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The Notice on the Notion of State Aid: Every Light Has Its Shadow

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The Modernisation of State Aid for Economic and Social Development

Part of the book series: Studies in European Economic Law and Regulation ((SEELR,volume 14))

Abstract

The aim of the Notice on the definition of aid is, according to the European Commission, to contribute to an easier, more transparent and consistent application of the conditions listed in Article 107(1). The Notice sets out a very detailed guide based on the existing case law of the European Court of Justice as well as some Commission decisional practice. This contribution discusses the legal status of the Notice within the hybrid framework of EU State aid regulation and critically analyses the text and specific provisions of the Notice.

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Notes

  1. 1.

    Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union, OJ C 262, 19.7.2016, pp. 1–50. Hereafter ‘Notice on the notion of aid.’

  2. 2.

    Ibid., para 2.

  3. 3.

    Snyder (1995), p. 64 amended during the 6th International Workshop for Young Scholars, Dublin, November 2007.

  4. 4.

    On the concept of hybridity see Trubek et al. (2006).

  5. 5.

    Rawlinson (1993), p. 58.

  6. 6.

    Rawlinson (1993), pp. 56–58.

  7. 7.

    Cini (2001), pp. 192, 200.

  8. 8.

    See on this Snyder (1994).

  9. 9.

    European Commission, State Aid Action Plan: Less and Better Targeted State Aid A Roadmap for State Aid Reform 2005–2009 COM (2005) 107.

  10. 10.

    Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions—EU State Aid Modernisation (SAM) COM/2012/0209 final.

  11. 11.

    See http://ec.europa.eu/competition/consultations/2014_state_aid_notion/index_en.html. The authors have contributed to this process—see Biondi et al. (2014).

  12. 12.

    Curtin et al. (2013), pp. 1, 6.

  13. 13.

    Scott (2011), pp. 329, 336.

  14. 14.

    […] ‘contributing to an easier, more transparent and more consistent application of this notion across the Union.’ Notice on the notion of aid, para 1.

  15. 15.

    See the Special Issue of Revue Trimestrielle de l’Union Europeenne,no 575, Feb 2014, in particular B Bertrand, p. 80.

  16. 16.

    Snyder (1994), pp. 199–201.

  17. 17.

    Hofmann (2006), pp. 169–170.

  18. 18.

    Benz (2000), p. 33.

  19. 19.

    Joined Cases C-189, 202, 205, 208 & 213/02 Dansk Rørindustri and others v Commission ECLI:EU:C:2005:408, para. 211.

  20. 20.

    Judgment in Case C-526/14 Kotnik, ECLI:EU:C:2016:570, para 40; Judgment in Case C-431/14 P Greece v Commission, ECLI:EU:C:2016:145, para 69 and 70.

  21. 21.

    Judgment in Case C-226/11 Expedia, ECLI:EU:C:2012:795, para 28.

  22. 22.

    ‘This Notice only concerns the notion of State aid as referred to in Article 107(1) of the Treaty, which both the Commission and national authorities (including national courts) have to apply in conjunction with the notification and standstill obligations provided for in Article 108(3) of the Treaty.’ Notice on the notion of aid, para. 2.

  23. 23.

    Judgment in Case C-313/90 CIRFS v. Commission, ECLI:EU:C:1993:111, para. 35.

  24. 24.

    Judgment in Case C-242/00 Germany v. Commission, ECLI:EU:C:2002:380, para. 35.

  25. 25.

    Judgment in Case C-311/94 IJssel-Vliet v. Minister van Economische Zaken, ECLI:EU:C:1996:383, para. 37–44.

  26. 26.

    See for a recent example Judgment of the Court in Case C-121/10 Commission v Council ECLI: EU: C: 2013:784, para 52.

  27. 27.

    As summarized also in the Opinion of Advocate General Léger in Case C-382/99 Netherlands v. Commission, ECLI:EU:C:2002:169, para. 47.

  28. 28.

    Judgment in Case C-292/95 Spain v. Commission, ECLI:EU:C:1997:192, para. 30.

  29. 29.

    Judgment in Case C-311/94 IJssel-Vliet v. Minister van Economische Zaken, paras 39 and 40.

  30. 30.

    Jacobsson (2004), p. 359.

  31. 31.

    Finnemore and Toope (2001), pp. 743, 749.

  32. 32.

    Aldestam (2004), p. 14.

  33. 33.

    Further references in Blauberger (2009), pp. 729–730.

  34. 34.

    Blauberger (2009), p. 730.

  35. 35.

