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‘Wait a Minute, Mr Postman’: On Universal Service, the Postal Services Directive and the SGEI Framework · Joined Cases C-431/19 P and C-432/19 P Inpost · Annotation by Joris Gruyters and Lennard Michaux journal article

Annotation on the Judgment of the Court of Justice of the European Union (Tenth Chamber) of 17 December 2020 in Joined Cases C-431/19 P and C-432/19 P Inpost Paczkomaty sp. z o.o. and Inpost S.A. v European Commission

Joris Gruyters, Lennard Michaux

European State Aid Law Quarterly, Volume 20 (2021), Issue 2, Page 292 - 297

On 17 December 2020, the Court of Justice brought an end to the Inpost saga, following the compatibility assessment by the Commission – and the subsequent appeal before the General Court – of an aid scheme for universal service obligations in the postal sector. Together, these decisions and judgments provide the opportunity to reflect on three more general issues of State aid law. First, the acceptable calculation method of ‘an unfair financial burden’ should be highlighted, a key notion in the Postal Services Directive. Second, the rules of interaction between non-State aid provisions of EU law and the aid analysis will be revisited. Third, and finally, the connection between the transparency requirements of the SGEI Framework and the public service inquiry has to be clarified.

Performance of SGEI Tasks Cannot, of Itself, Justify an Exemption from the Notification and Standstill Obligations · Case C-445/19 Viasat · Annotation by Alessandra Fratini journal article

Annotation on the Judgment of the Court (Grand Chamber) of 24 November 2020 in Case C-445/19 Viasat Broadcasting UK Ltd. v TV2 Denmark A/S and Kingdom of Denmark

Alessandra Fratini

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 150 - 153

The Court of Justice confirmed the obligation for a national judge to order the payment of illegality interest also where the aid, implemented in breach of Article 108(3) TFEU, has been declared by the Commission compatible with the internal market under Article 106(2) TFEU. By extending the findings in CELF to illegal State aid granted in favour of undertaking entrusted with the operation of services of general economic interest, the Court has clarified that the performance of SGEI tasks cannot, in and of itself, justify an exemption from the notification and standstill requirements under Article 108(3) TFEU.

New Methodology to No Avail? journal article

A Review of the European Commission’s Case Practice Regarding the Net Avoided Cost Methodology Following the 2012 SGEI Package

Mikael K. Lund

European State Aid Law Quarterly, Volume 20 (2021), Issue 2, Page 229 - 239

Seeking to improve cost estimates for services of general economic interest (SGEI), the European Commission in the 2012 SGEI package introduced the new net avoided cost (NAC) methodology for calculating the cost of such services. This article conducts a comprehensive review of the Commission’s case practice with respect to the application of the NAC methodology. The review shows that the Commission has a low threshold for what is considered a ‘duly justified’ reason for not using the NAC methodology. First, the Commission has held that the undertaking performing the SGEI must be known in advance. This effectively means that it cannot be used in conjunction with tenders or public procurement. In practice, the NAC methodology can only be applied where the undertaking is already engaged in the activity in question. Second, the Commission has implicitly established two criteria for when a relevant counterfactual scenario can be defined. These criteria are interpreted strictly, effectively restricting the application of the NAC methodology to very few cases not already covered by sector specific regulation. The implication of these findings is that the introduction of the NAC methodology did not contribute anything substantial to SGEI regulation. Keywords: services of general economic interest; SGEI compensation; public service compensation; net avoided cost; NAC methodology.

Support for Services in the Lithuanian Electricity Sector · Case C-706/17 Achema · Annotation by Lina Barauskaitė journal article

Annotation on the preliminary ruling of the Court of Justice (Fourth Chamber) of 15 May 2019 in Case C-706/17 AB Achema, AB Orlen Lietuva and AB Lifosa v Valstybinė kainų ir energetikos kontrolės komisija, Lietuvos Respublikos energetikos ministerija, UAB Baltpool

Lina Barauskaitė

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 352 - 358

On 15 May 2019, the Court of Justice of the European Union (the CJEU or the Court) rendered a landmark state aid preliminary ruling where it assessed the Lithuanian public interest services (PIS) support measure provided to certain Lithuanian electricity producers. The measure was never notified to the European Commission and was subject to number of court disputes at the national level. The ruling confirms that the PIS support in the electricity sector constitutes State aid. In particular, the Court confirms that PIS funds can be regarded as State resources, since their life cycle (collection, administration and distribution) are strictly regulated and remains under the control of the Lithuanian State. PIS funds are also intended to finance certain services in the electricity sector, constituting a selective advantage. Moreover, due to characteristics of the Lithuanian electricity market, such as existing interconnectors and European Union electricity market liberalisation, PIS scheme is also liable to affect trade between the Member States and distort competition. Finally, the Court also expressed its doubts whether PIS should be defined as service of general economic interest (SGEI). According to the Court, the requirements for SGEI existence are not met. Keywords: Energy; Electricity; State resources; Imputability; Effect on trade; Distortion of competition; SGEI.

The Thin Red Line Between Existing and New Aid: The Buonotourist Case · Case T-185/15 Buonotourist Srl v European Commission · Annotation by Davide Guadagnino journal article

Annotation on the Judgment of the General Court (Second Chamber) of 11 July 2018 in Case T-185/15 Buonotourist Srl v European Commission.

Davide Guadagnino

European State Aid Law Quarterly, Volume 18 (2019), Issue 2, Page 192 - 197

This note offers a detailed overview on the Buonotourist Case (T-185/15), where the General Court confirmed Commission Decision 2015/575 ordering the recovery of the beneficiary’s extra compensation regime. It provides an in-depth analysis of the application of Regulation (EC) 659/1999, highlighting the procedural and substantive aspects relating to the notions of ‘existing aid’ and ‘new aid’. First, the note provides a description of the background to the dispute, focusing on the compensation granted to Buonotourist Srl for the costs occurred in the fulfilment of its public service obligations, as well as the related Commission Decision. Then, the Court’s reasoning is underlined, namely the assessment of the compensatory regime in the light of the exemption established under Article 11 of Regulation (EEC) 1191/69 and the Altmark judgment. The annotation highlights the controversial aspects of the measure, such as the ex post calculation of the compensation and the absence of unilaterally imposed public service obligations, which led to its classification as ‘new aid’. Finally, the author’s opinion is given, focusing on the nature of public service obligations and the applicability of Article 93 TFEU in the case at hand. Keywords: Public transport; SGEI; Compensation; Altmark; New aid.

The Role of Presumptions and the Burden of Proof in Recent State Aid Cases – Some Reflections journal article

Leigh Hancher

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 470 - 488

Until relatively recently, only a handful of State aid cases raised the question of who should discharge the burden of proof. In the past twelve months the issue has begun to surface more regularly. This article examines the role of presumptions in understanding how the burden of proof is allocated in State aid cases before the European courts. Presumptions are a well-established tool in EU competition law. In theory it is for the party alleging that a State aid has been granted — usually the Commission — to show that the State measure confers a selective advantage on the beneficiary. Depending on what ‘hat’ the Member State is wearing when it confers a benefit, the evidentiary burden may shift back to itself to rebut a presumption as to how it has or intends to intervene. This contribution examines the role of presumptions and the allocation of the burden of proof depending on whether the State claims that it acts as a market investor, whether it exercises a public prerogative or whether it arranges the provision of services of general economic interest. Finally, the article briefly considers the burden of proof on third parties, especially in cases where the state authorities have not actively engaged in the rebuttal of a presumption by the Commission.