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

Monies paid by a Member State to an undertaking entrusted with the operation of a service of general economic interest in order to compensate for the additional costs of obligations resulting from such service do not constitute State aid. The Court of Justice set forth in Altmark  the cumulative conditions which have to be fulfilled to exclude a finding of State aid in cases of compensation for pu …

Principle

Monies paid by a Member State to an undertaking entrusted with the operation of a service of general economic interest in order to compensate for the additional costs of obligations resulting from such service do not constitute State aid. The Court of Justice set forth in Altmark  the cumulative conditions which have to be fulfilled to exclude a finding of State aid in cases of compensation for public burdens:

- the recipient undertaking must have public service obligations to discharge which must be clearly defined;

- the elements for calculating the compensation must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage favoring the recipient undertaking over competing undertakings;

- the advantage must be proportionate in relation to the costs incurred, taking into account the revenues obtained and a reasonable profit for discharging those obligations .

According to the Altmark ruling, when the choice of the undertaking entrusted with the execution of public service obligations is not carried out in the context of a public procurement procedure , the level of compensation required must be determined on the basis of an analysis of the costs which a typical well-run and adequately equipped undertaking would have incurred to perform those obligations, taking into account related revenues and a reasonable profit.  In determining the level of compensation on the basis of an analysis of the costs of a well-run company it is necessary to ensure that the fees paid to the company in question do not cover costs that may result from a lack of efficiency .  

Only the portion of subsidies, exemptions or other type of aid exceeding what is strictly necessary to finance the discharge of the public service may constitute a State aid .

Regulation No 360/2012 sets a de minimis ceiling for State aid granted to undertakings providing services of general economic interest . Aid granted to undertakings providing services of general economic interest which do not affect trade between Member States and/or distort or threaten to distort competition are exempt from the notification requirement provided that the total amount of aid granted for the provision of services of general economic interest received by the beneficiary undertaking does not exceed EUR 500,000 over any period of three fiscal years. Where a Member State intends to grant de minimis aid to an undertaking, it must inform that undertaking in writing of:

- the service of general economic interest in respect of which it is granted;

Prior to granting the aid, the Member State also obtains a declaration from the undertaking providing the service of general economic interest, in written or electronic form, about any other de minimis aid received under the regulation or under other de minimis regulations during the previous two fiscal years and the current fiscal year in order to ensure that the total amount of de minimis aid granted to the same undertaking does not exceed the EUR 500,000 ceiling.

Case C-280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003] ECR I-7747, LawLex200500004593JBJ: public subsidies granted to a private undertaking in order to compensate for the exact cost of discharging a public service do not constitute State aid.

Case C-53/00 Ferring [2001] ECR I-9067, LawLex200500004899JBJ, ECLR, 2003, 561-573, obs. NICOLAIDES: failure to make wholesale distributors liable for the tax on direct sales of medicines does not constitute a State aid where it corresponds to additional costs that they actually incur in discharging their public service obligations and which their competitors do not incur; Case T-274/01 Valmont v Commission [2004] ECR II-3145, LawLex200500004508JBJ: the classification as State aid of a portion of the financing of a public car park of which an undertaking is the main user first entails the examination of whether the undertaking does not bear the cost of opening of the park to the public inconsideration.

Case T-738/17 Syndicat Transport Île de France (STIF-IDF), Judgment of 12 July 2019, LawLex202000000273JBJ, specifying that the fourth Altmark criterion is not satisfied where the applicant merely submits that, insofar as the undertakings established outside the territory of the Île-de-France Region which it selected for the purpose of its comparative cost analysis were subject to a competitive tendering procedure in accordance with the requirements of the Sapin Law, they must automatically be regarded as well-run undertakings without  demonstrating precisely how that procedure and, in particular, the selection criteria used in that respect allowed for a level of competitive tendering comparable to that of tendering procedures for the award of public contracts.

Case C-446/14 Federal Republic of Germany, Judgment of 18 February 2016, not available in English.

See also for a first application of those criteria: Case C-34/01 Enirisorse [2003] ECR I-14243, LawLex200500004598JBJ.

Commission Regulation No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest, L 114/8 of 26 April 2012.

European Competition Law

384. Principle

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384. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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