June 2, 2014


Working Paper. To access the French version, click on the French flag

The "crucial companies" and their regulation

by Marie-Anne Frison-Roche

The document must be referenced at the following address: http://mafr.fr/article/8-reguler-les-entreprises-cruciales/

The expression "regulated company" may appear as an oxymoron : the State  regulates areas (markets, networks, etc.) because of their structural failures, but the State doesn't enter a company that develops its activities autonomously.

But on reflection, it is sometimes necessary to "regulate a company" and this necessity is increasingly imposed. This is imperative if a company absorbs the entire area, because it is a monopoly or because it wants to become the heart of a crucial area, such as Google which has the project to become the future global brain. In a more general way, it is a necessity to  locate businesses which are "crucial", banks are only one example, and organize, beyond supervision, providing direct regulation of such firms.

This regulatory power on critical firms must take the form of attendance of public power and policy within the company itself, so that the state interfere in decisions which social group suffers the consequences.

The control can go beyond this "public presence" to take the form of "public authority", the state ruling as operator. Under such conditions of "cruciality", the neutralization of "public enterprise" by the competition law must cease, the public company must be better recognized as a regulatory instrument in distance with the simple game of competition.

This Working Paper is a thoughtful work that has formed the basis of the conference "L'entreprise régulée" (The regulated company) in the symposium Actualités du droit de l'entreprise, which was held by Professor Alain Supiot, June 12, 2014, at the College de France in Paris.

After the conference, this Working Paper will be reinforced by regular enrichment, depending on the evolution of law and academic publications.

Access the program and access the slides of the conference.

See and hear the conference of 12 June 2014 (in French).

In July 2014, a shorter version without notes and footnotes was published in the Recueil Dalloz.

A shorter version will be published in the collective book published by Editions Dalloz at the beginning of 2015, without scientific apparatus to meet the editorial constraints.
The French version of this Working Paper is avaible by a click on the French flag.
The crucial companies and their regulation
Marie-Anne Frison-Roche
Professor at Sciences Po (Paris)
The expression "regulated company" is at first glance a contradiction, or at least an ellipse.

In fact, and fundamently, one must distinguish the individual and the area in which he or she deploys his/her action, in which he/she exercises his/her freedom of action, in which he/she develops his/her activity. Thus, an agent - whatever he/she is - unfolds in the economic area, the market. It is the activity that develops in this area that triggers the part of the competition authorities qualification of "entreprise." Indeed, to the competition law, an "entreprise" is any entity that has a business proposition for goods or services in a market.

In this way, the competition law neutralizes the agent itself, since it is only approached by his activity. Relying on this affirmation of the economic market theory, the company is a "black box", thus the competition law apprehends the activity and gives relevance as agent behavior, denying legal relevances to the agent itself.

The firm is in addition to protest, including the State, because of the European principle of th capital neutrality, even if the company itself is controlled by the State because the latter  is the owner of equity securities of the corporation, the State is obliged to act as an ordinary shareholder.

So what is going on inside the company ? How are decisions made ? By which way could  a particular interest be maintained or promoted ? The regulatory law doesn't care.

Regulatory Law is concerned with how certain sectors are structured. Indeed, a regulation will be adopted, including the establishment of a regulatory authority, the enactment of regulations, and so on, when it is not possible to let the market work,only  guarded by the  competition authority. This competition authority just  reacts in the case of anti-competitive behavior which has damaged the free functioning of the market (for example, and abuse of dominant position).

The regulation occurs in three situations that havn't the same nature. The first is when an area was previously held by compagnies with exclusive prerogatives and positions. Most often, these exclusive rights are awarded to only one company, so this is a legal monopoly. In most cases, the state has built its own entreprise, using its normative monopoly and deciding at the same time to be the owner of this enterprise. Most often it is a public monopoly. But after this period, by a political decision, or the State itself - for example the UK has decided to solve its problem of public finances by privatizing its companies and correspondingly liberalizing sectors, or an entity with bar on the state, as is the case of France which was compelled to obey the texts of the European Union about certain sectors.

In the later case, the European Commission considered that sectors were organized by public monopolies, not by an "effect of nature," but by the "good pleasure" of the state. This "good pleasure",which others call "sovereignty", had been analyzed by  the European Commission to be an abuse of dominant position. In the 1990s, it forced  member states, particularly France, to exchange the signature of liberalization directives fo relevant sectors (telecommunications, electricity, post office, gas) against a perspective that was acquired from a conviction of abuse of dominant position by the European Court of Justice.

