Category Archives: State aid

Une remise en question par le Tribunal de l’Union européenne de la méthodologie de la Commission européenne et, implicitement, de son impartialité et du respect du principe de bonne administration, dans les affaires d’aides d’Etat de nature fiscale à l’occasion du dossier concernant le régime belge relatif aux bénéfices excédentaires

Jugement
Affaires T-131/16 et T-263/16
14.02.2019
PartiesJuridictionFormationJuge RapporteurAvocat GénéralSujet
AppelRoyaume de Belgique et Magnetrol International contre Commission européenneTribunal de l’Union européenne7ème Chambre élargie V. Tomljenović/Aides d’Etat – Décision fiscale anticipée – Régime d’aides
Mots-clésAides d’État – Régime d’aide mise en exécution par la Belgique – Décision déclarant le régime d’aides incompatible avec le marché intérieur et illégal et ordonnant la récupération de l’aide versée – Décision fiscale anticipée (tax ruling) – Exonération des bénéfices excédentaires – Autonomie fiscale des États membres – Notion de régime d’aides – Mesures d’application supplémentaires
RésuméSi l’on excepte le premier moyen tiré de l’atteinte à la compétence exclusive des Etats membres en matière de fiscalité directe, qui s’opposerait à un contrôle de la Commission au titre des aides d’Etat, qui a été balayé car outrancier, l’objet immédiat de l’arrêt rendu par le Tribunal de l’Union européenne (le « TUE ») le 14 février 2019 dans les affaires T-131/16 et T-263/16, opposant respectivement la Belgique et Magnetrol International à la Commission européenne était technique puisqu’il portait sur la notion de régime d’aides par opposition à celle d’aide individuelle. Toutefois, l’arrêt rendu revêt de l’importance dans l’offensive lancée par la Commission européenne contre ce qu’elle considère comme des cadeaux fiscaux de certains Etats membres aux groupes multinationaux. Au travers d’une motivation précise et fouillée, il met, en effet, en évidence certains manquements méthodologiques des services de la Commission dans ses investigations au titre des règles relatives aux aides d’Etat dans le domaine fiscal.

La Commission avait-elle pu à bon droit identifier un régime d’aides concernant l’exonération des bénéfices excédentaires en droit belge ? Les enjeux pratiques étaient substantiels. L’existence d’un régime d’aides dispensait la Commission européenne d’examiner toutes les mesures individuelles octroyées à des entreprises sur la base du supposé régime. Elle pouvait prendre une seule décision sur le régime, interdisant son maintien. C’était donc toute une législation qui cessait de s’appliquer. L’atteinte à la politique fiscale de la Belgique était bien plus substantielle et rapide, au prix d’un investissement en travail nettement moindre de la Commission européenne. Pour la même raison, une telle qualification était de nature à permettre à la Commission européenne, dès l’ouverture de la procédure formelle d’investigation, d’ordonner la suspension de l’application de la législation concernée dans son ensemble. Si, en l’espèce, elle ne l’avait pas requis expressément, la Belgique, consciente des risques encourus, avait opté pour une telle suspension.

Pour retenir la présence d’un régime d’aides et non d’un faisceau d’aides individuelles disparates, la Commission européenne n’avait pas pu identifier un acte juridique instituant un tel régime d’aides. Comme la jurisprudence l’y autorise dans un tel cas, elle avait cherché à se fonder sur un ensemble de circonstances de nature à déceler l’existence en fait d’un tel régime. A cet effet, elle avait retenu pas moins de quatre éléments juridiques, de nature différente et s’échelonnant dans le temps : une disposition légale (l’article 185, paragraphe 2, sous b), un extrait de ses travaux préparatoires (l’exposé des motifs de la loi du 21 juin 2004), une circulaire administrative (du 4 juillet 2006) et, enfin, les réponses du ministre des Finances aux questions parlementaires sur l’application de ladite disposition légale. Selon elle, ceux-ci constituaient les actes sur la base desquels l’exonération des bénéfices excédentaires est accordée.

Le TUE a toutefois mis en lumière que plusieurs des éléments essentiels du prétendu régime d’aides, dégagés par la Commission européenne, ne découlaient pas des bases du régime retenues par la Commission mais provenaient de l’examen d’un échantillon des mesures individuelles. Autrement dit, elle avait bâti, à partir de certaines mesures individuelles, un prétendu régime général qu’elle avait cherché à rattacher à des fragments juridiques de portée générale du droit fiscal belge. Bref, elle avait construit un dossier à charge de l’Etat belge. Les éléments essentiels en question prêtés au régime postulé étaient la méthode de calcul en deux étapes des bénéfices excédentaires et certaines formes d’intensification de la présence en Belgique.

Dans un ordre d’idées proche, le TUE a également relevé que la catégorie des bénéficiaires identifiée par la Commission ne correspondait pas à celle figurant dans la disposition légale retenue par elle comme l’une des bases du régime. Ceci constituait une nouvelle distorsion du cadre juridique belge par la Commission et confirmait que le rattachement du régime qu’elle prétendait avoir identifié aux bases qu’elle avait retenues était forcé.

Le TUE a également relevé que l’un des éléments présentés comme essentiels par la Commission, la méthode de calcul en deux étapes des bénéfices excédentaires, n’avait pas été systématiquement adoptée.

Par ailleurs, le TUE a souligné que l’administration fiscale belge disposait d’une marge d’appréciation substantielle pour déterminer s’il y avait lieu à ajustement des bénéfices, ce qui contredisait la thèse d’un régime général donnant lieu à de simples mesures individuelles d’application.

D’une part, l’approche était au cas par cas. L’ajustement ne nécessitait pas l’attribution des bénéfices concernés à une autre société. Contrairement au prescrit de la disposition légale, le montant à exonérer et les bénéfices excédentaires ne faisaient pas l’objet d’une définition dans les actes de base. Seuls 50 % des dossiers soumis à l’administration donnaient lieu à une décision anticipée.

