Public Undertakings and Imputability: The Case of DSBFirst

In this article, the issue of impuability to the State of public undertakings’ decision-making is analysed and discussed in the context of the DSBFirst case. DSBFirst is owned by the independent public undertaking DSB and the private undertaking FirstGroup plc and won the contracts in the 2008 Oeresund tender for the provision of passenger transport by railway. From the start, the services were provided at a loss, and in the end a part of DSBFirst was wound up. In order to frame the problems illustrated by this case, the jurisprudence-based imputability requirement in the definition of State aid in Article 107(1) TFEU is analysed. It is concluded that where the public undertaking transgresses the control system put in place by the State, conditions for imputability are not fulfilled, and it is argued that in the current state of law, there is no conditional link between the level of control exercised by the State, imputability to the State, and the State’s fulfilment of the Market Economy Investor Principle. Furthermore, it is examined whether, in the absence of imputability, public undertakings’ market behaviour is subject to the Market Economy Investor Principle, and it is concluded that this is not the case. Lastly, it is discussed whether other legal instruments, namely competition law, public procurement law, or the Transparency Directive, regulate public undertakings’ market behaviour. It is found that those rules are not sufficient to mend the gap created by the imputability requirement. Legal policy proposals are made on how the current deficiency in the regulation of public undertakings could be amended.