Member states have been obliged to liberalize. But states can't be both those who set the rules and those that act on a sector now facing competitors. Indeed, it is structurally a conflict of interest. From this came the principle that a state can't be both regulator and operator. This is true regardless of the history of the country. Thus, the French Government has chosen to outsource regulation through an administrative regulatory authority which can only be absolutely independent of the government in order to better keep its state-owned  operators now competing with private companies.
But it is not enough to declare the competition for it to happen. It can certainly happen without the law declaring it open, if the technology is involved, as was the case in telecommunications: competition had moved through satellite before the 1998 guidelines legally opened the sector. Internet has the same effect of "creative destruction." But more often, if there is not a wave of innovation, incumbents are so powerful that competition is only written on paper, whereas incomers remain at the door of the industry.

The texts therefore put in place a regulatory system that has the purpose of establishing by "forceps" a future competition system. A regulator is setting up a transitional way to artificially decrease the power of the incumbent, transferring some of its assets to its new competitors, imposing transparency and thus making it vulnerable, and so on. Competition is then the end of regulation, one would like or dream transient. This regulation is asymmetric, that is to say, it mistreats the incumbent in order to actually open the appetite for new entrants.

The telecommunications sector is cited as the most relevant to this regulation. This corresponds to the first range of the Regulation.

A second variety, which has nothing to do with it but can be superimposed on the same sector, refers to the hypothesis of market failures. This is the case in which the adjustment of the supply and demand mechanism, multiple offers and multiple consumers meeting within the market which shows the exact price, cannot function. This may be the mechanism of "economically natural monopoly", such as a transportation system that, when it has been built by an operator, will never be duplicated by another operator, as as profitable for the first as it would be for the second. Mention may be made here of the power transmission networks. It can also be a definitive phenomena of information asymmetry that plagues financial markets. These technical phenomena are in themselves universal and definitive. They therefore justify a permanent regulation.

The permanent regulation, which also takes the form of a regulator with power Ex Ante and Ex Post, which justifies the adoption of regulations, etc., can be superimposed on the first, and will survive it. Thus telecommunications were regulated first of all to actually open up to competition and then because of many market failures, for example relating to networks of civil engineering which circulate communications, definitely regulated by a technical and permanent regulation, the regulator also organizes a permanent but symmetric regulation.

Finally and thirdly, also overlapping the first two types of Regulation, there is a regulation of a political nature because there may be areas that technically could be organized according to the principle of competition between operators competing, but State has decided that it won't happen. With this single statement, it is easy to understand that the competition authorities don't like this third type of Regulation, whereas they promote the first and readily admit the second.

Indeed, the State is par definition in charge of the public good and the quality of life of the people under its care. As such, it will use its regulatory powers and public money to ensure that everyone has access to market of commun goods, even if the consumer isn't solvent. What for? Because of the social contract on which the State is built and laid it. The field of public health or that of culture can justify such an organization, regulation then coming push the competitive mechanism, which naturally excludes the consumer would not be able to provide only the capacity required by the market, e.g. the payment of good or service consumed.

All this is highly controversial and is the subject of very fine provisions. But it's still the area that is regulated, not companies. Using the public  authority, the market structure will be drawn, as monopolistic, or oligopolistic, through the licenses or approvals, but public power doesn't penetrate inside companies that are active in these areas. Just sometimes it looks transparency, through the mechanism of supervision, but we will see infra  that this doesn't amount to a regulation of the company that is the object.

Certainly the regulatory law intended business activities and spends much of its provisions to charge some of the realization of "services of general economic interest ', which is transcoding into Law of European Union  the French " service public ". In the definition that the European Commission itself gives companies charged for such a service of general economic interest, it warrants that the competition law shall cease to apply to such a company as soon as the competition law would impede the performance of the service some still call "public."

But even in this case, this is an analysis of the firm's activities and missions and a exception to the behavior rules.

Thus, when one speaks of "regulated company" at best it makes an ellipse to the "firm whose behavior is regulated," particularly because instead of having the sole purpose of conducting profits, it will target the public good. To do this, it will have means that other companies don't have, such as government subsidies, otherwise, companies are competitive struggle against it, such as the Charge of the Light Brigade, will bring it into bankruptcy, the public good being as pebbles in his pockets.

