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

Only undertakings, i.e. autonomous entities exercising an economic activity independent of their legal status and financing method, are liable to benefit from a State aid within the meaning of Article 107(1)  TFEU. The Commission Notice on the notion of State aid  restates that the rules only apply where the beneficiary is an undertaking regardless of its status under national law and whether or n …

Concept of undertaking

Only undertakings, i.e. autonomous entities exercising an economic activity independent of their legal status and financing method, are liable to benefit from a State aid within the meaning of Article 107(1)  TFEU. The Commission Notice on the notion of State aid  restates that the rules only apply where the beneficiary is an undertaking regardless of its status under national law and whether or not it is set up to generate profits provided that the entity in question offers goods or services on a market. The concepts of “undertaking” and “economic activity” are objective notions which derive directly from the Treaty and which depend on factual elements and not on the subjective choices or assessments of national authorities . As a result, the legal status of the entity concerned is irrelevant . Separate entities within a group form an economic entity for the purposes of State aid regulations . The holding of rights of control over legal entities constitutes a first relevant element in the examination of the existence of an economic unity between these entities, but it is also necessary for the parent company to effectively exercise audit by interfering directly or indirectly in the management of its subsidiaries and thus taking part in the economic activity carried out by the undertaking being audited .

The fact that an entity has the prerogatives of public authority to carry out part of its activities does not prevent it from being classified as an undertaking, provided that it carries out other economic activities that can be dissociated from these prerogatives . In the same way, the social function of an organization is not sufficient to exclude it from the scope of application of Article 107(1) TFEU, as only the criteria of economic activity and autonomy are decisive. An entity that carries out both economic and non-economic activities is regarded as an undertaking only with regard to the former . Thus, the fact that payments of retirement pensions can also be made through banks constitutes an indication that the activity of money order operations enabling the payment of retirement pensions may be separable from the national pensions system and constitute an economic activity . Likewise, activities of exploitation of an airport and extension of its infrastructures must be characterized as economic activities, even if they are neither profitable nor carried out by private operators . This is also the case for organizations for the protection of the environment which carry out secondary activities such as the sale of wood, hunting and fishing leases or tourism, insofar as by offering goods and services on competitive markets, they pursue an interest which is separate from their prerogatives as public authorities related to environmental protection . A banking foundation which, owning controlling shareholdings in a banking company, actually exercises that control by involving itself directly or indirectly in the management thereof, or which, in the fields of public interest and social assistance for which it is responsible, is liable to offer goods or services in a market competing with other operators , or an entity created for exercising certain research operations , constitutes an undertaking.  A tax exemption to which a congregation belonging to the Catholic Church is entitled in respect of works on a building intended to be used for activities that do not have a strictly religious purpose, may fall under the prohibition in Article 107(1) TFEU if those activities are economic .

On the other hand, a public body responsible for the prevention of, and compensation for, damage caused to agricultural holdings by natural risks, whose insurance activity relies upon a social mandatory scheme the benefits and contributions for which are set by the national legislature (receipts obtained through a quasi-fiscal charge) is not an undertaking because it does not enjoy sufficient autonomy . The same applies for a banking foundation which does not exercise an economic activity but an activity of management of its assets and use of its proceeds for making grants to not-for-profit bodies operating in the social field  or for an activity consisting of the electronic publication of tender notices and award decisions issued by contracting entities which is, in itself, connected with the exercise of public power  . Similarly, a body involved in the management of a scheme which has a social objective and applies the principle of solidarity under State  supervision could be classified as an undertaking on the ground that other bodies operating in the context of the same scheme  are actually seeking to make a profit .   Indeed, the Commission Notice on the notion of State aid recalls that activities that intrinsically form part of the prerogatives of official  authority and are performed by the State do not constitute economic  activities,  with the exception of cases where a public undertaking carries out an economic activity which can be separated from the exercise of its public powers .

