On 6 June 2010 the Spanish competition authority, the Comisión Nacional de la Competencia (the "CNC"), released its second Annual Report on State Aid granted in Spain in 2009. The report was prepared pursuant to the CNC's powers to monitor the implications on competition caused by the legislative activity of the Spanish regional and national Governments. Unlike the European Commission, however, the CNC does not hold any sanctioning or decision making powers as regards illegal state aid.
This report, like its predecessor, has two main objectives:
- to provide a broad overview of the context of state aid and the main developments, both in the regulatory area and as regards key cases for Spain, as well as to update the available statistics. The report reflects the effects that the economic crisis has had on increasing the intensity of state aid and on the specific measures adopted to soften its impact; and
- to raise awareness among public administrations regarding the public interest benefits of carrying out a prior in-depth analysis of the impact of legislative measures on competition before their enactment. According to the CNC, this step has become increasingly important in the current economic climate of crisis and tightening budgets.
Helpfully, the Report dedicates two specific chapters to analysing certain aspects of all state aid granted last year.
The first chapter deals with some of the legislative practices carried out by different public administrations granting state aid, which do not eliminate or reduce the possible anti-competitive repercussions as much as would be desirable. Special attention is focused on clarifying the issues that need to be taken into account to identify state aid properly and the criteria that should guide the correct design of state aid in general.
The other chapter sets out an assessment of the design and competition impact of different aid schemes to individual consumers. The chapter pays special attention to the automobile purchase schemes "Plan 2000E" which expired last July, aimed at both encouraging consumers to replace their old cars with new ones in order to have safer and more efficient vehicles and to give an economic stimulus to the Spanish automotive sector during the financial crisis. This chapter includes an assessment of the impact on prices and car sales.
This aid scheme consisted of a subsidy of € 500 from the central government, conditional on a further € 1000 discount by the car producer or importer. Regional authorities were also able to participate with a maximum € 500 subsidy. From a competition perspective the consumers, in order to benefit from the aid, had to reside in the region where the aid was granted and register the car there as well as purchase the car in an establishment located in that region. This last condition attracted criticism from the CNC, since the requirement to buy a car in a given geographic area introduces artificial geographic barriers to the free circulation of products and services, distorting the decision of the buyer and discriminating against the retailers located outside the region granting the aid. The result, according to the CNC, was that retailers were able to increase prices corresponding to the amount of the subsidy counteracting its effect and the public benefits.
It is worth noting that this aid scheme, despite not drawing the attention of the EU authorities given the small sums involved, nonetheless contained certain elements that may imply discrimination between operators and that may limit or negate the benefits of the aid for consumers, potentially having a counterproductive effect.
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