Pursuant to article 108 TFEU, the Commission is called upon to assess the compatibility with the internal market of any State aid granted by Member States. Following a preliminary investigation, the Commission can either decide not to raise objections, thereby approving the measure concerned, or initiate a formal investigation. According to settled case law, the initiation of the formal investigation procedure must take place once the Commission experiences “serious difficulties” in its assessment of the compatibility of the proposed aid with the internal market and is unable to overcome all the difficulties raised by that assessment in the course of the initial examination.
The existence of such “serious difficulties” may be substantiated by reference to a body of consistent evidence concerning, firstly, the length and the circumstances of the preliminary investigation and, secondly, the content of the decision at issue. In particular, if the decision reveals that the Commission’s preliminary investigation is insufficient or incomplete, this constitutes evidence that the Commission encountered serious difficulties as regards the classification of the disputed measure as State aid and its possible compatibility with the internal market.
On 13 December 2018, the General Court issued two judgments further clarifying the circumstances under which the Commission should find that there are serious difficulties in the assessment of the notified measure. The judgments in question are cases T-630/15, Scandlines Danmark ApS and Scandlines Deutschland GmbH v European Commission and T-631/15, Stena Line Scandinavia AB v European Commission, two cases opposing the Commission to ferry operators.
These cases concerned a Commission decision not to raise objections in relation to measures granted by the Danish State to support the planning, construction and operation of infrastructure, road and railway connections between Denmark and Germany. More precisely, the Commission decided, following a preliminary investigation, that the measures did not constitute State aid and that, even if they did, they were compatible with Article 107(3)(b) TFEU and with the communication on State aid to promote the execution of important projects of common European interest (IPCEI).
The General Court reviewed the process that led the Commission to conclude that the measures were compatible with the internal market. In this context, the General Court observed that, on various points, the Commission’s analysis was imprecise or contradictory. According to the General Court, these elements demonstrated that the Commission had encountered serious difficulties in its assessment of the aid requiring the initiation of the formal investigation procedure.
These judgments may of course have a significant impact on the handling of State aid notifications and complaints because they urge the Commission to consider the aid measures brought to its attention more carefully. For interested parties (such as competitors of an aid recipient), this is of course a welcome development. These judgments endorse their procedural rights and may well enhance the possibility of expressing their opinion in the context of formal investigation procedures.
Please contact Pierre de Bandt or Jeroen Dewispelaere for further information on these cases and/or for general advice relating to State aid.