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What is Normal?

Phedon Nicolaides


Keywords: Advantage, Normal Costs, Distortion, Competition, Compensation

A question that is often asked is whether companies derive an advantage in the meaning of Article 107(1) TFEU if they receive compensation for the extra costs they incur when they have to provide services as a result of obligations imposed on them by the State. The answer given in the case law is that no advantage is obtained when such compensation satisfies the so-called “Altmark” conditions. Recently, however, the General Court and the Court of Justice have provided contradictory answers in relation to compensation for the extra costs of pension obligations towards former civil servants. While the Court of Justice followed the consistent approach of the case law, the General Court considered that the extra costs incurred by Deutsche Post, the undertaking in question, were not normal because such costs were not borne by other postal operators. This article argues that the reasoning of the General Court is defective or at least incomplete because it failed to take into account the total employment costs of Deutsche Post from employing former civil servants and whether it could have enjoyed other advantages from their employment.
Keywords: Advantage; Normal Costs; Distortion of Competition; Compensation.

Phedon Nicolaides, Professor at the College of Europe and at University of Maastricht. Comments from the editors are gratefully acknowledged. DOI: 10.21552/estal/2017/2/3


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