Summary: 9. State Aid Law

Read the summary and the most important questions on 9. State aid law

• 2 The prohibition of state aid (Art 107 TFEU)

• 2.1 Structure of the norm

• Article 107 TFEU has three main structures of the norm. What are they?

  • Para 1: principle of incompatibility
    
  • para 2: legal exceptions
  • para 3 discretionary exceptions

• 2.2 Principle of incompatibility

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• What are the six required cumulatively elements of the norm laid down in art. 107 para 1 TFEU?

  • Advantage
    
  • state-related
  • beneficiaries
  • selectivity
  • (threat of) distortion of competition
  • appreciable effect (Affecting trade between MS)

• What does the element 'advantage' mean as norm art. 107 para 1 TFEU?

  • Wide interpretation
    
  • All forms of economic advantage which would not occur under normal market conditions
  • Direct grants
  • Mitigation of burden
  • MS forgoes an appropriate reward

• What is a special case regarding the advantage of economic activity of state as norm art. 107 para 1 TFEU?

  • Acquisition/sale of shares of/to companies; increase/withdrawal of capital/ making business-related decisions
    
  • Assessment by means of private investor test
  • comparison: hypothetical private person acting under normal conditions
  • Transparency Directive!

• What is a special case regarding cross-subsidization as norm art. 107 TFEU?

  • Companies wo have subsidiaries for parts of their activities become active themselves or via their subsidiaries on various relevant markets 
    

  
  
  
  
  
  
  risk that activities principally subject to free competition are supported or expanded by profits or public subsidies from protected areas (distortion of competition)

• What is a special case regarding compensation for services of general economic interest (SGEI) as norm art. 107 TFEU?

  • Problem that SGEI are often not provided under market conditions and therefore require a certain support
  • What is an appropriate compensation of additional costs for provision of non-marketalble service?

• ECJ case C-280/00, judgement of 24 July 2003, Altmark Trans. What were the facts of the case?

  • Granting of licenses for scheduled bus transport services to Altmark Trans
  • Action by competitor: Altmark Trans is dependent on subsidies

  
  
  
  Subsidy for deficit balancing in local public transport as unlawful state aid ?

• ECJ case C-280/00, judgement of 24 July 2003, Altmark Trans. What was the decision of the ECJ?

  Four cumulative criteria for an appropriate compensation – if met: no
  state aid!
  

  • required to discharge clearly defined public service obligations (determination of kind, duration and scope of tasks)

  
  

  • parameters for calculation of compensation are established beforehand in an objective and transparent manner

  
  

  • compensation does not exceed what is necessary to cover all or part of the costs incurred in discharging the public service obligations
    

  
  

  • determination of amount of compensation in the course of a public procurement procedure or on the basis of an analogue market analysis
    

• What is a special case regarding advantage in taxes and parafiscla chargers as norm of art 107 TFEU?

  • Ad taxes:
    
  • problem of differentiated burden of taxes
  • assessment according to systemic coherence
  • Ad parafiscal charges:
  • legally prescribed obligatory contribution 
  • Equivalence of service and reward?

• What does state-relatedness mean acc/ to state-induced ?

  • Wide interpretation of term 'state' 
    
  • private or public bodies denominated or established by the state
  • intermediary of subsidies