Introduction
On 5 September 2024, the Court of Justice of the EU [CJEU] delivered two judgments on the two most frequent procedural issues on State aid: Who has standing to challenge a Commission decision and when the Commission is obliged to initiate the formal investigation procedure. These two issues are closely connected. Those whose interests are harmed by State aid typically claim that their right to provide comments on aid measures approved by the Commission is violated by the alleged failure of the Commission to open an investigation that gives them the opportunity to submit their views.
Case 1: Legal standing
In case C‑224/23 P, Penya Barça Lyon: Plus que des supporters (PBL) & Issam Abdelmouine v Commission,[1] “Penya Barça Lyon: Plus que des supporters” (PBL) [a French association of fans of Barcelona football club (FCB)] and Issam Abdelmouine [a member of PBL and contributor to FCB] asked the Court of Justice to set aside the 2023 judgment of the General Court in case T-538/21, PBL v Commission, by which the General Court dismissed their action for annulment of Commission decision SA.64489 concerning alleged State aid granted to Paris Saint-Germain [PSG] football club. The Commission found that the applicants failed to prove that they were “interested parties”.
In 2021, Lionel Messi left FCB to join PSG. Soon afterwards, PBL submitted a complaint to the Commission alleging that illegal State aid had been granted to PSG. After the Commission rejected the complaint, PBL lodged an appeal with the General Court, which was eventually dismissed.
Interested party
The applicants claimed that they had legal standing for being an interested party in the meaning of Article 1(h) of Regulation 2015/1589. Therefore, they alleged infringement by the Commission of the concept of “interested party”.
The CJEU, first, recalled that “(53) Article 1(h) of Regulation 2015/1589, which codifies the Court’s case-law on the concept of ‘party concerned’ referred to in Article 108(2) TFEU, states that the concept of ‘interested party’ includes ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations’”.
“(54) Next, as follows from Article 24 of that regulation, the status of ‘interested party’ enables the person who is granted that status to benefit from certain procedural rights, including the right to lodge a complaint to inform the Commission of any alleged unlawful aid or any alleged misuse of aid, to submit comments following a Commission decision to initiate the formal investigation procedure and, where that person has submitted such comments, to receive a copy of the decision taken by the Commission at the end of the procedure.”
Then the CJEU explained that “(57) it follows from the clear wording of Article 1(h) of Regulation 2015/1589 that that concept of ‘interested party’ does not include only the Member States, the beneficiary or beneficiaries of the alleged aid which is called into question by the complaint, undertakings competing with that beneficiary or those beneficiaries and the trade associations concerned. Beyond those specified categories of legal or natural persons, that concept also includes any other person whose interests might be affected by the grant of that aid.”
Furthermore, “(58) the concept of ‘interested party’ refers, […], to an indeterminate group of addressees, which may include any person claiming that his or her interests may be affected by the grant of alleged aid […], provided, however, that that person demonstrates, to the requisite legal standard, that the requirements for it to be regarded as an ‘interested party’ are satisfied and, in particular, that the alleged aid is likely to have a specific effect on his or her situation”.
“(59) To that end, the person who relies, in a given case, on the status of ‘interested party’ must demonstrate to the requisite legal standard, first, that it is indeed the grant of the alleged aid, as such, which may affect his or her interests, to the exclusion of any other conduct or measure, in particular any legally distinct measure which may have been adopted by the Member State granting that aid, even if such a measure is in fact linked to that aid. It is only where some of the procedures for implementing such aid are so inextricably linked to its purpose that it would not be possible to assess them in isolation that those inextricably linked procedures may be relied on in order to demonstrate that the person in question is an ‘interested party’”.
“(60) Secondly, that person must show to the requisite legal standard that it is indeed ‘his’ or ‘her’ interests, that is to say, interests which are personal to him or her, which may be affected by the grant of the alleged aid”.
“(61) That said, that requirement does not exclude the possibility, for certain types of legal persons, such as those constituted in the form of trade unions or associations, of relying on interests of a categorical or even general nature, such as the promotion or defence of the interests of the members of a trade union in the context of collective bargaining or the general interest in ensuring that a sports facility is operated under economic conditions which ensure that it is accessible to both amateur and professional sportsmen and women, provided that such interests fall within the objects of those legal persons and therefore overlap with a personal interest of those legal persons”.
