Under Article 108(3) TFEU, measures intended to grant State aid cannot be implemented unless they have been notified to the European Commission and declared compatible with the internal market by the latter.
In its CELF judgment of 12 January 2008 (C-199/06), the Court of Justice ruled that national courts were under an obligation to order the recipient of aid declared compatible with the internal market by the Commission, but implemented before the Commission’s decision (i.e. unlawful aid), to pay interest in respect of the period of unlawfulness.
In its Viasat Broadcasting judgment of 24 November 2020 (C-445/19), the Grand Chamber of the Court of Justice clarified that this obligation equally applied in a situation where the aid at issue had been granted, in violation of Article 108(3) TFEU, to an undertaking entrusted with the operation of services of general economic interest, and subsequently declared compatible with the internal market by the Commission in accordance with Article 106(2) TFEU.
In support of this conclusion, the Court of Justice underlined, in particular, that Article 106(2) TFEU allows exemptions to TFEU rules solely where they are necessary for performance of the particular tasks assigned to an undertaking entrusted with the operation of a service of general economic interest. In the field of State aid, this must necessarily be reviewed by the Commission before such aid is implemented. However, that review may only be conducted after the intended aid has been notified to the Commission. Therefore, the performance of the tasks as an undertaking entrusted with the operation of a service of general economic interest cannot, in and of itself, justify an exemption from the notification requirement laid down in Article 108(3) TFEU.
In addition, the Court stressed that any exceptions to the obligation to notify measures intended to grant State aid to the Commission must be explicitly provided for. Hence, State aid which is not expressly exempted from the obligation of notification to the Commission remains subject to that obligation, including aid intended for undertakings entrusted with the operation of a service of general economic interest.
Finally, undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in Article 108(3) TFEU, or a legitimate expectation that the advantage they derive from the non-payment of interest, due in respect of the period during which the aid is unlawful, is itself lawful.
Please contact Pierre de Bandt or Raluca Gherghinaru for further information regarding the above or for general information relating state aid and competition law.