Yet it is many cases in which the law transforms some sort of companies transparent for looking at the quality of the capital of these corporations by which the enterprise enters the trade by legal tools such as contracts. The law checks the reliability of its leaders, is going to accept them,  intervenes in case of change in control, will produce standards for the internal control of these companies.

Yes, but it is precisely anything other than regulation!

This is called the phenomenon of "supervision".

Thus, in banking and financial areas, companies are supervised, whereas their behaviors in the financial sector is regulated. They are therefore subject to two separate Authorities. To take the example of France, will be the Autorité des Marchés Financiers - AMF (French Financial Markets Authority) that regulate their behavior when they become actors in the financial markets, while it is the Autorité de contrôle prudentiel et de résolution - ACPR  (French Prudential Supervision and Resolution Authority ), which will oversee, looking transparent internal functioning and strength.

The different branches of law and the decisions of the AMF partly fall under the control of the Cour d'appel de Paris , which is a judicial court, while the ACPR can all be challenged before the Conseil d'Etat  (Council of State).
It raises the same institutional translation into European law, because the financial markets are regulated by the European Securities and Markets Authority (ESMA), while banks are supervised by the European Banking Authority (EBA).

Moreover, the regulatory authority lays little or no standards, regulation is the fact the government, whereas supervision standards, organizing governance and ensuring the strength of the actors involved, that is to say, "prudential standards "are issued by the Basel Committee, an informal forum bringing together including all central bankers, and are then taken up by them, ACPR being such a department of the Banque de France  (Bank of France), without legal personality in relation thereto.

Thus, in the simple competitive world, there is no regulation or supervision. Then we see in the second time that certain sectors justify a regulation that, organizing the structure of its area, affects the behavior of agents, the rules don't get inside of them. Finally, and also the circumstances warrant, as an exception, companies become transparent, the public authority to supervise entering it better. This is an exemplary case of banks, the State has to check at the outset and constantly because their strength, being the guarantor of last resort, it may need to refinance drawing on Financial Capability each, through a recapitalization with public funds.

But this description just made and to which we usually stops that quiet time is up. Indeed, the distinction between regulation and supervision, including institutional organization is tangible evidence is wholly inadequate to the reality of things!

Indeed, successive crises, we must put things flat and design some companies as regulated. Not because they belong to the State, because the property is not a title that justifies a specific power, the Court of Justice challenging the theory of a "state-shareholder" which will invoke its sole capacity as owner of the capital to escape the equality operators, but because in fact and in law sometimes it is appropriate that a company is directly regulated.

It should therefore first identify cases where it is appropriate the State regulates a company (I), before examining the modes of regulation used by the State (II ).


The State cannot exercise its powers by displaying only its quality, opening the door of the company and reversing the formula of Louis XIV (“L’Etat, c’est moi”), merely saying: “C’est moi, l’Etat (It is me, I am the State)",  this statement then would be enough to sit on the Board of Directors, to appoint corporate officers, to impose DSES choice, and so on.
However, it may happen that the State should claim to directly regulate an enterprise. The first case in which it is lawful to do so and to stand up to the competition law to do so, not because it is the State in itself

, but because it is required, is the case in which the company "fills the area." In such a case, it should regulate this area and that the company which occupies the whole, then the State  must regulate the company because it is the only way to regulate the area  (A). But this is also true if the company has a key structural role in this area. The situation of the economically natural monopolies is just one example and must be expanded to a class of firms, which is to say the "crucial firms” (B).
It is accepted that some areas may not be satisfied with a single competitive framework that agents of vigilance can activate Ex Post when markets are affected in a significant way, in the three assumptions which have been descripted above. It has been shown, in an introductory way, that there is a methodological confusion between a sector regulation and supervision of operators, but this distinction has a limit.
This limit is tautological: it's when a company absorbs the sector itself. In such a case, when an operator "holds in his hand" a sector, then to regulate the State must regulate the firm itself, because this company is the industry itself. This corresponds to two assumptions. First, the assumption will be presented to the monopolist (1). But that is a given-act. The regulation comes under the Ex Ante, of anticipation, of what is built, what is decided to happen or not to happen. So if it turns out that a company is willing to become a monopoly, while the coveted area  is crucial, we must similarly regulate this firm, and this must be done  before this project would be fulfilled (2).
1 The monopolist
First, one should remember State monopolies (a). Second, one can consider the continuing relevance of the regulation of natural economically monopolies (b).
a. Memories of state monopolies

