Introduction
MeteoServices filed a complaint with the National Competition Authority in Belgium (NCA) against the Belgian Meteorological Institute (KMI) in mid 2004. There has been some progress since then with enquiries focusing increasingly on the usability of the EU Directive on re-use of PSI (Director 2003/98/EG)
In the course of 2006 the Belgian Competition Authority may be the first to apply the rules of the Directive, following the MeteoServices' (MS) complaint). Briefly put, MS claims that that there is no level playing field in the Belgian market for meteorological business alleging that KMI is breaching a number of competition rules, also those imposed under the Directive.
The complaints lodged cover the full spectrum of the Directive's area of operation, being:
Meteorological data are by nature cross border data. However, for the basic national data MS needs to rely on the KMI to a large extent. Being a market where market entry barriers are high and the public sector is the traditional data supplier under its public task, tensions are high in a number of countries. Therefore, the whole meteorological world will be watching the outcome of the Meteo Services case!
2. Justification of choice
The case between MS and KMI is a perfect example where the Directive is likely to have an enormous impact, provided that the market parties exploit the tools offered. MS stands out, as it has reaped the opportunities avant la lettre, requesting the Belgian Competition Authorities to look at the position of the KMI taking into account the (then upcoming) rules to be transposed.
3. Factual description
In markets where the raw data represent substantial value, the tensions to transform and live up to the obligations of the Directive will be significant. This particularly applies to domains where market entry barriers are high and the public sector is the traditional data supplier under its public task, like the market for meteorological data.
In this context, Meteo Services (MS) has lodged a complaint with the Belgian Competition Authorities against the Belgian Meteorological Institute (KMI). Briefly put, MS claims that that there is no level playing field in the Belgian market for meteorological business alleging that KMI is breaching a number of competition rules, such as: misuse of dominant position, dumping practices, [unequal terms] and unfair cross subsidizing. A decision hereon is expected in the course of 2006.
4. Relevance towards the Directive
The complaints lodged cover the full spectrum of the Directive's area of
operation, being:
Furthermore, MS invokes general rules of fair competition: like [gelijke begin posities], claiming that the KMI can avail itself from benefits that are distorting a level playing field like, not having to levy VAT, not having to pay company taxes like taxes on profits and some social security contributions. The KMI does not even have the obligation to make profit nor to publish its results.
It will be extremely interesting to see how the Belgian Competition Authority will apply the rules of the Directive, as it seems to be the first case where public authorities are requested to apply the Directive practically following a complaint lodged.1
5. Conclusions
To Meteo Services the Directive is just the starting point: having rules does not ensure that they are being lived up to. Where commercial practices by public sector bodies have been applied for decades, it is likely that players will not give up their positions without a battle.
Therefore, the fair and full application of the Directive will need to be substantiated through emphasizing monitoring and control, from the inside and the outside. One could think of (really independent) supervisory boards, self regulatory initiatives and external audit obligations and, added on, obligations to exercise full transparency.
Furthermore, the Directive will not reach its goals if the (transaction) costs for seeking redress, including all the hassle and negative implications for the relationship with the public sector organization, will be too high.