State Aid Decisions Research Articles

Contrasting approaches to very highcapacity network regulation and policy: a comparative analysis of France, Portugal, Spain and the UK (2008–2020)

Purpose The purpose of this paper is to examine the factors that may have contributed to different levels of very high-capacity network (VHCN) coverage, with a particular focus on the role of regulation and State aid. Design/methodology/approach A comparative empirical study based on multiple case studies was conducted in France, Portugal, Spain and the UK. Findings Although France, Portugal and Spain initially adopted similar regulatory strategies for VHCN deployment, the outcomes differed significantly. The UK, with a more demanding regulation, achieved a residual coverage. This study highlights the importance of the regulatory approach to VHCN access in balancing private and public investment and emphasizes the importance of State aid in the policy agenda for nationwide VHCN deployment projects. Research limitations/implications Research on complex phenomena, such as the impact of regulation on investment or the effectiveness of State aid procedures, may focus on specific events to the detriment of others, which could bias the results. Practical implications The findings of this study provide insights for policymakers involved in State aid decisions and regulators by understanding the importance of timely State aid interventions, efficient governance and the impact of regulation on investment incentives. Originality/value This paper extends the literature on the impact of regulation on investment incentives and State aid as a tool to complement private investment for VHCN deployment through in-depth case studies.

Access to Environmental Justice under the Aarhus Convention: Evaluating the Contemporary Hurdles for ENGOs in Challenging State Aid Decisions under EU Law

Access to Environmental Justice under the Aarhus Convention: Evaluating the Contemporary Hurdles for ENGOs in Challenging State Aid Decisions under EU Law

Revisiting the standing debate before the EFTA Court through the lens of post-Lisbon EU devlopments regarding locus standi

The Lisbon Treaty broadened and relaxed the standing requirements before the EU Court of Justice by adding a third class of acts amenable to judicial review. In the meantime, the EU has moreover been found in breach of the Aarhus Convention twice for shortcomings in access to justice for environmental organisations. Hence, the Aarhus Regulation, which implements the Aarhus Convention at Union level, was revised in 2021, and possible further amendments with regard to state aid decisions are being examined at the moment. The current standing requirements before the EFTA Court by contrast still reflect the situation prevailing in the European Union before those EU pillar evolutions. This article revisits four judgments of the EFTA Court in light of these developments and analyses how the EFTA Court has dealt with the existing discrepancies before, and might or might not be able to deal with them in the future.

Ochrona środowiska jako cel uzasadniający pomoc inwestycyjną na rzecz portów lotniczych

The goal of this paper is to determine whether and under what circumstances environmental protection can be considered as an objective of common interest justifying investment aid to airports. It begins by presenting the principles for examining the compatibility of investment aid to airports with EU law. In this context, the main focus will be on a comparative analysis of the two guidelines issued by the European Commission on eligibility conditions for such aid. It then outlines the development of the concept of environmental protection in the EU legal order. It also discusses the most important environmental impacts of airports, and methods to reduce the negative effects of their operation. The next section reviews the Commission’s main State Aid decisions on improving the environmental performance of airports, allowing us to draw conclusions on how such investments are assessed in practice. The main goal of this section is to critically examine the Commission’s current approach to assessing pro‑environmental investments at airports. The analysis leads to the formulation of two postulates of de lege ferenda. The first proposes adding a fourth objective of common interest concerning environmental protection to point 84 of the Guidelines on State Aid to Airports and Airlines. The paper then outlines the reasons for this change, which will, in particular, provide an appropriate legal basis for the approval of pro‑environmental State Aid and enhance legal certainty for both aid providers and beneficiaries. It will also reflect how environmental protection is rising up the agenda of the European Union, and help to achieve the objectives of the European Green Deal. The addition of an environmental objective will also aid EU cohesion. The second postulate indicates the need to change the way in which the eligible objectives of investment aid to airports are set out, from points to exemplary. The paper argues that the inclusion of only three eligible objectives of common interest for investment aid to airports leads to a limitation of the scope of Article 107(3)(c) TFEU; it is therefore incompatible with EU law.

Fiscal state aid law as a tool against harmful tax competition in the EU: déjà vu?

