State Aid Uncovered Blog

The principle of res judicata cannot be used to avoid recovery of incompatible State aid.   An update on State aid measures to counter the impact of COVID-19 As of 3 April 2020, the Commission has approved 29 measures submitted by 16 Member States. Article 107(3)(b) is the legal basis for 26 of those measures, while Article 107(2)(b) is the […]

Neither the existence of market failure, nor national laws that designate a service to be in the general interest can replace an official act that assigns to one or more undertakings clearly defined public service obligations.   Introduction The proper definition of public service obligations (PSOs) is an issue that arises with surprising regularity. It is surprising because numerous court […]

A service is classified as an SGEI not only when it is important for citizens but also when the market does not adequately supply it and one or more undertakings are compelled to provide it to specified consumers, in specified areas and on specified terms.   Introduction   The Treaty on the Functioning of the EU and the case law […]

Compensation for public service obligations may be fixed at less than the net extra costs of the provider of the public service to induce it to become more efficient.   Introduction   Every three years the UK determines the compensation it provides to the Post Office Limited (POL) for the extra costs of the public services it provides. Commission decision […]

The compulsory nature of an assigned public mission makes the services covered by the mission different from those provided by market operators for profit.   Introduction The justification of government intervention for the purpose of ensuring delivery of adequate services of general economic interest [SGEI] and the design of measures that compensate providers of SGEI can be very tricky. This […]

Public service obligations may cover both profitable and unprofitable segments of the market.   Introduction 18 January 2017, the General Court delivered its judgment in case T-92/11 RENV, Jørgen Andersen, v European Commission.[1] Mr Andersen appealed against Commission Decision 2011/3 which concluded that public service contracts between the Danish Ministry of Transport and Danske Statsbaner [DSB], the incumbent train operator, contained […]

Providers of public services must keep separate accounts. The parameters for calculating the compensation for the extra costs of public services must be determined in advance. Awards for damages do not constitute State aid. However, no damages can be awarded as a substitute for incompatible State aid.   Introduction It is often asked how compensation measures for public service obligations […]

When Member States impose PSOs they are never allowed to grant even a single euro in excess of the net extra costs of the PSO. That is prohibited for the simple reason that it results in over-compensation.     Introduction The Lexxion seminar on state aid for transport and transport infrastructure that took place in Brussels on 21-22 September (view […]

Even efficient companies will fail the 4th Altmark criterion if their costs are not proven to be comparable to those of a typical and well-equipped undertaking. Public funding of infrastructure is not State aid to users only if access is open to all. Public funding for training to raise social awareness is still State aid if it relieves companies of […]

Security of energy supply can be a service of general economic interest. Avoiding harm to the environment is not one of the principles that underpin the internal market and which may not be violated by State aid measures. Determining whether competition is distorted does not require definition of the relevant markets.   This article examines two apparently different but in […]