    Judgment in Case C-322/88 Grimaldi v. Fonds des maladies professionnelles ECLI:EU:C:1989:646, para. 18; Opinion of Advocate General Ruiz-Jarabo Colomer in Case C-415/07 Lodato Gennaro v. INPS and SCCI ECLI:EU:C:2008:658, para. 37.

  36. 36.

    Judgment in Case 310/85 Deufil v Commission ECLI:EU:C:1987:96, para 22.

  37. 37.

    Judgment in Case C-325/91 France v Commission ECLI:EU:C:1993:245, para 31.

  38. 38.

    Scott (2011), p. 342.

  39. 39.

    Notice on the notion of aid, para. 4.

  40. 40.

    Judgment in Case C-280/00, Altmark ECLI:EU:C:2003:415, para 75.

  41. 41.

    For a discussion and references on EU soft law and judicial precedent see Stefan (2012), pp. 152–154.

  42. 42.

    Paragraph 3 of the Notice on the Notion of aid.

  43. 43.

    See for an attempt to trace such an evolution Biondi and Righini (2015).

  44. 44.

    Judgment in Case C-487/06 British Aggregates Association v Commission ECLI:EU:C:2008:757, para 85.

  45. 45.

    Judgment in Case C-173/73 Italy v Commission ECLI:EU:C:1974:71.

  46. 46.

    Notice on the notion of aid, paras 5 and 200.

  47. 47.

    Judgment in Case T-128/98 Aéroports de Paris v Commission, ECLI:EU:T:2000:290, confirmed on appeal in Judgment in Case C-82/01 P Aéroports de Paris v Commission, ECLI:EU:C:2002:617 and Judgment in Case C-288/11 P Mitteldeutsche Flughafen AG and Flughafen Leipzig-Halle GmbH v Commission, ECLI:EU:C:2012:821; see also Judgment in Case C-518/13 Eventech v The Parking Adjudicator, ECLI:EU:C:2015:9. See in general Papandropoulos and Righini (2016).

  48. 48.

    Mitteldeutsche Flughafen AG and Flughafen Leipzig-Halle GmbH v Commission, C-288/11 P, ECLI:EU:C:2012:821, para 62 and ss.

  49. 49.

    Notice on the notion of aid, para 209.

  50. 50.

    Judgment in Case C-524/14 European Commission v Hansestadt Lubeck, ECLI:EU:C:2016:971.

  51. 51.

    See  Commission Regulation (EU) 2017/1084 of 14 June 2017 amending Regulation (EU) No 651/2014 as regards aid for port and airport infrastructure, notification thresholds for aid for culture and heritage conservation and for aid for sport and multifunctional recreational infrastructures, and regional operating aid schemes for outermost regions and amending Regulation (EU) No 702/2014 as regards the calculation of eligible costs, OJ L 156, 20.6.2017, p. 1–18.

  52. 52.

    Judgment in Case 730/79 Philip Morris  ECLI:EU:C:1980:209.

  53. 53.

    Judgment in Joined Cases C-197/11 and C-203/11, Libert and others, ECLI:EU:C:2013:288 and case law cited.

  54. 54.

    Commission Decisions on State aid cases in N 258/2000 Leisure Pool Dorsten (OJ C 172, 16.6.2001, p. 16).

  55. 55.

    Case C-494/06 Commission v Italy and Wam, ECLI:EU:C:2009:272, para. 62.

  56. 56.

    Judgment in Joined Cases T-515/13 and T-719/13, Spain and others/Commission ECLI:EU:T:2015:1004.

  57. 57.

    Notice on the notion of aid, para 196. Same criteria are also applied for infrastructure and SGEI. For a criticism see Sanchez-Graells (2016), pp. 157–187.

  58. 58.

    Judgment in Case C-518/13, Eventech v The Parking Adjudicator, ECLI:EU:C:2015:9, para 66.

  59. 59.

    Ibid., para 71.

  60. 60.

    AG Whal speaks of a ‘rebuttable presumption on effect of trade’. Opinion of  Advocate General Wahl in Case C-518/13, Eventech, ECLI:EU:C:2014:2239, para. 85.

  61. 61.

    Judgment in Case C-20/03 Criminal Proceedings against Burmanjer, van der Linden and De Jong ECLI:EU:C:2005:307; Judgment in Case C-212/06 Government of the French Community and Walloon Government v Flemish Government ECLI:EU:C:2008:178.

  62. 62.

    Biondi et al. (2014), 9.1.

  63. 63.

    Judgment in Case C-400/08 Commission v Spain ECLI:EU:C:2011:172, para 62.

  64. 64.

