Transactions At Market Rates Can Still Confer An Advantage That Constitutes State aid (PART I)

By: Phedon Nicolaides (State Aid Uncovered)

When public authorities purchase goods and services for themselves, it is crucial that they pay a fair market price. Failing to do so would result in an unfair advantage for the sellers. However, a recent ruling on June 14, 2023, by the General Court in the case of Ryanair & Airport Marketing Services v European Commission (T-79/21) emphasizes that even if public authorities pay market prices, they still bestow an unfair advantage by acquiring goods and services they do not genuinely require.

Ryanair and its wholly owned subsidiary, Airport Marketing Services (AMS), sought to challenge Commission decision 2020/1671, which addressed the State aid provided by France to Ryanair and AMS for their operations at Montpellier airport. The Commission deemed this aid incompatible with the internal market.

The State aid took the form of marketing agreements between AMS and the Association for the Promotion of Tourist and Economic Flows (APFTE), a group consisting of public authorities, responsible for promoting the Montpellier region to foreign tourists. The agreements involved advertising the region on Ryanair’s website. While some contracts were put out for tender before being awarded to AMS, the Commission concluded that these agreements did not fulfill a genuine regional need and instead granted a selective advantage to AMS and indirectly to Ryanair…

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