Transforming Monopolies: EU-Adjustment or Social Changes?

Abstract

On the internal market in the European Union (EU), supply and demand should meet. The EC Treaty provides that across the whole union economic operators should under equal and undisturbed competition do business with each other, work, invest and produce, and thereby promote the objectives of the union. In an international perspective, it is an advanced form of economic integration between a limited number of countries. The idea is that distribution of production resources and the exploitation of “comparative advantage” in a larger market will create conditions for progress in all the countries involved. Adam Smith’s famous theory that a reasonable person should do what he does best and is most beneficial has thus been transposed to the relations between states. Each member state should concentrate on what best suits the country’s natural resources, climate and labour market. The development of the internal market in the EU has meant that many national barriers to trade that stood in the way of an optimal distribution of production resources now have been eliminated. It has also meant a move towards greater uniformity in terms of national market legislation and economic systems in general. However, the goal is not to achieve complete uniformity. The Swedish monopolies on alcohol, pharmacies and gaming undoubtedly pose difficulties in the way of the completion of the internal market in the EU, as they presuppose to some extent the existence of a nationally protected home market. Monopolies of a commercial character are nevertheless not prohibited under the EC Treaty. According to Article 31 EC monopolies only need to be adjusted in such a way that “no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States”. The gradual adjustment of the Swedish monopolies to the conditions of the EU internal market is illustrative of how far national market rules and financial systems must be uniform in the EU. This chapter is devoted to the question how the Swedish monopolies on alcohol, pharmacies and gaming have been assessed under EC law following Sweden’s accession to the EU. As the European Court of Justice (ECJ) has not yet assessed the gaming monopoly, the ruling of Regeringsrätten (the Supreme Administrative Court) in the case Wermdö Krog, which concerns the compatibility of the Swedish gaming monopoly with EC, is discussed instead. In this context, some judgments of the ECJ relating to other countries’ gaming markets are also discussed. The purpose of the chapter is to show what has happened with the Swedish monopolies since Sweden joined the EU, and evaluate the reasons for this development. Is it a question of a mechanical adjustment to the EU rules or is it rather changes that relate to the general development in society? Finally, the Swedish strategy as an EU member is discussed. Should Sweden act differently in order better to promote Swedish interests in the EU?