Abstract The theme of this article is the relationship between harmful tax competition measures and prohibited fiscal State aid. The aim of this article is to present a targeted examination of the use of State aid rules against national tax measures, eg tax schemes and tax rulings, following the adoption of the EU Code of Conduct for Business Taxation in 1997. The fiscal State aid decisions and judgments to be covered are divided into two parts: the first fiscal aid wave of the (early) 2000s and the second (ongoing) fiscal aid wave, which most notably includes the Apple, Fiat, Starbucks, and Amazon cases. It is argued that an important factor connecting the two fiscal State aid waves is the link they share with the EU’s fight against harmful tax competition.

Judicial Review of the State Aid Decisions on Advance Tax Rulings: A Last Resort to Safeguard the Rule of Law

In this article, the author provides a critical examination of various decisions addressing whether advance tax rulings on intra-group transfer pricing policies granted to multinational enterprises are illegal State aid under articles 107 and 108 of the Treaty on the Functioning of the European Union. Further, the author looks at whether the aid recovery process in these cases could be deemed to be contrary to the EU principles of legal certainty and the protection of legitimate expectations.

European Union and United Kingdom Competition Law Developments in the Aviation Sector: January to June 2021

As a direct result of the Coronavirus disease 2019 (COVID-19) pandemic, and the support measures initiated by EU Member States to compensate airlines for lost revenues, a review of the EU competition law developments the first half of 2021 continues to be dominated by State aid cases. This article summarizes the main developments over the past six months and provides the reader with an overview of the details of each of these developments. The first six months of 2020 have continued to be dominated by State aid cases, be it decisions by the European Commission (‘Commission’) to approve State aid applications, appeals of those or previously decided State aid cases, or the handing down of judgments from the General court. It is to be expected that for years to come, State aid decisions will form a significantly greater part of the competition law diet. In the six-month period, looking only at COVID-19 pandemic related cases/decision: at least sixteen Commission State aid decisions related to compensating undertakings for the direct or indirect effects of the COVID-19 pandemic; twelve Commission State aid decisions were appealed to the General court (mostly by Ryanair); and we are now seeing a significant number of judgments from the General Court relating to some of the Commission’s COVID-19 State aid decisions. In this period, Ryanair scored equal numbers of successful and unsuccessful appeals. Taking a quick look at the State aid applications submitted to the Commission State, a number of measures were submitted under Article 107(2)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), which enables the Commission to approve State aid granted to compensate specific companies or specific sectors for the damages directly caused by ‘exceptional occurrences’. Few could ever contest that the COVID-19 pandemic would not qualify as an ‘exceptional occurrence’ it was an extraordinary, unforeseeable event having a significant economic impact globally. As a result, the interventions by the Member States to compensate for the damages directly linked to the COVID- 19 pandemic were considered justified. The Commission is also empowered to assess State aid measures requested by Member States under Article 107(3)(b) TFEU, which enables it to approve State aid granted to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State. Again, few would dispute that the COVID-19 pandemic caused serious disturbances in the economies of EU Member States. The final main mechanism to consider State aid is the Temporary Framework specifically set up by the Commission to enable the quick approval of State aid providing that the measures fell within defined parameters. In relation to mergers, there are only five mergers mentioned, of which one reference the abandonment out of the Air Canada/Air Transat transaction after an in-depth investigation lasting more than eleven months. It should be noted that as a direct result of commitments regularly imposed by the Commission in State aid decisions under the Temporary Framework, recipients of State aid (like Air France, TUI, Finavia, Riga Airport etc.) are in principle prohibited from acquiring shares in competing or related markets, and this may have a dampening effect on merger activities in the aviation sector.

Access to justice in State aid: how recent legal developments are opening ways to challenge Commission State aid decisions that may breach EU environmental law

Access to justice in State aid matters is very limited. In particular, the admissibility test before the Court of Justice of the EU excludes private parties who are not market operators. The recent CJEU ruling in the Hinkley Point C case and the findings of the Aarhus Convention Compliance Committee call into question the adequacy of the current system. The findings demand an opening for non-market actors, including non-governmental organisations, to allege breaches of EU environmental law by the beneficiary of a State aid measure and consequently, the incompatibility of the aid measure with the internal market.

