Kerstin Rohde, Adrian Roseanu

European State Aid Law Quarterly, Volume 22 (2023), Issue 1, Page 29 - 41

On 8 February 2022, the Commission adopted the Communication ‘A Chips Act for Europe’. It announces the case-by-case assessment directly under Article 107(3)(c) TFEU for semiconductor cases and sums up principles for the compatibility assessment. On 5 October 2022, the Commission approved State aid for STMicroelectronics. It is the first Decision based on Article 107(3)(c) TFEU and the principles of the Chips Act Communication. State aid practitioners are divided on the nature of the Chips Act Communication. It appears like a deviation from the typical soft law instruments that were adopted since SAM. Against this background, this paper deals with the question whether the Chips Act Communication represents a departure from the Commission's practice for its compatibility assessment and therefore favours the semiconductor industry. In this regard, it will assess whether the announced case-by-case assessment directly under Article 107(3)(c) TFEU complies with the Commission’s practice and whether the Chips Act Communication due to its nature is directly applicable. It will then examine the existence of a rule of practice to comprehensively limit the Commission’s discretion by a detailed set of assessment criteria and the admissibility of sector-specific soft law. Keywords: Chips Act Communication; compatibility assessment; limitation of discretion

Christopher McMahon

European State Aid Law Quarterly, Volume 20 (2021), Issue 3, Page 427 - 433

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.

Anna Nowak

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 212 - 221

The evidence requirements in the State aid compatibility assessment are a highly important and practical issue, which however has not been properly discussed until now. Indeed, the relevant provisions of the notification forms and of the acts of soft law do not give clear guidance as to the evidence requirements in the State aid procedure. Furthermore, the Commission is very indulgent towards the evidence provided by the notifying States, especially in the preliminary examination, and thus the evidence requirements are low. Such low evidence requirements do not properly secure the standard of ‘serious doubts’ necessary to open the formal investigation, and increase the risk of errors in State aid decisions. On the other hand, the possibility to tighten up the evidence requirements is limited, due to the ex ante character of State aid control. Keywords: Evidence; procedural law; compatibility assessment.

Kristina Schattat, Natalia Budzynska

European State Aid Law Quarterly, Volume 17 (2018), Issue 3, Page 399 - 411

The compatibility assessment of a State aid measure is about balancing its negative effects on trade and competition in the common market with its positive effects in terms of a contribution to the achievement of well-defined objectives of common interest. One key element for the Commission’s so-called ‘balancing test’ of operating aid under the 2014 Aviation Guidelines is an ex-ante business plan ensuring that the company managing the airport will be able to cover all operational costs as of 2024 at the latest. Another key element for the assessment is the analysis of the catchment area of concerned airports. This article discusses the role of financial and economic analysis and evidence in this balancing test. The Commission Decisions published so far on this type of aid have not included many technical details about the economic and financial analysis of the Commission’s assessment. Neither has the Commission published specific guidance for the Member States on these elements. This article aims to shed light on these aspects by not only reviewing the decisional practice of the Commission but by sharing the practical experience of the authors with helping Member States to receive the Commission’s approval for granting operating aid to regional airports. Keywords: Balancing Test; Compatibility Assessment; Economic and Financial Analysis; Operating Aid; Airport; Infrastructure; Aviation Guidelines 2014; Notification; Business Plan; Operating Funding Gap; Cost of Capital; Catchment Area.