D’autre part, il n’y avait pas une ligne systématique de conduite de l’administration fiscale, que la Commission, dans une attitude de repli devant le TUE, avait cherché à présenter, à titre subsidiaire, comme la base du prétendu régime général. Non seulement le Tribunal a fort logiquement écarté cette prétention, en indiquant qu’il ne pouvait pas accepter une motivation postérieure à l’adoption de la décision de la Commission, mais il s’est employé à démonter les faiblesses méthodologiques de la Commission dans l’invocation de cette prétendue ligne systématique. C’est ainsi que celle-ci avait cherché à asseoir l’existence d’une telle constance sur un échantillon couvrant un tiers des décisions individuelles de l’administration fiscale belge sans préciser le choix de cet échantillon ni les raisons pour lesquelles il avait été considéré comme représentatif de l’ensemble des décisions individuelles. Pour un autre point, elle s’était contentée de se référer à un onzième des décisions sans aucune précision sur le caractère suffisamment représentatif de l’échantillon.
A retenirLe Tribunal a mis en lumière de substantielles erreurs de la Commission européenne dans l’analyse des éléments de droit fiscal belge concernés comme constituant un régime général d’aides. Celles-ci confinent à l’arbitraire. Leur multiplication donne l’impression que, pour certains services de la Commission, la fin (lutte contre l’optimalisation fiscale et la concurrence fiscale dommageable, recherche d’une imposition plus substantielle des multinationales, harmonisation fiscale au sein de l’Union européenne) justifie les moyens (la dénaturation des faits, distorsion de la réalité). Au terme d’une démonstration magistrale, le Tribunal rappelle que l’instrumentalisation politique a des limites dans une Union de droit. Que la Commission développe des thèses juridiques nouvelles et ambitieuses est une chose, qu’elle prenne des distances avec la réalité et plie les faits à ses désirs en est une autre.

Ce manque de rigueur, cette dérive de la Commission amènent à s’interroger sur la fiabilité du traitement qu’elle a réservé à d’autres affaires d’aides d’Etat de nature fiscale, encore en cours. Les prochains arrêts du Tribunal en la matière sont attendus avec impatience.

Par ailleurs, le souci du Tribunal et le contrôle par celui-ci d’une analyse rigoureuse du droit fiscal national en cause par la Commission européenne procède peut-être d’une volonté de trouver un point d’équilibre entre, d’une part, la compétence exclusive des Etats membres en matière de fiscalité directe et, d’autre part, le fait que le droit des aides d’Etat a néanmoins vocation à s’appliquer à cette matière. Le respect par la Commission de la compétence des Etats membres à continuer à développer une politique fiscale vis-à-vis des entreprises requiert, à tout le moins, qu’elle traite le droit fiscal d’un Etat membre comme il l’est, sans a priori défavorable.

The methodology of the EU Commission and implicitly its impartiality and its good admnistration questioned by the General Court in the tax state aid investigations in the Belgian excess profit regime case

Judgment
Cases T-131/16 and T-263/16
14.02.2019
PartiesCourtChamberJudge-RapporteurAdvocate GeneralSubject-matter
AppealKingdom of Belgium and Magnetrol International v European CommissionGeneral Court7th Chamber (Extended Composition) V. Tomljenović/State aid – Aid scheme – Tax ruling
KeywordsState aid – Aid scheme implemented by Belgium – Decision declaring the aid scheme incompatible with the internal market and unlawful and ordering recovery of the aid granted – Tax ruling – Excess profit exemption – Fiscal autonomy of the Member States – Concept of an aid scheme – Further implementing measures
Significant pointsApart from the first plea alleging infringement of the exclusive competence of Member States in the field of direct taxation, which would preclude the Commission’s control of State aid, and which was dismissed by the General Court (“GC”), the object of the judgment delivered was technical. It concerned the concept of an aid scheme as opposed to that of an individual aid measure. The judgment is important with regard to the Commission's offensive against what it considers to be tax gifts granted by certain Member States to multinational groups. By means of a precise and detailed statement of reasons, it highlights certain methodological shortcomings by the Commission in its investigations in this area.

Could the Commission have correctly identified an aid scheme concerning the exemption of excess profits under Belgian law? The practical stakes were substantial because the existence of an aid scheme exempted the European Commission from examining all individual measures granted to companies on the basis of the alleged scheme. The Commission could instead take a single decision on the regime as a whole, prohibiting its continuation. Such a classification enabled the Commission to order the suspension of the legislation concerned as a whole as soon as the formal investigation procedure was opened. While the Commission had not expressly requested it in the case at hand, Belgium opted for such a suspension considering the risks at stake.

In determining the existence of an aid scheme and not of a range of individual aid measures, the Commission had been unable to identify a legal act establishing such a scheme. On the basis of established case law allowing it to do so, the Commission had sought to rely on a set of circumstances likely to demonstrate the existence of the scheme. To this end, the Commission had identified four legal elements: a legal provision (Article 185(2)(b)); an extract from its preparatory work (the explanatory memorandum of the law of 21 June 2004); an administrative circular (of 4 July 2006); and, finally, the responses of the Minister of Finance to parliamentary questions on the application of the abovementioned legal provision. In the Commission’s view, these were the acts on the basis of which the excess profits exemption was granted.

However, the GC pointed out, first, that several essential elements of the alleged aid scheme did not actually stem from the bases of the scheme identified by the Commission but were derived from the examination of a sample of individual measures. In other words, the Commission had built, on the basis of certain individual measures, an alleged general scheme which it sought to link to elements of Belgian tax law. The essential elements of the alleged scheme in question that were not present in the bases of the scheme were the two-step method of calculating excess profits and certain forms of intensification of the companies’ presence in Belgium].

In a similar vein, the GC noted that the category of beneficiaries identified by the Commission did not correspond to that contained in the legal provision considered by the Commission as one of the bases of the alleged scheme. This constituted a further distortion of the Belgian legal framework by the Commission and confirmed that the connection established between the alleged aid scheme and the elements identified as the bases of that scheme was erroneous.

The GC also considered that one of the elements presented as essential by the Commission, the two-step method of calculating surplus profits, had not been systematically adopted in the decision.

In addition, the GC pointed out that the Belgian tax administration enjoyed a substantial margin of discretion in determining whether or not a profit adjustment was necessary, which contradicted the hypothesis of a general scheme giving rise to simple individual implementing measures.

On the one hand, the approach by the Belgian taw authorities was done on a case-by-case basis. The profit adjustment did not require the allocation of the profits concerned to another company. Contrary to the requirement of the legal provision, the amount to be exempted and the excess profits were not defined in the basic acts. Only 50% of the files submitted to the administration gave rise to an advance ruling.