Commission

This overview highlights the Commission’s (i) presentation of the European Semester Autumn Package, (ii) agreement with G20 Leaders to devise a fair, sustainable and modern international tax system by mid-2021, (iii) launch of a preliminary consultation on administrative cooperation for crypto-assets and e-money, (iv) welcome of the adoption of the EU Long-Term Budget for 2021-2027, (v) status of the infringement procedure regarding Greek inheritance tax rules, (vi) State aid decisions on the Polish State aid scheme and Italian corporate tax exemptions for ports, and (vii) endorsement of implementing decisions on the EU-UK Withdrawal Agreement.

Spanish Professional Football Clubs: How Salient Is the Exact Nature of the Aid? · Cases T-865/16 FC Barcelona v Commission, C-362/19 P Commission v FC Barcelona, T-791/16 Real Madrid CF v Commission, T-766/16 Hércules CF v Commission, T-732/16 Valencia

Five judgments handed down by the General Court (GC), in 2019-20, and by the Court of Justice, in 2021, have clarified aspects of three Commission State aid decisions regarding Spanish professional football clubs, through preferential tax rates applicable to non-profit organisations (Real Madrid, FC Barcelona, Athletic Bilbao, Atletico Osasuna) and land transactions between municipal and regional authorities and private entities (Real Madrid) and financial guarantees offered by public authorities to private entities (Hércules CF, Valencia CF, Elche CF). Not only questions of substance were clarified but also procedural ones. Two GC rulings were appealed to the Court. The specificity of sport (Article 165 TFEU) does not appear to have been instrumental in shaping any of the judgments annotated.

At loggerheads over state aid: Why the Commission rejects aid and governments comply

State aid is of significant importance to EU economies. The Commission is responsible for monitoring that all aid instruments comply with EU law. The present article analyses two questions: Why does the Commission reject aid instruments? How do national governments respond to such rejections? I argue that national governments are more willing to risk conflict with the Commission if perceived corruption and Euroscepticism are high. The Commission anticipates the likelihood of non-compliance when ruling on proposed aid instruments. If it expects non-compliance, the Commission is more likely to reject an aid instrument where its public trust ratings are high. If non-compliance is unlikely, the Commission can focus exclusively on the legal consistency of its ruling. On the empirical side, I test my arguments by analysing all state aid decisions between 2000 and 2018. Most importantly, the results show that state aid is more likely to be rejected, where public trust in the Commission is high.

The Rise of an (Autonomous) Arm’s Length Principle in EU State Aid Rules?

In its recent State aid Decisions, the Commission claimed that an (autonomous) arm’s length principle, independent from the one originating in the OECD framework, is embedded in Article 107(1) TFEU as a tool to ensure the protection of the principle of equality. Considered a novelty, the Commission’s approach has been challenged not only by the appeals submitted from the interested parties but also from a number of practitioners and academics. Although the last words remain still with the Courts, the purpose of this article is to join the debate and bring a personal view on the matter. It therefore reviews the recent State aid Decisions on individual aid in order to determine the potential embedding of an (autonomous) arm’s length principle in European State aid law. Keywords: Fiscal State aid; Arm’s length principle; Tax rulings

The Intersection of EU State Aid and US Tax Deferral: A Spectacle of Fireworks, Smoke, and Mirrors

The Advance Pricing Agreements or transfer pricing rulings granted to U.S. multinationals by Ireland, the Netherlands, and Luxembourg were principally designed to achieve U.S. tax deferral and not EU tax avoidance. Adverse BEPS effects within the European Union would be immaterial in comparison to the deferral of U.S. tax on residual IP-related profits, and would have occurred primarily in countries other than those charged with the granting of unlawful State aid. The Irish, Dutch, and Luxembourgish treasuries have not foregone tax revenues in favor of the U.S. multinationals they allegedly aided, which is a requirement for a finding of prohibited State aid. However, the conduct of these low-tax EU States, which enables the deferral of U.S. tax and facilitates the accumulation offinancial capital within the European Union may benefit such countries possibly at the expense of other EU Member States, and can therefore be viewed as a form of tax competition that is questionable in light of the EU Code of Conduct. Conversely, if the retroactive State aid charges were to prevail, the U.S. Treasury would forfeit its claim over unrepatriated earnings of U.S. multinationals. The significant tax policy implications for both Europe and the United States resulting from the State aid decisions by the EU Commission are explored here in detail.

