A case on electric cars, gas stations and State aid
A recent case before the district court of The Hague shows that the development of electrical vehicles is not only interesting from a technical and environmental point of view, but that it also raises some pertinent issues of competition law.
A recent case before the district court of The Hague shows that the development of electrical vehicles is not only interesting from a technical and environmental point of view, but that it also raises some pertinent issues of competition law. For anyone who regularly travels by car, it is quite apparent that gas stations are in constant competition, in the sense that they presumably want drivers to purchase fuel at their station and not somewhere else. The State is also involved: the exploiter of a gas station must obtain a permit (a concession) for its activities and must pay a substantial fee for the use of the land, which is owned by the State.
The case before the district court revolves around an agreement reached between the State and the gas station concessionaries in 2000. In return for certain promises made by the concessionaries, the State agreed to prevent any other gas station from setting up shop along the Dutch highways until 2019.
In the meantime, the development of electric cars was taking flight. Electric cars can be charged at home in about 8 hours, which requires quite some planning when driving longer distances. There are also charging stations that can charge an electric car in twenty minutes, making the use of an electric car a lot more practical. Given the advantages of these quick-charging stations, the State proposed that gas stations (the concessionaries) would be allowed to also exploit charging stations along the Dutch highway, without having to pay a fee. In the course of time, it would be examined whether a fee would be charged. However, the gas stations, presumably preferring to sell traditional fuel rather than electricity, did not take up this offer, so the State decided to allow others to exploit electric charging stations.
This decision obviously rubbed the concessionaries the wrong way, because they submitted a State aid complaint with the European Commission, arguing amongst other things that not charging a fee for the exploitation of the charging stations constituted a State aid in the sense of Article 107 TFEU that should have been notified to the Commission. Soon after, they initiated proceedings before the district court of The Hague to request interim measures against the granting of the permits for the exploitation of the charging stations. They argued that the State had not honored its 2000 agreement and that it had violated State aid law by not charging a fee for the exploitation of the charging stations. Clearly, they felt that their competition interests would be hurt by the introduction of charging stations, which might convince more drivers to switch to electric cars and thus no longer spend their money at gas stations.
In the end, their arguments did not hold. Regarding the State aid claim, the concessionaries could not sufficiently counter the State’s argument that, given the high start-up costs and the low immediate gains from exploiting a charging station, not charging a fee for its exploitation did not constitute an advantage that exceeded the de minimis limit. It will be interesting to see whether the Commission reaches the same conclusion.