Edited by Grith S. Ølykke and Albert Sanchez-Graells
Chapter 12: Modification of contracts during their term: principle or exception? – a view from the perspective of negative externalities
This chapter deals with Article 72 of the 2014 Directive setting out the conditions for the modification of existing public contracts during their term. It is argued that the final wording of Article 72, introducing a considerable degree of flexibility and accommodating concerns as to avoiding transaction costs to the detriment of competition, provides for a context that can give rise to ‘negative externalities’, which may distort competitive dynamics in other markets. This conflicts with the pro-competitive orientation of the 2014 Directive. It is argued that the harmful effects resulting from Article 72 become even more apparent if it is taken into account that these ‘negative effects’ converge to a large extent with the ‘advantages’ the State aid prohibition in EU law envisages avoiding. It is submitted that the CJEU case law on modifications of public contracts, reflecting a competition-oriented approach, has been reversed through a directive that is, however, endowed with a mission to contribute to economic policy outcomes through promoting competition. Nevertheless, EU State aid law may offer a way to delimit the harmful effects that Article 72 could produce. Hence, the CJEU may well use EU State aid regulation to reinstate the Pressetext approach.
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