Public Authority or Economic Activity in the Context of Public Infrastructures

Abstract

The introduction of a more economic approach in State aid control should be viewed as a healthy development. However, before subjecting public spending to the constraints of thorough economic analysis it is necessary to ask whether State aid control is requisite and meaningful at all. A corner stone of this assessment is to determine the dividing line between exercise of public authority and economic activities. In this paper, we raise concerns about the Commission’s recent approach to distinguishing between exercise of public authority and economic activity in the context of general transport infrastructure. The Commission’s approach and notably its new focus on the concept of ‘commercial exploitation’ may overstretch existing Case law and thus the notion of aid. It is concluded that the Commission should return to a more nuanced and specific assessment of each activity when it draws this important line. Keywords: Concept of undertaking; Public authority; Economic activity; General transport infrastructure