State aid reform - European Commission proposes new draft Procedural Regulation and Enabling Regulation

As part of its broader State Aid Modernisation initiative (previously reported in Stibbe's Competition Law Newsletter of June 2012), the Commission on 5 December 2012 adopted proposals to amend two (somewhat dated) Council Regulations governing EU state aid control, notably the ‘Procedural Regulation’ of 1999 and the ‘Enabling Regulation’. The two proposals will now be discussed in the Council and in the European Parliament.

The proposal for a new ‘Procedural Regulation’ primarily aims at increasing the efficiency and transparency of the state aid procedure. It inter alia formalises the right of national courts to obtain information, or ask opinions, from the Commission on state aid issues. The proposal also introduces the right for the Commission to make amicus curiae submissions before national courts. It moreover clarifies the requirements to submit a state aid complaint. Complainants are required to submit a certain amount of compulsory information. Second, complainants must demonstrate that they are interested parties within the meaning of Article 108(2) TFEU and Article 1(h) of the Procedural Regulation. This should result in a reduction of the workload of the Commission (which would only be obliged to investigate well-founded complaints).

The proposal contains other interesting features. For instance, as is already the case in antitrust and merger investigations, it would equip the Commission with effective ‘market information tools’. Thus, instead of having to rely on the voluntary cooperation of third parties, the Commission would be capable of ordering the communication of certain information within a specified deadline, subject to penalties. The proposal also envisages the possibility for the Council to conduct sector inquiries.

The proposal for a new ‘Enabling Regulation’ aims at expanding the categories of aid that may, subject to predetermined compatibility requirements, be excluded from the obligation of notifying the Commission. It would extend the scope of the Regulation inter alia to aid in favour of: culture and heritage conservation; forestry and the promotion of certain food product; conservation of marine biological resources; innovation; amateur sports; or certain broadband infrastructure.

The goal of the Commission is to have the Council amend the Enabling Regulation in the course of 2013. The Commission would then be able to implement its newly granted competence by amending the Global Block Exemption Regulation or by adopting additional Block Exemption Regulations.