1.76 the costs of providing services 24 hours billion in 1991 to DEM 3.14 billion in a day and throughout the territory of 1997 (increase of 78.41%) and the the Land; if for social reasons user costs in Rheinland-Pfalz rose from charges are uniform throughout the DEM 86 million in 1992 to DEM 128 Land then they will necessarily be million in 1999 (increase of higher than the remuneration requested 49.75%). 73 by private undertakings which provide their lucrative services only in densely populated areas during peak times;

150. Thirdly, rapid and high quality ambu- lance services are — as the representative of the Landkreis rightly explained — a question of life and death and therefore of paramount importance for society as a 148. First, the national courts must bear in whole. mind the respective responsibilities of the national legislature and of the medical aid organisations within Articles 86(1) and 82 EC. A Member State is liable under Arti- cle 86(1) only where there is a failure in the system which it has set up, that is to say where an abuse is the consequence of its regulatory or decisional intervention, 151. The referring court should therefore whereas undertakings enjoying special or analyse primarily whether authorisations exclusive rights are alone responsible for for independent operators may contribute any infringement of the competition rules to shorter arrival times and to generally attributable exclusively to them. Arti- higher quality services, or whether on the cles 86(1) and 82 will therefore not be contrary even without such authorisations infringed where the only reason that a the public ambulance service is perfectly medical aid organisation is 'manifestly not able to provide the necessary services in all situations and at all times of the day. The decisive factor should in my view be the 74 — See, for a similar situation, my Opinion in Albany, cited in ability of the public ambulance service to note 32, paragraphs 412 to 414. provide rapid and high quality services even

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156. In the present case Ambulanz Glöck- ner appears to complain more about the second type of conflict of interests, namely a conflict between regulatory powers and 153. I conclude therefore that it is for the economic interests. national court to establish whether Para- graph 18(3) of the RettDG 1991 creates a situation in which the medical aid organi- 75 — Case C-163/96 [1998] ECR I-533. sations are manifestly not in a position to 76 — Case C-260/89 ERT [1991] ECR I-2925; Raso, cited in satisfy demand. That court should attach note 75. 77 — See, for example, France v Commission, cited in note 44, particular importance to the capacity of the paragraph 51 of the judgment; GB-INNO-BM, cited in medical aid organisations to provide rapid note 44, paragraph 26 of the judgment; Case C-91/94 Tranchant [1995] ECR I-3911, paragraph 19 of the and high quality services at peak hours. judgment.

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157. In that regard it will be recalled that aid organisations are thus not entrusted the defendant Landkreis consulted the with regulatory powers within the meaning medical aid organisations entrusted with of the Court's case-law. the public ambulance service in the opera- tional area of Pirmasens before taking its decision to refuse the authorisation. We also know that both medical aid organisa- tions had recommended that refusal. 161. Moreover, it appears from the RettDG 1991 that the Landkreis enjoys no discre- tion as regards its decision, but must grant the authorisation, if the ambulance opera- tor concerned fulfils the legal requirements. The main proceedings show that a refusal is 158. That way of proceeding is in my view then subject to full judicial review. Those not prohibited by Articles 86(1) and 82 EC. are two important further safeguards against biased decisions.

166. The Court has also explained that it is not necessary to prove an actual effect; a potential effect is sufficient. 80 On the other 164. Under the Treaty, for Articles 86(1) hand the effect in issue must be 'appreci- and 82 EC to apply either the effects of the able' and not just insignificant. 81 abuse or the effects of the State measure must be liable to affect trade between Member States. 78

167. It follows also from the case-law that an undertaking may invoke Articles 86 and 165. The Court has held in that regard: 82(1) EC against its own State in proceed- ings which do not involve a concrete cross- border element in its own situation. 82 Perhaps the best example in that respect is Höfner in which the Court did not apply the rules on freedom to provide services 'The interpretation and application of the because the activities at issue in the main conditions relating to effects on trade proceedings were confined in all respects to between Member States contained in Arti- one Member State. 83 It did however apply cles [81] and [82 EC] must be based on the the competition rules since the national purpose of that condition which is to provisions at issue potentially affected define, in the context of the law governing recruitment of nationals of other Member competition, the boundary between the States. 84 areas respectively covered by Community law and the law of the Member States. Thus Community law covers any agree- 79 —Case 22/78 Hugin v Commission [1979] ECR 1869, ment or any practice which is capable of paragraph 17 of the judgment. 80 — Höfner and Elser, cited in note 28, paragraph 32 of the constituting a threat to freedom of trade judgment. between Member States in a manner which 81 — See, in the context of Article 85 of the EC Treaty (now Article 81 EC), Case C-306/96 Javico v YSLP [1998] ECR might harm the attainment of the objectives 1-1983, paragraph 16 of the judgment. 82 — See for example the facts in Case C-320/91 Corbeau [1993] ECR i-2533. 83 — Höfner and Elser, cited in note 28, paragraphs 37 to 40 of 78 — See, in that sense, Bodson, cited in note 41, paragraph 25 the judgment. of the judgment. 84 — Ibidem, paragraphs 32 and 33 of the judgment.

