European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

To assess whether a State aid exists when the State acts as a market player and not as a public authority , the Commission applies the concept of market economy operator.  The Communication on the notion of State aid recalls the general principles applicable when applying the market economy operator criterion. Thus, only the benefits and obligations linked to the State's role as an economic operat …

Principle

To assess whether a State aid exists when the State acts as a market player and not as a public authority , the Commission applies the concept of market economy operator.  The Communication on the notion of State aid recalls the general principles applicable when applying the market economy operator criterion. Thus, only the benefits and obligations linked to the State's role as an economic operator are to be taken into consideration, to the exclusion of those linked to its capacity as a public authority. The conformity of a state intervention with market conditions must be assessed ex ante, taking into account the information available at the time the decision to intervene was taken . This conformity can be established directly on the basis of market data specific to the intervention in two hypotheses: - when the transaction is carried out pari passu, i.e. implemented under the same conditions (identical levels of risk and remuneration) by public bodies and private operators in a comparable situation; - when the transaction concerns the sale and purchase of assets, goods and services within the framework of competitive, transparent, non-discriminatory and unconditional offers. Apart from these two hypotheses, conformity with market conditions can be determined using other methods, either a comparative analysis, which generally makes it possible to arrive at a range of possible values established on the basis of a set of comparable transactions, or a commonly accepted standard valuation method, based on “available objective, verifiable and reliable data”.

As part of a discretionary assessment power, the supervisory authority conducts an economic analysis of the facts in order to determine whether a private operator would have adopted similar behavior in the same circumstances . No State aid is involved if resources are made available on terms which a private investor would find acceptable under normal market economy conditions . To rule out State aid, the conduct of a private investor with which the intervention of a public investor pursuing economic policy aims is compared, must be guided by prospects of profitability in the long term  or, at least, within a reasonable period of time . Payment received as consideration by the State should be comparable to that which would be obtained by a private operator under “normal market conditions” . There is no cause to deduce a general obligation for the Commission to define, prior to any analysis of the possible conferral of an economic advantage in favor of one or several undertakings, the market or markets concerned by the State intervention subject to examination under Article 107 TFEU . In all cases, the applicability of the private operator principle does not depend on the means used to place that undertaking at an advantage nor on the nature of the means used . The private operator in a market economy principle applies to the advantage granted to one or more undertakings by the State, either directly or through the intermediary of private undertakings under its control or influence . The Commission cannot deduce the existence of an aid only from the finding that an advantage is for no consideration; it must ascertain whether that behavior corresponds or not to that of a private operator under normal market conditions . It is also required to ascertain whether the measures in question provide the recipient of the aid with a profit margin .

The private investor test is not applicable to an order made by a national court ruling in interlocutory proceedings, granting the appellant interim measures to protect its financial interests which presents, in view of its nature, the context in which it is set, its objective and the rules to which it is subject, the characteristics of a judicial act falling within the prerogatives of public authority of the Member State concerned - Case C-332/18 P Mytilinaios Anonymos Etairia, Judgment of 11 December 2019, LawLex201900001521JBJ.

Case C-763/21 P TUIfly GmbH, Judgment 29 June 2023, not available in English: when examining the compatibility of aid to an airport and airlines, the Commission may, in order to apply the private investor in a market economy criterion, adopt the method of carrying out an ex ante analysis of the profitability of the disputed agreements, as it would have been expected by a private investor at the time each of the agreements was concluded.

Case C-331/20 P Volotea SA v EasyJet Airline Ltd, Judgment of 17 November 2022, LawLex202200009900JBJ, which states that the private purchaser criterion, the counterpart of the private seller criterion, is one of the criteria giving concrete form to the private operator principle in a market economy.

Case T-346/99 Diputación Foral de Álava and others v Commission [2002] ECR II-4259, LawLex200500005046JBJ.

Case T-486/18 RENV Danske Slagtermestre, Judgment of 18 April 2024, .

Case T-778/17 Autostrada Wielkopolska S.A., Judgment of 24 October 2019 , LawLex201900001292JBJ: in assessing the existence of an economic advantage, the Commission is entitled to examine whether the compensation paid to the applicant by the Member State concerned further to the elimination of the double charging of heavy goods vehicles for the use of the same section of road exceeded the compensation obligation imposed by national legislation in favor of the latter as a motorway concession holder, and unduly improved its financial situation.

Case T-778/17 Autostrada Wielkopolska S.A., Judgment of 24 October 2019 , LawLex201900001292JBJ: insofar as no hypothetical, rational private operator would have accepted to pay more than what was required by the national legislation in question and the concession agreement, the conditions of application of the private investor test are not fulfilled.

Case C-42/93 Spain v Commission [1994] ECR I-4175, LawLex200500005057JBJ; insofar as, by granting aid, a Member State pursues, by definition, objectives other than that of making a profit from the resources made available to undertakings, it must be held that those resources are, in principle, granted by the State exercising its prerogatives as a public authority: Case C-579/16 P FIH Holding A/S, FIH Erhvervsbank A/S, Judgment of  6 March 2018, LawLex201800000426JBJ.

Commission Decision No 2000/392/EC of 8 July 1999, Measure implemented by the Federal Republic of Germany for Westdeutsche Landesbank, LawLex200400002589JBJ.

The arm's length principle is a tool enabling the Commission to check if, through the fiscal measure granted to an integrated company, the national authorities accepted a certain level of pricing for intra-group transactions which corresponds to prices that would have been charged under market conditions, Cases T-760/15 and T-636/16 Netherlands (Starbucks), Judgment of 24 September 2019, LawLex201900001131JBJ, adding that in order to determine whether the advance pricing arrangement (APA) concluded between the Dutch tax authorities and the undertaking in question has conferred an advantage on it, it is for the Commission to demonstrate that the methodology for determining transfer pricing established in the APA has led to a reduction in its tax burden and, more specifically, to demonstrate that its level of profit, calculated in application of the transfer pricing method, is reduced to such an extent that it cannot be considered to be a reliable approximation of a market-based outcome; Cases T-755/15 and T-759/15 Grand Duchy of Luxembourg, Judgment of 24 September 2019, LawLex201900001129JBJ, specifying that the arm's length principle is used to establish whether the taxable profit of a company in a group for corporate income tax purposes had been determined on the basis of a methodology that approximated market conditions, so that that company is not treated more favorably under the general corporate income tax system as compared to non-integrated companies whose taxable profit is determined by the market; Case T-613/97 Ufex and others v Commission [2000] ECR II-4055, LawLex200500005209JBJ.

Case C-131/15 P Hotel club Loutraki, Judgment of 21 December 2016, LawLex201600002120JBJ.

Case C-579/16 P FIH Holding A/S, FIH Erhvervsbank A/S, Judgment of  6 March 2018, LawLex201800000426JBJ.

European Competition Law

381. Principle

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381. Principle

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

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