Subsidy control cases coming into land
The Welsh Government has published a statement advising that on 25 June, it had received notice that the decision to award a £205m subsidy to Cardiff Airport to improve facilities would be challenged by Bristol Airport.
This is the first time an acknowledged subsidy has been challenged in the Competition Appeals Tribunal (CAT) and the fourth challenge launched under the Subsidy Control Act 2022.
Previous challenges to the Subsidy Control Act 2022
The previous challenges, relating to the question of whether or not a subsidy has actually been granted, include:
- In Durham, a competitor of the council’s commercial waste collection business argued that the Council was using its statutory waste collection service to subsidise commercial activity.
- In Weis, a property developer argued that the council had made loans which amounted to subsidies without considering its obligations under the Act. This case is still awaiting judgment.
- The recently issued New Lottery Company v The Gambling Commission involves a decision of the Commission to grant an alleged subsidy to Camelot to contribute to marketing spend promoting the business of the National Lottery.
Because the Bristol Airport case relates to an acknowledged subsidy, the CAT will need to consider the decision made by the Welsh Government as to the subsidy’s compliance with the subsidy principles set out within the Act.
What could this mean for the future of subsidy control challenges?
It will be interesting to see if the CAT adopts the relatively 'hands off' approach used by the court in cases, such as British Gas and E.On v Secretary of State for Energy Security and Net Zero, which challenged the government’s subsidisation of energy supplier Bulb.
Additionally, it's important to note what level of scrutiny the CAT will apply to decisions made by public authorities. This is particularly relevant in this case, as the Competition and Markets Authority has already reviewed the assessment conducted by the Welsh Government.
In any event, it’s clear that after a very slow start, competitors are now more prepared to bring challenges on subsidy control grounds, and we expect the judgments in these cases to provide much needed clarity for public authorities making these assessments.
Contact
Angelica Hymers
Principal Associate
angelica.hymers@brownejacobson.com
+44 (0)115 976 6092
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