2010EurStAidLQ331

8/13/2019 2010EurStAidLQ331

1/17

Citation: 2010 Eur. St. Aid L.Q. 331 2010

Content downloaded/printed from

HeinOnline (http://heinonline.org)Fri Jan 3 03:33:24 2014

-- Your use of this HeinOnline PDF indicates your acceptance

of HeinOnline's Terms and Conditions of the license

agreement available at http://heinonline.org/HOL/License

-- The search text of this PDF is generated from

uncorrected OCR text.

-- To obtain permission to use this article beyond the scope

of your HeinOnline license, please use:

https://www.copyright.com/ccc/basicSearch.do?

&operation=go&searchType=0

&lastSearch=simple&all=on&titleOrStdNo=1619-5272

8/13/2019 2010EurStAidLQ331

2/17

8/13/2019 2010EurStAidLQ331

3/17

332 1Direct Action in State Aid Cases -Tightropes and Legal Protection? LtL~~1

Nothing in the wor ding of this prov~ision exemptsState aid decisions frorn this requirement.

Also Commnission decisions not to iaise objec-tions to a contested State aid measure oi to approvesuch aid should therefore in the vijew of someauthoirs only be ireviewable if these conditions weremet.

Howxever, Article io8 2) Ti-EU [formerly Article88 (2) BC] foresees that the Commission in the for-mal investigation procedure shall give notice to theparties concerned t submit their comments, priorto taking any decision o the aid.

T1he Court has therefore interpreted the ECTreaty to the effect that parties who would havehad the right to be heard during a formal investiga-tion procedure can only enforce that right by beingable to challenge a Commission decision decidingon the aid issues without the opening of the formalprocedure.

The locus standi conditions have been developedthrough a longstanding case-law that includes thejudgments in Plautnann4 , In(, rinllst/, Co/aZ6, Cook 7Matra Sytraval and Brink ~s France and ARE1 0.

In Plaumnann, the ECJ held that persons otherthan those to whom a decision is addressed mayonly claim to be individually concerned if that deci-sion affects them by reason of certain attiibuteswhich are peculiar to them or by reason of circum-stances in which they are differentiated from allother persons and by virtue of these factors distin-guishes them individually just as in the case of theperson addressed .

In Cofaz, the ECJ decided that any undertakingseeking to challenge a decision by the Commissionto end the formal review procedure under Article93 0 BC [later Article 88 3 BC and now Article108(3) T1EU] would both have to showx that its mar-ket position had been substantially affected by thecontested aid measure and that it had been proce-durally involved in the Commission's decision-making by way of having been at the origin of thecomplaint that led to the opening of the procedureand by subsequently hav ing played a decisive rolein the conduct of same procedure.'I1

In Cook, the ECJ confirmed that the preliminarystage of the procedure for reviewing aids under whatinow Article io8 3) TFEU is intended merely to

allow the Commission to form a prima facie opinionon the partial or complete conformity of the aid inquestion, and must be distinguis~hed from the exam-ination under what is now Aiticle io8 2) TEI.

The Court observed thati) it is only in connection with the latter exarnina-

tion, which is designed to enable the Ciommis-sion to be fully informed of all the facts of thecase, that the Treaty imposes an obligation onthe Commission to give the par ies concernednotice to submit their comments,

(ii) wxhere the Commission finds, without initiatingthe procedure under what is now Article 1io8 2)Ti-EU, that an aid is compatible with the cornmon market, nowx in T1FEU the internal mar-ket ), the persons intended to benefit fromthose procedural guarantees, [i e. the partiesconcerned ], may only secure compliance there-w~ith if they are able to challenge that decisionby the Commission before the Court, and

(iii)consequently this w~ s allowed (although notwxithout limnitations as we shall see).

Furthe, the parties concerned , within the mean-ing of what is now Article io8 2) TFEU, had inJntcrnzlls been defined by the Court as the persons,undertakings or associations whose interests mightbe affected by the giant of the aid, in particularcompeting undertakings and trade associations.

On this background, a distinction has beenapplied in practice between actions by which theapplicant essentially seeks to safeguaid the proce-dural rights available to him under what is no wArticle io8 2) TFEU by challenging the Commis-Sion's failure to open the formal investigationprocedure, and actions by w~hich the applicantessentially w~ishes to receive a final and bindingdecision from the Community judicature concern-ing the contested measure's substantive compati-bility wxith Community lawx and therefore questions Cas 5/62, Plaurnann v Commission. ~ Case 32382 SA Intermills v Commrission.6 Case 169/84, Cofaz and others v Commrission, judgment oi

28 January 1986.7Case C 1 98/91, Cook v Commrission.

8 Cas C-2-5, Mtra. Commiss~ion.9 QCs C-367/95 Commrission %,Svtraval nd Brinks France.

0 Case C-78 @3P,Aktionsgerneinschaft Re lit uncl EigenturnvCommission (hereinater AR~E )Michael HonorE reflcted inEStAL 2/200 1he Standing of Third Parties in State Aid Cases-on the legal position following ARE.

I I See the article by lasmin Battista i participation in the Commis-sion' administrative procedure a necessary condition for legalstanding , EsTAL 2/008 foi a further analysis oi the case-law~evolvement on the procedural participation requirement laiddow~n in ctaz_

EURODPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

4/17

L~t\L O1ODirectction in State Aid Cases -Tightropes and Legal Protection? 333

the merits of the Commission's decision appraisingthe measuire.

To the extent that the applicant either challengesa decision taken at the end of the formal investiga-tion pioceduie under Article 1o8 2) TFEU oi by itsaction and pleas essentially challenges the substan-tive legality of the Commission's decision not toraise objections to the contested measure, the appli-cant has, according to case-law, , had to demonstratethat it enjoys a particular status within the meaningof Plaumann.

If on the other hand, the applicant merely byits action seeks annulment ot the Commission'sdecision not to open the formal investigation pro-cedure under Article io8 2) Ti-EU in order to safe-guard his procedural rights under this Article theapplicant w~ill only have to showx that it is a 'con-cerned party within the meaning of Article io8 2)TFEU or an interested party within the meaningof Aiticle 4 of Regulation 659/1999.

