In April 2012 the Commission adopted its revised 'de minimis'-regulation for SGEI's. That regulation complements the first three elements of the Commission's revised legislative package pertaining to SGEI's that were adopted in December 2011.
After the seminal judgment in the Altmark case (C-280/00, 24 July 2003), in which the ECJ set out the conditions under which compensation granted to undertakings for discharging public service obligations would not be "state aid", uncertainty existed as to the exact scope and meaning of the so-called 'Altmark conditions'. In response, the Commission adopted a Communication and a Decision setting out its view on the application of the judgment in 2005. The Commission's view has now been updated in the new package. The part of the package adopted in December 2011 consisted of:
- A Communication from the Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest;
- A Commission Decision on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest;
- A Communication from the Commission — European Union framework for State aid in the form of public service compensation.
On 25 April 2012, these documents were supplemented by a Commission Regulation (No 360/2012) on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest
The entire revised package has entered into force.
SGEI's are public service obligations discharged by undertakings which receive compensation for doing so. In short, the newly adopted package provides guidance on the question under what circumstances it can be prevented that such compensation constitutes state aid that may not be compatible with the TFEU.
To that end the Communication on the application of the state aid rules to compensation granted for the provisionof SGEI's clarifies the key concepts underlying SGEI's. The Commission Decision and the Communication relating to the framework for State aid in the form of public service compensation set out in more detail when the compensation granted is compatible with the TFEU. The 'de minimis' Regulation, finally, introduces a threshold below which compensation does not qualify as state aid within the meaning of the TFEU. In brief, this threshold implies that compensation not exceeding (gross) EUR 500,000 over three fiscal years will not be considered state aid.
The revised package provides a summary of the developments in case law and the Commission's thinking on the topic of the state aid regime relating to SGEI's after 2005. For this reason the package is useful when assessing the compatibility of SGEI compensation with the state aid rules. However, the package does not contain clear rules on all relevant aspects of this assessment. Notably no new guidance is provided on the question when a certain activity would qualify as SGEI. This implies that legal uncertainty remains when national courts are asked to apply the state aid rules to SGEI's. This is unfortunate as at the member state level we observe the need of private parties to have the operations of 'public service operators' tested in court, in particular where the SGEI-operators compete with the commercial activities of regular companies. The Commission's hesitance to limit member state discretion when it comes to SGEI's can be understood in the light of the political sensitivity of the topic in European politics. However, wide member state discretion may result in divergence of market conditions within the internal market. Likewise, companies will continue to have difficulty in trying to restore a level playing field on markets where SGEI-operators are active on the commercial market in parallell to their public service activities.