On the other hand, the tax administration’s systematic approach presented in the alternative by the Commission as the basis of the alleged general scheme was inexistent. Not only did the GC logically dismiss this claim, indicating that it could not accept a justification provided only subsequent to the adoption of the Commission's decision, but it also sought to demonstrate the Commission's methodological weaknesses in invoking this alleged systematic approach. In particular, the Commission had sought to establish the existence of such a consistent treatment on a sample covering one third of the Belgian tax administration's individual decisions without justifying the choice of this sample or specifying the reasons why it had been considered representative of all individual decisions. On another point, it had simply referred to one eleventh of the decisions without any clarification on the sufficiently representative nature of the sample.
NoteworthyThe GC found substantial errors on the part of the Commission in its analysis of the elements of Belgian tax law considered as constituting a general aid scheme. The assessment was regarded as arbitrary by the GC. Their multiplication gives the impression that, for the Commission, the ends (i.e. the fight against tax optimisation and harmful tax competition, increased taxation of multinationals, tax harmonisation within the European Union) justified the means (i.e. distortion of facts, distortion of reality). At the end of a masterful demonstration, the GC recalls that political instrumentalisation has limits in a Union governed by the rule of law. It is one thing for the Commission to develop new and ambitious legal arguments, but it is another to distance itself from reality and manipulate the facts in order to serve specific purposes.

The Commission's drift and lack of rigour in the decision raise questions as to the reliability of the way in which it has handled other tax-related state aid cases, which are still ongoing. The GC's forthcoming judgments in this area are eagerly awaited, therefore.

Moreover, the GC's concern and its scrutiny of the Commission’s analysis of the national tax law at stake may stem from a desire to strike a balance between, on the one hand, the exclusive competence of the Member States in the field of direct taxation and, on the other hand, the fact that State aid law is nevertheless intended to apply in this area. The Commission's respect for the competence of the Member States to continue to develop tax policies towards companies requires, at the very least, that it treats the tax law of a Member State as it is, without pre-conceived bias.

Le périmètre des services d’intérêt économique général doit être défini clairement et précisément

Jugement
Affaires jointes T-202/10 RENV II and T-203/10 RENV II
15.11.2018
PartiesJuridictionFormationJuge RapporteurAvocat GénéralSujet
AppelStichting Woonlinie e.a. contre Commission européenneTribunal de l’Union européenneHuitième Chambre élargieG. De Baere /Aides d’Etat – SIEG
Mots-clésAides d’État – Logement social – Régime d’aides en faveur des sociétés de logement social – Aides existantes – Engagements de l’État membre – Décision déclarant l’aide compatible avec le marché intérieur – Service d’intérêt économique général (SIEG) – Définition de la mission de service public
RésuméLe 15 novembre 2018, le Tribunal de l’Union européenne (le "Tribunal") a rejeté au fond un recours contre une décision de la Commission européenne relative à un régime d'aides au profit de sociétés de logement social néerlandaises.

Par une décision de 2009, partiellement modifiée en août 2010, la Commission avait accepté les propositions de mesures utiles présentées par les Pays-Bas concernant un régime de financement de logements sociaux considéré comme un régime d'aides existant. Le constat essentiel de la Commission était que la mission de service public pour laquelle une compensation avait été accordée aux sociétés de logement social n'était pas définie avec suffisamment de précision.

Stichting Woonlinie et d'autres sociétés de logement social à but non lucratif néerlandaises ont demandé l'annulation de la décision de la Commission devant le Tribunal. Ce dernier a déclaré leurs recours irrecevables (affaires T-202/10 et 203/10). Sur pourvoi, la Cour de justice de l’Union européenne (CJUE) a jugé les recours recevables et renvoyé les affaires devant le Tribunal pour qu'il statue sur le fond (affaires C-132/12 P et C-133/12 P). Le Tribunal a rejeté les recours comme étant manifestement non fondés (affaires T-202/10 RENV et T-203/10 RENV). Toutefois, ses ordonnances ont été annulées par la CJUE par arrêts du 15 mars 2017 (C-414/15 P et C-415/15 P). Celle-ci a, à nouveau, renvoyé les affaires devant le Tribunal, donnant lieu à l'arrêt en cause.

Dans son arrêt du 15 novembre 2018, le Tribunal a rejeté les recours au motif principal que la définition du service d'intérêt économique général ("SIEG") de logement social en cause était insuffisamment précise (deuxième au sixième et huitième moyens). Il a également écarté les moyens relatifs aux notions de régime d’aides et d’aides existantes (premier et septième moyens).

Le Tribunal a rappelé qu’une compensation publique pour un SIEG échappe à la qualification d’aide d’Etat moyennant le respect des quatre conditions développées par la CJUE dans son célèbre arrêt Altmark. La première de ces conditions est que l'entreprise bénéficiaire soit chargée de l’exécution d’obligations de service public clairement définies. Celle-ci doit également être remplie dans les cas où la dérogation prévue à l'article 106, paragraphe 2, du TFUE a vocation à être appliquée, c'est-à-dire lorsque certaines des autres conditions de la jurisprudence Altmark ne sont pas remplies.

Le Tribunal a également rappelé que les Etats membres jouissent d'un large pouvoir d’appréciation dans la définition de ce qu'ils considèrent comme un SIEG. Par conséquent, cette définition ne peut être remise en question par la Commission qu’en cas d’erreur manifeste. A cet égard, les Etats membres doivent démontrer que le périmètre du SIEG est nécessaire et proportionné par rapport à un besoin réel et actuel de service public. L'absence de la preuve que ces critères sont satisfaits peut constituer une erreur manifeste d'appréciation.

En l'espèce, le Tribunal a considéré que la définition du SIEG en cause était entachée d’une erreur manifeste car elle prévoyait de donner la priorité aux personnes "qui avaient des difficultés à trouver un logement adéquat", sans définir précisément le groupe cible de personnes défavorisées (deuxième moyen).

Le Tribunal a estimé que, contrairement à ce qu’alléguaient les requérants, la Commission n'avait pas exigé une définition du SIEG fondée sur une limite de revenus et qu'elle était tout à fait en droit d'exiger une définition plus précise du groupe cible que celle retenue par le droit néerlandais (quatrième et sixième moyens).

Le Tribunal a également estimé que la Commission n'avait pas commis d'erreur dans son appréciation du périmètre du SIEG. Au contraire, cette dernière avait correctement constaté que l'absence d'une délimitation précise du SIEG comportait le risque que les compensations octroyées aux sociétés de logement bénéficient également à leurs activités accessoires (rentables), qui ne seraient donc pas exercées aux conditions du marché (troisième moyen).