Finally, the case-law piovides that an associationmay have standing if its members oi some of itsmembers -would have had standing had theylaunched the action themselves oi if the associationitself is affected by the contested decis~ion in such aspecial manner, e.g. in its capacity as a negotiatothat the necessary standing is attained in this way.

The Cook and katra doctrine was criticised,amongst others in the light of the wording ofArticle 23 (4) EC but by the judgment in ARE, theCourt, acting in Grand Chamber, rejected the chal-lenges to this doctrine as the Court did not followxthe express proposal by Advocate General Men-gozzi that the Court once and for all abandoned thisdoctrine.

F-urther the Court introduced in ARE a doctrineconcerning reinterpretation of the applicant's pleas.

12 See in particular paragraph 34-37 of the jUdgment. The Court alsouncleilined that in the event an association set Lipo promrote thecollective interests of a category of prons calls into question themerits o a Comrmission decision on State aid, the association ca nonly be regarded s being individually concerned to the extentthe position of its members in the market is suibstantially affetedby the aid schcrnE covered y the contested decision. Moreoverthe Couirt made it clear that an applicant cannot invoke its paitic-pation in the formal review procedure before the Commission assuifficient proof of being i idii dia liv conceirned by the contesteddecis~ion.

13 The Court stated that the jUdic laiEs cannot reinterpret an applica-tion, y which only substantive pleas aie invoked, to the extentthat the purpose of this annulment action shall hereinafter beconsidered to s k a safeguaring oi the applicant's proceduralrights

Contrary to the CEJ s decision in the case underappeal, the Court held that ARE's action was notadmissible as ARE had not submitted any expresspleas claiming infringement by the Commission ofits procedural rights pursuant to Article 88 2) ECnor had ARE established that it was substantiallyaffected by the Commission's decision. ARE hadonly submitted pleas, which contested the substan-tive legality of the Commission's decision. T hiscould not be 'repaired so to be treated as a plea forstanding in order to obtain annulment w~ith a viewxto the opening of the formal investigation proce-dure'

Such a reinterpretation of the application wouldconstitute a reclassification of the subject-matter ofthe annulment action going beyond the judiciaries'lawful discretion.

F-ollowxing the judgment in ARE, the Communitycourts~ will -at least as mrain rule -not reinterpretthe applicant's pleas as a support for a plea that theCommission failed to open the formal investigationprocedure under Article l08(2) TFEU if the appli-cant has not expressly submitted a plea claimingthis failure on behalf of the Commission.

3. The Impact of the Lisbon TreatyAmendment of Article 23 [C

Atticle 230 (4) EC wvas amended with the LisbonTreaty and moved to Article 63 (4) T1FEU.Article 23 (4) EC set out that 'Any natural or

legal person may, under the same conditions, insti-tute proceedings against a decision addressed tothat person or against a decision which, although inthe forni of a regulation or a decision addressed toanother person, is of direct and indii dual concern tothe former

Now the wording of Article 263 (4) T1FEU is thatAny natural or legal person may, under the conditions laid down in the first and second paragraphs,institute proceedings against an act addressed tothat person or which is of direct and individual con-cern to them, anti againsta regulatory act which isof dlirect concern to them anti does not entail implementing measures .

According to the new wording only the require-ment of 'direct concern but not the requirementof indiv dual concern' wvill apply to the challengeof a riegulatory act not entailing implementingmeasures.

EUR-QPEAN STATE AID LAW QUARTER-LY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

5/17

334 1Direct Action in State Aid Cases -Tighitropes and Legal Protection? LtL~1

The notion of regulatory acts is not defined inTEUh It is not settled whether the term shall beinterpreted to include legislative acts (which wouldbe suppoited by the wording) oi only non-legisld-tive regulatory acts which may find support in thehistory of the provision which has been taken oveifrom the Constitutional Tireaty) 1

In any event it would appear less likely that Stateaid decisions made by the Commission prima faciew~ould qualify as 'regulatory acts not entailingimplementing measures

It could be questioned w~hether guidelines adopt-ed by the Commission wxould qualify as regulatoryacts in light of the fact that such guidelines are nor-mally binding upon the Commission. To the extentthat the soundness of a decision w~ s dependentupon the validity of a set of guidelines, one couldtherefore alo consider whether the decision itselfcould be challenged on that basis by applicants whowere not indiv idually concerned.

However, at the present stage it appears morereasonable to assume that the requirements ofdiirect and indiv dual concer n established in pirac-tice under Article 230 (4) EC will continue to beapplicable under Article 263 (4) TFEU as regards~State aid decisions, both as regards indiv dual aidsas well as aid schemes.

Ev en though a Commission decision in one par-ticular case may serve -at least at the administra-tive level -as a precedent for subsequent cases oraid measures, it w~ould seem difficult to argue thatsuch a decision constitutes or implies an abstractregulation of the legal order.

Howxever, these issues wxill have to be assessed innew~ case-law,%as none of the judgments discussed inthis article have been passed after the entry intoforce of Article 263 (4) iFEU on 1 December2009

gation proceduie under what is now Article 1o8 2TFEU.

In Section we ieview some of the most impor-tant procedural issues in the light of these judg-ments and identify a number of lessons learned.In Section 4 and 5 we v sit some of the issues ofreviewxable acts in the light of the judgments in thinaikifechniki and M i

inally, in Section 6 w~ set out some conclusionson the visited cases and the procedural issues con-cerning private parties' access to challenge theCommission's State aid decisions.

IL.Recent Case-law on Direct andIndividual Concern

1. Case 1 289/03 -BUPA v. Commission

This judgment was passed by the CFI on 12 Februa-ry 2008.16

The case concerned a contes

8/13/2019 2010EurStAidLQ331

6/17


Irish P market on which the VI 11 occupied adominant position.

Moreover, it was undisputed that BUPA Irelandat the time of the application -was the sole net con-tributor undei the RES.BUPA contested both the substantive legality ofthe Commission's decision as well as the Commis-sion's failure to open the formal investigation pro-cedure.