“(62) Thirdly, […], the person in question must demonstrate, to the requisite legal standard, that the grant of the alleged aid actually has or, at the very least, is potentially likely to have a specific effect on his or her interests, […], by highlighting both that actual or potential impact itself and the causal link which it has with the grant of the aid at issue”.
Then the CJEU examined the present case where “(63) the General Court held, in essence, that the Commission had rightly considered, […], that the various interests relied on by the appellants in order to show that Mr Abdelmouine had to be regarded, in his capacity as a socio of the FCB, as an ‘interested party’ in the light of the alleged aid referred to in his complaint had not been established, in some cases, and were ‘purely general or indirect’ in the case of the others.”
The conclusion of the General Court in case T-538/21 was based on four reasons.
- It was not shown that a contributing member of the FCB, such as Mr Abdelmouine, could incur financial liability in case FCB would lose matches without Lionel Messi.
- The public interest in football and its values could not be relied on by a natural person such as Mr Abdelmouine in order to show that he was an interested party.
- The claim that Mr Abdelmouine had an interest in the defence of his moral rights and his right to freedom of association was insufficiently clear and precise.
- The argument relating to Mr Abdelmouine’s interest in retaining the various rights he held in his capacity as a contributing member of the FCB was rejected.
The CJEU held that the appellants did not put forward any valid new argument to challenge the findings of the General Court.
More specifically, with respect to the second line of argumentation put forth by the appellants, the CJEU reiterated that “(70) as is apparent from the clear wording of Article 1(h) of Regulation 2015/1589 and the settled case-law […], it is solely because, and in so far as, the grant of aid may affect a person in ‘his’ or ‘her’ interests, that is to say, interests which are personal to him or her, as opposed to the interests of other persons and a fortiori public interests, that person must be classified as an ‘interested party’ within the meaning of that provision. Thus, it is solely because, and in so far as, the grant of certain aid could affect categorical interests or a general interest which certain legal persons had as their corporate object to defend, and, consequently, because, and in so far as, those categorical interests or that public interest overlapped with the personal interest of those legal persons, that it has been accepted that they may rely on such interests in order to be recognised as having the status of ‘interested party’”.
“(72) It is both necessary and sufficient that the person seeking to be classified as an ‘interested party’ demonstrates, to the requisite legal standard, that the grant of the aid referred to in his or her complaint actually has, or at the very least is potentially likely to have, a specific effect on his or her interests, by highlighting both that actual or potential effect itself and the causal link which it has with the grant of that aid. That demonstration may, in particular, be carried out by adducing evidence of the actual impact which that aid has or may have, directly or indirectly, as a result of a chain of linked events which have already materialised or which are called upon to materialise in a sufficiently foreseeable and certain manner.”
“(73) Nevertheless, those errors of law are not capable of leading to the judgment under appeal being set aside, since the General Court held, in parallel, […], that the evidence relied on by the appellants in support of their fourth argument was, moreover, uncertain and did not therefore establish that the grant of the alleged aid referred to in the complaint lodged by Mr Abdelmouine was likely to have an actual impact on his interests, assessments which are free from any errors of law”.
Case 2: The obligation of the Commission to initiate the formal investigation procedure
On 5 September 2024, the CJEU also delivered its judgment in case C-447/22 P, Slovenia v Petra Flašker & Commission. Slovenia appealed against the 2022 judgment of the General Court in case T-392/20, Flašker v Commission, by which the General Court annulled Commission decision SA.43546 concerning State aid in favour of the public pharmacy Lekarna Ljubljana. The Commission had concluded that the aid received by Lekarna Ljubljana was existing aid.
The General Court held that the Commission should have had serious doubts and should have opened the formal investigation procedure. More specifically, the General Court considered that, since the Commission had not carried out, on its own initiative, a more detailed examination of the development of the legal and economic context of pharmacy sector in Slovenia, it could not be certain that there was no alteration of the existing aid.
The nature of the preliminary examination of State aid by the Commission
The CJEU began its analysis by recalling the obligations of the Commission during the preliminary stage of assessing the compatibility of State aid.
