Minicab giant Addison Lee recently suffered another defeat in the latest battle in the bus lane wars – this time at the ECJ. The outcome is no great surprise, but the Court’s approach to the question of when inter-state trade is affected is likely to be of broader interest.
On a reference from the Court of Appeal, the ECJ ruled that the policy of allowing black cabs but not minicabs to use London bus lanes did not appear to meet some of the criteria for prohibited State Aid under Art 107(1) TFEU (Eventech Ltd v The Parking Adjudicator Case C-518/13, 14 January 2015). The final decision was one for the Court of Appeal, the ECJ emphasised, but it’s now all but certain that Addison Lee’s State Aid argument will fail in that Court, as it had at the High Court.
Many will be familiar with the widely-reported background to the decision. In 2012, Addison Lee exhorted its drivers to drive in London bus lanes, in a provocative challenge to the long-standing policy of allowing only buses and black cabs but not minicabs or other vehicles to drive in such lanes. Two Addison Lee drivers took up the challenge were duly served with penalty charged notices, upheld on appeal by the Parking Adjudicator. Addison Lee (through Eventech Ltd, the registered keeper of the company’s minicabs) challenged the validity of one of the statutory orders underlying the policy, arguing that it was Wednesbury unreasonable and contrary to European and competition law, including the Art 107(1) prohibition against State Aid.
Art 107(1) provides (in summary) that any aid granted by a Member State or through State resources that distorts competition is incompatible with the internal market so far as it affects trade between Member States. Mr Justice Burton upheld the validity of the order and by extension the policy, dismissing Addison Lee’s Art 107(1) and other arguments (Eventech Ltd v The Parking Adjudicator [2012] EWHC 1903 (Admin)). Eventech was granted permission to appeal but the Court of Appeal stayed the proceedings and referred several questions on the applicability of Art 107(1) to the ECJ for a preliminary ruling. In summary, the ECJ held:
- The bus lanes policy did not involve the use of State Resources because there was no sufficiently direct link between the advantage given to the beneficiary (i.e. black cabs) and a reduction or risk to the State budget (§34).
- The policy was not selective – i.e. discriminatory between operators who were comparable – because of the factual and legal distinctions between black cabs and minicabs, such as the requirement that black cabs have wheelchair access and that their drivers have a “particularly thorough knowledge of the city of London”(§60).
- There was no de minimis threshold below which inter-state trade could not be affected under Art 107(1) (§68). Here, it was conceivable that that there might be an effect on trade between Member States, as the policy made it less attractive to provide minicab services in London and thereby reduced opportunities for foreign minicab operators (§70).
Much of the judgment will surprise no one, although the reasoning in parts is rather thin – how, one might ask, is The Knowledge at all relevant to selectivity?
Of broader interest is the expansive approach to the question of when inter-state trade is affected for the purposes of Art 107(1). This, after all, was a policy about a bus lane in central London, and there is no bar to citizens of any Member State driving either black cabs or minicabs – facts that the Court of Appeal took care to mention in its question to the court on the issue. Future claimants will be tempted to do exactly what Mr Justice Burton had deprecated: to invoke European law to challenge a regulation of basically domestic effect.
Competition Bulletin 