118 COMPETITION LAW IN TOURISM The Société nationale maritime Corse Méditerranée (SNCM) case is a good example to show how this strict approach is applied in practice. The SNCM was a ferry company in the Mediterranean area, which provided ferry services between the island of Corsica and the mainland of France. After long national procedures about the definitions of the financing of public transports services between the island and the mainland, one of its competitors turned to the European Commission, stating that SNCM received incompatible and illegal State aid for its activity. In its decision, the Commission concluded that “the scope of the public service remit as defined by a public service contract [had to be] necessary and proportionate to a real public service need, as demonstrated by the lack of regular transport services under normal market conditions”.Therefore, the Commission separated its assessment as regards the basic27 and additional services28 provided by SNCM. As regards the basic services, namely minimum territorial continuity service between Marseilles and the five Corsican ports the Commission found that they belong to clearly defined public service needs, and as there was no private initiative to provide these services. Conversely, the Commission found that public service for the additional service during peak times was not needed when many tourists travelled to and from the island and concluded that France committed a manifest error of assessment by classifying this service as an SGEI. The reason behind this conclusion was that both the demand and the supply sides were substitutability present. For the tourist, it was not so important from which French city (Toulon or Marseille) they travel to the island, and there was a clear trend of rapidly developing competition for the services by other undertakings. The French authorities were not giving any evidence either about the presumed market failure in peak times. Consequently, the Commission concluded that the additional service, mainly required by the presence of tourists, is not a genuine SGEI and declared the aid, as regards the basic service, as illegal. This, in the sense of the State aid procedural rules as France did, not notified in accordance with Article 108(3) TFEU but compatible with Article 106(2). As regards the illegal additional service, the Commission concluded that, in the absence of necessity and market failure, the aid was incompatible with the internal market. The Commission also ordered to stop paying compensation for the additional service and repay the compensation provided for these services with interest. 27 A permanent ‘passenger and freight’ service to be provided throughout the year on all the routes concerned. 28 An additional ‘passenger’ service was to be provided during peak periods on the Marseilles-Ajaccio, Marseilles-Bastia and Marseilles-Propriano routes.
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