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SubscribeIn 2016, a private pharmacy in Slovenia asked the European Commission (EC) to investigate a series of measures granted by various Slovenian municipalities in favor of Javni Zavod Lekarna Ljubljana ("Lekarna Ljubljana"), a public pharmacy created by the Municipality of Ljubljana (hereinafter, "the Municipality"), in order to determine whether those measures constituted State aid compatible with the internal market.
In 2020, after receiving submissions from the Slovenian national authorities, the Commission adopted its decision, concluding that the alleged measures did not constitute State aid, among other reasons because it was established that there was no economic advantage—i.e., an exemption from concession fees applicable to both public and private pharmacies—or, even if there was an advantage, it did not distort the market—i.e., in the Municipality of Ivancna Gorica its market share was below 1%. However, the decision was appealed in relation to one of the measures, specifically the one consisting of the "transfer of assets under management in 1979 and after 1979 carried out by the Municipality of Ljubljana". The General Court annulled that part of the decision, which was ultimately upheld by the Court of Justice.
The 1979 transfer of assets under management consisted of the transfer, by the Municipality to the public pharmacy, of three publicly owned real properties without consideration. On the other hand, the transfer of assets after 1979 consisted of three acts in favor of the public pharmacy: (i) the conclusion of a lease agreement (2004) for commercial premises at a reduced rent; (ii) the conclusion of a management agreement (2008) for real property without any remuneration; and (iii) the conclusion of another management agreement (2009) for real property without any consideration.
In that vein, the Commission, after conducting a new analysis of the measures described in the previous paragraph, has preliminarily concluded that these do constitute State aid, as the elements of State aid are present.
By this decision, the European Commission is initiating a formal investigation procedure, within which both Slovenia and other Member States may submit observations, and which will conclude with the adoption of a final decision that may declare (i) the absence of State aid; or (ii) that the aid is compatible or incompatible, and, where appropriate, order its recovery.
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