Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

ECJ’s ruling on France Telecom’s State aid case (Joined Cases C-399/10 P and C-401/10 P)

with 2 comments

Note by Alfonso: As some you may have noticed, I’ve taken an unusually long blogging break from which I’m now back. As every time I’m out of combat, Pablo Ibañez Colomo (who, by the way, has recently been fast-track tenured -major review- at LSE and has just received a major review teaching prize; congrats!) comes up with a replacement post that’s better of what I would’ve written (we have a luxury bench at Chilin’Competition…). A few days ago Pablo sent us this post on France Telecom that we(I)’ve been slow to publish due to the easter holidaus and to to the frenchy’s posting frenzy ;) We leave you with Pablo:

Some readers wll remember that during my short-lived tenure as a substitute blogger a few months ago, I wrote about a pending State aid case involving France Telecom. I guess that at least a fraction on those readers will be interested in knowing that the Court of Justice delivered its Judgment in the case on 19 March.

Unsurprisingly, the judgment is in line with AG Mengozzi’s (very sensible) opinion. The General court annuled the Commission’s decision on grounds that the Commission had not identified a clear link between the advantage deriving from  a shareholder loan offer in favour of France Telecom and the State resources allegedly involved by virtue of the measure. As I argued in my previous post, the Court of Justice takes the view that the General Court’s interpretation of Article 107(1) TFEU would leave outside the scope of the provision measures suh as guarantees departing from market conditions (see paras 107-111). Such measures do not immediately place a burden on the budget of the State, but a ‘sufficiently concrete risk of imposing an additional burden on the State in the future‘. According to the Court, it is sufficient to identfy such a ‘sufficiently concrete risk‘ for State aid rules to come into play.

The broader picture is aguably more interesting than the outcome of this case. As I mentioned in the previous post, the Court of Justice has sided with the Commmission (thereby departing from the analysis of the General Court and the theses advanced y Mmember States) in some key cases revolving around the notion of selectivity. France Telecom, arguably the single most important case of the past years on the notion of State resources, seems to confirm this trend. The old principles of Article 107(1) TFEU case law, if anything, seem more solid following these high-profile disputes

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2 Responses

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  1. I agree that there should be a “sufficiently concrete risk”. However, by lumping together the State’s public announcement and the shareholder loan the Court of Justice missed the chance of clarifying the rules on when the risk associated with such announcements is sufficiently concrete.

    Philipp

    2 April 2013 at 5:28 pm

  2. This is a very complex reading sentence. Not by the case itself, because the measure(s) that supposedly involved a State aid were strange or difficult of understanding (sometime the measure is a financial engineering measure). But the reasoning to hold or not the General Court ruling is. Why? Because in this case, it is a very complicated task probe the link between advantage and state resources.

    I am clearly in disagreeing with the Sloman Neptum Doctrine (only advantages financed directly or indirectly with State recourses are State Aid). Probably I am the only one. But, in this “France Telecom State Aid case”, all we can be in agree that there was a State aid because there was a clear advantage to FT in the French Government “clever” declarations and announcement of shareholder’s loan, but the link with State resources is clearly a metaphysical argument, Why? Because in order to recognize a State aid, we have to probe the link advantage/State resources, and usually it’s -as we can see in this case- very difficult in practice.

    If we would have admitted –as before Sloman case- that the key question is the advantage itself more than the link with State resources, we not only would be able to analyze as State aid many state interventions that are really advantages against the fair trading (for example, a change in a sector regulation in favour of one or more undertakings), but it is not necessary this kind of “artificial” argumentations

    José Antonio Rodríguez Miguez

    3 April 2013 at 3:02 pm


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