Redrawing the Market Economy Operator Test: EU State Aid Law Post-Frucona

The Court of Justice of the European Union (CJEU) has handed down a landmark ruling in the field of State aid.

The case resolves a number of fundamental and long-existing questions concerning the application of the market economy operator test.

What does the Commission’s obligation to conduct a diligent and impartial investigation encompass? What is the requisite legal standard for discharging its burden of proof in that regard? Is the Commission’s obligation to examine “all relevant information available” limited to documents on its administrative file, or does it include additional information that the Commission should have sought to obtain? Does the subjective state of mind of the Member State concerned affect the scope of that obligation?

Frucona has succinctly answered these questions in a ruling that marks the first time that the Court defined the extent of the Commission’s duties of investigation when carrying out the private creditor test. In doing so, the Court has formulated the “Frucona test”.

This article first appeared in European Competition Law Review and is reproduced with permission.