Covering the Court of Justice of the EU as well as the EFTA Court, this section presents all of the latest judgments in the State aid legal field.
The Court (Fifth Chamber)ruled:1. Article 107 TFEU and Article 4(3) TEU, read together with Article 4(2) of Commission Decision 2009/287/EC of 25 September 2007 on State aid awarded by Poland as part of Power Purchase Agreements and the State aid which Poland is planning to award concerning compensation for the voluntary termination of Power Purchase Agreements must be interpreted as precluding, where the European Commission has assessed a State aid scheme in the light of the Commission Communication of 26 July 2001 relating to the methodology for analysing State aid linked to stranded costs and classified it as being compatible with the internal market before its implementation, the national authorities and courts from reviewing in turn, at the time the State aid in question is [...]
On those grounds, the Court (Grand Chamber) hereby rules: 1. The Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘Banking Communication’) must be interpreted as meaning that it is not binding on the Member States. 2. Articles 107 to 109 TFEU must be interpreted as not precluding points 40 to 46 of the Banking Communication in so far as those points lay down a condition of burden-sharing by shareholders and holders of subordinated rights as a prerequisite to the authorisation of State aid. 3. The principle of the protection of legitimate expectations and the right to property must be interpreted as not precluding points 40 to 46 of the Banking [...]
The court declared: 1) Decision 2014/200/EU of the Commission of 17 July 2013 on State aid SA.21233 C/11 (ex NN/11, ex CP 137/06 ) implemented by Spain - Plan tax applicable to certain finance lease agreements, also called "Spanish tax lease system" is canceled. 2) The European Commission shall bear its own costs and those incurred by the Kingdom of Spain, Lico Leasing, SA and Sociedad Pequeños y Astilleros Medianos retraining, SA.
The Court rules that EU law precludes, in circumstances such as those at issue in the main proceedings, the application of a rule of national law enshrining the principle of res judicata from preventing a national court which has held that contracts forming the subject-matter of the dispute before it constitute State aid, within the meaning of Article 107(1) TFEU, implemented in breach of the third sentence of Article 108(3) TFEU, from drawing all the consequences of that breach because of a national judicial decision which has become definitive, which court, without examining whether those contracts constitute State aid, has held that the contracts remain in force.
The court rules: Commission Decision C(2012) 8764 final of 28 November 2012 concerning the aid granted by the Spanish authorities for the restructuring and recapitalisation of the BFA Group, and Articles 107 TFEU and 108 TFEU, which form the basis for that decision, do not preclude the application, in proceedings relating to a collective redundancy that is within the scope of that decision, of national legislation under which the compensation payable to an employee whose dismissal is held to be unfair is set at an amount higher than the legal minimum.
The court sets aside the judgment of the General Court of the European Union in Andersen v Commission (T-92/11, EU:T:2013:143) in so far as, by that judgment, as regards the aid paid from 3 December 2009 under the second public transport service contract concluded for the years 2005 to 2014, the General Court annulled the second paragraph of Article 1 of Commission Decision 2011/3/EU of 24 February 2010 concerning public transport service contracts between the Danish Ministry of Transport and Danske Statsbaner (Case C 41/08 (ex NN 35/08)); it dismisses the appeal as to the remainder; it dismisses the cross-appeals;it refers the case back to the General Court of the European Union for judgment, in the light of the three pleas of the application, taking account of Article 8(3) of [...]
The case concerned the appeal of Elecrabel SA and Dunamenti to the court to set aside the judgement of the General Court (Dunamenti Eromu v Commission). The commission had contested power purchase agreements between a public undertaking and electricity generators, under the auspices of the Hungarian authorities to certain electricity generators. In dismissing the appeal in favour of the Commission, the court considered inter alia the definition of 'party' bring an appeal, the relevance of the date of Hungary's accession to the EU for the determination of illegal state aid, the concept of state aid and of advantage, the private investor test and the methology for calculating the amount of aid.
