The Impact of Altmark: The European Commission Case Law Responses

Abstract

This chapter analyses the case law of the European Commission in relation to State aid granted to companies entrusted with public service missions following the landmark ruling in Altmark. Klasse shows that the criteria laid down by the CJEU for public service compensation to be free of State aid elements have been met only on rare occasions in the case law. The author notes that this is a consequence of the difficulties the Commission has faced when applying the Altmark test which resulted in a very strict reading by the Commission of the Altmark criteria. According to his interpretation, the 2005 SGEI Package, adopted by the Commission to provide stakeholders with legal certainty on the application of the State aid rules, clarified that the room for financing public service missions without the necessity for Member States to notify the financing to the Commission is rather limited. His chapter charts the Commission’s practice in relation to each of the four Altmark criteria. While the first three criteria are generally considered to be relatively straightforward to apply, his analysis shows that the Commission’s case law has confined the Member States’ room for manoeuvre in relation to each criterion. Even where the Commission acknowledges a margin of discretion on the part of the Member States, which is subject only to review for manifest errors, such as in relation to the definition of a public service mission, it has interpreted its powers widely. Klasse notes that the main challenging factor remains the assessment of the fourth Altmark criterion, according to which, in the absence of a competitive tender, a benchmarking analysis is required. Save for in exceptional circumstances, the benchmarking exercise has never been successful. He argues that it is difficult to reconcile the Commission’s approach emanating from its case law with the jurisprudence of the European Courts.