Le Tribunal a par ailleurs jugé que, si la Commission ne peut faire dépendre la définition du SIEG de son mode de financement, une définition claire du SIEG est néanmoins nécessaire pour garantir le respect de la condition de proportionnalité de la compensation à la mission de service public et pour éviter que les activités exercées par les sociétés de logement en dehors du SIEG ne bénéficient d’aides d'État ( risque de subventions croisées) (cinquième moyen).

En outre, le Tribunal a estimé que, contrairement aux allégations des requérants, la Commission n'avait pas imposé une liste exhaustive de bâtiments pouvant être qualifiés de "sociaux". La liste avait en réalité été établie par les autorités néerlandaises afin de répondre à la crainte, exprimée par la Commission au cours de la procédure, que l'aide accordée pour le financement du SIEG ne bénéficie à des bâtiments dans lesquels sont exercées des activités commerciales (huitième moyen).

S’agissant du premier moyen selon lequel certaines mesures auraient été considérées à tort comme faisant partie d'un régime d'aides par la Commission, alors qu'il s'agissait d'aides individuelles non prévues par un texte législatif, le Tribunal a opposé que le fait que des aides individuelles soient accordées n'exclut pas l'existence d'un régime sur le fondement duquel ces aides sont octroyées. En outre, le règlement 659/1999 ne requiert pas qu’un régime d’aides soit fondé sur une disposition législative.

Les requérantes avançaient également que la Commission avait commis une erreur en n'examinant pas l'existence d'une surcompensation dans le système initial de financement du logement social. Cependant, le Tribunal a opposé qu’un tel examen n’est pas, en soi, indispensable pour évaluer correctement, à propos d’un régime d’aides existant, des mesures utiles pour l’avenir (septième moyen).

Par conséquent, le Tribunal a rejeté les recours interjetés par les requérants.
A retenirCet arrêt est le dernier épisode en date du dossier des organismes de logement social à but non lucratif néerlandais.

Il en ressort que si la Commission n'est pas compétente pour définir un SIEG, cette tâche revenant à l'Etat membre concerné, les SIEG doivent toutefois être clairement et précisément définis.

A cet égard, il appartient à l'Etat membre de démontrer que le périmètre du SIEG est nécessaire et proportionné par rapport à un besoin de service public qui doit être réel et actuel. Une définition précise garantit l’absence de surcompensation et permet d’assurer que les activités accessoires des entreprises responsables du SIEG ne bénéficient pas d'aides d'Etat. En outre, les autorités nationales doivent fournir des informations sur tous les coûts supplémentaires encourus par les entreprises chargées des missions de service public.

Il n'appartient pas à la Commission de donner des indications ou de proposer des éléments de définition concernant le mode de détermination des bénéficiaires du SIEG. Le Tribunal a également jugé qu'il n'était pas nécessaire d'indiquer une limite de revenus. En sens inverse, réduire la valeur maximale des logements pouvant être considérés comme des logements sociaux ne permet pas d’identifier les personnes auxquelles les SIEG sont ouverts.

Enfin, une activité accessoire rentable est autorisée aux opérateurs en charge des SIEG. Dans le cas présent, par exemple, en cas de surcapacité des logements sociaux, l'opérateur pourrait louer un logement à des personnes qui n'entrent pas dans la catégorie des personnes cibles. Toutefois, l'activité accessoire ne sera pas considérée comme un service public et ne pourra pas être incluse dans le périmètre du SIEG. En outre, elle doit faire l'objet d'une comptabilité séparée afin de refléter l'absence de subventions croisées. Enfin, elle doit être menée aux conditions du marché.

The GC underlines the importance of clearly and precisely defining the scope of Services of General Economic Interest

Judgment
Joined cases T-202/10 RENV II and T-203/10 RENV II
15.11.2018
PartiesCourtChamberJudge-RapporteurAdvocate GeneralSubject-matter
AppealStichting Woonlinie and Others
v
European Commission
General Court8th Chamber, Extended
Composition
G. de Baere/State aid - SGEI
KeywordsState aid — Social housing – Aid schemes in favour of social housing corporations – Existing aids – Member State commitments — Decision declaring the aid compatible with the internal market — Article 17 of Regulation (EC) No 659/1999 — Service of general economic interest — Article 106(2) TFEU — Definition of the public service mission
Significant pointsOn 15 November 2018, the General Court (the “GC”) dismissed an appeal against a Commission decision on a Dutch aid scheme in favour of social housing corporations.

By decision in 2009, partially modified in August 2010, the Commission had accepted proposals for appropriate measures submitted by the Netherlands concerning a social housing financing scheme considered as an existing aid scheme by the Commission. The Commission’s main finding was that the public service mission for which compensation was granted was not defined precisely enough.

Stichting Woonlinie and other Dutch non-profit social housing corporations sought the annulment of the Commission’s decision before the GC. The latter declared their actions inadmissible (cases T-202/10 and 203/10). On appeal, the Court of Justice of the European Union (the “CJEU”) found the actions admissible and referred the cases back to the GC for judgment on the merits (cases C-132/12 P and C-133/12 P). The GC dismissed the actions as manifestly unfounded (cases T-202/10 RENV and T-203/10 RENV). However, its judgments were annulled by the CJEU by judgments of 15 March 2017 (C-414/15 P and C-415/15 P). The Court again referred the case back to the GC, giving rise to the judgment at hand.

In the judgment on 15 November 2018, the GC dismissed the actions on the main ground that the definition of the service of general economic interest (“SGEI”) for social housing at stake, which was provided for in Dutch legislation, was insufficiently precise (2nd to 6th and 8th pleas). It also dismissed the pleas relating to the concepts of aid scheme and existing aid (1st and 7th pleas).

The GC recalled that public compensation for SGEIs does not constitute State aid if four conditions are fulfilled as per the Altmark judgment. The first of these conditions is that the recipient undertaking must have public service obligations which are clearly defined. This condition must also be fulfilled in cases where the derogation provided for in Article 106(2) TFEU is to be applied, i.e. when some of the other Altmark conditions are not met.

The GC also recalled that Member States enjoy broad discretion as to the definition of what they consider to be an SGEI. Therefore, this definition can only be called into question by the Commission in the event of a manifest error. In this regard, Member States must demonstrate that the scope of the SGEI is necessary and proportionate in relation to the public service need, which must be genuine. The absence of evidence that these criteria are met may constitute a manifest error of assessment.

