The Commission must explain in its State aid decisions why a sector-specific grant constitutes a selective advantage

Judgment
C-70/16 P
20.12.2017
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityComunidad Autónoma de Galicia and Retegal SA v CommisisonCourt of Justice 4th ChamberK. JürimäeM. WatheletState aid
KeywordsAppeal — State aid — Digital television — Aid for the deployment of digital terrestrial television in remote and less urbanised areas — Subsidies granted to operators of digital terrestrial television platforms — Decision declaring the aid incompatible in part with the internal market — Concept of ‘State aid’ — Advantage — Service of general economic interest — Definition — Discretion of the Member States
Significant pointsIn order to achieve the coverage objectives set out for digital terrestrial television (DTT), the Spanish authorities made provision for the grant of public funding in order, inter alia, to support the terrestrial digitalization in less urbanised areas of Spain, known as “Area II”. After receiving a complaint from a private company in Spain, the Commission decided to open a State aid investigation into the public funding. It reached the conclusion that the measure granted to the operators of the terrestrial television platform for the deployment, maintenance and operation of the DTT network in Area II infringed Article 108(3) TFEU and was incompatible with the internal market. Therefore, the Commission ordered the recovery of the incompatible aid from the DTT operators.

The appellants brought actions for the annulment of the Commission’s decision before the General Court. The latter rejected each of their pleas and dismissed their actions.

This present judgment was one of several joined appeals brought before the Court of Justice asking to set aside the judgment of the General Court. However, only in this particular appeal, brought by the Comunidad Autonoma de Galicia and Regetal SA, did the Court of Justice annul the judgment of the General Court. The Court of Justice found that both the judgment of the General Court and the Commission’s decision did not contain an adequate statement of reasons to support the selectivity of the measure at stake (one of the necessary conditions for finding State aid). On this point, the Court of Justice first recalled that according its settled case law, the selectivity criterion requires the EU Commission to explicitly determine whether under a particular legal regime, a national measure is such as to favour “certain undertakings or the production of certain goods” over others which, in the light of the objective pursued by that measure, are in a comparable factual and legal situation.

In this respect, the Court has already held that that examination must be supported by sufficient reasoning to allow full judicial review, in particular of the question whether the situation of operators benefiting from the measure is comparable with that of operators excluded from it.

In its statement of reasons, the General Court solely indicated that the measure at stake benefited only the broadcasting sector and that, within that sector, the measure at issue concerned only the undertaking active on the terrestrial platform market. However, it did not give any indication of the reasons why undertakings active in the broadcasting sector should be regarded as being in a factual and legal situation comparable to that of undertakings active in other sectors or why undertakings using terrestrial technology should be regarded as being in factual and legal situation comparable to that of undertakings using other technologies. According to the Court, this is important because such a measure is selective only if this latter condition is met. The Court has already held that a measure which benefits only one economic sector or some of the undertakings in that sector is not necessarily selective. Therefore, according to the Court, the third ground of appeal must be upheld.
NoteworthyThe Court in this judgment has clarified the Commission’s burden of proof in establishing that a measure is selective within the meaning of Article 107 TFEU.

The reasoning of the Commission must contain sufficient information for the addressees and court to find out to what extent the undertaking active in a specific sector should be regarded as being in a factual and legal situation comparable (or not) to that of undertakings active in other sectors or why using certain technologies instead of others could place the undertakings in a different or comparable legal and factual situation.

Contrary to what the Commission argued, therefore, the Court of Justice has stated that a measure which benefits only one economic sector or some of the undertakings in that sector does not necessarily imply that it is selective. There is no automatic presumption that the selective condition is fulfilled.

Information provided in professional examinations are subject to EU data protection rules

Judgment
C-434/16
20.12.2017
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityPeter Nowak / Data Protection CommissionerCourt of Justice2nd ChamberM. IlešičJ. KokottPersonal Data Directive
KeywordsReference for a preliminary ruling — Protection of individuals with regard to the processing of personal data — Directive 95/46/EC — Article 2(a) — Concept of ‘personal data’ — Written answers submitted by a candidate in a professional examination — Examiner’s comments with respect to those answers — Article 12(a) and (b) — Extent of the data subject’s rights to access and rectification
Significant pointsThe Supreme Court of Ireland asked the Court of Justice to rule in a preliminary ruling whether the written answers submitted by a candidate in a professional examination and the examiner’s comments with respect to those answers can be considered as protected personal data under Article 2(a) of the Directive 95/46/EC.

