EDF, A Leading Case Revisited: The Application of the Market Economy Operator Test to Fiscal Measures and the Energy Sector.

Abstract

The European Energy Internal Market has changed completely the environment of the Energy Sector in Europe. This deep transformation was a consequence, almost in a very significant part, of the regular application of the European Competition Law rules.

The evolution of Energy Sector in Europe, where the most important firms were the old monopolists, generally in hands of the public sector, it is based on the expandable delimitation of the notion of "Services of General Economic Interest" ("SGEI") and their missions contained in Article 106.2 TFEU and in the well-known doctrine of the "essential facilities".

In this new context, both the European Commission and the National Competition Authorities started a strong fight not only against anti-competitive agreements and abuses of dominant position, but also against illegal state aid.

In the field of state aid control, many of the "Leading Cases" on the complex notion of State Aid from Article 107.1 TFEU are "energy cases", many of them related with taxation. The "EDF Case" is one of these leading cases, and the principal object of this paper.

In EDF case, the European Commission analyses, in a second decision, after the General Court and the Court of Justice had annulled the first one, the reclassification as capital of the tax-exempt accounting provisions for the renewal of the high-voltage transmission network (RAG) implemented by France in favour of one of the biggest European firms in the energy sector. This decision gives very interesting remarks on the application of the "Market Economy Investor Test", on a measure financed by public resources from a tax instrument.

Keywords: Energy Sector, State Aid, Taxation

JEL Classification: E62, K23, K34, Q4