The Concept of State Aid in Liberalized Sectors

Thomas von Danwitz

in Market Integration and Public Services in the European Union

Published in print March 2011 | ISBN: 9780199607730
Published online May 2011 | e-ISBN: 9780191725258 | DOI:

Series: Collected Courses of the Academy of European Law

The Concept of State Aid in Liberalized Sectors

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One of the ways in which states ensure the supply of a universal service is by compensating suppliers, and here the EU's state aids rules have played a crucial part. This chapter focuses on the concept of state aid in liberalized sectors. The starting point is the specific mandate of state aid control, to eliminate selective distortions of competition resulting from specific state intervention, as opposed to the ‘general, far-reaching regulatory mandate to maintain a level playing field’ for all undertakings in the single market, the province of general competition, and indeed free movement law. Cross-subsidization has been recognized as falling within Article 106(2) TFEU (ex Article 86(2) EC) at least since the Corbeau case, in the context of postal services; the development of principles for the application of state aid controls is more recent. It may be that the new legal basis provided by Article 14 TFEU will to some extent replace the instruments hitherto used to address the status and operation of public services in the single market. However, state aid has been and is likely to remain of fundamental importance. The issues raised concern not only the technicalities of cross-subsidization, but also the powers of the European Commission in assessing state aids and the role of the courts (in particular the Court of Justice), and the extent and nature of judicial review of Commission decisions.

Keywords: EU state aids; EU law; universal service; state aid control; cross-subsidization

Chapter.  6703 words. 

Subjects: EU Law

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