In accordance with the Cook and Mlatracase-law,,the CFH found that the applicants had standing, inso far as they sought to secure respect for theirprocedural rights under Article 88 2) EC as theyundisputedly were parties concerned wxithin thesense of Article 88(2) EC.7

In addition, the CFH found that the applicantscould challenge the substance of the contested deci-sion as they were both directly and alo individual-ly and substantially affected by the decision withinthe meaning of the Plaumann case-law.

On the issue of diiect concein the CHJ statedthat a contested national aid measure is not inter-mediate if it is puiely theoietical that the nationalauthoirities will not enact it. Since the Irish authoi-ties fiimly intended -at the time of the application-to implement the RES, the only iemaining ques-

tion being when it would become applicable, theRES was not an inteimediate aid measure. Theapplicants weie theiefoie diirectly conceined by thecontested decision.As regards the issue of individual concern, theCFH emphasized that BUPA Ireland was the VHI'smain competitor on the Irish IDMI market, and thatBUPA Ireland w~as the only net contributor underthe RES at the time of the application. Furthermore,the mechanism of the RES essentially led to a rans-fer of funds from BUPA Ireland to the VHI.

T1he fact that the group of persons concerned bythe RES in theory comprised all insurers on theIrish PMl market could not alter or alleviate theburden actually imposed on BUPA Ireland as thesole net contributor.

17 Ct paragraph 7_ 76.18 See for rev ew of the CH's judgment in the case the annotation,

Review 0f judgment in case T-27/02 Kronotirance v. Commis-sion by Ulrich Soltesz in [StAL 1/005

01 1998 C 107 p.7, the mLtisectoral frarnexwotk of 199820 Cf. paragraphs 28-31 of the jUdgment.21 Cf paragraphs 103-113 of the opinion.

The CTI theiefoie held that BUPA Ieland wassubstantially affected by the Commission's decisionto accept the RELS.

2. Case C-75/05 C-80/05 -Germany v. Kronofrance SATihe Court passed judgment in this case on 12September 2008 after having heard the Opinion ofAdvocate General Bot delivered on 6 March 2008.18

Tihe case before the CIH (case T 27/02) concerneda Commission decision not to raise objectionsagainst Germany's grant of investment aid to amanufacturer of wood panels and boards, Glunz,for the construction of an integrated wood process-ing centre. is aid fell w~ithin the 1998 multisec-toral framework on regional aid for large invest-ment projects' .

Befoie the CFI a French competitor KronofianceSA had attacked the Commission decision, arguingamongst otheirs that the Commission had infringedAtticle 87 EC and the multisectoial framework aswell as on the ground that the Commission hadwirongly refused to initiate the formal investigationpioceduie piovided for in Aiticle 88 2) EC.

The CFI had found that Kronofiance SA was aninteiested party that was directly and individuallyconceined so that the application was admissible.Fuithei the CFI found that the Commission had infact infringed Article 87 BC and the mulisectoralframewxork and annulled the decision.

An appeal to the Court w~as brought by Germanyas w~ell as by Glunz and another entity, OSB3

Tihe Advocate General, the Commission andGermany all invited the Court to depart from its set-tled ook and Matraand Plaurnann case-law, , albeitin opposite directions.

Tihe Commission and Germany contended thatKronofrance s status as an 'interested party withinthe ook and atra sense wxas insufficient for it togain locus standi and that Kronofrance insteadneeded to prove that its comnpetitive situation wassubstantially affected by the contested aid. This wasallegedly not the case since Kronofrance in theirv ew was not ev~en a competitoi to Glunz on therelevant market.]0

Advocate General Bot on the other hand piro-posed a unified locus standi test 2 based on thepurpose of the action to be applied iirrespective ofthe grounds invoked by the applicant in support of

EUR-QPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

7/17

336 Direct Action in State Aid Cases -Tightropes and Legal Protection? LtL~~1

the plea foi annulment of the contested Commis-sion decision.

He suggested that the ook and klatra inte-iested party threshold should be applied in allsituations in which an applicant challenges a deci-sion taken at the end of the preliminary exarnina-tion while the Plcwmanin and ofaz substantialaffectation threshold should be applied in all situa-tions, in w~hich the applicant challenges a decisiontaken at the end of the formal investigation proce-dure.

T he Advocate General argued that all actionschallenging a Commission decision taken at theend of the preliminary examination essentially andnecessarily call in question the Commission's fail-ure to open the formal investigation procedure, irre-spective of the pleas in law invoked in support ofthis action by the applicant, s the sole purpose ofsuch an action would be the initiation of the formalprocedure to investigate the aid.

Contrary, once the formal investigation proce-dure has been initiated and the inteiested partieshave been able to lodge theii observations in thatiegard, the action brought against the Commis-sion's decision by necessity seeks to call in questionthe validity of its assessment.

The Advocate General consequently suggestedthat any person wishing to biing an action againstsuch a decision would hav e to show an individualinterest pursuant to the Cofiaz thieshold by estab-lishing that its competitive market position hadbeen substantially affected by the contested deci-sion.

T he Court rejected both the proposals of theAdvocate General and the Commission and con-firmed the locus standi doctrines set out in the ookand Mlatraand Ploumann case-lawx

T he Court stressed that the FJ had rightlyfound that Kronofrance had sought annulment ofthe contested decision on the ground that theCommission had w~rongly refused to initiate the for-mal investigation procedure provided for in Article88 2) EC, and that Kronofrance therefore wouldmerely have to show that it had the standing of aninteirested party in oirder for the action to beadmitted.

The Couit iejected the argument that Krono-fiance would in addition have to establish that ithad been substantially affected by the decision as itwould suffice to establish that a competitive iela-tionship existed between Kronofrance and Glunz.

As the EJ had also scrutinized this aspect, theCourt iejected the Commission's and Germany'spleas and upheld the Ads ruling.

2.1. Case T-388/02 -Kronopiy GmnbH co.and others v. CommnissionThe FJ rendered judgment in this case on 10 De-cember 2008.

T he action was brought by two German compa-nies, Kronoply and Kronotex, against a Commis-sion decision not to raise any objections to certainindividual aid measures granted by Germany toLellstoff Stencial GmbH (LZSG ) for the construc-tion of a cellulose factory and the establishment ofa w~ood procurement undertaking and a logisticsundertaking in Sachsen-Anhalt.

