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

The Commission first fixed the conditions for the granting of aid to finance services of general economic interest in a decision addressed to the Member States and a framework document  and subsequently replaced that package - known as the “Altmark package” with the “Almunia” package which has revised the rules on compensation granted for the provision of services of general economic interest . De …

 From the "Altmark" to the "Almunia" package

The Commission first fixed the conditions for the granting of aid to finance services of general economic interest in a decision addressed to the Member States and a framework document  and subsequently replaced that package - known as the “Altmark package” with the “Almunia” package which has revised the rules on compensation granted for the provision of services of general economic interest . Decision No 2012/21 of 20 December 2011, which broadly reproduces the conditions laid down in the 2005 decision, lowers the notification threshold from EUR 30 million to EUR 15 million per year. Where the aid exceeds that threshold, it must be assessed in light of Framework 2012/C 8/03, which applies to compensation falling outside the scope of the decision. 

According to Decision No 2012/21, where the annual amount of compensation granted to undertakings entrusted with the operation of services of general economic interest is less than EUR 15 million, as well as compensation granted in particular to hospitals providing medical care and services meeting social needs , are compatible with the internal market in application of Article 106(2) TFEU  and exempt form the notification requirement pursuant to Article 108, provided that several combined conditions are met:

- an act must specify the public service obligations  and the conditions for calculating the compensation ;

- the amount of the compensation must be in proportion to the costs incurred in discharging the public service obligations ; it includes all the advantages granted by the State or through State resources in any form whatsoever;

- States must ensure that there is no overcompensation.

Framework No 2012/C 8/03, which replaces Framework No 2005/C 297/04, provides that State aid may be declared compatible with Article 106(2) of the Treaty if it is necessary for the operation of the service of general economic interest concerned and does not affect the development of trade to such an extent as to be contrary to the interests of the Union. The aid must concern a genuine service of general economic interest as referred to in Article 106(2) TFEU . It is necessary to establish an entrustment act specifying the public service obligations and the methods of calculating compensation. The duration of the period of entrustment should not exceed the period required for the depreciation of the most significant assets required to provide the SGEI. The aid must comply with rules laid down in Directive No 2006/111 on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings and those relative to  public procurement rules. Where an authority assigns the provision of the same SGEI to several undertakings, the compensation must be calculated on the basis of the same method in respect of each undertaking. The amount of compensation must not exceed what is necessary to cover the net cost of discharging the public service obligations , including a reasonable profit.

Commission Decision No 2005/842/EC of 28 November 2005, Application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, Framework No 2005/C 297/04 of 29 November 2005. The 2005 decision laid down the conditions under which certain types of public service compensations constitute State aid compatible with Article 106(2) and exempts from the prior notification requirement compensations granted to undertakings with an average annual turnover before tax, all activities included, of less than EUR 100 million during the two preceding financial years, and which receive annual compensation of less than EUR 30 million. The framework set the criteria of compatibility of public service compensation granted to undertakings in connection with activities subject to EU rules. The Commission has also published a Guide to the application of the European Union rules on State aid, public procurement and the internal market to services of general economic interest (SGEI). The guide also answers some of the questions most frequently asked by public authorities in the Member States, citizens, civil society organizations and other stakeholders.

Commission Communication No 2012/C 8/02 of 11 January 2012 on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest; Commission Decision No 2012/21 of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest; European Union framework for State aid in the form of public service compensation (2011), OJEU 2012/C 8/03 of 11 January 2012. As for the Altmark package, the Commission published a guide aimed at addressing the questions most frequently asked by public authorities, citizens, civil society organisations and other stakeholders concerning the application to SGEIs of the EU rules, especially those relative to State aid, public procurement and the internal market.

Provided a number of conditions are met, limited amounts of compensation do not affect the development of trade and competition to such an extent as would be contrary to the interests of the Union (recital 9). However, the extent to which a particular compensation measure affects trade and competition depends not only on the average amount of compensation received per year and the sector concerned, but also on the overall duration of the period of entrustment. Application of the decision is thus limited to periods of entrustment not exceeding 10 years (recital 12).

In particular the precise nature and the duration of the public service obligations; the undertakings and territory concerned; the nature of any exclusive or special rights assigned to the undertakings.

Indication of the parameters for calculating, controlling and reviewing the compensation, the arrangements for avoiding and repaying any overcompensation.

Taking into account the relevant receipts and reasonable profit for discharging those obligations, reasonable profit should be determined as a rate of return on capital that takes into account the degree of risk, or absence of risk, incurred. The rate of return on capital should be defined as the internal rate of return that the undertaking obtains on its invested capital over the duration of the period of entrustment. In determining what constitutes a reasonable profit, the Member States should be able to introduce incentive criteria relating, in particular, to the quality of service provided and gains in productive efficiency. Any rewards linked to productive efficiency gains should be set at a level such as to allow balanced sharing of those gains between the undertaking and the Member State and/or the users.           

In particular, Member States cannot attach specific public service obligations to services that are already provided or can be provided satisfactorily and under conditions consistent with the public interest, as defined by the State, by undertakings operating under normal market conditions.

The net cost necessary, or expected to be necessary, is calculated using the net avoided cost methodology - the net cost necessary, or expected to be necessary, to discharge the public service obligations is calculated as the difference between the net cost for the provider of operating with the public service obligation and the net cost or profit for the same provider of operating without that obligation. Where the use of that methodology is not feasible or appropriate, the net cost necessary to discharge the public service obligations can be calculated as the difference between the costs and the revenues for a designated provider of fulfilling the public service obligations, as specified and estimated in the entrustment act. 

European Competition Law

423. From the "Altmark" to the "Almunia" package

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Les notions juridiques connexes

423. From the "Altmark" to the "Almunia" package

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise