New report on private enforcement of State aid rules in the EEA

ESA has published a new study on the private enforcement of State aid rules, finding that few private actors make use of the regulations. Revisions are suggested in order to strengthen enforcement in the future.

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Advokatfirmaet Hjort has contributed to the EFTA Surveillance Authority’s (ESA) new Study on the private enforcement of State aid regulations in the EEA, as an addition to Kluge’s analysis of the current status of State aid regulation and practice in Norway.  

The purpose of State aid regulation is to secure fair competition, however the rules have been enforced to a limited extent by private parties. Due to this reason, ESA wanted to map the application of the regulations in order to contribute to strengthening of the enforcement. The Study shows that only a limited number of cases have been issued before national courts during the last 25 years. Possible reasons for the lack of decisional practice can be referenced to include unclear regulations, lack of knowledge within the national courts and that many businesses are unaware of the ability to make use of the regulations.

Since the EEA agreement has been in force for the past 25 years, the study has only found one instance of a decision, the Norwegian Synnøve Finden (2019), wherein a breach was found regarding the stand-still obligation.

The Study further reveals that there are a limited number of cases regarding damages claims resulting from breaches of State aid regulations. Norwegian practice indicates that it may be particularly difficult to prove that one has suffered economic loss following infringements of the regulations.

However, infringements of State aid regulation is more rapidly used as a means to convince the courts of a certain result and to support another claim in cases which do not primarily concern breaches of the State aid regulations. It is pointed out that the Norwegian government has a tendency to use State aid regulations as a “defence”. The regulations are then used to support a particular interpretation of a rule or contract that will lead to illegal State aid. Despite limited practice within the field, it is found that the depth and quality of the analyses of the Norwegian courts have improved during the last couple of years.

Regarding Norwegian legislation and practice,  it is held that “[t]o some extent, the cases identified in the Study also indicate that private actions can be successful, provided that a breach of the standstill obligation can be proven. That being said, the national legal framework is short on detail and lacking in clarity.” The lack of clarity is considered an obstacle to private enforcement for Norwegian courts.

In order to strengthen the enforcement of State aid regulations, the Study suggests that a revision of national regulations should be carried out in all three Member States of the EEA. When revising national regulations it is additionally suggested:

  • That the changes allow for an unequivocal implementation of the standstill obligation, as well as including clear regulation governing the consequences of a breach.
  • Clearer and more detailed procedural rules for private enforcement, and enforcement of recovery.
  • Clarification as to the applicability of the Norwegian statute of limitations.

It is further suggested that ESA contributes to an increased understanding of the regulations on State aid, i.e. through the training of national courts. The Study is available on ESA’s webpage through this link.

In addition, The European Commission has also begun to focus on State aid regulations. It recently published new guidelines for recovery of illegal State aid. The guidance, which seeks to contribute to increased awareness of the ability to succeed in bringing a claim for recovery, also explains in detail how Member States may be provided guidance from the Commission in individual cases dealing with recovery.