170. However, if I understand the provi- 173. It will be for the referring court to sion at issue correctly, occasional cross- verify whether those statements are correct. border transports of patients do not seem It will then also be for the referring to fall within its scope. Paragraph 18(3) of court — taking into account the results of the RettDG 1991 seems to be mainly an its verification — to determine whether in obstacle for operators who wish to provide view of the economic characteristics of the ambulance services in Rheinland-Pfalz on a two product markets for ambulance ser- more permanent basis. It is a rule which vices in Rheinland-Pfalz there is a sufficient renders the access of operators from other degree of likelihood that a rule such as Member States to the market in Rheinland- Paragraph 18(3) of the RettDG 1991 Pfalz more difficult. prevents operators established in other

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Member States from either operating such as Paragraph 18(3) of the RettDG ambulances 8 5or even establishing them- 1991 is necessary to protect the 'perfor- selves 86 in Rheinland-Pfalz. mance, in law or in fact, of the particular tasks assigned' to the medical aid organisa- tions.

VIII — Justification under Article 86(2) EC 176. The Landkreis, the ASB and the Vertreter des öffentlichen Interesses argue, first, that the presence of independent operators on the markets for emergency and non-emergency patient transport might 174. The Landkreis, the ASB, the Vertreter cause confusion for accident victims and des öffentlichen Interesses and the Austrian patients, with potentially fatal conse- Government argue that a rule such as quences. In particular in emergency situa- Paragraph 18(3) of the RettDG 1991, even tions persons who wish to alert emergency if there were a prima facie infringement of ambulances must not be confronted with a Articles 86(1) and 82 EC, would be in any confusing choice between several ambu- event justified under Article 86(2) EC. lance service providers.

179. The presence of independent opera- tors on the market reduces the revenue of the public ambulance service. Since there is only a finite number of transports to be provided, more transports provided by independent operators will entail a corre- 182. It must also be borne in mind that sponding reduction of transports effectu- losses of the public ambulance service are ated by the public ambulance service. not only losses for the medical aid organi- sations, but will generate costs for society as whole. The public ambulance service is financed ultimately either through taxes or through health insurance costs. In the words of the Austrian Government there 180. It is moreover to be expected that is thus a serious risk that the inevitable independent profit-oriented operators will losses of the public ambulance service are prefer to provide their services mainly in socialised, whilst its potential profits are densely populated areas where distances privatised. are short. It is also to be expected that they will prefer to operate mainly on the market of non-emergency transport. That is because emergency transport requires costly investments in equipment and quali- fied personnel and cost-efficient planning is difficult. Private operators therefore con- centrate their activities on non-emergency 183. Subject to one important reservation, transport in densely populated areas and I find those arguments convincing. thus engage in a form of 'cherry-picking'.

181. The resulting reduction of revenue of 184. Article 86(2) seeks to reconcile the the public ambulance service — which is Member States' interest in using certain

186. The Court has also established that for the exception in Article 86(2) EC to apply it is not necessary that the survival of the undertakings entrusted with the service of general interest should be threatened. It is sufficient that, in the absence of the special or exclusive rights at issue, it would not be possible for the undertakings con- cerned to perform the particular tasks entrusted to them 89 or that the mainte- 188. I have however one important reser- nance of those rights is necessary to enable vation. If authorisations for independent the undertakings concerned to perform providers are refused even though medical their tasks under economically acceptable aid organisations entrusted with the public conditions. 90 ambulance service are manifestly unable to satisfy demand (for example at peak hours) 92 the economic reasons which I 87 — Case C-157/94 Commission v Netherlands [1997] ECR I-5699, paragraph 39 of the judgment. 88 — Ibidem, paragraph 37 of the judgment. 91—See the useful contribution of L. Hancher and J-L. 89 — Ibidem, paragraph 52 of the judgment. Buendia-Sierra, 'Cross-subsidisation and EC Law', Com- 90 — Corbeau, cited in note 82, paragraphs 14 to 16 of the mon Market Law Review, 1998, p. 901. judgment. 92 — See paragraph 151 above.

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of such an authorisation is likely to have adverse effects on the operation or the profitability of the public ambulance service infringes Article 86(1) EC read in conjunction with Article 82 EC and is not justified under Article 86(2) EC where

— that rule is liable to create a situation in which the medical aid organisation(s) entrusted with the public ambulance service are manifestly not in a position to satisfy demand in particular for rapid and high-quality patient transport services at peak hours, and

— in view of the economic characteristics of the markets in question there is a sufficient degree of likelihood that that rule prevents operators established in other Member States from operating ambulances or establishing themselves in Rheinland-Pfalz.

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