Public investment in culture and communications industry
Brussels
22 November 2011
State aid control
Wouter Pieké*
Head of Unit COMP.C.4
*"The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official
position of the European Commission."
European Commission,
DG Competition, Directorate C, Unit C4
Is public investment State aid?
• Article 107(1) TFEU implies the use of public
resources, advantage, selectivity, risk of
distortion of competition & effect on trade,
for undertakings or productions.
• General measures – no selectivity, no aid.
• Market economy investor principle (MEIP) –
no advantage, no aid.
European Commission,
DG Competition, Directorate C, Unit C4
Compatibility of aid (1)
• Culture and communication cover a variety of
activities.
• Article 107(3)c) allows for aid to promote
certain economic activities.
• Article 107(3)d) allows for aid to promote
culture.
• Article 106(2) allows for aid to SGEI.
European Commission,
DG Competition, Directorate C, Unit C4
Compatibility of aid (2)
• Whether 107(3)c) or 107(3)d): aid must be the
adequate instrument and necessary to
achieve the goal set, and it must be
proportionate to it.
• The positive effects of the aid need to be
balanced with the negative effects on
competition and trading conditions.
European Commission,
DG Competition, Directorate C, Unit C4
Compatibility of aid (3)
•
•
•
•
•
•
Specific rules in:
Broadcasting Communication (2009)
Broadband Guidelines (2009 – review)
Cinema Communication (2009 – review)
SGEI package (2005 – review)
Decisions published on website.
European Commission,
DG Competition, Directorate C, Unit C4
Compatibility of aid (4)
• Undertakings in culture and communication
may also benefit from horizontal aid schemes
(environment, R&D&I, training, regional
development, SME aid).
• Rules can be found in the GBER and horizontal
frameworks and guidelines.
• “De minimis” aid is also possible.
European Commission,
DG Competition, Directorate C, Unit C4
Fiscal measures
• The form of the aid is in principle not relevant
for compatibility, as long as the aid is
measurable.
• Direct and indirect fiscal aid can be made
comparable to grants.
• Difficulties: profitability, no margin for
discretion (entitlement to aid).
European Commission,
DG Competition, Directorate C, Unit C4
Example: tax credits for film industry
2009
• Italian tax credits for film production and
distribution were found to be compatible
under Article 107(3)d).
• Regarding tax credits for digitisation of
cinemas the Commission expressed doubts on
necessity, proportionality and adequacy.
European Commission,
DG Competition, Directorate C, Unit C4
Example: tax credits for publishing
2011
• In October 2011 the Commission approved a
scheme for Italian publishing companies in the
form of a 10% tax credit on paper purchased
(advertisement excluded).
• A similar scheme had been approved in 2004
after a full examination and which was
prolonged in 2005.
European Commission,
DG Competition, Directorate C, Unit C4
Environment and energy savings
Regional development
Research, Development and
Innovation
Risk capital
SME
Training
Employment aid
Compensation of damages caused
by natural disaster
Culture
Heritage conservation
Promotion of export and
internationalisation
Social support to individual
consumers
Other
Total Sectoral Aid
Coal
Other sectoral aid
EU-27
Germany
Spain
France
Italy
Netherlands
Poland
UK
Total of horizontal objectives
State aid for primary objectives and
sectoral aid as % of total aid
85.0
88
77
79
96
100
76
93
23.7
38
17
4
7
55
11
34
24.3
25
25
34
33
1
29
6
17.9
21
26
14
17
37
3
20
1.3
0
0
0
0
0
1
15
4.2
2
3
5
18
3
0
5
1.3
1
2
1
6
0
2
2
4.6
0
1
0
6
0
28
0
0.0
0
0
0
0
0
0
0
2.8
1
3
4
1
3
0
5
0.3
0
0
0
0
1
1
0
0.4
0
0
0
6
0
0
0
3.5
0
0
17
0
0
0
0
0.7
0
0
0
0
0
0
5
15.0
12
23
21
4
0
24
7
4.7
12
19
0
0
0
8
0
10.3
0
4
21
4
0
16
7
European Commission,
DG Competition, Directorate C, Unit C4
Thank you for your
attention.
European Commission,
DG Competition, Directorate C, Unit C4