EU Competition Law Developments in the Aviation Sector: January to June 2017

The first half of 2017 continues to highlight the significant impact of competition law in the aviation sector. This article summarizes the main competition law developments over the past six months and then provides the reader with greater detail of each of these developments. The European Commission (‘Commission’) has cleared a number of mergers and taken a significant number of State aid decisions. It has also re-adopted its 2010 Air Cargo Cartel decision imposing fines on 11 airlines, all of whom are appealing this new decision. In addition, the National Competition Authorities in Italy, Germany and the UK have been involved in merger cases and investigations in the aviation sector. The Commission has also approved new State aid rules applicable to airports and published a draft Regulation which will potentially enable it to challenge anti-competitive behaviour occurring in markets beyond the EU but affecting EU carriers.

State Aid and Tax Rulings – An Assessment of the Selectivity Criterion of Article 107(1) of the TFEU in Relation to Recent Commission Transfer Pricing Decisions

The author, in this article, explores whether or not the European Commission’s approach to the selectivity criterion in its recent State aid decisions in the area of transfer pricing is in line with ECJ case law.

Genentech, Lundbeck, Paramount and Others: A Survey of Cases at the Intersection Between Competition Law and IP Law in the Past Year

This Survey reviews EU competition law developments involving consideration of intellectual property rights in the year to October 2016. The cases reviewed cover: (i) acceptable royalty terms in licences (Genentech v Hoechst, CJEU); (ii) the first judgment by a European Court on ‘reverse’ patent settlements (Lundbeck and related cases, GC); (iii) Commission merger decisions in the TMT and biopharma sectors; (iv) commitments decisions involving obligations to license IP; (v) state aid decisions involving IP issues; and (vi) the Paramount commitments decision in relation to copyright licensing, together with relevant developments in the Commission's e-commerce sector inquiry. In July 2016, the CJEU delivered its first judgment in many years on the compatibility of a patent licensing agreement with Article 101 TFEU. The question referred by the Paris Appeal Court focussed on whether a licensor could legally collect royalties for the entire duration of a licence agreement, even if the licensed patents were found to be invalid or non-infringed.

Is Belgium and Forum 187 v. Commission a Suitable Legal Source for an EU "At Arm’s Length Principle"?

This article revisits the facts and merits of the Belgium and Forum 187 v. Commission judgment of the European Court of Justice. The European Commission refers to this 2006 judgment to justify the use of an at arm’s length principle in its controversial State aid decisions on advance pricing agreements. We will argue that the European Court of Justice did not intend to establish and endorse such principle in this judgment and that the Commission therefore overstretches the impact of this judgment. Keywords: Belgium; Forum 187; Coordination Centres; Advance Pricing Agreements; At Arm’s Length Principle.

European Union Competition Law Developments in the Aviation Sector: January to June 2016

The first half of 2016 continues to highlight the significant impact of competition law in the aviation sector. This article summarises the main competition law developments over the past six months and then provides the reader with greater detail of each of these developments. The European Commission (hereinafter ‘Commission’) has cleared a number of mergers, and taken several State aid decisions. It has also not appealed the Court of Justice’s decision annulling its air cargo decisions, which potentially paves the way for it to take a new decision addressing the deficiencies (after having provided the relevant parties the opportunity to respond to the Commission’s concerns). In addition, the National Competition Authorities in Greece, Hungary, Sweden and the UK have all been involved in mergers and/or behavioural cases in the aviation sector. The UK’s Civil Aviation Authority (which has concurrent competition powers with the UK’s competition authority) has also published a working paper on significant UK and European Union cases having an impact on airport operation services, including in relation to access to facilities and charging for services.

HSH Nordbank v Commission: Action for Annulment by Minority Shareholders Against State Aid Decisions Approving Aid in the Form of a Capital Increase

<i>HSH Nordbank v Commission</i>: Action for Annulment by Minority Shareholders Against State Aid Decisions Approving Aid in the Form of a Capital Increase

The Protection of Competitors under State Aid Law

This article maps out the different tools that competitors have at their disposal to challenge State aid measures. The analysis covers private enforcement (the judicial remedies available before national courts), as well as public enforcement tools (the right to lodge complaints with the Commission, the possibility to submit comments in the course of the Commission’s formal investigation procedure and, eventually, to seek the judicial review of State aid decisions). While conceding that the availability and/or efficacy of some of these tools is limited, the article argues that the opportunities that competitors have to protect themselves against the potentially harmful effects of State aid measures is greater than generally acknowledged. Keywords: Private Enforcement; Complaint; Participation; Standing; Judicial Review.