Stockholm, 10 October 2011

(by Ton Zijlstra)

The Swedish Competition Authority on October 4th published a much awaited study that will support both public sector bodies and re-users in better understanding and soundly apply the PSI rules. Although the report focuses on the Swedish implementation ofthe PSI Directive, it will also be of great interest to (stakeholders in) other Member States, as it explores the interaction between general competition rules and the specific re-use rules. Also, the publication of this report confirms the increasing interest competition authorities are taking in the PSI re-use dossier, which likely reflects the boosting of the economic value of PSI.

To see the full report (in English, with summary in Swedish) you can download the PDF file.

The report, which has been drafted by Björn Lundqvist (competition lawyer at the law firm Roschier in Stockholm) and Marc de Vries (legal expert in the field of PSI re-use law), explores and clarifies two terms: ‘business activity’ and ‘exclusive right’ as they appearin sections 4 and 10 of the Swedish PSI Act, implementing the PSI Directive.

Business activity and public task

The term ‘public task’ is probably the most crucial (and debated) term in the PSI Directive, as it sets the principle line of demarcation between application and non-application of the PSI Directive. Where the Swedish legislator has chosen to implement the term ‘public task’ through the term ‘business activity’ (a term borrowed from the Swedish Copyright Act) confusion has arisen as to the meaning of the latter term (which the Swedish Competition Authority sought to solve).

The report argues that this implementation appears to bring with it difficulties. Judging from the preparatory works of the Swedish PSI Act, the point and level of connection do not correspond, since the term business activity is connected to the term ‘commercial activity’mentioned in Article 10(2) of the PSI Directive (which applies to further re-use by the public sector body itself), instead of the term ‘public task’, which sets the scope in Article 2(1) of the Directive. Therefore, applying the PSI re-use rules, the term ‘business activity’should be given a meaning that is consistent with the PSI Directive, independent of the term ‘commercial activity’ and the definition of the business activity in the Swedish Copyright Act.

Exclusive rights

The second point the Swedish Competition Authority sought to clarify concerned the term ‘exclusive right’, which, contrary to ‘business activity’ has been implemented in Swedish national law in full accordance with the equivalent term in the PSI Directive.Unfortunately, however, the PSI Directive remains silent as to the question whether the ban on exclusive rights catches only arrangements between a public sector body and one other contractor, or whether arrangements that provide rights to more than one (buta limited number) of contractors are also caught.

The report demonstrates that despite the temptation to interpret the term ‘exclusive right’ in Art 11 of the Directive as equivalent to the identical term contained in Article 106 TFEU (thus limiting the scope to the situation where there is one exclusive right holder), therepercussions of this would be contrary to the aims of the Directive and this narrow approach should be avoided. The mention of both special and exclusive rights in Article 3 of the Public Procurement Directive supports this broad definition, especially where the 2009European Commission supporting statement makes reference to tender procedures.

The report also stresses the importance of further guidance to be issued on the interpretation of the terms concerned; a cry for help which apparently has been picked up by Commissioner Ms Neelie Smit Kroes announcing the plans to clarify (and harness) the PSI Directive in the context of the 2012 Review!