COMPETITION • EUROPEAN LAW • STATE AID
Since the Altmark ruling, financing provided by a Member State to an undertaking entrusted with the operation of a service of general economic interest [SGEIs] to compensate for the additional costs of obligations arising from it does not constitute State aid. This approach means that the public service obligations of the recipient undertaking must be clearly defined; that the basis for calculating the compensation must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favor the recipient undertaking over competing undertakings; and that the advantage must be in proportion to the costs incurred, taking into account the receipts obtained and a reasonable profit for discharging the obligations.
Where one of the conditions required by the Altmark decision is missing, the application of the competition rules laid down in Article 107 TFEU must not however constitute an obstacle to the performance of particular tasks of undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly, within the meaning of Article 106(2) TFEU. In effect, verification of the conditions laid down in the Altmark judgment, which occurs upstream, must be resolved first i.e. before the examination of the issue of whether the incompatible aid is nevertheless necessary to the performance of the tasks assigned to the recipient of the measure at issue under Article 106(2) TFEU.
Pursuant to Article 106(2), the undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly are subject to the competition rules, insofar as the application of such rules does not obstruct the performance, in law or in fact, of their tasks. A State aid to compensate for the costs incurred by an undertaking for the provision of a service of general economic interest is, according to the Commission, compatible with the internal market, in accordance with Article 106 TFEU, where: i) the public service in question is clearly defined as a service of general economic interest by the Member State, ii) the undertaking is officially entrusted with the provision of that service and iii) the State funding does not exceed the net cost of the public service taking into account other direct or indirect revenues derived from that public service.