In the case, the claimant took a national exam, which he failed. He initially tried to challenge the result, but his request was denied. Therefore he submitted a data access request seeking to access all personal data relating to him held by the CAI (Institute of Chartered Accountants of Ireland).

First of all, the fact that the candidate can be identified by the examiner directly or indirectly is irrelevant in relation to this question. Instead, it is necessary to determine whether the written answers provided, and any comments made by an examiner with respect to those answers, constitute “information” linked to the candidate (under Article 2(a) of the Directive).

The Court considered that the answers reflect the extent of the candidate’s knowledge and competence, the candidate’s professional abilities and his suitability to practise the profession, and moreover, the use of the information contained in the answers will determine whether the candidate succeeds or fails, and that is the reason why they constitute information relating to the candidate.

The candidate can have a legitimate interest, based on the protection of his or her private life, in being able to object to the processing of his or her answers, outside of the examination procedure, in particular if sent to third parties or published without his or her permission.
Nevertheless, the right to access or the right of rectification provided for in Article 12(a) and (b) of the Directive cannot enable a candidate to correct, a posteriori, answers that are incorrect. The assessment of the data collection shall be made in the light of the purpose for which that data has been collected. Accordingly, the candidate, as also stated by Advocate General Kokott, may ensure after a certain period of time that his or her examination and the examiner’s comments with respect to them, are erased. The Court therefore concluded that the written answers submitted at a professional examination and any comments of the examiner with respect to those answers constitute a candidate’s personal data to which he has, in principle, a right of access. To give a candidate that right serves the objective of the EU legislation to guarantee the protection of private life with regard to the processing of personal data relating to them.
NoteworthyAs recalled in the decision, the use of “any information” under Article 2(a) of the Directive 95/46 shows the willingness of the EU legislator to give a broad scope to that concept, potentially encompassing all kinds of information, objective or subjective, in the form of opinions and assessments.

In that regard, it seems relevant to draw a parallel between the drafting of Article 2(a) of the Directive 95/46 and Article 4(1) of General Data Protection Regulation 2016/679. The Court would certainly consider that answers to a professional examination and the comments of the examiner with respect to those answers will always constitute personal data. Consequently, it seems sensible that the Court grants the right to access and also the right to be forgotten, as it is expressly foreseen in the Regulation 2016/679.

Prudential supervision of Banking Groups by the ECB: The Crédit Mutuel Arkéa case. Judgment of the General Court of 13 December 2017 in cases T-712/15 and T-52/16.

Judgment
T-712/15
13.12.2017
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityCrédit Mutuel Arkéa v European Central BankGeneral Court 2nd ChamberM. Prek-Economic and monetary policy - Single Supervisory Mechanism
KeywordsEconomic and monetary policy – Prudential supervision of credit institutions – Article 4(3) of the Regulation (EU) No 1024/2013 – Prudential supervision on consolidated basis – Supervised group – establishment permanently affiliated to a central body – Article 2(21)(c) of the Regulation (EU) No 468/2014 – Article 10 of the Regulation (EU) No 575/2013 – Capital requirements – Article 16(1)(c) and (2)(a) of the Regulation No 1024/2013
Significant pointsCredit Mutuel is a non-centralised French banking group, made up of a network of local credit unions having the status of cooperatives. Each local mutual credit union must be affiliated with a regional federation and each federation must be affiliated with the Confédération nationale du Crédit mutuel (CNCM), the central, national body of the network.

