The Altmark judgment sets out the cumulative conditions that payments made by a Member State to an undertaking entrusted with the operation of a service of general economic interest to compensate for the additional cost of the obligations arising therefrom must satisfy in order not to constitute State aid:

– the public service obligations of the recipient undertaking must be clearly defined;

– the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner to avoid giving the recipient undertaking an economic advantage over its competitors;

– the advantage must be proportionate to the costs incurred in the discharge of the public service obligations, taking into account the relevant receipts and a reasonable profit.

According to the Altmark ruling, when the choice of the undertaking entrusted with the performance of public service obligations is not carried out in the context of a public procurement procedure, the level of compensation required must be determined on the basis of an analysis of the costs which a typical well-run and adequately equipped undertaking would have incurred to perform those obligations, taking into account related revenues and a reasonable profit.

The conditions of the Altmark ruling, whose sole purpose is to identify a measure as State aid, must be clearly distinguished from the conditions for the application of Article 106(2) TFEU, whose aim is to verify the compatibility of State aid with the internal market.