The Court declares that it is unnecessary to adjudicate on the action, in so far as it seeks the annulment of Commission Decision 2011/839/EU of 20 April 2011 on the measures implemented by Denmark (C 2/03) for TV2/Danmark, in that the Commission found that the advertising revenue from 1995 and 1996 paid to TV2/Danmark A/S by the TV2 Fund amounted to State aid;it dismisses the action as to the remainder;it orders Viasat Broadcasting UK Ltd to bear its own costs and to pay those incurred by the European Commission; it orders the Kingdom of Denmark to bear its own costs and it orders TV2/Danmark to bear its own costs.
The State’s delay in the recovery of aid deemed incompatible with the common market will result in fines of the relevant authority. In a previous decision from 25 November 1999, the Commission held that: (1) reductions to the tune of €37.7 mio. per annum, or (2) relief amounting to c. €292k per annum, of social security contributions for firms in the Venice and Chioggia region constituted State aid incompatible with the common market. Continual failure of Italy to fulfil the obligation of recovering the aid led the Commission towards: (a) ordering Italy to pay a lump sum of €30 mio. to prevent recurrence of similar infringements, and (b) to be subjected to a fine of €12 mio. per semester of delay to encourage it to recover the aid.
Italian legislation defining application of compound interest for the recovery of State aid according to an EU regulation, not yet in force, is admissible. A2A would have to repay not only the €170 mio. in capital, but also the €120 mio. in compound interest. The parameters for defining the interest rate were solely within the discretion of the Member State. The Italian legislation cannot be seen as retroactive because neither the recovery, nor the tax assessment, had taken place, before the Italian legislation was passed. The legal standing of a tax assessment before the legislation came into force would be purely theoretical. Compound interest is considered a valid means to offset the competitive advantage which the undertaking unlawfully gained.
The Court rules that Article 107(1) TFEU must be interpreted as meaning that a rule of national law, such as that at issue in the main proceedings, which, for the purposes of safeguarding the interests of agricultural holdings, effectively prohibits an emanation of the State from selling agricultural land to the highest bidder in a public call for tenders, where the competent local authority considers that his bid is grossly disproportionate to the estimated value of that land, cannot be classified as ‘State aid’, provided that the application of that rule results in a price which is as close as possible to the market value of the agricultural land concerned, that being a matter for the referring court to ascertain.
The Court declares that by failing to take all the measures necessary to recover from to Société Nationale Corse-Méditerranée (SNCM) the State aid declared illegal and incompatible with the internal market by Article 2(1) of Commission Decision 2013/435/EU of 2 May 2013 on State aid SA.22843 (2012/C) (ex 2012/NN) within the periods prescribed, by failing to cancel all the payments of aid referred to in Article 2(1) of that decision within the periods prescribed, and by failing to inform the commission of the measures taken to comply with that decision within the period prescribed, the French Republic has failed to fulfil its obligations under Article 298, fourth paragraph, TFEU and Articles 3 to 5 of that decision.
The General Court dismisses the actions brought by the airline Niki Luftfahrt against Lufthansa’s acquisition of Austrian Airlines and the restructuring aid granted by Austria to Austrian in that regard. None of the arguments put forward by Niki is capable of casting doubt on the Commission’s authorisation of that concentration and that aid, which it granted subject to conditions.
The Court rules that the Federal Republic of Germany has failed to fulfil its obligations under Art 108(2) TFEU and Art 14(3) Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 108 TFEU and Art 1 and 4 to 6 Commission decision 2012/636/EU of 25 January 2012, C 36/07.
The court rules that Articles 87(1) EC and 88(3) EC must be interpreted as meaning that where the referring court considers that the privileges at issue constitute new State aid, it is required to exclude the application of national provisions establishing such privileges on account of their incompatibility with those provisions of the Treaty.