    Judgment in Case C-147/03 Commission v Austria ECLI:EU:C:2005:427, paras 64–66.

  65. 65.

    Resolution of the Council and the representatives of the Governments of the MS, meeting within the Council on a code of conduct for business taxation [1998] OJ C2/2.

  66. 66.

    See Commission Decision of 21 October 2015 in Case SA.38374, Starbucks, JOCE L/83/2017, Commission Decision of 21 October 2015 in Case SA.38375, Fiat, JOCE L/351/2016, Commission Decision of 11 January 2016 in Case SA.37667, excess profit exemption state aid scheme, JOCE L/260/2016, all cases are under appeal.

  67. 67.

    See Commission Decision of 30 August 2016 in Case SA.38373, JOCE L/187/2017.

  68. 68.

    Notice on the notion of aid, para. 170.

  69. 69.

    Ibid., para. 172.

  70. 70.

    For a detailed analysis see P. Nicolaides at http://stateaidhub.eu/blogs/stateaiduncovered/post/6919 [consulted 20/11/2016].

  71. 71.

    Judgment of the Court of Justice in Joined Cases C-182/03 and C-217/03, Belgium and Forum 187 v Commission ECLI:EU:C:2006:416.

  72. 72.

    Ibid., paras 94–97 That method of assessment of taxable income is based on the so-called cost-plus method recommended by the Organisation for Economic Cooperation and Development (OECD) for the taxation of services provided by a subsidiary or a fixed establishment on behalf of companies belonging to the same international group and established in other States. In order to decide whether a method of assessment of taxable income such as that laid down under the regime for coordination centres confers an advantage on them, it is necessary, as the Commission suggests at point 95 of the contested decision, to compare that regime with the ordinary tax system, based on the difference between profits and outgoings of an undertaking carrying on its activities in conditions of free competition. In that regard, the staff costs and the financial costs incurred in cash-flow management and financing are factors which make a major contribution to enabling the coordination centres to earn revenue, inasmuch as those centres provide services, particularly of a financial nature. Accordingly, the effect of the exclusion of those costs from the expenditure which serves to determine the taxable income of the centres is that the transfer prices do not resemble those which would be charged in conditions of free competition. It follows that such an exclusion confers an economic advantage on the centres.

  73. 73.

    The interpretation of such a criteria created several problems for the ECJ itself. See in general Prek and Lefevre (2012), p. 335.

  74. 74.

    Notice on the notion of aid, para. 121.

  75. 75.

    Judgment in Case T-219/10, Autogrill España/Commission ECLI:EU:T:2014:939, para 60.

  76. 76.

    Judgment in Joined Cases C-20/15 P and C-21/15 P, Commission v World Duty Free Group and Others ECLI:EU:C:2016:981.

  77. 77.

    See also the recent judgment in appeal in  Joined Cases C-66/16 P to C-69/16 P Comunidad Autónoma del País Vasco and Others v European Commission ECLI:EU:C:2017:999. The ECJ itself is not always consistent. In other judgment the Court seems to have embraced a rather restrictive interpretation of the selectivity criteria as it held that the requirement as to selectivity ‘must be clearly distinguished from the concomitant detection of an economic advantage, in that, where the Commission has identified an advantage, understood in a broad sense, as arising directly or indirectly from a particular measure, it is also required to establish that that advantage specifically benefits one or more undertakings.’ Judgment in Case C-15/14,  Commission / MOL (C-15/14 P) ECLI:EU:C:2015:362. See also Judgment in Case C-524/14 Hansestadt Lubeck, cit. supra, decided on the same day as the Autogrill case, where the Court adopted a narrow interpretation on selectivity.

  78. 78.

    Judgment in Case C-226/11 Expedia, ECLI:EU:C:2012:795, para 29.

  79. 79.

    Scott (2011), pp. 344–348.

  80. 80.

    Snyder (1994), p. 216.

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  1. Centre of European Law, King’s College London, London, UK

    Andrea Biondi & Oana Stefan

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  1. Andrea Biondi
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Correspondence to Andrea Biondi or Oana Stefan .

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  1. University of Milan, Milan, Italy

    Bruno Nascimbene

  2. Faculty of Law, University of Milan, Milan, Italy

    Alessia Di Pascale

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Biondi, A., Stefan, O. (2018). The Notice on the Notion of State Aid: Every Light Has Its Shadow. In: Nascimbene, B., Di Pascale, A. (eds) The Modernisation of State Aid for Economic and Social Development. Studies in European Economic Law and Regulation, vol 14. Springer, Cham. https://doi.org/10.1007/978-3-319-99226-6_3

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