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The Relationship between Economic Advantage and the Compatibility Assessment in Decisions Not to Raise Objections · Case T-578/17 a&o hostel and hotel Berlin GmbH v Commission (Jugendherberge Berlin) · Annotation by Christopher McMahon

Annotation on the Judgment of the General Court (Sixth Chamber) of 20 June 2021 in Case T-578/17 a&o hostel and hotel Berlin GmbH v Commission (Jugendherberge Berlin)

Christopher McMahon


Keywords: economic advantage, preliminary assessment, compatibility assessment, serious doubts, Article 108(2)

A recent decision of the General Court to annul the Commission’s decision not to raise objections to individual aid for the development of a youth hostel raises important questions about the burden that the Commission must bear in establishing that there are no serious doubts as to the compatibility of the contested measures with the internal market. The case related to a contract between the regional government of Berlin and a non-profit organisation allowing the latter to occupy a site rent-free provided that it developed and operated a youth hostel there. A competing provider of low-cost tourist accommodation that made a complaint regarding the contract applied for the annulment of the Commission’s decision not to raise objections after a preliminary assessment. After dismissing a number of speculative arguments on the admissibility of the action, the General Court annulled the decision due to the Commission’s failure to rule out the existence of serious doubts as to compatibility with the internal market. The decision will require the Commission to tread carefully in refusing to rule on the existence of aid as part of the preliminary assessment, particularly where this relates to uncertainty on the condition of economic advantage. This may limit the ability of the Commission to conserve resources by refraining from identifying and quantifying any economic advantage.

Christopher McMahon is a PhD candidate and Adjunct Assistant Professor at Trinity College Dublin. He is a qualified barrister and holds degrees from Trinity College Dublin and the University of Oxford. For correspondence: <>.


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