SCOTLAND should take a leaf out of Scandinavia’s book and adopt legislation to protect businesses from “unfair” encroachment by the public sector, one of the country’s top competition lawyers has said.
Michael Dean, a partner who heads the competition and regulatory team at legal heavyweight Maclay Murray & Spens, highlighted a “grey area” where existing European rules regarding state aid are difficult to apply.
Those rules, which cover the forms of assistance public or publicly funded bodies can provide, have led to a number of high-profile cases in recent years. In 2012, VisitScotland’s website stopped acting as a third party in taking bookings online. It followed criticism from some bed and breakfast operators.
However, Dean said the state aid rules were not appropriate to many cases where private businesses felt they faced unfair competition from publicly-funded ventures.
“For some businesses that may be struggling already this could see them struggle even further,” Dean said. “Below the state aid rules, there is a gap in the law where there is not a remedy. There is nothing to protect those businesses being undermined by some element of the public sector.
“In a number of countries including the Netherlands, Sweden and Finland, there are specific laws that protect private businesses from unfair competition from the state. In Scotland, there is a very large public sector and from time to time they will overstep the mark and have a negative impact on a private business, where an individual has invested their own capital.”
Dean said any public initiative should demonstrate that it does not damage enterprise.