Kronoply and Kronotex pleaded that the deci-sion infringed the 1998 mulisectoral framewxorkon iegional aid for large investment projects andArticle 87 1) and 3) c) EC, that ZSG's own con-tribution was too small, that the Commissionhad made a number of mistakes in the calculationsand that the Commission had failed to examinethe sectorial effects of the aid plans on wood s aresource.

As to pioceduie, Kronoply and Kronotex con-tended that the Commission had infringed Article88 2) EC and Regulation 659/199 since no foimalinvestigation procedure had been opened althoughthe Commission had had serious cause for concein.Opposing these pleas, the Commission invokedin support of a plea of inadmissibility thatKronoply and Kronotex were not active on thesame product market s ZSG. Therefore, Kronoplyand Kronotex were not direct competitors of ZSGand could not be 'interested parties within themeaning of Regulation 659/1999 and Article 88 EC.F-urther they were not substantially affected bythe contested aid. T he Commission also argued thatthe FJ could not reinterpret he appl cants' pleas soto render them admissible if no procedural argu-ments supporting the pleas had been made, cf. AREThe CEI should theiefoie abstain from iuling onthose of Kronotex' pleas that only conceined themerits.

The German Government submitted in supportof its plea foi inadmissibility that Kronoply andKronotex had to piove that they had a 'materiallyrelevant interest in annulment of the contesteddecision, and that the applicants had failed to piovethe existence of such an interest.

EUR DPEAN STATE AID LAW QUARTEPLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

8/17


The CFI followed neithei.Aftei reciting the Cook and kla tra ARE and

Flautnann case-law, the CFI stated that sinceKronoply and Kronotex disputed both the legalityof the Commission's decision as such as well as theCommission s failuie to open the formal investiga-tion procedure, the CH- wxould have to conduct atvo sided locus standi test a dual approach , byfirst evaluating, w~hether the applicants had provedto meet the Plo urnann formula of being substan-tially affected so to have standing to challenge thesubstance of the Commission's decision.

If this was not the case, the CH would in thealternative have to examine whether the applicantshad demonstrated that they w~ere 'interested par-ties w~ithin the sense of Regulation 659,/1999 andthus had standing to challenge the Commission'sfailure to open the formal investigation procedure.

The CFI did not find that Kronotex andKronoply weie substantially affected by the con-

22The CHIemphasized that ZSC had only 1-2 ' o n the [C printpapei market and its need fell fresh w~ood varied from 2J to A4million mn3 qualling about 4' ft the 60 million m3 of freshw~ood available in Germany Conseque ntly, the contested aid w~asnot of a nature to aus substantial impact on the applicants'competitive position. Furthei Kronotex and Kionoply had notproved, even if accepting that the local price of fresh wood hadncreased since the introduction of the contested aid and that

their profits had decreased as a result of the contested measure,that this was not also the case fell tw~elve othei factories close toZSC. They had therefore not proved to be sufficiently individuallyaffected by the contested aid. Finally they had not pioved thattheir lose af~terhe introduction 0f the contestd aid wverecaused by the aid and not by other external factors.

23 The main reason being that Kronoply and Kronotex had submittedthat as the local prices 0f fresh wood had increased, both theirposition on the local Lupstream maiket foi purchase of fieshwood where they comnpeted wvith SG and their position on theirow~n owxnstream maiket were negatively affected. The CFI ouindthat it wvould not do justice to the wvide notion 0f the concept of nteiested party- only to have regaid to the aid's possible affect

on the direct product market on wvhich the aid was granted ordeemed to be applied. It should therefore be assessd how~ the aid-given the structure 0f the relev ant provision market in the case

and the limited wxood resourice within this market - would impacton the applicants interests EvEn thoug~h Kronoply and lxronoTexlad no>t rve any direct caus~al ln between the introductoothe contested aid and the increased price on wood from the rele-vant provision zone, the fact that the price had increased wAouldbe likely to have further repercussions on their costs and/or prices,thus affecting theii competitive position on theii product market

vi mi competitors not provisioning from the same zone as themand thus not being affected in the same way

4 Paragraph 80.25 Cf. paragraphs 82-8326 See the summary of the appeal, published in he 0.1. C 141,

20.6.2009 p.2627 Case C- 17/09P1

tested decis~ion and aid 22 but found that they were interestedparties

The CIl therefore concluded that the actioncould be admitted inasmuch as Kronoply andKronotex sought to safeguard their proceduralrights under Article 88 2) EC.

In the light hereof, the CFI examined the natureof each of the three pleas invoked by Kronoply andKronotex in support of the claim for an annulmentof the Commission's decision.

T he CFH noted that Kronoply and Kronotexexplicitly invoked the Commission's failure to openthe formal investigation procedure in their secondplea2 Reciting the RE ban on reinterpretation ofpleas by stressing that to the extent that an appli-cant had not invoked any plea of failure to open theformal investigation procedure at all, the CFI couldnot take into consideration any pleas prima faciegoing against the substance of the Commissionsdecision.

The CFI however stated2 3 that this ban did notgo so far as to restrict the Community judge fromscrutinizing the aiguments invoked by an applicantin one context in order to verify whether the sameargument could be utilized in another context toascertain whether the Commission had encoun-tered such serious difficulties that it should haveopened the formal investigation procedure.

The CFI therefore concluded that Kronotex'andKronoply's fiirst plea on the Commission's misap-plication of the case's relevant merits w~ s admissi-ble as ancillary support for their second plea on theCommission's failure to open the formal investigation procedure in spite of serious difficulties .

Kronotex' and Kronoply's third plea on the Cornmission s decision infringing Article 87 (i) and(3) (c) C and the multisectoral framewxork wasinadmissible inasmuch as Kronotex and Kronoplyby this argument in reality asked the CFH to passfinal judgment on the aid's compatibility w~ith thecommon market.

After an examination of the issue of seriousdifficulties, the CFI disis'sed the action as un-founded.

