24 July 2003, Almark GmbH and Gegierhngzpräsidium Magdeburg v/ Nahverkehrsgesellschaft

Case C-280 / 00 (2003), ECR I-7747.

To read the decision, click here.

The Court of Justice of European Communities held in its judgmet Almark  the four conditions required for the compensation paid by the State to enterprise in charge of a public service are not state aid prohibited.

It does not matter that the company is public or private.

The company charged by the state of general economic interest must be clear and precise obligations.

The ruling added that the parameters of the compensation must be established in advance, in an objective and  objective and manner.

The public service compensation must not exceed the costs, plus a reasonable profit.

The cost analysis must be done in reference to an undertaking, well run and adequately provided with the relevant means.

Theses four criteria will taken again in the European Commission decision on 2011, 20 december, on the application of Article 106 (2) of the Treaty on the Functionining of the European Union to State aid in the form of public service compensation granted to certain undertaking entrusted with the operation of services of general economic interest.

If these four conditions are respected, it isn’t necessary to notify the compensation to the European Commission.