In the case at hand, the GC considered that the definition of the SGEI was vitiated by a manifest error because it provided that housing for rental be prioritised for people “who had difficulty in finding suitable housing", without precisely defining the target group of disadvantaged people (2nd plea).


The GC found that the Commission did not require a definition of the SGEI based on an income ceiling as alleged by the applicants and was entitled to demand a more precise definition of the target group than that provided for by Dutch legislation (4th and 6th pleas).

The Court also found that the Commission had not erred in its assessment of the scope of the SGEI. On the contrary, it had correctly noted that the absence of a precise delimitation of the SGEI entailed the risk that the compensation granted to housing companies would also benefit their ancillary (profitable) activities, which would therefore not be exercised under market conditions (3rd plea).

The Court also held that, although the Commission cannot make the definition of the SGEI dependent on its method of financing, a clear definition of the SGEI is nevertheless necessary to ensure compliance with the condition of proportionality of the compensation to the public service mission and to avoid that the activities carried out by housing companies outside the SGEI do not benefit from State aid (risk of cross-subsidies) (5th plea).

In addition, the GC found that, contrary to the applicants’ allegations, the Commission had not imposed an exhaustive list of buildings that could be qualified as "social”. The list was established by the Dutch authorities in order to address the concern, expressed during the procedure, that the aid granted for the financing of the SGEI could benefit buildings in which commercial activities were carried out (8th plea).

As regards the first plea according to which certain measures were wrongly considered by the Commission to form part of an aid scheme even though they were individual aid measures not provided for in a legislative text, the GC objected that the fact that individual aid was granted did not exclude the existence of a scheme on the basis of which such aid was granted. Moreover, Regulation 659/1999 does not require that an aid scheme be based on a legislative provision.

The applicants also argued that the Commission erred in failing to examine the existence of overcompensation in the original system of financing social housing. However, the GC objected that such an examination is not, in itself, necessary to properly assess appropriate measures for the future in respect of an existing aid scheme (7th plea).

As a result, the GC dismissed the appeals brought by the applicants.
NoteworthyThis judgment is the latest episode in the case of Dutch non-profit social housing organisations.

It follows that, although the Commission is not competent to define a SGEI since this task falls to the Member State concerned, SGEIs must nevertheless be clearly and precisely defined.

In this regard, it is for the Member State to demonstrate that the scope of the SGEI is necessary and proportionate in relation to the public service need, which has to be genuine. A precise definition ensures that there is no overcompensation and that the ancillary activities carried out by the companies in charge of the SGEI do not benefit from State aid. Moreover, national authorities must provide information on any additional costs incurred by the companies in charge of the public service missions.

It is not for the Commission to give indications or propose elements of definition concerning the method of determining the beneficiaries of the SGEI. The GC also judged that there is no requirement to indicate an income ceiling. Conversely, reducing the maximum value of housing that can be considered as social housing does not make it possible to identify the persons to whom the SGEI is opened.

Finally, an ancillary profitable activity is permitted for operators in charge of SGEIs. In this case, for example, in the event of overcapacity in housing, the operator could rent housing to people who did not fall within the category of target persons. However, the ancillary activity will not be regarded as a public service and may not be included in the scope of the SGEI. In addition, it must be subject to separate accounting to reflect the absence of cross-subsidy. Finally, the activity must be carried out under market conditions.

Services of general economic interest are only valid where the public service obligation is clearly and precisely defined

Judgment
C-91/17P & C-92/17P
26.04.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Preliminary rulingCellnex Telecom SA and Telecom Castilla-La Mancha, SA v European CommissionCourt of Justice ninth ChamberK. JürimäeE. SharpstonState aid – Service of general economic interest
KeywordsAppeal - State aid - Digital Television - Deployment of terrestrial digital television in areas remote and less urbanized of the Comunidad autonomous of Castilla - La Mancha (autonomous community of Castile - La Mancha, Spain) - Grant for the digital terrestrial television platform operators - Decision declaring partially measures of aid incompatible with the internal market - Service of general economic interest (“SGEI”) - Definition
Significant pointsBy judgment on April 26, 2018, the Court of Justice put an end to proceedings concerning a measure of support for the development of digital television in a region of Spain with a low level of urbanisation. As a result of this judgment, the development in question cannot be considered a SGEI due to the lack of a clear definition of the service provided.

In 2016, the Commission considered that this measure amounted to State aid and that it was incompatible with the internal market. In its reasoning, the European Commission considered that, in the absence of both a sufficiently precise definition of terrestrial platform exploitation as a public service and an act awarding the public service contract to an operator of a designated platform, the measure in question could not fall into the ambit of Article 106(2) TFEU relating to SGEI.

An appeal against this decision was lodged before the General Court notably on the ground that the European Commission had infringed Articles 106 and 107 TFEU as well as its obligation to state reasons. The General Court rejected the appeal and upheld the European Commission’s decision, confirming notably that the definition of the SGEI by the Spanish authorities was not clear.

Considering that the Commission’s control over the way in which a Member State defines a SGEI should be limited to verifying that the Member State had not committed a manifest error, the applicants argued that the General Court was mistaken when it found that the definition of the SGEI by the Spanish authorities was not clear enough.

In its judgement, the Court of Justice first recalled that, in principle and subject to the manifest error of assessment, Member States have a wide discretion regarding the scope and organisation of the SGEI that they decide to implement in their territory.

However, the Court also recalled that the power of the Member States concerning the definition of the SGEI was not unlimited. This is because the first Altmark condition is essentially intended to determine whether, first, the recipient undertaking actually has public service obligations to discharge and, second, whether those obligations are clearly defined in national law.

The Court considered in this respect that this requirement implies meeting at least the following minimum criteria: the existence of one or more acts of public authority specifying the nature, duration and scope of the public service obligations.

In that respect, a law identifying telecommunications services, including broadcast radio and television networks as a service of general interest is too general to conclude that terrestrial network operators are responsible for the execution of public service obligations clearly defined within the meaning of the first criterion of Altmark.

In addition the Court of Justice pointed out that the definition of a SGEI can be included in an act that is different from the act by which the public authority entrusts a company with the execution of the SGEI.
NoteworthySince the definition of SGEIs forms part of the first Altmark condition, it leaves real room for its judicial review.