The Commission has appealed the CFI's judg-ment. 6

The Commission contends that the CFI eired inlaw in 1 applying the Cook and Matra standardwhen assessing the locus standi of an interestedpaity since -according to the Commission -theindividual concer n should hav e been deteirmined


ESt L 2 2

8/13/2019 2010EurStAidLQ331

9/17

338 1Direct Action in State Aid Cases -Tighitropes and Legal Protection? t ~

on the basis of the Plautnann foimula instead, andthat 2 the CFI conducted an inadmissible rint rpretation ot the foims ot order sought by the applicants inasmuch as the CFI examined aiguments Putforward by the applicants which were not put for-waid in regard to the piotection of the applicants'alleged procedural rights, even though the actionw~ s admissible only for the purposes of protectingthe alleged procedural rights.

T1he judgment under appeal would in theCommission's view ultimately lead to the introduc-tion of a popular action against State aid lavx deci-sions, which according to the Commission wxouldbe extraneous to Community lawx

3 Case C-487/06 PBritish Aggregates Associationv. Commission

The Court rendered judgment in this case on December 2008 after having heard the Opinionof Advocate General Mengozzi on 17 July 2008.

The Court set aside the FEJ ruling in caseT-210/02 dismissing British Aggregates Associa-tion's ( BAA') action against the Commission's deci-sion not to raise objections against a contested gen-eral State aid measuie in the foim of a part of theUnited Kingdom's 2 1 Finance Act ("the Act )imposing a levy on the commercial exploitation ofaggregates ('the AGL ) in the United Kingdom2

BAA had in its first plea before the CFI set fortha substantive plea contending the Commission'sinfringement of Article 87 1) EC, wxhereas BAA inits second to fourth pleas had submitted 'purelyprocedural pleas". In its third plea before the CI,BAA had explicitly invoked the Commission's fail-ure to open the formal reviewx procedure 8

T1he CFI had dismissed the action after declaringit admissible2

BAA appealed and the Commission lodged across-appeal on the CFJ's ruling on the admissibili-ty of BAA's action.

In support of the cross-appeal, the Commissioninvoked that the CFI had eired in law by failing tohave iegard to the fact that the AGL was a incasurcof gener l application which affected a potentiallyunlimited number of opeiratoirs in the UnitedKingdom and that the membeis of BAA were notthe only undertakings affected negatyively by theAGL. Due to this general natuie of the AGL, the

Commission's decision could not be of individualconcein' to BAA, nor to its members.

Moreovei, the Commission contended that BAAhad challenged the soundness of the Commissionsdecision, and that BAA theiefoie needed to pass thetest laid down by Plautnann and Cofaz

As the contested aid scheme w~ s of a generalnature, the Commission w~ent one step further, sub-mitting that BAA w~ould have to pass an evenstricter test than that of substantial affectation inorder to prove individual concern within the senseof article 230 (4) BC. OtherwisLe the result wouldhave systematic implications in so far asCommission decisions regarding alleged aid meas-ures of general application, particularly in the formof tax measures, w~ould then become challengeableby potentially unlimited numbers of individuals, tothe point of depriving the concept of 'individualconcein' in the fourth paragiaph of Aiticle 23o ECof its useful meaning."3

In his opinion Advocate Geneiral Mengozzi sum-marised the Plautnann and the Cook and Matracase-law as confiirmed in ARE

H-e suggested that the the case-law on locus stan-di could be tiaced back to the need to ensuie thatwhere an action is birought by apeirson who is sim-ply relying on his status as a concerned party with-in the meaning of Article 88 2) EC, the Communityjudicature' rev ew of the contested decision shouldnot go beyond what is needed to ensure that theprocedural rights conferred by that provision arecomplied with.

T1hat w~ould be the case w~here rather than mere-ly determining wxhether the conditions justifyingnon-initiation of the formal investigation procedurewere satisfied the Court wxould establish that thecontested measure did constitute unlawxful State aidor that the Commission erred in lawx when declar-ing the aid measure compatible wxith the commonmarket.

In such cases the applicant w~ould not only havesecured initiation of the formal investigation proce-duie but also obtained a judicial decision by which

27Cf paragraph 2 o the ju~dgment referring to paragraph 18~of the HFs jUdgment.

8 Cf. paragraph 5~ f the ju~dgment.29 The CHI held that the Commisson had not made any manifest

ei ors of assesment, not encounitered difficl ties requLii ng theformal investigation procedure to be initiated.

30 Cf. paragraphs 13-19 of the jUdgment.

EUR-DPEAN STATE AID LAW QUARTEPLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

10/17

8/13/2019 2010EurStAidLQ331

11/17


capable of affecting the competitive position of aniumber of BAA's members significantlyT e Court stated that a special status within the lautnann sense requires proof of a substantialadveirse effect on the applicant and that if an effectof that kind is established, the fact that an unde-fined number of other competitors may, in appro-priate circumstances, allege that they have sufferedsimilar harm does not constitute an obstacle to theadmissibility of the action brought by the appellantundertaking 3

Moreover, the Court rejected the Commission ssubmission that the lcwmnann special statuscould only be demonstrated by proving theexistence of such factors as a significant decline inthe applicant's turnover or an appreciable financialloss or a significant reduction in the applicant'smarket share followxing the grant of the aid in ques-tion.

The Court held that the iequiied pioof of theadveirse effect on the applicant could equally beinferred from a large number of othei factois suchas e.g. the applicant' loss of an oppoitunity tomake a piofit and the applicant's business under-going a less favourable dev elopment than whatwould hav e been the case without the disputed aid.The structure of the maiket concerned and thenlatur e of the aid in question should be given par-ticular cons~ideration.

4. Case T-388/03 -Deutsche Post andDHL International v. CommissionThe FH passed judgment in this case on 10 Februa-ry 2009.

Deutsche Post and its Belgian subsidiary DH LInternational had brought action against the Coinmission's decision Of 23 July 2 3 not to raise ob-jections against certain individual aid measuresgranted by Belgium to a publicly owned enterprise,La Poste.

La Poste wv s iesponsible for the universal postalserv ce in Belgium pursuant to a public serv cemanagement contiact with the Belgian state andfurthermore conducted various serv ces of generaleconomic inteirest.