The State  control of the company which occupies the entire sector is the assumption that France places its political history easily. In fact, it refers to the largest monopolies, for example EDF, France Telecom, SNCF, back when they were public bodies, under direct supervision and direction, governed through both the technical supervision of Ministry of Economy and Industry and the financial supervision of the Ministry of Finance.
Supervision and regulation didn’t differ in the mechanism of guardianship of the public company. Indeed, the company is entirely in the hands of the State, whether in the form of an institution or a corporation whose stock is owned by the State. The State could structure governance of the sector in the firm, which is transparent to the sector it covers.
Thus, in such a case, when the company has a monopoly, it is in terms of "corporate regulation" that should not just be thought in terms of "supervision".

It is not just a question of trying to find the exact words, an outflow of legal preciousness. Because the regulatory Law is much more powerful than the supervision law. As we could had appreciated about legal means of “regulation” and “supervision” in the introduction of this article, the regimes of the two Law aren’t the same. In the supervision Law, the State’s powers are already considerable, but they don’t go beyond power of accreditation, control or sanction. For example, the State cannot sit in place of the managers after the appointment of the latter has been approved. On the contrary, the Regulation, being the structural organization of an area that requires very strong powers, it comes down to the idea of ​​a "Meccano" and then allows for example to make decisions instead of managers, to give orders, to take capital intensive decisions, etc.

b. The Regulation of natural economically monopolies

This not only represents memories of the "good old days" of public monopolies, at a time when the  law of the European Union didn’t raise the competitive principle and didn’t require the liberalization of sectors, forcing States to give up these mechanisms of administrative controls, one technical and the other financial, leaving the State as the regulator of these sectors in certain circumstances, even if it keeps the control of the company.
Indeed, when areas are crossed by economically natural monopolies, as are transportation networks, railways, power transmissions, transportation audiovisual communication, even if the networks are not areas in the strict sense, they form spaces that fills the company itself holding the power to manage this crucial area comprising the essential facility.

Therefore, the law develops requirements from the company which manages critical infrastructure, usually a company in which the State owns the share capital or exercises a decisive influence, that is to say, a "control", far beyond supervision, to reach across the company regulating the area itself.

We can take the example of the electricity transmission network. Economically, it is a natural monopoly. It is an essential infrastructure, with electricity generation,  transport and distribution networks, which must be efficient, available and affordable for competitors and consumers, always internationally interconnected. In France, the management of electricity transmission is entrusted to EDF Transport, a subsidiary 100% owned by EDF, a public company in the form of a private company where a minority share of the capital is placed on the financial market, the majority share being held by the State.
The financial situation of EDF Transport , therefore depends on the transportation charge for the provision of network access price which is provided to eligible final consumers and the money EDF leaves  available to it. Thus, the manager of the transportation network reported publicly in 2012 that he has difficulties to keep the transmission system in good conditions due to financial group decisions decided by EDF.

The fact remains that the regulator, the Commission de Régulation de l’Energie – CRE  (French Commission for Energy Regulation), goes beyond the supervision of the network firm. It really controls it. Indeed, it requires investments. It controls profit margins that its monopolistic position enables it to obtain vis-à-vis its customers, who don’t have alternatives. Moreover, the regulator must validate investment plans.

This notion of "regulation of the company in charge of crucial infrastructure in a regulated sector" is still evident in the area of ​​air. Thus, the French private company, listed since 2012, Aéroports de Paris (ADP), in charge of the Parisian airports, issues a "contrat de régulation (regulatory contract)". This contract is subject to approval by the State. It includes the investment plans, the measures to improve system security and passenger safety. Thereby regulating the company, this is the area which the State regulates. One understands better the judgment ruled by the Tribunal des conflits (French Tribunal of conflicts), ADP , 18 October 1999, by which it was asked that the rules organizing the company which belong to the organization of the public service and the litigation that may arise should be referred to the administrative judge, without being assessed under the competition law. This judgment could be understood because under the firm, it is the area which is regulated by the public Law.

Thus, this assumption isn't only historical but also seeks current situations. We have to push the analysis further, because the regulatory law aims not so much the past and the present to, and more ever the future. That is why this branch of law is essentially political. However, there are areas that are not yet subject to monopolies, but for which some companies have plans to establish monopoly power, a power that should hinder the establishment. Regulation is needed for this sort of company with such a project then.
2 The company aiming to conquer a crucial space
Then we need to explain the general principle (a) and then capture a particular case, almost a textbook case, the Google case (b).
a. The general principle

It may happen that areas are identified as involving critical issues and at the same time companies are seen as having plans to conquer a monopolistic power, or if there is alliance in an oligopolistic fashion .

