Seite - 14 - in Austrian Law Journal, Band 1/2019

ALJ 2019 Martina Melcher 14 the conditions set out in these instruments are met, a derogation is granted and vice versa. Despite its non-binding soft law nature, the 2011 SGEI Framework is applied by the Commission and the CJEU in the same way as the Decision. Interestingly, neither of the instruments lays down rules regarding the necessity of State aid or explains to what extent the application of the rules on competition would have to obstruct the performance of SGEI. In case law, the ‘necessity requirement’ is referred to occasionally, but generally not assessed at all.72 Evidently, with regard to State aid, the fulfilment of this condition is not questioned. Instead, the Commission focuses on defining criteria to ensure the proportionality stricto sensu and the compliance with the second sentence of Article 106 (2) TFEU (i.e. prohibition to affect the development of trade to such an extent as would be contrary to the interests of the EU). In a nutshell, proportionality is mainly linked with the avoidance of overcompensation. In particular, the compensation need not exceed ‘what is necessary to cover the net cost incurred in discharging the public service obligations, including a reasonable profit’.73 In essence, this condition is a more detailed version of the third Altmark criterion74 – although, the second to fourth Altmark criteria may not be directly relied on in the context of Article 106 (2) TFEU given that they are used to disqualify a compensation as State aid75. By making sure that the undertaking in question receives only as much aid as it needs to discharge the public service obligation, the Commission apparently intends to strike a strictly proportionate balance. An effect on the development of trade that is contrary to the interest of the EU is explicitly addressed and mainly associated with a lack of compliance with Directive 2006/111/EC and EU public procurement rules.76 In addition to the findings regarding the construction of the balancing test, two further observations can be made: First, the rules contained in the SGEI Framework are much stricter and more detailed than in the Decision. The submission to the notification procedure of the services referred to therein also ensures that the Commission may check and evaluate any State aid of economic significance, i.e. any public service compensation surpassing 15 million Euro with the exception of certain privileged areas, such as medical care, health and long-term care, childcare or social housing. At the same time, State aid to SGEI covered by the 2011 SGEI Decision gives the Member States considerable leeway due to the absence of an obligatory notification and less detailed rules regarding compatibility.77 Second, the conditions set out in the 2011 SGEI Decision and Framework do not only ensure a proportionate balancing, but also foster certain ideas of how SGEI should be provided, organized and commissioned. For example, according to para 19 of the 2011 SGEI Framework, aid will be considered compatible only where the responsible authority complies with the EU public procurement rules, thus making the application of these rules a 72 Case C-660/15 P Viasat Broadcasting UK v Commission, ECLI:EU:C:2017:178, para 34; Case C-66/16 P Communidad Autónoma del País Vasco and Itelazpi v Commission, ECLI:EU:C:2017:999, para 55. 73 2011 Commission Decision, Article 5 para 1 with further details; 2011 SGEI Framework, para 21. 74 Equally Case T-289/03 BUPA, ECLI:EU:T:2008:29, para 224. 75 Case C-660/15 P Viasat Broadcasting UK v Commission, ECLI:EU:C:2017:178, para 33; Case C-66/16 P Communidad Autónoma del País Vasco and Itelazpi v Commission, ECLI:EU:C:2017:999, para 56. 76 2011 SGEI Framework para 18, 19 and 51 et seq. 77 See for example the Austrian report under Article 9 (a) to (d) of the SGEI decision, which include the entrustment of obligations regarding the participation of a regional branch of the Austrian Red Cross in disaster prevention and relief as well as the operation of a show garden by Die Garten Tulln GmbH, available at http://ec.europa.eu/competition/state_aid/public_services/2015_2016/austria_en.pdf (last visited Feb. 15, 2019).