EN Official Journal of the European Union C 334/8

Invitation to submit comments pursuant to Article 1(2) in Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice with regard to the alleged aid granted to Innovation Norway concerning its activities within the market of web infrastructure and related services, as well as possible aid in favour of the RTBs and the DMOs

(2014/C 334/08)

By means of Decision No 300/14/COL of 16 July 2014, reproduced in the authentic language on the pages following this summary, the EFTA Surveillance Authority initiated proceedings pursuant to Article 1(2) in Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (‘Protocol 3’). The Norwegian authorities have been informed by means of a copy of the decision.

By means of this notice the EFTA Surveillance Authority (‘the Authority’) gives the EFTA States, EU Member States and interested parties notice to submit their comments on the measure in question within one month of the date of publication to:

EFTA Surveillance Authority Registry Rue Belliard/Belliardstraat 35 1040 Bruxelles/Brussel BELGIQUE/BELGIË

The comments made will be communicated to the Norwegian authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

SUMMARY

Procedure

By a letter dated 5 July 2013, TellUs IT AS, in the meantime merged with New Mind (‘New Mind | tellUs’, also referred to as ‘the Complainant’), made a complaint to the Authority against Innovasjon Norge AS (‘IN’) in which it alleged that IN was receiving State aid for its commercial activities in the web infrastructure and related services market within the tourism sector.

The Authority has had several exchanges of correspondence with the Norwegian authorities and the Complainant, and has met both parties.

The facts of the case

IN is a limited liability State-owned company established in 2003 by the Norwegian Government through the Act on Innovation Norway (‘Lov om Innovasjon Norge’ (1)). The company was established with the purpose of contributing to innovation of business, development in rural areas and to increase the competitiveness of the Norwegian companies. The promotion of Norway as a tourist destination is also one of IN’s tasks.

IN is intended to promote increased profitability within the various segments of the tourism industry at national level, while the regional tourism boards (‘RTBs’) and destination management organisations (‘DMOs’) are the main actors at regional and local level. The RTBs and the DMOs are undertakings whose shares are owned by the county or local authorities together with private tourism businesses active in their respective geographic areas.

The Norwegian authorities have recently decided to adopt a new tourism strategy in order to render the public support to the sector more efficient, reduce the number of actors and ensure more coordination among them. With these objectives in mind, the Norwegian authorities have proposed a new tourism structure aiming, inter alia, to reduce the number of RTBs and DMOs and to consolidate Norway’s tourism promotion efforts through IN and its webpage visitnorway.com.

In the 2013 Budget letter for IN (2), IN’s tasks in the tourism sector are stated as follows: ‘Innovation Norway is to ensure good distribution of Norwegian travel experiences through visitnorway.com and help to make the players in the tourism industry competent to enter their products into the national booking solution linked to visitnorway.com’. The 2013 Budget letter clarifies that: ‘Innovation Norway shall not offer user paid services that are in direct or indirect competition with private actors. To the extent that Innovation Norway offers services that could have been carried out by a private providers, the price that Innovation Norway ask must reflect the real accrued cost, including what is, covered by the basic costs’.

As a consequence, at this phase of the procedure, the Authority understands that since 2013, the Norwegian authorities have entrusted IN with the mandate to actively promote tourism through visitnorway.com, making of this platform a main actor of the tourism structure. Furthermore, IN is for the first time allowed to enter into economic activities in the tourism sector.

An upstream market from the tourism promotion activity is the supply of web infrastructure and related services. These services enable clients can submit and regularly update information about (e.g.) tourist sites, hotels, restaurants and events simultaneously on their own webpage and on other external channels such as visitnorway.com, Google Maps, tourist information kiosks, mobile portals, as well as printed newspapers.

IN previously had a contract with New Mind | tellUs for the IT services required to operate visitnorway.com. However, IN has developed its own functionalities. IN is furthermore offering those services (i.e web infrastructure and related services) to the RTBs and the DMOs as part of the services provided within visitnorway.com. IN’s web infrastructure and related services are not offered to a general market, but only to the RTBs and the DMOs using visitnorway.com site.

The RTBs and the DMOs contracting with visitnorway.com are discontinuing their own websites and, as a consequence, ending their previous service agreements with private operators (such as the Complainant). According to the Complainant, the end of those websites and agreements is a condition imposed by Innovation Norway on the RTBs and DMOs. The Complainant defines this alleged obligation as a tie-in condition in breach of antitrust law.

The alleged State aid measures

The measures at hand in the decision are the following: (i) the alleged cross-subsidisation of IN’s web infrastructure and related services with funds meant for non-commercial activities; (ii) the alleged profits foregone through the non-profit orientation of IN’s activities, including the web infrastructure and related services; and (iii) the alleged aid granted by IN to the RTBs and the DMOs in form of prices below market price.