The first assumption is that in which the conquest is effected by the acquisition of another company, for a takeover. Merger control, which is an integral part of the regulatory law, can intervene to possibly impose conditions, to redesign, or to oppose, the establishment of an empire that would violate a requirement of general economic interest.
For example, when market operator, which have for object to organize financial markets, merge, even though it is a friendly takeover, or when clearing merge, to the extent that they take the money markets, which are essential infrastructures, State, through the competition authorities which function as regulatory authorities, may act Ex Ante and can oppose this increase in power or refuse the entry of a particular non-European foreign actor, for example.

Power of merger control, which was removed to the Minister of Economy in France by the Law of 2 August 2008 sur la modernisation de l’économie (on the modernization of the economy) to be transferred to the Autorité de la Concurrence  (French Competition Authority), an organization which previously just formulated a notice for a ministerial decision of economic policy, is unfortunate, because a competition authority should not exercise Ex Ante powers of economic policy, especially in relation to the imperative of structural autonomy, here the economic and financial autonomy of a  region of the world.
When the New York Stock Exchange (NYSE) merged with Euronext, the European place has lost its technical autonomy from the North American financial markets, especially because the economic and financial interests aren’t identical, in the same way as their banking structures are opposed. Here "Neutrality" worn by the Competition Authorities was harmful, whereas a decision to regulate firms, here financial markets companies, which are the places themselves and thus are comparable to the industry itself, should have been outlet. It is indeed the Finances Minister and not the Competition Authorities to design the future shape of the global banking and financial structures themselves underlying real economy. Only the Government and the Parliament are legitimate to support the future of the social group.

b. The Google case

Moreover, a company deserves attention because it has already made ​​clear its project: it is Google. Of course, Google isn't the only company which transforms people into data. Facebook integrates this transformation in its business plan and has developed in his "science data" and "Academic Center" computer tools to analyze the behavior of Internet users in case of good or bad news. But it is “only” to sell the knowledge of movements of social psychology, not to transform human beings into added, manipulated and predictive data.
Google executives, both those who have the power to decide for the corporation and those who, in care of the company, are responsible for thinking about innovation and the future, wrote a book in which they state what  they are currently building: a "global brain."
To do this, Google offers each of free wonderful tools which allow everyone to find information without paying anything apparently. Who hasn't used this search engine? The Law couldn't understand the behavior of Google because the traditional commercial Law prohibits gratuity. For restitute a legal coherence, in favor for Google and co.,  the North American political discourse has invented as a new and very attractive principle, called the "net neutrality”. It would engender free access, freedom of the world 2.0 ., etc., to allow some companies, and at first Google, to go anywhere to offer all for nothing.

"In exchange for nothing" .The term is misleading. What is given is not money. In exchange, Google receives data. Personal data. Sensitive data. Its computing power, its power of innovation, Google being the largest employer of mathematicians and computer scientists in the world, allowit to build up a stock of metadata. It is with them that Google has already said it is building a "global brain."

Capture information about everyone is now the purpose of Google, a company which has built its business plan on the finding of a pure information economy, whatever its nature, whatever its object, the value being in the data processing. The company doesn’t hide it.
That's why Google took control of Titan in Mars 2014, in order to improve Google map software. Takeovers are strategic moments during which companies are obliged to disclose to the market their plan for the future. The acquisition of a leading global manufacturer of drones makes sense. Let the people make themselves everything they know about themselves or drones will take pictures of people, all coming up metadata.

Moreover, the acquisition by Google in May 2014 of Word Lens, the company which improves the translation of all languages,  permits ​​to make it more efficient Google translation software. The latter is used by all but his growing is due to the users themselves who correct inaccuracies in translation and allow the software to progress without cost, increasing their dependence. This process and this strategy show the idea of ​​a "global brain" progressing methodically and efficiently.
Metadata are the computer equivalents of a brain synapses. When the project of the company will be completely, build, Google will have a complete understanding of what is happening. It will provide – et this is beginning - services such as "decision aids" for those who have to manage people on which information will were combined, which will become the information due to the predictive power of the metadata.

Is it what we want?