The judgement of the Court of Justice is in line with the judgement dated 20 December 2017 (C-66/16P to C-69/16 P) according to which the definition of a SGEI has to be clear and meet minimum listed requirements.

This judgement confirms that the review of the EU Commission and of the EU courts in SGEI matters is not limited to the mere control of manifest errors in any respect. Distinctions have to be made. For example, the requirements for a clear definition of the SGEI and its public service obligations (“PSO”) and for an entrusting act (which form parts of the first criterion) as well as the need for objective, transparent and prior parameters of the compensation (second criterion) are subject to an in-depth scrutiny. More generally, it seems to us that the trend is towards a more stringent control by the EU Commission and the EU courts of the actions of the Member States in SGEI matters, however without jeopardizing their room for political manoeuvre. The EU Commission and the EU Courts only ensure that once a Member State decides to pursue an objective of general interest by setting up a SGEI, it designs it in a correct, serious and – to some extent - efficient way. This entails that the objective of general interest as well as PSOs must be genuine, the undertaking in charge of the SGEI must be capable of fulfilling the objectives assigned (that is to say being economically viable), there must be a genuine market failure, no overcompensation can be paid, the proceeding by which the undertaking is chosen has to be carefully designed and implemented, …. Fulfilling all of these conditions requires serious and significant preparation by the Member States and the other national and subnational public bodies involved. Public authorities should therefore adequately design their SGEI taking into consideration the decision-making practice of the EU Commission and the principles laid down in the EU courts’ case law. Otherwise, the SGEI may be subject to criticism and annulment by the EU Commission and the undertakings allegedly assigned with a SGEI risk being forced to pay back all the money granted by public bodies.

Application of State aid and Competition law rules to the health sector reinforced by the General Court

Judgment
T‑216/15
05.02.2018
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Non-contractual liabilityDôvera zdravotná poist'ovňa et al v European CommissionGeneral CourtSecond ChamberM. J. Costeira-State aid - Health insurance bodies
KeywordsState aid — Health insurance bodies — Capital increase, debt repayment, subsidies and Risk Equalisation Scheme — Decision finding no State aid — Concept of State aid — Concept of undertaking and economic activity — Principle of solidarity — State supervision — Activity that is economic in nature — Competition on quality — Presence of operators seeking to make a profit — Pursuit, use and distribution of profits — Error of law — Error of assessment
Significant pointsThe General Court has annulled a decision of the EU Commission finding no state aid because the recipient of the measure, a Slovak health insurance body was not an undertaking.

According to the General Court, a health insurance body has to be considered an undertaking and is therefore susceptible to benefit from State aid where it offers goods and services on a market and is in competition as regards the quality and scope of services with operators seeking to make a profit and has the ability to make, use and distribute part of its profits, notwithstanding the social and solidarity nature of certain other features of the health system.

The General Court reached this conclusion after having checked first whether the health insurance body met three cumulative criteria which would mean that it should be considered as not pursuing an economic activity. These are: the existence of a social aim of a health insurance scheme, the implementation of the principle of solidarity by this scheme and the supervision by the State.

In this respect, the General Court found that the second criterion was not fulfilled.

On the one hand, health insurance companies’ ability to seek and make a profit showed that, regardless of the performance of their public health insurance task and of State supervision, they were pursuing financial gains and, consequently, their activities in the sector fell within the economic sphere. Therefore, the strict conditions framing the subsequent use and distribution of profit which may result from those activities does not call into question the economic nature of such activities.

On the other hand, the existence of a certain amount of competition as to the quality and scope of services provided by the various bodies within the Slovak compulsory health insurance scheme also had a bearing on the economic nature of the activity. Indeed, the companies could freely supplement the compulsory statutory services with related free services, such as better coverage for certain complementary and preventive treatment in the context of the basic compulsory services or an enhanced assistance service for insured persons. They compete through the ‘value for money’ over the cover they offer and, therefore, on the quality and efficiency of the purchasing process.

Second, the General Court added that, assuming that some health insurance bodies were not seeking to make a profit, they amount to undertakings all the same, provided that the offer exists in competition with that of other operators that are seeking to make a profit. Where other operators on the market in question are seeking to make a profit, the entities involved would have to be considered undertakings too ‘by contagion’.
NoteworthyThere are several lessons to be learnt from this judgment.

First, the delineation between the economic activity of health insurance and social security schemes, which do not fall within the ambit of Competition and State aid law, was once again at stake, (cf caselaw Poucet & Pistre, C-159/91; FFSA and Others, C-244/94; Cisal, C-218/00; AOK Bundesverband and Others, C-355/00; AG2R Prévoyance, C-437/09) and, In accordance with well-established case law, the General Court resorted to the body of evidence technique to reach the overall conclusion that the entity at stake behaves like an undertaking. Key elements were the commercial and managerial autonomy and the competition with profit-driven operators.

Second, after the Iris Judgment (T-137/10), where a decision of the EU Commission not to open formal proceeding against public hospitals in relation with alleged over-compensation was annulled, the General Court confirms its principle in favour of the full application of State aid law to the health sector. By contrast, the EU Commission appears more inclined to close its eyes to and ignore distortions of competition in light of social considerations.

The stringent approach of the General Court is likely based on the belief that social and solidarity goals should not be a blanket for excessive expenses, unnecessary competition distortions, hurdles to innovation and, at the end of the day, stagnation and a poor level of services. In its view, the Commission may not purely abstain from monitoring whether a public financing to health insurance bodies (like in the case at hand) or hospitals is indeed necessary, justified and limited to what is required.

Third, the judgment appears unclear, however, as to the respective weight of the criteria taken into account by the General Court and notably the one on the existence on the concerned market of profit-driven operators. It cannot be ruled out that the General Court paid attention to strengthen the reasoning of its decision to minimize the risk of appeal and possible annulment by the ECJ.

Certainly, the existence on the concerned market of profit-driven operators makes the other operators become undertakings ‘by contagion’. However, the judgment leaves unanswered the question to what extent operators are undertakings when on the contrary none of them is profit driven.

