Keywords

Summary



Keywords

1. State aid – Concept – Measures seeking to compensate an undertaking for the costs associated with its public service mission – Not included – Conditions

(Arts 86(2) EC and 87(1) EC)

2. Competition – Undertakings entrusted with the operation of services of general economic interest – Compensation for the costs generated by the public service mission – Classification as State aid – Not included

(Arts 86(2) EC and 87(1) EC)

3. State aid – Administrative procedure – Possibility for the Commission to base its decision on the information available – Condition – Prior use of power to issue directions to the Member State concerned

(Art. 88(2) EC; Council Regulation No 659/1999, Arts 5(2), 10(3) and 13(1))

4. State aid – Examination of complaints – Obligations of the Commission

(Art. 88(2) EC)

Summary

1. Where a State measure must be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings do not enjoy a real financial advantage and the measure thus does not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, such a measure is not caught by Article 87(1) EC.

For such compensation to escape classification as State aid in a particular case, a number of conditions must be satisfied. First, the recipient undertaking must actually have public service obligations to discharge, and the obligations must be clearly defined. Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favour the recipient undertaking over competing undertakings. Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations. Fourth, where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately equipped so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations.

(see paras 72-73)

2. Where State resources were granted to an undertaking as compensation for additional costs associated with the provision of a service of general economic interest under the conditions laid down in Case C-280/00 Altmark [2003] ECR I-7747, the Commission, if it is not to render Article 86(2) EC entirely ineffective, cannot classify as State aid all or part of the public resources granted, as long as the total amount of those resources remains below the additional costs generated by carrying out the public service mission.

(see para. 74)

3. In the course of the administrative procedure on State aid, the Commission is empowered to adopt a decision on the basis of available information when it is faced with a Member State which fails to comply with its obligation of cooperation and refuses to provide information the Commission has requested from it for the purpose of assessing the compatibility of aid with the common market. However, before taking such a decision, the Commission must comply with certain procedural requirements. In particular, it must order the Member State to provide it, within a time-limit it lays down, with all the documentation, information and data necessary for the purpose of assessing the compatibility of aid with the common market. It is only where the Member State, notwithstanding the Commission’s order, fails to provide the information requested that the Commission is empowered to terminate the procedure and make its decision, on the basis of the information available to it, on the question of whether or not the aid is compatible with the common market. These criteria have been incorporated and delineated in Articles 5(2), 10(3) and 13(1) of Regulation No 659/1999 concerning the application of Article 88 EC.

(see para. 75)

4. The Commission is required, in the interests of sound administration of the fundamental rules of the Treaty relating to State aid, to conduct a diligent and impartial examination of a complaint, which may make it necessary for it to examine matters not expressly raised by the complainant. Moreover, the Commission must check whether the beneficiary of aid has received an actual advantage. Therefore, where State resources are transferred to an undertaking entrusted with providing a service of general economic interest, the Commission cannot overlook the information provided to it by the Member State disbursing the aid in an attempt to show that the applicant had not enjoyed any advantage through public resources and cannot conclude that State aid had been granted without having first checked whether the public resources bestowed an advantage on the recipient.

(see para. 92)