The AG proposed that the court should find that Art 14 of the Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (now Article 108 TFEU), articles, 9,11, and 13 of the Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty and the general principles of EU law must be interpreted as not precluding national legislation, which provides that interest in regard to state aid recovery following a Commission decision [reported 7 June 2002] is determined by applying the method of compound interest.
The CJEU responds to the preliminary ruling questions that 1) the State guarantee granted exclusively to credit institutions prima facie constitute ‘State aid’. It is for the referring court to ascertain more specifically the selective nature of such a guarantee by determining, in particular, whether, following the amendment of the Decree of 2001 which is supposed to have taken place in 2008, that guarantee may be granted to economic operators other than credit institutions and, in the affirmative, whether that fact may call into question the selective nature of that guarantee; 2) if the referring court classifies the State guarantee at issue in the main proceedings as ‘State aid’ within the meaning of Article 107(1) TFEU, such a guarantee must be regarded as new aid and is, [...]
AG Cruz Villalon proposes that Article 107 TFEU should be interpreted to mean that a rule of national law such as that in the present case which, with the purpose of improving agricultural structures, prohibits a body of the State from selling in the context of a procurement an agricultural land to the highest bidder where the best bid is disproportionate to the value of the land can only escape a categorisation as state aid if that value is as close as possible to the market value, which implies that this estimation takes into account the prices proposed in the course of the procurement.
The CJEU finds the preliminary ruling questions referred by the Tribunal do Comércio de Lisboa (Portugal) have disclosed nothing capable of affecting the validity of Commission Decision 2011/346/EU of 20 July 2010 on the State aid C 33/09 (ex NN 57/09, CP 191/09) implemented by Portugal in the form of a State guarantee to BPP.
The GC dismissed the action to annul the Commission decision. Dismissing all four pleas, the GC found that there were no serious difficulties faced by the Commission necessitating the initiation of the formal investigation procedure provided for in Article 108(2) TFEU, thatthe omission of economic data in the non-confidential version of the contested decision did not hinder the applicant’s understanding the reasoning of the Commission or their ability to challenge this, and that the applicants did not present demonstrate that there was an error of law in the Commission’s joint assessment of the VLT Agreement and of the Addendum.
The General Court found that the Commission failed to establish that the Spanish corporation tax regime - allowing for the deduction of shareholdings in foreign companies - was selective and thus deemed as State Aid. It states that a measure which may confer an advantage on all undertakings without distinction, within a States, does not constitute State aid as regards to the criterion of selectivity.
In this judgement, the aid granted to BT by the UK authorities in the form of an exemption, constituted State aid incompatible with the common market. The exemption was granted to that company's pension fund, from the obligation to pay a contribution to a pension protection fund - in respect of persons employed by the company before its privatisation.
The Italian company Alcoa Trasformazioni appealed an EC decision regarding preferential electricity tariffs. The General Court ruled that in some cases it is possible for the EC to breach the protection of legitimate expectations when the Commission reassesses its measures to take a harder stance on a particular measure. The company's appeal was rejected by the General Court.
The General Court dismissed the appeal by Eurallumina SpA in its entirety and confirmed the Commission finding that preferential electricity tariffs granted by the Romanian state-owned company Hidroelectrica constituted incompatible operating aid. Dismissing all five pleas, the GC found that the decision was adequately motivated, the applicant could have no legitimate expectations regarding the omitted lawfulness of the aid, the distortions of competition led to a clear categorisation as state aid, the grant could not benefit from regional aid and that there was no breach of the principle of good administration.
The EC issued a decision stating that electricity tariffs concerning two Romanian companies, Alpiq RomIndustries Srl and Alpiq RomEnergie Srl, constitute State aid. The companies appealed to the General Court, arguing that the EC was not authorised to decide on measures that were taken before Romania's entry into the EU. However, the Court did not rule on that question, because the appeal was rejected due to procedural reasons.