“(48) The Commission may […] confine itself to the preliminary examination under Article 108(3) TFEU when taking a decision in favour of aid only if it is able to satisfy itself after the preliminary examination that that aid is compatible with the internal market. If, by contrast, the initial examination leads the Commission to the opposite conclusion or even if it does not enable it to resolve all the difficulties involved in determining whether the aid is compatible with the internal market, the Commission is under a duty to carry out all the requisite consultations and for that purpose to initiate the procedure under Article 108(2) TFEU”.
“(49) Where the procedure under Article 108(3) TFEU does not enable it to overcome all the difficulties involved in determining whether the measure in question is compatible with the internal market, the Commission is under a duty to initiate the procedure under Article 108(2) TFEU, without having any discretion in that regard. Thus, in accordance with the objective of Article 108(3) TFEU and its duty of sound administration, the Commission must, in an endeavour to overcome, during the preliminary procedure, any difficulties encountered, employ the measures and verifications necessary to remove any doubts as to the compatibility of the measure in question with the internal market”.
“(50) Since the concept of ‘serious difficulties’ is objective in nature, proof of the existence of such difficulties, which must be looked for both in the circumstances in which the decision was adopted after the preliminary investigation and in its content, must be furnished by the applicant seeking the annulment of that decision, by reference to a body of consistent evidence”.
“(51) The existence of doubts about its compatibility is precisely the evidence which must be adduced in order to show that the Commission was required to initiate the formal investigation procedure.”
“(52) The Court has already held, in that regard, that the insufficient or incomplete nature of the examination carried out by the Commission during the preliminary examination procedure is an indication that the Commission was faced with serious difficulties in assessing the compatibility of the notified measure with the internal market, which should have led it to initiate the formal investigation procedure”.
“(54) In addition, the lawfulness of a decision taken at the end of the preliminary examination procedure, such as that referred to in Article 4(2) of Regulation 2015/1589, falls to be assessed by the Courts of the European Union, in the light not only of the information available to the Commission at the time when the decision was adopted, but also of the information which ‘could have been available’ to the Commission, which includes information that seemed relevant and which could have been obtained, upon request by the Commission, during the administrative procedure”.
“(55) The Commission is required to conduct a diligent and impartial examination of the contested measures, so that it has at its disposal, when adopting the final decision establishing the existence and, as the case may be, the incompatibility or unlawfulness of the aid, the most complete and reliable information possible for that purpose”.
“(56) Although it may be necessary, when the existence and legality of State aid is being examined, for the Commission to go beyond a mere examination of the facts and points of law brought to its notice, it is not, however, for the Commission, on its own initiative and in the absence of any evidence to that effect, to seek all information which might be connected with the case before it, even where such information is in the public domain”.
“(57) Thus, the mere existence of a potentially relevant piece of information of which the Commission was not aware and which it was not required to investigate, in the light of the pieces of information that were actually in its possession, cannot demonstrate that there were serious difficulties obliging the Commission to initiate the formal investigation procedure”.
In response to Slovenia’s claim that it provided to the Commission all the necessary information, the CJEU held that “(66) although a Member State is effectively bound, in accordance with Article 4(3) TEU, by a duty of sincere cooperation throughout the procedure for the examination of a measure by reference to the provisions of EU law on State aid […] that fact cannot, however, preclude, […], the existence of ‘serious difficulties’ or ‘doubts’ […] Any other interpretation would mean, by implication but necessarily, that the Commission’s doubts could automatically be dispelled solely on the basis of the national authorities’ assertions […] To accept that doubts as to the existence or the compatibility of an aid measure can be dispelled with such ease solely on the basis of mere assertions by national authorities would not only entirely defeat the purpose of the preliminary procedure under Article 108(2) TFEU, but it would also risk undermining the State aid control mechanism and the role entrusted to the Commission.”
The CJEU pointed out that “(67) it is much more difficult for a complainant to obtain the relevant information from the public authorities which may have granted State aid, than for the Commission, which has extensive powers for that purpose”.
Indeed the Commission has the right to request additional information from Member States by exercising the powers granted to it by the TFEU and by Regulation 2015/1589.
On the basis of the above reasoning, the CJEU rejected Slovenia’s appeal.
The full text of the judgment can be accessed at:
