Last week, a case of importance for state aid law and competition economics was heard in the Supreme Court in Norway. The Supreme Court will determine whether Frogn Municipality’s provision of capital to a commercial and municipally owned gym in 2021 and 2022 constituted illegal state aid under EEA regulations.
State aid rules are intended to promote the efficient allocation of resources and ensure competitive markets by preventing the public sector from giving firms artificial and unfair competitive advantages.
The issue has previously been addressed in the District Court and the Court of Appeal. In connection with these legal proceedings, Oslo Economics prepared a report, commissioned by Virke, that assessed whether the capital injections in 2021 and 2022 would pass a state aid market investor test – i.e., whether the capital injections would yield an expected positive return with a reasonable required return on capital. The report was also discussed during the proceedings in the Supreme Court.
A public version of Oslo Economics’ report (in Norwegian) can be accessed here.
We look forward to the Supreme Court’s decision.