Assessment of the measure

Existence of State aid

Article 61(1) of the EEA Agreement reads as follows: ‘Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement’.

The Authority takes the preliminary view that based on the 2013 Budget letter, IN has entered into a new market in competition with private operators, offering services against remuneration. These services fall outside IN’s mandate to promote businesses in Norway. It is likewise the Authority’s preliminary view that providing web infrastructure and related services implies offering economic services on the market. As a consequence, it appears that IN should be considered to be an undertaking for the purpose of State aid rules with regard to those specific services.

The information available at this point in time does not allow the Authority to draw a conclusion on whether the measures at hand entail State aid.

At the current stage of the procedure, the Authority has doubts as to whether the current separation of accounts within IN allows IN to distinguish the costs and revenues related to economic and non-economic activities, in each of its projects, in particular, within the visitnorway.com project. The Authority recalls that when an entity carries out both commercial and non-commercial activities, a cost-accounting system should be put in place to ensure that the commercial activities are not subsidised through State resources allocated to the non-commercial activities.

Furthermore, the Authority notes that any business owner or investor will normally require a return on their investment in a commercial undertaking. However, it is not clear from the available information whether IN obtains such a profit from any economic services it undertakes in providing web infrastructure and related services.

If IN’s price policy does not ensure a sufficient return in capital, taking into account all their direct and indirect costs, the RTBs and the DMOs may also be beneficiaries of State aid because they will be receiving services for less than their real cost.

New aid

The Norwegian authorities argue that if the measures at hand were considered State aid, they would be existing aid pursuant to Article 1(b)(i) or Article 1(b)(v) of Part II of Protocol 3 to the Surveillance and Court Agreement. At this stage of the procedure, the Authority takes the preliminary view that if the measures were considered to be State aid, they would be also classified as unlawful new aid.

Regarding the application of Article 1(b)(i) of Part II of Protocol 3, the Authority takes the preliminary view that IN’s entrance in a new market (i.e. web infrastructure and related services), where private operators are already present, is outside the mandate IN received from the Norwegian Government. Its financing system also appears to be different. IN’s promotion activities are financed by public resources, but the 2013 Budget letter clarifies that the provision of economic services must be financed by the recipients of the services, by means of remuneration. As a consequence, it is the Authority’s preliminary opinion that any aid granted to IN when providing those services should be qualified as new aid.

Finally, the Authority does not consider, at this point in time, that the measure can be declared to be existing aid pursuant to Article 1(b)(v) in Part II of Protocol 3.

Compatibility

The Norwegian authorities have argued that if the measures at stake were to be considered to be new State aid, they would be compatible under Article 61(3)(c) of the EEA Agreement, as aid for the tourism sector. However, the Norwegian authorities have not provided sufficient information to demonstrate their view.

In any event, the Authority currently has doubts as to whether the aid measures correspond to a real market failure and whether they are proportionate.

Regarding the alleged tie-in condition referred to above, the Authority takes the preliminary view that if it exists and is imposed by IN, it might be contrary to Articles 53 or 54 of the EEA Agreement and, therefore, the measures could not be declared to constitute compatible aid in application of the ‘Matra’ case-law (3).

Conclusion

In light of the foregoing considerations, the Authority has doubts as to whether it can be excluded that the measures mentioned above are State aid pursuant to Article 61(1) of the EEA Agreement. The Authority takes the view, at this stage of the procedure, that if the measures were to be defined as State aid, they would be new aid. Finally, the Authority also has doubts as to whether the measures comply with Article 61(3) of the EEA Agreement.

In light of the above, the Authority has decided to open the formal investigation procedure in accordance with Article 1(2) of Part I of Protocol 3 with regard to the alleged aid granted to IN concerning its activities in web infrastructure and related services market, as well as possible aid in favour of the RTBs and the DMOs.

Interested parties are invited to submit their comments within one month from publication of this notice in the Official Journal of the European Union.

(1) LOV-2003-12-19-130. Available at: http://www.innovasjonnorge.no/no/om-oss/lov-om-innovasjon-norge/

(2) The document is available at:

http://www.regjeringen.no/upload/NHD/Vedlegg/Brev/2013_oppdragsbrev_innovasjonnorge.pdf#search=OPPDRAGSBREV®j_oss=1

(3) Case C-225/91 Matra v Commission [1993] ECR I-3203, para. 41. According to this case-law, State aid incorporating conditions which contravene other provisions of EEA Agreement cannot be approved as compatible aid.