Case C-325/22 TS and HI, Judgment of 19 October 2023, LawLex202400004700JBJ, which, reiterating the principle, specifies that the concept of undertaking is not subject to the occurrence of random circumstances subsequent to the granting of the advantage concerned, such as that which would consist in the use of the property acquired for economic purposes.

Commission Notice on the notion of State aid No 2016/C 262/01, pt 6 et seq.

Case T-347/09 Germany v Commission, Judgment of 12 September 2013, not available in English.

Case C-222/04 Cassa di Risparmio di Firenze and others [2006] ECR I-289, LawLex200800000247JBJ; See also decision in the same case: Commission Decision No 2003/146/EC of 22 August 2002, Measures for banking foundations implemented by Italy, LawLex200600000522JBJ.

Commission Decision No 2003/146/EC of 22 August 2002, Measures for banking foundations implemented by Italy, LawLex200600000522JBJ.

Case C-74/16 Congregación de Escuelas Pías Provincia Betania, Judgment of 27 June 2017, LawLex201700001141JBJ.

Case C-355/00 Freskot [2003] ECR I-5263, LawLex200500004599JBJ.

Case C-687/17 P Aanbestedingskalender BV, Negometrix BV, Judgment of 7 November 2019,  LawLex201900001568JBJ.

Joined Cases C-262/18 P and C-271/18 P Tomat and Loewenthal, Judgments of 11 June 2020, LawLex202100004539JBJ.

Case C-687/17 P Aanbestedingskalender BV, Negometrix BV, Judgment of 7 November 2019,  LawLex201900001568JBJ, which specifies that the “separation” criterion only applies where certain activities of a  public entity do not, as such, form part of the exercise of public powers and must be considered, in isolation, to be economic activities.

Case T-364/20 Denmark, Judgment of 28 February 2024, LawLex202400007941JBJ.

Case C-262-18 P Tomat and Loewenthal, Judgment of 11 June 2020, LawLex202100004539JBJ, for bodies managing a compulsory health insurance scheme with the status of a private limited company; Case T-166/21 Autorità di sistema portuale del Mar Ligure occidentale, Judgment of 20 December 2023, LawLex202300014754JBJ, which held that since the classification of the economic nature of the activity carried out depends solely on the nature of that activity, the legal status of a port manager plays no role in the Commission's assessment.

Case T-216/21 Ryanair DAC, Judgment of 20 December 2023, LawLex202400004760JBJ, which takes up the usual competition law criteria for defining a legal entity and holds that the capital, organic, functional and economic links within a group of companies tend to demonstrate that the holding company effectively exercises audit by interfering directly or indirectly in the management of the subsidiaries and takes part in the economic activity carried out by them.

Case T-494/21 Ryanair DAC, Judgment of 20 December 2023, LawLex202400004761JBJ.

Case T-166/21 Autorità di sistema portuale del Mar Ligure occidentale, Judgment of 20 December 2023, LawLex202400007944JBJ, which considers that the fact that a product or service supplied by a public body and connected with the exercise by the latter of prerogatives of public authority is supplied in return for remuneration provided for by law is not sufficient to classify the activity carried out as an economic activity and the entity carrying it out as an undertaking.

Case C-666/20 P Gesamtverband Verkehrsgewerbe Niedersachsen eV (GVN), Judgment of 24 March 2022, not available in English, finding that a public authority that carries out both economic and non-economic activities can only be classified as an undertaking with respect to its economic activities.

Case C-185/14 EasyPay AD, Finance Engineering AD, Judgment of 22 October 2015, LawLex201500001337JBJ.

Case T-443/08 Freistaat Sachsen and others v Commission, LawLex201100000652JBJ; Case C-288/11 P Mitteldeutsche Flughafen AG, Judgment of 19 December 2012, LawLex201300000038JBJ.

European Competition Law

388. Concept of undertaking

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Les notions juridiques connexes

388. Concept of undertaking

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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