Before the CFI the Commission pleaded that the FH should rule that Deutsche Post's and DI-ILInteirnational's action against the decision was mnad-missible as the applicants' position on the maiket

was not substantially affected by the aid measure,and as the applicants were not individually con-cerned. F urthe, according to the Commission, theaction was inadmissible since the applicants hadoniy very geneially claimed infiingement of theirpioceduial guarantees and, in the form of ordersought by them, had sought annulment of the con-tested decision and not the initiation of the formalinvestigation procedure.

Deutsche Post and DHL refuted the Commis-sion's pleas, contending that the contested meas-ures distorted competition to their detriment, sincethey operated as direct competitors ot La Pioste onthe Belgian market, particularly within the expressparcel delivery sector.

T1he CIH noted that it was apparent from theapplicants' seven pleas that the applicants simultaneously challenged both the Commission's refusalto initiate the formal investigation procedure andthe substance of the contested decision.

Consequently, the CFI found that it had to cariyout a two-phased analysis ( the dual approach '),fiirst consider ng whethei the applicants had stand-ing to challenge the substance of the contested deci-sion and, secondly whether they in the alternativehad standing to ensuie that their procedural rightsweie respected.4

The CFI did not find that the applicants hadestablished that their position on the maiket couldbe significantly affected by the aid. The CFIstressed that it did not suffice to simply adduce thatthe applicants w~ere in a competitive relationshipwith La P~oste and/or that the contested aid measurecould exercise an influence on this competitive rela-

7 Thes factors included the fact that BAA argued that the exemp-tion had a negative impac ton the competitive position 0f those ofits mnembers wvhich exported very little or not at all unlike theirlarger competitors on the United Kingdom market. The eemptionfor exports conferred on those competitors and in particuIlar onone opeiatoi w.hic wixashe sour e 01 over 9 X of exportedaggregates the advantage of hav ng no losses to recoup by the

prceo products sold in tie United Kingdom. By cot t BA'smembers were led to sell their taxed aggregates at a los and toiecouip the cost of the ACL across all theii products.

8 Cf. paragraphs 639 See for a further analysis of the substantive State id issues related

to the BAA judgment Michael Honore, '.Selectivitv and TaxationReflections in the Light of Case C-487/06 P.British AggregatesAssociation and Raymond H.C. LLIja 'Group Taxation, SectoralTax Benefits and De Facto Selectiv ity in State Aid Rev iew' bothEStAL 4,1009.

40 Cf. paragraphs 45-46 of the judgment.

EURODPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

12/17

L~t\L O ODirectction in State Aid Cases -Tightropes and Legal Protection? 34-1

tionships on the relev ant market(s). Deutsche Postand DHL had not established that they were affected by the decision anymore than the other compet-ing undertakings on the relevant Belgian postalmarkets. As a result the CFI held that Deutsche Postand DI-IL had not been substantially affected by thedecision and did not have standing to challenge thedecision's substantive legality.

T he CFI howxever found that the applicants hadthe status of concerned parties w~ithin the mean-ing of Article 88(2) EC in their capacity as directcompetitors of La Poste on the express parcel deliv-cry market. T1hey wxere theretore granted standingto challenge the Commission's failure to open theformal investigation procedure.

Before reaching this conclusion, the CFI hadassessed whether the applicants could in fact bytheir action be said to seek to defend their proce-dural rights iesulting fiom Article 88 2) E C 4 I

Refeiring amongst others to a set of cases from196 i as well as to the Thermcnhotcl case theCFI held that an applicant's pleas should be 'exam-ined in ter ms of their substance rather than of the irclassification, and that it could also examnine otherarguments which an applicant advanced in order toverify whethei they too contributed evidence ofarguments in support of a plea expressly claimingthe existence of doubts which would have justifiedthe initiation of the proceduie refeired to in Ar-tidle 88(2) EC.Tihe CIH scrutinized Deutsche Post's and DHIL'sseven pleas and concluded that Deutsche Post andDFHL had, by their second plea, expressly submittedthat their procedural rights which they derivedfrom Article 88(2) EC w~ere infringed. The CFH fur-ther held that it was apparent from the applicationthat the third, fourth, fifth and seventh pleas pro-vided arguments in support of the second plea,since the applicants claimed by these pleas, in cer-tain specific respects, that the Commission's exam-

4 Cf. paiagraphs 4-5 of the judgment.42 joined case 19/60 20/60 2/61 and 3/61. Fives Lille ailarnd

Othters vs. High AUthority.43 Case T- 58/ 99 Theimenhotel toiset Franz and Others v

ormssion

45 Cf paragraphs 62-64 of the jUdgment.46 Ct paragraphs 66-67 and 69 of the judgment.47 Cf. point 71 of the opinion.

ination wv s insufficient and incomplete and thatthe formal investigation procedure should havebeen initiated. The CIl thus found that the appli-cants had standing to bring proceedings against theCommission's decision not to open the formalinvestigation procedure.

In support of its plea for inadmissibility theCommission had also claimed that the applicantshad no legal interest in the outcome of the dispute.Tihe Commission took the view that, if the contest-ed decision was annulled, there wxould be a risk forthe applicants that the Commission Decision2002/ 3 /EL ot 19 June 2 2 on measures imple-mented by the Federal Republic of Germany forDeutsche Post4 4 , wxhich declared those measures tobe incompatible w~ith the common market, wouldbe confirmed. The applicants disputed that argu-ment.

The CFI equally renounced the Commissionsposition taken on this point by expressing that theapplicants had in fact as concerned parties suffi-cient legal interest in seeking the annulment of theCommission's decision inasmuch as such an annul-ment would require the Commission to initiate theformal investigation procedure, permitting them topresent their observations and thus exert an influ-ence on the new Commission decision. It was notfor the Community courts to compare the pleasraised by the applicants in the context of the actionat hand with the arguments in defence presentedby them in a separate case, as the matter of legalinterest w~ s solely to be decided on the basis of thestanding and arguments set out in the case athand.

inally, the CIH considered wxhich kind of reviewthe CIH was to conduct and wxhich of the applicantspleas the CH- could examine under the scope of itsreviewx 46

Tihe CH- first returned to Advocate GeneralMengozzi s Opinion rendered in B 4 by settingout that w~hen reviewing whether the Commissionhas failed to open the formal investigation pro-cedur e it is~ not for the Court of First Instanceto rule at that stage of the Commission's procedurefor examination of aid on whether aid existsor whether it is compatible with the conmmonmarket.

