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Public Activities on Commercial Markets: The Issue of Cross-Subsidisation

DOI https://doi.org/10.21552/estal/2017/2/6

Michael Honoré


Public authorities are increasingly engaging in economic activities. This may give problems of competitive neutrality, as also highlighted by the OECD. The purpose of this article is to illustrate some of the complex – and often overlooked - State aid issues that may arise when an economic activity is carried out by a public authority, with particular emphasis on the issue of aid (cross-subsidisation) at the level of the public undertaking. It is contended that State aid law is a potent instrument for private operators faced with competing public undertakings, and that State aid law may in fact impose requirements upon public authorities in terms of accounting separation and benchmarking, which go further than the requirements under e.g. the State Aid Transparency Directive and antitrust-law (including Articles 101, 102 and 106 TFEU).
Keywords: Notion of Advantage; Cross-Subsidisation; Public Undertakings; Separation of Accounts; Implied and Unlimited Guarantees.

Michael is partner and head of the State aid department of Bech-Bruun law firm, Copenhagen. Thanks are due to my colleague, Asbjørn Godsk Fallesen, for his invaluable input during the process, and to Koen Van den Casteele and to Antonis Bouchagiar for fruitful discussions on this topic during the EStAL events in Lake Starnberg and Copenhagen, respectively. DOI: 10.21552/estal/2017/2/6

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