An act of entrustment is a legal requirement under European Union law to ensure that financial compensation for public services is not classified as "state aid" under the Treaty on the Functioning of the European Union (TFEU). This concept helps distinguish lawful public service funding from prohibited subsidies that distort competition in the internal market.
Article 106(2) of the TFEU (formerly Article 86(2) of the European Communities Treaty) provides a framework for ensuring that public services are subject to competition rules without compromising their ability to fulfill specific tasks. It states:
Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.
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In its judgment in the case of Altmark Trans GmbH and Regierungsprasidium Magdeburg v. Nahverkehrsgesellschaft Altmark GmbH [2] (the Altmark case), the Court of Justice of the European Union held that public sector compensation does not constitute state aid if the following four criteria are all met:
The European Commission has stated [3] that an "act of entrustment" is necessary in order to set out the public service obligations of the undertaking and must have been committed to the organisation through an official act having legal force under the national law of the relevant EU member state. There need not be any specific legal framework covering acts of entrustment, but the act must extend sufficiently to create an obligation or accountability: permission, such as legal recognition or regulatory approval would not be sufficient. The obligation may be set out in legislation, the terms of a contract or in certain cases in a grant agreement. The act of entrustment should, in particular, state the nature, territorial scope and duration of the public service obligations, the organisation concerned, and the nature of any exclusive or special rights which the organisation may be able to exercise, along with the mechanism for calculating the level of compensation.
The European Court of Justice (ECJ), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Union, it is tasked with interpreting EU law and ensuring its uniform application across all EU member states under Article 263 of the Treaty of the Functioning of the European Union (TFEU).
European Union law is a system of rules operating within the member states of the European Union (EU). Since the founding of the European Coal and Steel Community following World War II, the EU has developed the aim to "promote peace, its values and the well-being of its peoples". The EU has political institutions, social and economic policies, which transcend nation states for the purpose of cooperation and human development. According to its Court of Justice, the EU represents "a new legal order of international law".
In the European Union, competition law promotes the maintenance of competition within the European Single Market by regulating anti-competitive conduct by companies to ensure that they do not create cartels and monopolies that would damage the interests of society.
In European Union law, direct effect is the principle that Union law may, if appropriately framed, confer rights on individuals which not only the courts but also the public administration of member states of the European Union are bound to recognise and enforce.
State aid in the European Union is the name given to a subsidy or any other aid provided by a government that distorts competition. Under European Union competition law, the term has a legal meaning, being any measure that demonstrates any of the characteristics in Article 107 of the Treaty on the Functioning of the European Union, in that if it distorts competition or the free market, it is classified by the European Union as illegal state aid. Measures that fall within the definition of state aid are considered unlawful unless provided under an exemption or notified by the European Commission. In 2019, the EU member states provided state aid corresponding to 0.81% of the bloc's GDP.
The European single market, also known as the European internal market or the European common market, is the single market comprising mainly the 27 member states of the European Union (EU). With certain exceptions, it also comprises Iceland, Liechtenstein, Norway, and Switzerland. The single market seeks to guarantee the free movement of goods, capital, services, and people, known collectively as the "four freedoms". This is achieved through common rules and standards that all participating states are legally committed to follow.
The EFTA Court is a supranational judicial body responsible for the three EFTA members who are also members of the European Economic Area (EEA): Iceland, Liechtenstein and Norway.
Article 101 of the Treaty on the Functioning of the European Union prohibits cartels and other agreements that could disrupt free competition in the European Economic Area's internal market.
Article 102 of the Treaty on the Functioning of the European Union (TFEU) is aimed at preventing businesses in an industry from abusing their positions by colluding to fix prices or taking action to prevent new businesses from gaining a foothold in the industry. Its core role is the regulation of monopolies, which restrict competition in private industry and produce worse outcomes for consumers and society. It is the second key provision, after Article 101, in European Union (EU) competition law.
United Kingdom competition law is affected by both British and European elements. The Competition Act 1998 and the Enterprise Act 2002 are the most important statutes for cases with a purely national dimension. However, prior to Brexit, if the effect of a business' conduct would reach across borders, the European Commission has competence to deal with the problems, and exclusively EU law would apply. Even so, the pre-Brexit section 60 of the Competition Act 1998 provides that UK rules are to be applied in line with European jurisprudence. Like all competition law, that in the UK has three main tasks.
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The Posted Workers Directive96/71/EC is an EU directive concerned with the free movement of workers within the European Union. It makes an exception to the Convention on the Law Applicable to Contractual Obligations 1980, which ordinarily requires that workers are protected by the law of the member state in which they work.
European labour law regulates basic transnational standards of employment and partnership at work in the European Union and countries adhering to the European Convention on Human Rights. In setting regulatory floors to competition for job-creating investment within the Union, and in promoting a degree of employee consultation in the workplace, European labour law is viewed as a pillar of the "European social model". Despite wide variation in employment protection and related welfare provision between member states, a contrast is typically drawn with conditions in the United States.
Höfner and Elser v Macrotron GmbH (1991) C-41/90 was a significant EU competition law case, concerning the definition of an "undertaking" and abuse of a dominant position.
Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet (2007) C-341/05 is an EU law case, relevant to all labour law within the European Union, which held that there is a positive right to strike. However, it also held that the right to strike must be exercised proportionately and in particular this right was subject to justification where it could infringe the right to freedom to provide services under the Treaty on the Functioning of the European Union article 56.
The general principles of European Union law are general principles of law which are applied by the European Court of Justice and the national courts of the member states when determining the lawfulness of legislative and administrative measures within the European Union. General principles of European Union law may be derived from common legal principles in the various EU member states, or general principles found in international law or European Union law. General principles of law should be distinguished from rules of law as principles are more general and open-ended in the sense that they need to be honed to be applied to specific cases with correct results.
Van Binsbergen v Bestuur van de Bedrijfvereniging voor de Metaalnijverheid (1974) Case 33/74 is an EU law case, concerning the free movement of services in the European Union.
Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie (1999) C-67/96 is an EU law case, concerning the boundary between European labour law and European competition law in the European Union.
Deutsche Post v Commission is a 2011 pair of joined cases, C 463/10 P and C 475/10 P, before the Court of Justice of the European Union concerning the scope for judicial review in information injunctions in state aid cases. The opinion, handed down 13 October 2011, interprets Article 263 of the Treaty on the Functioning of the European Union to mean that any official act on the part of any body, office or agency of the European Union that produces binding legal effects affecting the interests of a natural or legal person is open to challenge before the Court of Justice. Overruling the General Court, the opinion thus strengthens the right to judicial review of administrative acts.
The Rule of Law Conditionality Regulation is a regulation of the European Union and Euratom, which allows the European Commission to adopt measures, including the suspension of payment of funds from the EU budget, to member states which violate the principles of rule of law enshrined in article 2 of the Treaty on European Union.
