On 17 July 2014, the European Court of Justice (ECJ) handed down its judgments (Case C-553/12 P and Case C-554/12 P) in appeals by the Commission against General Court judgments annulling the Commission’s original decision that Greece infringed Article 106(1), in conjunction with Article 102, by maintaining the exclusive rights for access to lignite granted to the state-owned electricity company, Public Power Corporation (as per Greek initials “DEI”), and annulling the consequent commitments accepted by Greece.
According to the Commission, the granting of privileged access to lignite deposits was contrary to Article 106(1) TFEU, read together with Article 102, and created inequality of opportunity between economic operators as regards access to primary fuels for the purposes of generating electricity and allowed DEI to strengthen and maintain its dominance in the wholesale electricity market by “excluding or hindering” rivals from entering the market.
The Commission argued that a Member State infringes Article 106 in connection with 102 TFEU even in the absence of abusive behavior by the public undertaking. The General Court however held that the Commission was required to establish an actual or potential abuse of dominance. According to the General Court, this was not the case as the granting of lignite exploitation permits depended exclusively on the will of the Greek State and thus the failure to give other economic operators access to the lignite deposits could only attributed to the Greek State.
The ECJ agreed with the Commission, holding that it was not necessary that any abuse should actually occur. The ECJ ruled that it was sufficient for the Commission to identify a potential or actual anti-competitive consequence liable to result from the State measure at issue in order to establish an infringement of Article 106 (1), in conjunction with 102. Such an infringement may thus be established where the State measures at issue affect the structure of the market by creating unequal conditions of competition between companies, by allowing the public undertaking or the undertaking which was granted special or exclusive rights to maintain, strengthen or extend its dominant position over another market, thereby restricting competition, without it being necessary to prove the existence of actual abuse.
The ECJ concluded that the General Court’s judgment must be set aside. The case is referred back to the General Court so that it can rule on the pleas that were not dealt with in the first judgment in the first instance. Ultimately, the ECJ’s judgment in the Greek lignite case provides a broad scope of Article 106 (1) in conjunction with 102 TFEU and urges the true liberalisation of the Greek electricity market. In the meantime, the Greek State makes progress in strengthening competition by selling a portion of the DEI business to the private sector, in accordance with the provisions of Law 4273/2014.