They are dictators elected by people expressing their will. Profit companies aren't less to be feared and the enthusiasm of the public for them is analogue to the enthusiasm for a charismatic leader.

Maybe we shouldn't be afraid of machines. Perhaps, we don’t have to stay with the child fears around cartoon Gandahar or distrust of computing embodied by Hal in 2001 Space Odyssey.These stories give us perhaps a reactionary vision of technical progress, a repulsive and fearful face of progress reflex.

But if there is concern for public and private freedoms, Google should be regulated, because its business plan for the future is to occupy all the space in our lives by sucking all the information about them, to cross and derive information on the future of our individual and collective lives: our future health, our future spouse, our future purchases, our future studies, our future children. Google will know.
Google could then sell the future.

Could be a most wonderful power and monopoly?
Customers would rush to the door of the company, became the "global brain", which is to sell the knowledge of the future. Insurance companies would buy. Marketing services would buy. Armies would buy. States would buy. In short, this is the offer which would build the market of the knowledge of the future and Google woulde be the price maker.
Every can at least admit that the idea of human beings as simple data and the idea of the future as a monopolist market are challenging. The crossing of the two leads to the exclusion of the group of "individuals with no future" or even the forced exclusion of "individuals with a statistically dangerous future for the group,".

Do we want that ?

The Law can say No.

The State can say No.  

If the decision is taken to say No, the company whose the project is a monopolistic way to "own the future", wonderful market which is being built in turn into brain, must be regulated.

The law has already taken action to counter such a business plan, which we understand the economic logic, if paranoia is not pushing us to see a political project transparency behind it.

By Google judgment the European Court of Justice, on 13 May 2014, laid under the term "right to be forgotten". Through the invention of a new kind of "right to ...", the Court allows regulators to unite internationally to all crucial search engines to make commitments to them.

But Law should probably go further and make a more general affirmation, namely Law need to regulate crucial firms.
In areas governed just by the rule of competition, economic agents are atomized and the competition law doesn't tying their internal operations, or their property, or even to their market position in itself. Thus, the dominant's position within a company isn't a concern for competition law, which doesn’t address the "dominance", from the moment that there isn't "abusive". The theory of "self abuse , accusation that a company solely because of its market power has a “quasi” abusive behavior", wasn’t retained by the law.

Conversely, the regulatory Law, giving relevance to the structure of areas, attaches consequences to the companies’ power itself, their "dominance", by asymmetric regulation, but mostly organizes specific rules because of their function in sector or because of their activities, if they are essential to the proper functioning of the sector or for the economy as a whole, or of the social group.
Thus we can identify the idea of ​​a "crucial firm”, one which a particular area must have to operate. This is to develop an already proposed through the concept of "critical operator" design. In such a case, a State cannot let such a crucial firm  without control, even more interference. De jure or de facto , in law or in fact, the State regulates the crucial firrm.
The law has already, through a catalog, identify  many "critical firms" (1). But we must go further and design an abstract legal category to which shall be attached a definition. Thus, a a legal regime would be attached and the public authorities could always intervene to regulate a "crucial firm” (2).

1 Critical companies already identified
The crucial firm can distinguish two ways: those negatively crucial (a), the others which are positively crucial (b).
a. The negatively definition of the crucial firm

Banks and financial institutions are crucial firms. They are adopting a negative definition. Indeed, they are systemic or “super-systemic” institutions. This technically means that their particular failure causes the failure of other institutions and the collapse of the financial system as a whole, which brought down the economy.
Therefore, banks are not only monitored but are still regulated. In addition, the European Banking Union, that is built from three Community Rules adopted on November 24, 2010, has not only set up a European system of supervision, but with the new European system of "banking resolution". It allows public power directly to the meccano on the banking and financial market, which is exactly the definition of regulation.

In addition, accounting standards are at once oversight mechanisms, next to the "prudential standards" but also, and above all, investors information standards, next to the auditing standards, which are regulatory standards. Thus, in five years was built a kind of "prudential regulation" on which stood in the West, both in the United States and Europe, the new financial markets.
Especially given the complexité of the système, it isn’t possible to exclude this step forward could also be the nest for the next crisis, but in any case, it shows that banks are obviously companies now not only supervised but regulated, since States are at liberty to inject money, cut heritages, rebuild new banks on the remains of the old, etc.
b. The positive definition of crucial firm
But this is only for the negative definition of "business critical", which must remain because without it all falls apart. In this time a positive definition, the critical enterprise is one whose presence is required for space "works like it should work."

