Competition Law in Tourism

TOURISM AND STATE AID 129 an advantage but not in the one assessing its compatibility. Based on these facts, the Court concluded that the Commission had not carried out a sufficient and complete assessment of the incentive effect of the aid. Since this was an individual, ad hoc measure, the Commission should have accomplished a more detailed assessment, especially as the information and economic assessment about the profitability of the project it gathered from different sources had contradicting results. As regards the assessment of the measure’s proportionality, the Court stressed that this is a basic principle of EU law and the EU institutions are subject to it when adopting legal acts. The proportionality has to be analysed in the light of the objective pursued and cannot go beyond the necessary minimum to achieve the objective. In its proportionality assessment, the Commission refers to different documents originating from the complainant, from the beneficiary and also from the other youth project’s owner. Nevertheless, the Commission has not clearly explained in the decision how the costs of building and maintaining the hostel for thirty years relates to the rent not being paid by the beneficiary during the time of the rental contract. This situation does not exclude the presence of difficulties as regards the assessment. The Commission explained, during the procedure, that it had relied on a document provided by the German federal authorities. Although the Commission is not necessarily obliged to quantify the exact amount of the aid, it is obliged to show based on which actual information it based its conclusion on the necessity and proportionality of the aid. The Commission clearly explained in the decision that the information originating from the applicant and the German authorities were contradicting each other. Against this background, the Court found that nowhere in the decision it is explained that, even the complainant is right, the amount of aid is proportionate. Nevertheless, the Commission was compelled to exclude overcompensation (as this is never necessary or proportionate), even though it is not clear from the decision how the Commission has taken into account the information provided from different sources, just merely referring to them without any assessment or direct conclusion drawn. Afterwards, the Court turned its attention to the Commission’s statement, in the decision, about the beneficiary’s profits that would be reinvested and that it is a non-profit public legal person. The Court confirmed, that under the constant jurisprudence, that all these details were irrelevant and the beneficiary should be treated as an undertaking since it provided services on the market, being in competition with other economic operators. At the hearing, the Commission

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