Consequently, the CFI held that Deutsche Post'and DHIL s sixth plea, which alleged that theCommission had used an incorrect method to cal-culate the difference between items of overcom-


ESt L 2 2

8/13/2019 2010EurStAidLQ331

13/17


pen'sation and undei compensation in respect of theadditional cost of the SGE~s, had to be iejected asinadmissible since this plea constituted a plea aim-ing at obtaining a iuling from the CFI on the exis-tence of aid oi on its compatibility with the cornmon miaiket.

In contrast, Deutsche Post's and DHL's secondand third, fourth, fifth and seventh pleas we readmitted by the CIH s these pleas sought -accord-ing to the CHl- either directly to criticise theCommission's failure to comply with Article 88 3)BC or to establish that the examination carried outby the Commission during the preliminary exami-nation stage was insufficient or incomplete.

5. Case C-319/07 3FEv. CommissionThe Court passed judgment in the case 3 F v.Commission (heieinafter' F on 9 July 2009 afterhearing Adv ocate General Sharpston's Opinion ren-deied on 5 March 2 9

The judgment iaises seveial important questionswith respect to the approach taken by the CFI insome of the cases referied to abov e.

The case concerned an appeal brought by 3F aDanish labour union against the CFJ s decision todismiss as inadmissible F s application foi annul-ment of the contested Commission decision con-cerning a tax scheme for seafarers.Denmark had twxo shipping registers. T1he first ofthese registers was an ordinary shipping register,the Danish National Shipping Register, or just theDAS register . In 1988 Denmark established a sec-ond register, the Danish International ShippingRegister ( the DIS register ). T1he DJS register wa sintended to combat the flight from Communityflags to flags of convenience. T1he main advantageof the DJS register was that shipowxners wxhose ves-sels wxere registered in it wxere allowed to employseafarers from non-member countries on those ves-sels and pay them wages on the basis of theirnational laws.

Seafarers on board DIS-iegisteied ships wereaccorded certain fiscal advantages by the Danishgovernment ('the fiscal measures '). In paiticulai,employees registered on board a DIS registeredship were completely exempt from the obligation topay income tax. It seemed to be agreed between 3Fand the Danish gover nment that the benefit ofthese fiscal measures in practice was transferred to

the ship owners~, who thus had the flexibility toreduce gross wages without the exempted seafarersseeing a reduction in their net wages.

The Commission decision was taken s a resultof a complaint lodged by 3F in which 3F claimedthat the fiscal measures, in particular the taxexemption for seafarers on DIS registered ships,were contrary to the 1997 Community Guidelineson State aid to maritime transport (the 1997Guidelines ) because the tax exemption w~ s grant-ed to all seafarers, not only to Community seafarers,and because the measures had not been notified tothe Commission.

In the contested decision the Commission heldthat the measures did in fact constitute State aid,but that they were compatible wxith the commonmarket in accordance w~ith Article 8703(c) EC. TheCommission therefore decided not to raise objec-tions to the fis~cal mneasures which formed the sub-ject Of Fs complaint.

Before the CFI, 3F invoked three different pleasin support of annulmient:i) the Commission had infringed Article 88 2) EC

in that the Commission failed to open the re-view procedure despite a four-year delay inanswering the complaint, which 3F construed s implying serious difficulty in determiningwhether State aid was compatible;

(ii) the Commission had infringed Article 87(3)(c)EC in that the Commission held that the aidwx s compatible wxith the common market,w~hen, s 3 F contended, it did not lead to anyincentive for employers to favour EC seafarers, s was required -according to 3F -by the 1997and 1989 Guidelines and the principle of legiti-mate expectations;

(iii) the Commission had committed a manifesterror of assessment in particular in that theCommission had failed to take social policyinto account and failed to investigate what leadan employer to choose to employ one seafarerover another.

On standing, 3F aigued that it occupied a clearlycircumscribed position as a negotiator of collectiveagreements and that its scope to negotiate suchagreements was affected by the aid regime whichprovided tax breaks not only for EC seafarers butfor all seafarers (including those in non-Commu-nity trade unions). 3F contended that this placed itsmembers~ at a competitive disadvantage. 3F lso

EUR-DPEAN STATE ID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

14/17


referred to the fact that the contested decision wasa result of its complaint.

The Commission iaised objections to the admis-sibility of the action, which had lead the CFI todeclare the action inadmissible.Advocate General Sharpston opined that the CFIhad decided the question of 31- s standing or lackof same on the basis of the Plaurnann criteria as3F had challenged the Commission's failure to openthe formal investigation procedure as well as themerits of the decision. Moreover, she found that theCFI had applied the Court's case-lavx correctly indoing so.4

Howxever, the Court held that the CFI had actual-ly -correctly -applied the concerned partythreshold, thus the Cook and atra standard, wxhenassessing 31- s first plea contending that theCommission had failed to open the formal investi-gation procedure.

The Advocate General had further submitted inher opinion that 'a degiee of opacity remains as tothe appiopiiate test for standing. Like her col-leagues in the earliei cases she had invited theCourt to adopt a whole new standing test.

She argued that the Community courts shoulddetermine the standing of the application in light ofwhat was actually sought with the action ratherthan on whether the applicant's arguments touchedon the undeirlying substance. 50

In particular she found it 'difficult to see how anapplicant can easily avoid being drawxn into themerits of a decision when seeking to show thatthere w~ere still serious difficulties remaining in theCommission's initial assessment of the aid in issue.Through ARE and BAA the Court has established averitable tightrope along which applicants andtheir advocates must gingerly advance. It is all tooeasy for them to slip and find that they are eithertrapped by the stricter laurnann est, or that theyhave not done enough to satisfy the Court thatthere were indeed procedural errors in the decisionthey wish to contest.