This requirement formulated in a tautological way, this space "functioning as it should it works" through a company refers to the three assumptions described in the introduction of regulation either in a competitive fashion that does not pass spontaneously either on a competitive basis-because it can not technically be otherwise, either on a competitive basis, because the policy is legitimate to separate the competitive principle.
The first regulation, transient and having to end the introduction of competition, the requirement is in the existence of a controller (integrated in the executive or independent of it) and nothing in existence a company that is different. On the contrary, the goal is for companies to be minimally different from each other, so their relationships with each other are "civilized", that is to say, are merely reports of competition.
This then justifies asymmetric regulation, neutral detriment of the public incumbent, until we come to a possible symmetric regulation (assumption of the telecommunications sector). This establishes the requirement of European behavior of the state shareholder neutral, which can only act as an ordinary prudent investor Union.
In the second and third hypothesis, there is quite different. Indeed, in the second case, the market mechanisms are technically and definitively failed. Therefore, in the example of economically natural monopoly, including transport networks, the state should regulate not only the industry but the company that manages such critical infrastructure. It is observed that regulators not only regulate the sector but also directly control such enterprises, particularly through their investment program, preservation of profit margins, etc.
Similarly, in technical and definitive example of information asymmetry, which marks the financial markets, business markets are of critical infrastructure. The state can not simply supervise, nor can not be content with monitoring systemic agents, in the negative sense of the term, such as banks and financial institutions.
We must go further. Looking at the power not only of market operators, private companies, whose capital come increasingly the most important to be listed on these companies and whose shares are listed on themselves them- same, is it reasonable?
If we thought for a moment that the banking and financial industry is autonomous, one might think that the state does not have to dive straight in such enterprises, but firstly it is the debtor's last spring (negative systemic status) and the financialization of the economy that banks and financial market underlies all economic activity which pursues an economic policy designed by the state (positive systemic status).
It is therefore appropriate to ask that if it is a sector operates on a business without which it would not work, which is the positive definition of the critical business, then the state should not settle regulate the sector, nor does it simply must oversee this company to fail not, he must regulate directly to act so that the sector develops in the direction of the common interest.
That's why the regulatory law must dynamically build the abstract category crucial Enterprises, which must be attached this positive definition.

2 The abstract category crucial enterprises to be directly regulated

Once defined the company negatively and positively crucial (a), what about the confrontation of this double definition of positive law (b)?
a. Establishing the definition

It should return to the classical law of the categories and qualifications. If we manage to formulate a definition, then settled a class to which you can attach a legal regime that applies to any legal reality in this category.
One can say that a company is "critical" in a negative way and a positive way. In a negative sense, a business is crucial if his disappearance causes a shock to the industry that endangers the sector itself. In a positive sense, a business is crucial if the proper functioning of the sector depends on the presence of functioning and the behavior of the company.
It is as the positive definition is both more vague and more political than the negative definition. It is also more difficult to be accepted by the European Commission. Indeed, a crucial business must be governed by the state, but here we must distinguish: when "only" negatively crucial support by the State Government company only last as long as the time that systemic risk away from his head (we have observed during the management of the financial and banking crisis and for the release of financial and banking crisis), while when the company is positively crucially, the state presence in the business is sustainable because it is a political project to achieve long-term (eg, preservation of social ties by means of transport or access to knowledge and the link with its own civilization in the world 2.0) ..
However, this permanent state presence where the business is positively crucial also corresponds to a fuzzier and more policy crucialité definition.
However, the concern of social ties, concern for public health, the level of social protection, protection of sensitive data or personal data, even as those on which they are would agree to sell them, are concerns that are often treated by the competition authorities in anti-competitive quibbles.

b. Confrontation of the double definition of positive law
Thus, the European judges, who admitted in the case law of the Court of Justice of the European Union the system of golden shares in companies power transmission, asking that the state should always monitor what happens in such enterprises, laid by a judgment of the Court of First Instance of the European Union du.29 November 2012, banks are businesses "like the others", which does not rely on a load mission of public interest. This is quite unfortunate when one knows the place of banks in a society. Not that they should be the centerpieces on the contrary. It is precisely because of their power, their crucialité, they should not be left solely to competition law, and that the state not only can, but must, so "must" regulate directly.Il est vrai qu'avec le mécanisme de résolution bancaire en cours d'adoption, on y est presque.


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