In this respect, the General Court seems to have been ill at ease in rebutting arguments raised from the AOK judgment (referred to above). According to this judgment, where bodies have a degree of freedom to compete to a certain extent in order to attract persons seeking insurance, that competition does not automatically call into question the non-economic nature of their activity, particularly where that element of competition was introduced in order to encourage the sickness funds to operate in accordance with principles of sound management. In our opinion, the General Court has overstated the scope of the AOK case law. In this case, the sickness funds were not competitors since there was a system of neutralisation and compensation between each other so that they were deprived of financial autonomy and were part of a single system of sickness funds. In addition, they did not compete with private operators. Put in other words, they did not form separate entities enjoying autonomy (one of the constituting elements of an undertaking) and there was not a market for services open to competition.

In our opinion, it would have been more appropriate for the General Court to rule that, as soon as bodies have some freedom to compete, for example as regards the offer of services and/or the quality of the services and form distinct and autonomous entities, they amount to undertakings, no matter whether they or some of them are able to seek and make a profit or not.

Fourth, on a more general level, it cannot ruled out that the rather extensive notion of undertaking developed by the General Court in this judgment could have an impact going beyond the matter of health insurance. It might be of relevance to other areas where entities are assigned tasks of general interest while providing goods or services on a market where other independent operators are active.

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.

Annulment of Commission’s decision finding subsidy of Deutsche Post pension scheme to be State aid

Judgment
T-143/12
14.07.2016
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
AppealPollmeier Massivholz GmbH & Co. KG
Federal Republic of Germany
v
European Commission
General Court8th Ch.M. Wetter/State aid
KeywordsPublic measures concerning the State aid – Postal sector - Funding the wages and social rights additional costs concerning part of Deutsche Post’s workers by means of subsidies and revenues by the remuneration of services at regulated rates – Commission’s decision finding an aid to be incompatible with the internal market - Concept of advantage - Judgement ‟Combusˮ– Burden and level of proof of the existence of an economic and selective advantage - Absence of advantage
Significant pointsFollowing the privatisation of Posdienst in Germany, Deutsche Post - a public limited company - was required to maintain the employment of Postdienst postal service workers and to contribute to a pension fund for them.

By a decision of 2011 the Commission held that the public financing of pensions constituted unlawful State aid and ordered Germany to recover the corresponding amounts from Deutsche Post.

Germany brought an action before the General Court seeking the annulment of the Commission’s decision, arguing that the Commission had incorrectly classified as State aid the public co-financing of pensions.

The General Court, when analysing whether the measure involved within the meaning of Article 107(1) TFEU, conferred a selective advantage to the beneficiary, emphasised that the measure must give the recipient a “selective economic advantage over its competitors” (para. 106).

In this respect, the Court stated that the mere fact that Germany partially covered the cost of pensions for former civil servant postal workers was not sufficient in itself to show that Deutsche Post had an advantage over its private competitors (para. 142). The GC deemed it is possible that, as a result of the public co-financing of pensions, Deutsche Post continued to be at a disadvantage in relation to its competitors or it was at parity with them, without therefore enjoying any advantage (para. 143). That is because the cost covered were not costs that its competitors face.

In relation to the Commission’s reasoning, the General Court held that merely stating the existence of an advantage was not enough (para. 154 - see judgement of the GC of 16 March 2004, Danske Busvognmænd v Commission, T-157/01, “Combus”).

Moreover, the Court held that the Commission wrongly assessed the existence of a selective economic advantage when analyzing whether the aid was compatible with the internal market. The General Court confirmed that the Commission should have established instead the existence of a selective economic advantage at the prior stage of the assessment of the very existence of State aid. (para. 150)

Finally, the General Court concluded that since the Commission did not show that Deutsche Post enjoyed such an advantage when analysing the existence of State aid in its decision, the Commission committed an error of law. Thus, the Court annulled the Commission’s decision insofar as it related to the pension-related subsidies.
NoteworthyAny decision of the EU Commission not to In this judgment, the GC confirmed that in order to classify state intervention as State aid, a real economic and selective advantage for the undertaking over its competitors has to be demonstrated.

The mere existence of financial support without a potential effect on competition in the beneficiary’s market was not considered enough to constitute a selective advantage and therefore State aid. This explicit reference to a competitive advantage is demonstrative of a quite demanding approach by the GC in the definition of a selective advantage and the notion of State aid. The specific circumstance of the case may have encouraged the GC to take this line and it must be seen whether the judgement will be followed on this point in a potential appeal or other cases. However, it can already be mentioned that this judgement is in line with another recent judgement of the General Court of 11 September 2014, Greece v Commission, T-425/11 (“Greek casinos”).

There is also a useful clarification from the General Court on the conceptual aspects of State aid, since the Court confirmed that the real economic advantage for the undertaking needs to be assessed while analysing the very existence of State aid, prior to the assessment.

State aid – Annulment of Commission decision on a Spanish tax exemption for lack of selectivity

Judgment
T-515/13 and T-719/13
17.12.2015
PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
AppealKingdom of Spain and others v
European Commission
General Court7th Ch.M. van der Woude /State aid
KeywordsState aid – Tax measures applicable for the financing and purchase of ships – Decision finding incompatible State aid and the recovery of aid – Annulment proceedings – Advantage – Selectivity – Effect on interstate trade and competition - Reasoning
Significant pointsThe case involved an appeal against a decision by the European Commission in July 2013 to find tax breaks granted by Spain to economic interest groups (EIGs) for the order of ships to constitute incompatible State aid within the meaning of Article 107 TFEU.

The General Court annulled the Commission decision for failing to establish a selective advantage granted to the investors of the EIGs and for failing to provide sufficient reasoning on how the potential advantage distorted competition and affected trade in the internal market.

On the failure to establish a selective advantage (paras 119-180):

- The economic advantage conferred onto the members of the EIGs was available to all taxpayers in Spain, in exactly the same conditions, even in the presence of an authorisation system. Accordingly, the advantage was not deemed selective within the meaning of Article 107(1) TFEU.

- The EIGs certainly benefitted from the tax measures. However, due to their financial transparency, the advantages directly produced by these measures were entirely passed onto their members.

- The fact that the advantage only related to an investment in a certain type of asset and not to other investments or in other assets did not make it selective as regards the investors themselves because the investment was open to all undertakings.

On the failure to show the distortion of competition and effect on trade between Member States (paras 181-209):

- As regards the Commission’s statement that the investors operated in all sectors of the economy and that the advantage conferred strengthened their position on their respective markets, this is a very general statement which could be applied to all types of State support. This statement does not contain any specific element that might explain how the measures involved could distort competition and affect trade between Member States on the markets where the investors were operating.

