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European Commission

Press release

Brussels, 27 June

State aid: the Commission opens an in-depth investigation into the compensation received by SNCM and CMN for the Marseille-Corsica sea link

The European Commission has opened an in-depth investigation to establish whether the compensation received by Société Nationale Corse-Méditerranée (SNCM) and Compagnie Maritime de Navigation (CMN) for operating the sea routes between Corsica and Marseille are in line with EU state aid rules. In particular, the Commission has doubts about the need for and proportionality of the public service obligation and also about the compensation mechanism. The opening of a formal investigation procedure gives interested third parties an opportunity to submit comments on the measures under examination, without in any way prejudging the outcome.

SNCM and CMN are maritime transport operators that operate the route between Corsica and Marseille for the period 2007-2013 under a public service delegation agreement concluded with the Corsican regional authorities and the Corsican Transport Board. At this stage, the Commission does not rule out that the public service compensation received by these undertakings could give them an unfair advantage over their competitors in the internal market, in breach of the EU rules on services of general economic interest (SGEI), see IP/11/1571.

The public service obligation encompasses both the basic service (permanent passenger and freight service) and the additional service (passenger service provided for traffic peaks during holiday periods and the summer season). The French authorities are being asked to demonstrate that there is a real public service need and that the additional service cannot be ensured by market forces alone.

The Commission also questions whether the parameters of the compensation scheme were pre-determined objectively and transparently. It is calling, moreover, for additional information about the compensation actually paid to SNCM and CMN in order to assess whether they have been over-compensated and whether the benefit to them has been correctly determined. Lastly, it will check whether the selection procedure ensured effective and sufficient competition so that the candidate able to provide the services in question at the least cost to the community was actually selected.

If the Commission concludes that the compensation constitutes state aid within the meaning of European competition law, it will then examine the compatibility of the aid with the rules on SGEI, see IP/11/1571.

Background

In 2003, the European Court of Justice (ECJ) ruled on the assessment of public service compensation in the context of EU state aid rules (case C-280/00, Altmark Trans). The ruling set out the four conditions that compensation granted by a Member State to SGEI providers must meet in order not to constitute state aid within the meaning of EU competition law. These criteria are: (i) explicit entrustment of the public service obligation, (ii) objective, transparent and pre-defined conditions for compensation, (iii) no over-compensation and (iv) choice of the least costly provider through an open tender or a level of compensation based on the costs of a typical, well-run company.

Following this ruling, the Commission adopted a package also known as the Monti-Kroes package, specifying the conditions under which compensation for SGEI that did not meet these four criteria could be compatible with the internal market (see IP/05/937). In December 2011, the Commission adopted a revised package (see IP/11/1571).

The Member States enjoy a wide margin of discretion in the definition of services of general interest. The Commission must, however, ensure that public funding granted for the provision of such services does not unduly distort competition in the internal market.

The non-confidential version of the decision will be made available under case number SA.22843 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)


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