I was recently on a flight which arrived 3 hours and 25 minutes later than scheduled. It departed from the EU, arrived in a non-EU country, was longer than 3500 km, and was operated by an EU carrier. Assume, for the sake of this discussion, that the delay was not caused by extraordinary circumstances.
The original text of EC261 does not discuss compensation for delayed flights, but as discussed in this answer, subsequent court interpretations have held a flight delayed by more than 3 hours is to be treated as a cancelled flight, and thus passengers are eligible for compensation of €600.
However, Article 7(2) says, in referenced to cancelled flights, that "[w]hen passengers are offered re-routing to their final destination on an alternative flight pursuant to Article 8, the arrival time of which does not exceed the scheduled arrival time of the flight originally booked by [four hours, in this case]", then compensation is reduced by 50%.
I wonder how this is applied when the flight was not actually cancelled but only delayed. In this case, no re-routing was offered, but the original flight arrived within four hours of its scheduled time. So is the compensation reduced? Am I owed €600 or €300?
I would prefer answers backed by court decisions or other outside evidence, instead of your own logical interpretation of the regulation.