- The Commission should have provided more information explaining how the advantage received by the investors in the EIGs, and not the shipping companies and shipyards, was capable of restricting or potentially restricting competition and interstate trade within the meaning of Article 107(1) TFEU on the markets where the investors were active.
Noteworthy1. This significant judgment confirms that the approach taken by the EU General Court in its judgments of 7 November 2014 in T-219/10 Autogrill España v Commission and T-399/11 Banco Santander and Santusa v Commission (currently under appeal before the Court of Justice) to thoroughly review the selectivity of tax measures. The EU General Court observed that an advantage must benefit certain undertakings under Article 107 TFEU and that a tax advantage which is open to all types of undertakings cannot be considered selective. A tax measure that benefits a certain type of investment open to all investors is a general measure and does not constitute State aid.

2. In addition, the EU General Court touched upon an area of State aid frequently ignored by the Commission when finding State aid: providing an explanation of how competition and trade are affected by the aid measure. In its decision of July 2013, the Commission had found that the measure benefitted investors who operated in all sectors of the economy. The General Court found this reasoning to be wholly insufficient. Even if an effect can be presumed in most cases, the Commission decision must still explain on which markets this effect will take place.

3. It is notable that the Commission’s decision did not find that State aid had been conferred to the Spanish shipyards. The fact that ordering ships became cheaper for EIGs through the tax breaks offered is likely to have led to an increase in demand for ships built in the Spanish shipyards. The Commission chose instead to identify a selective advantage benefitting the investors of the EIGs who ordered the ships and its decision was annulled for its weak reasoning in this regard.

State aid – Agreement between Hungary and the oil and gas company MOL relating to mining fees in connection with the extraction of hydrocarbons

Judgment

C-15/14  04/06/2015

Parties

Jurisdiction

Formation

Judge Rapporteur

Advocate General

Subject-matter

Reference for a preliminary ruling

 European Commission V MOL Magyar Olaj-és Gázipari Nyrt Court of Justice First Chamber F. Biltgen N. Wahl  State Aid

Key-words

 State aid – Agreement between Hungary and the oil and gas company MOL relating to mining fees in connection with the extraction of hydrocarbons – Subsequent amendment to the statutory rules increasing the rates of the fees – increase in fees is not applied to MOL – Decision declaring the aid incompatible – Selective nature

Summary

 The Court of Justice (CoJ) confirms the judgment of the General Court by ruling that the agreement between the Hungarian State and the oil company MOL does not constitute State aid. The combination of that agreement (signed in December 2005) and the increase in the rate of mining fees resulting from the amendment of the Mining Act (amended in 2007, with effect from 8 January 2008) did not confer a selective advantage on MOL.

By a decision of June 2010,[1] the Commission considered that the combination of the 2005 agreement (fixing the rate of the mining fee with respect to MOL for the following 15 years) and the increase of the mining fee (not applied to MOL due to the agreement) resulting from the 2007 amendment of the Mining Act had the effect of favouring MOL over its competitors. Considering the two events as part of the same measure, the Commission considered this measure constituting unlawful State aid. By its judgment of 12 November 2013,[2] the General Court annulled the Commission’s decision on the ground that there were no elements which proved that MOL had benefited from a favourable treatment compared to its competitors regarding the payment of the mining fees (§10-42).According to the CoJ the requirement of selectivity under Article 107(1) TFEU must be distinguished from the detection of an economic advantage, at least when a general scheme of aid is at stake (§59-64).Subsequent, the CoJ holds that the mere fact that the Hungarian authorities enjoy limited discretion, defined by law, to determine the rate of the extension fee is not sufficient to establish that certain undertakings might gain a selective advantage therefrom. The given margin allows the fixing of an additional charge imposed on economic operators in order to take account of the imperatives arising from the principle of equal treatment, and can therefore be distinguished from cases in which the exercise of such discretion is connected with the grant of an advantage in favour of a specific economic operator (§65).Likewise, the fact that the rates set by the 2005 agreement were the result of negotiation between MOL and the Hungarian authorities did not suffice to confer on that agreement a selective character. The authorities exercised their discretion to set the rate of the mining fee objectively, without discrimination and in compliance with the legal framework governing the conclusion of agreements extending mining rights which does not present any element of selectivity and, therefore, they did not favour MOL over its competitors (§66-71).

Although is not inconceivable that several consecutive measures of State intervention should have, for the purposes of Article 107(1) TFEU, to be regarded as a single intervention, there are no such links between the 2005 agreement and the 2007 amendment of the Mining Act. The increase in the level of the mining fees, resulting from the amendment of the Mining Act, occurred in a context of an increase in international crude oil prices. The Commission did not argue that the 2005 agreement had been concluded in anticipation of such an increase (§88-102).

Important to notice is the fact that external conditions to an agreement change in such a way that the operator in question is in an advantageous position vis-à-vis other operators, that have not concluded a similar agreement, is not a sufficient to conclude that the agreement and the subsequent modification of the external conditions, taken together, can be regarded as constituting State aid. Unless in the situation where the State acts in such a way as to protect one or more operators already present on the market, by concluding with them an agreement granting them fee rates guaranteed for the entire duration of that agreement, while having the intention at that time of subsequently exercising its regulatory power, by increasing the fee rate so that other market operators are placed at a disadvantage, be they operators already present on the market on the date on which that agreement was concluded or new operators.

In addition is the fact that only one operator concluded an agreement of that type is not sufficient to establish the selective nature of the agreement, since the criteria for concluding such an agreement are objective and applicable to any potentially interested operator, and the absence of other agreements may result from, inter alia, lack of interest on the part of any other operator (§66 and 91).

[1] Commission Decision 2011/88/EU of 9 June 2010 on State aid C 1/09 (ex NN 69/08) granted by Hungary to MOL Nyrt.

[2] T-499/10, MOL Magyar Olaj- és Gázipari Nyrt. v Commission, 12 november 2013.

Noteworthy

 This Judgment of the CoJ provides indirectly (by confirming the GC’s statements) valuable insights on the notion of selectivity in state aid matters. Notably, in line with the Autogrill and Santander case law of the GC (and, currently challenged by the EU Commission before the CoJ), a general measure which does not exclude categories of undertakings on the basis of their specific features does not constitute state aid. The very fact that not all undertakings susceptible to benefit from this measure have not done the necessary steps to enjoy it, actually does not alter such conclusion.