The Crédit Mutuel Arkéa is a variable-capital cooperative finance company, certified as a credit institution. It was founded in 2002 through the merger of a number of regional mutual credit federations. By decision adopted within the framework of the Single Supervisory Mechanism (SSM), the European Central Bank (ECB) asserted its prudential supervision of the entities in the Groupe Crédit Mutuel – including the Crédit Mutuel Arkéa. This was done on a consolidated basis (likely because the group reached the thresholds laid down in the basis Regulation N° 1024/2013 setting up the SSM triggering the direct supervision by the ECB) through the CNCM as it constituted a group of credit institutions permanently affiliated to a central body. It also considered that the Crédit Mutuel Arkéa had to possess additional tier 1 equity capital.

In its appeal before the General Court against this ECB decision, the Credit Mutuel Arkéa first argued that, since it is not a credit institution, the CNCM could not fall within the scope of the prudential supervision of the ECB. Second, it argued that the ECB wrongly considered the existence of a group for the purposes of prudential supervision. Finally, it alleged that it was unduly imposed an additional prudential requirement, which was akin to a hidden sanction.

On the first ground of appeal, the General Court considered following a teleological interpretation of the SSM rules that the notion of “supervised group” as foreseen by Article 2(21)(c) of the SSM Framework Regulation pursues the aims of allowing the ECB to grasp the risks capable of affecting a credit institution which does not result from this entity itself but from the group to which it belongs and avoiding a segmentation of a prudential supervision of the entities within a group between the different supervisory authorities. In light of these objectives and also in accordance with the wording of both Article 2(21)(c) of the SSM Framework Regulation and Article 10 of the Regulation (EU) n° 575/2013 (to which Article 2(21)(c) of the SSM Framework Regulation refers), the General Court found that the CNCM did not necessarily need to be qualified as a credit institution for its group to come under ECB supervision.

On the second ground of appeal, the General Court verified whether the conditions set out in Article 10(1) of Regulation No 575/2013, to which Article 2(21)(c) refers, were met. Thus, the General Court considered, first, that there was an obligation between the CNCM and its members to transfer the capital/equity and liquidity in order to ensure the solvability of its various entities. Second, it considered that the CNCM was responsible for the solvability and the liquidity of the group, as well for the accounting consolidation. Third, the CNCM was entitled to give instructions to its affiliate in order to ensure the respect of regulatory requirements.
As the requirements of Article 10(1) of Regulation No 575/2013 were fulfilled, the General Court considered that the ECB had correctly acknowledged the existence of a group.

On the third ground of appeal, the General Court explained that the risk profile analysis conducted by the ECB involves a complex assessment which takes into account current and future factors. Given this complexity, the ECB should be afforded a margin of discretion and the General Court is therefore allowed to overturn the ECB’s assessment where there has been a (i) procedural irregularity, (ii) lack of reasoning, (iii) material inaccuracy, (iv) manifest error of assessment or (v) misuse of powers.

The General Court considered that the ECB had not commited any mistake in establishing the risk profile of Groupe Crédit Mutuel and in imposing a capital ratio, and had not exceeded its power in doing so. Notably, the General Court takes the view that the ECB did not err in basing its assessment on the potential departure of the Crédit Mutuel Arkéa from the Groupe Crédit Mutuel. Such a hypothesis was in fact not so improbable that the ECB should not have taken it into account.

Consequently, the General Court dismissed Crédit Mutuel Arkéa.
NoteworthyEven though a bit overcomplicated, this judgment provides several valuable points to keep in mind.

First, the competence of the ECB in the matter of supervision of banks has to be construed notably in light of the objectives pursued by the SSM rules, among which the goal of ensuring an efficient and non-fragmented supervision of banks active within the Eurozone.

Second, the interpretation of EU legislation by administrative bodies, like the European supervisory authorities, EBA, ESMA, EIOPA and their predecessors (CEBS, CESR …), does not bind the EU courts. The latter remain solely competent to interpret EU law. However, guidelines of an administrative body, may be taken into account provided that this body is competent and has adopted them at the request of the EU legislator.

Third, the General Court has refrained itself from encroaching upon the room for manoeuvre of the ECB in its supervisory tasks. Such an approach appears wise and cautious. In the case at hand, the most recent developments confirm that it is well-founded. As a matter of fact, it is highly likely that Crédit Mutuel Arkéa will leave the Groupe Crédit Mutuel soon.