The Court of Justice found that the exemption from property tax of a plot of land belonging to the State may constitute State aid. In this case, the plot of land was made available to an undertaking whose capital is wholly State-owned. In addition, goods and services are produced on that plot of land that may be traded between Member States on markets open to competition.
The General Court annulled the Commission decision finding that the Greek State had granted preferential electricity tariffs (through the state owned public electricity company Dimosia Epicheirisi Ilektrismou AE (DEI) to Alouminion tis Ellados AE (ETA). The GC found that the grant of an interim order by the national court did not lead to categorisation as 'new aid,' since it does not alter the legal framework. However, once a jurisdictional decision is taken on the merits altering the framework this can constitute new aid, which must be notified.
The EC issued a decision stating that the Danish differentiated tax system regarding offline and online gambling is compliant with EU law. The Court argued that even though these tax measures are selective, they were still compatible with the internal market and therefore did not constitute unlawful state aid. Regarding the present case, the General Court concluded that the applicant had not been individually affected in any way. (See also: T-601/11 - Dansk Automat Brancheforening v Commission).
The EC issued a decision stating that the Danish differentiated tax system regarding offline and online gambling is compliant with EU law. The Court argued that even though these tax measures are selective, they were still compatible with the internal market and therefore did not constitute unlawful state aid. Regarding the present case, the General Court concluded that the applicant had not been individually affected in any way. (See also: T-615/11 - Royal Scandinavian Casino Århus v Commission).
The request for a preliminary ruling found that the sole director of the company providing guarantees (Commerz Nederland NV) acted improperly by deliberately keeping the provision of those guarantees secret, disregarding the undertaking's statutes, and found that the public authority (Havenbedrijf Rotterdam) would have opposed the provision of the guarantees had it been aware of it. These circumstances could exclude such imputability only if it may be inferred that the guarantees at issue were provided without the involvement of that same public authority.
The Court found that Germany granted unlawful state aid to a company and failed to recover it for two years. The Court of Justice argued that the given EC decision was impossible for Germany to implement. However, the Court also states that when problems regarding the implementation of an EC decision arise, the country needs to address the Commission, explain the problems and cooperate closely in order to enable the implementation. Additionally, the national Courts must ask the European Court of Justice for advice in case of difficulties. Finally, the Court found that both the granting authority and the given country are subject to liability in this case.
The General Court annulled a European Commission decision regarding casino tickets in Greece that, according to the EC, constituted unlawful state aid. The General Court argued that despite different prices on tickets (predetermined by the Greek state) the amount paid to the state is calculated in a proportional manner and is therefore not selective. Additionally, the Court argues that these measures do not constitute a reduction of the tax base.
The European Commission issued a decision saying that Lübeck airport's schedule of fees (landing fees, etc.) was state aid. After appeal by the city of Lübeck, the General Court ruled that general measures can only be considered state aid if they are selective, not if they apply to everyone without differentiation. The General Court decided that measures only applicable to Lübeck airport are not selective, as they apply to all airlines flying to and from Lübeck. The General Court argued that simply because measures only apply in a certain area or field, they are not necessarily selective and therefore do not always constitute state aid.
The European Commission repeatedly approved capital investment by the French state into the SNCF (a French maritime company), stating it was compatible with the common market, and thus no unlawful state aid. After the case was taken to court by Corsica Ferries France (SNCF's main competitor), the General Court partially annulled the EC's decision (T-565/08, 2012/09/11), arguing that among other assessment errors, the EC did not apply the market economy investor test (MEIP) correctly. The Court of Justice confirmed the General Court's ruling and rejected the appeals of France and the SNCF.
In a State aid ruling from 2011, the ECJ ruled that Italy had to pay a lump sum as well as further periodic payments. Italy now approached the General Court arguing that the EC, executing the ECJ's judgement, should have lowered the amount the Italian state had to pay. The General Court rejected Italy's claim and stated that the country so far has failed to recover illegal State aid.
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