The prohibition of state aid ( TFEU) - Principle of incompatibility
5 important questions on The prohibition of state aid ( TFEU) - Principle of incompatibility
ECJ case c-379/98, judgement of 13 March 2001, PreussenElektra. What were the facts of the case?
- German electricity supply undertakings are obliged to purchase the electricity produced in their area of supply from renewable energy sources
- Legally fixed purchase price (higher than market price for electricity!)
- Schleswag AG – the majority of its shares being held by PreussenElektra – was obliged by this provision
- Duty of PreussenElektra as upstream network operator to contribute to the additional costs
State id in factuur of producers of energy from renewable sources?
ECJ case c-379/98, judgement of 13 March 2001, PreussenElektra. What was the decision of the ECJ?
- Legal obligation as such not sufficient
- Direct or indirect transfer of State resources to undertakings required
- here: eco-electricity contribution is transferred by the conventional electricity undertaking directly to the eco- electricity undertaking
- Mere shifting of burden between private entities does not constitute state aid! Economically doubtful and controversial.
What does the term 'beneficiaries' mean as principle of incompatibility in art. 107 para 1 TFEU?
- Undertakings
- every entity engaged in an economic activity, regardless of legal status or financing
- offering goods/ gains of profits
- sectors of production (economic sectors)
- End-consumer?
- shifting the burden: indirect advantage for undertakings.
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What does the term 'selectivity' mean as principle of incompatibility in art 107 para 1 TFEU?
- Addresses must be sufficiently determinable
- substantial or territorial selectivity
- selection by laying down criteria in law or in course
- NOTE: GENERAL MEASURES OF ECONOMIC POLICY ARE NOT COVERED
- wide interpretation by ECJ!
What does the term 'threat of distortion/appriecable effect' mean in principle of incompatibility in art 107 para 1 TFEU?
- Distortion of competition
- effect of aid on competition between undertakings on respective product market
- affects trade between MS
- cross-border element
- De-minimis-Regulation (Reg 1407/2013)
- exemption from duty to notify (Art 108 para 3 TFEU) for all aid granted to companies of up to € 200.000 within three fiscal years
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