It is likely that Advocate Geneial Sharpston'invitation was caused by her reading of ARE andBAA which in her v ew lead to the legal positionthat an applicant who has raised ancillary substan-48 Cf. in partiCu]Iar pont 46-48 of the opinion.49 Cf. patagraph 39 of the judgment.50 Cf. points 37 45 of the opinion.5 Cf. paragraphs 26-34 of the judgment.

tive obsevations on the contested aid and decisionwas barred from ielying on such observations tothe extent the applicant did not fulfil the strictstanding criteria laid down in Plaumann.

M~oreoveri, the two judgments suggested, accord-ing to Advocate General Sharpston, that theCommunity courts may not sever the pleas in lawvbrought before them when the applicant does notmeet the Plaurnann criteria for admissibility to chal-lenge the merits of the decision so that the Courtmight not consider in this case admissibility withinthe category of party concerned in respect of theprocedural pleas.

T he Advocate General howxever further opinedthat although 3F challenged the merits of theCommission's findings on the nature of the aid, itdid so in the course of seeking a judicial review ofa procedural decision of the Commission. 31-'sstanding as an applicant should therefore beassessed against the criteirion of whethei it could beconsidered to be a paity concerned.

The Court followed this proposal.If the CFI had assessed 3 F s standing on that basis,it would according to Advocate Geneial Sharpstonhave been likely that 3F would have qualified, inthat the aid in question might affect its interests.Again, the Court agr eed with the Advocate Generalon this note.

The Couit -once again i epeated its Cook and atraand Plaumann and ARE case-law 5 and thenobserved the following:1135it is true that as appears from Article 4(3)

Regulation No 659 1999 a decision of the Cornmission not to raise objections is taken wxherethe Commission finds that the notified measuredoes not raise doubts as to its compatibility withthe common market. If an applicant seeks theannulment of such a decision he is essentiallychallenging the fact that the decision on the aidw~ s adopted w~ithout the Commission initiatingthe formal review procedure, thereby infringinghis procedural rights. For his action to be suc-ccssful the applicant may attempt to show thatthe compatibility of the measure in questionshould have given rise to doubts. The use of sucharguments cannot however have the conse-quence of changing the subject matter of theapplication or altering the condlitions of its

36 It is clear that, in the piesent case as is apparentboth fiom the order undei appeal and from the

EUR QPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

15/17

44 1Direct Action in State Aid Cases -Tightropes and Legal Protection? LtL~1

case-file at fiirst instance, the appellant's firstplea in law in its application was aimed at safe-guarding its procedural iights under Article88(2) EC by challenging the failuie, in the cir-cumnstances of the case, to initiate the formalireview pirocedure pirovided foi by that provi-sion, as w~ s expressly acknowxledged by theCourt of First Instance in paragraph 28 of thatorder.

39 It followxs that, as regards the first plea in lawxrelied on by the appellant before the Court ofFirst Instance, concerning the failure to initiatethe formal review procedure, that Court soughtto determine, as w~ s expressly stated in para-graph 28 of the order under appeal, w~hether theappellant could be regarded as a party con-cerned wxithin the meaning of Article 88(2) EC.

On this background, the Court assessed each Of 3F7 sfour grounds of appeal.

The Court held that F7as a tiade union, had toshow to tihe iequisite legal standard that its inter-ests might be affected by tihe grant of the aid. Thiswould be possible to do by showing that F was infact in a competitive position in irel tion to othertiade unions operating on the same market. Thatpossibility could not be excluded a piioii by iefe-ience to the lbany line of case-la-w concerning thenon-application of ordinary competition rules tocollective agreements or to any excessively restric-tive interpretation of the concept of market inconnection w~ith the question of the status of partyconcerned w~ithin the meaning of Article 88(2) EC .

Tihe ClFI had also erred in law by finding that 3F-could not rely on the social aspects of the Commu-nity guidelines to establish that it w~ s individuallyconcerned by the contested decision.S'

T1he Court rejected 3F s third plea in law, consist-ing in the CFI having misapplied the Platrmann and RE case-law, by finding that 3F could not be seenas individually concerned merely because the aidiesulting fiom the fiscal measuies at issue waspassed on to the recipients by means of a reductionin the wage claims of the seafarers benefiting fromthe income tax exemption. S

In this respect the Couit clarified that the REanid Plaurnann line of case-law was prima facie notof inteiest to the case as the CFI anid the Couitmerely -had to establish whether F fulfilled therequiirements for being a 'party concerned' oi not.

Notwithstanding this, the Court stated that neither3Fnoi its membeirs could be consideired to be 'eco-

nomic opeiatois within the sense used in AREL asthey were not competitors to the aid beneficiaries,the ship owneirs. In those circumstances, F couldtheiefore not contend that its market position hadbeen affected by the decision.

Finally, the Court rejected 3F's fourth plea,according to wxhich the CF I had misapplied the ander Kooy and Others nd CIRI S and Others line ofcase-law, by concluding that 31-'s owxn interests as anegotiator w~ere not affected by the fiscal measuresat issue.

The Court found that it w~ s not in a position togive judgment on the substance of the action as itcould not assess wxhether or not serious doubtshad been proven to exist before the Commission.Howxever, the Court found that it did hold sufficientinfoimation to give a final judgment rejecting theCommision's plea of inadmissibility.

The Court concluded in this respect that F haddemonstrated to the iequisite legal standard thatthe contested fiscal measuies could affect its posi-tion as a negotiatoi anid that of its membeirs in col-lective bargaining negotiations with ship owneirs,whose vessels weie registered in the DIS iegistei.

F therefoie had standing as a party conceinedand its action should be admitted in so far as it con-cerned the challenge of the Commission' failure toopen the foimal investigation piocedure.

6 Case T 375/04 -Scheucher-FleischCmbH and others v CommissionTihe Cl-I passed judgment in this case on 18 Novem-ber 2009 i e. around four months after the Courthaving rendered its judgment in F

Scheucher l-leisch G~mbH and four otherAustrian companies being sole traders specialisingin the slaughter and butchering of animals hadbrought action against the Commission's decisionOf 30 June 2004 not to iaise objections to the con-tested Austrian State aid measuie consisting of anarrangement by which slaughteiing undertakingshad to pay contiibutions foi the slaughter of cattleetc. to a market-iegulating agency -Agraimaikt

52Cf. pa agra phs 61 70 of the judgm ent53 Cf. paragraph 71 -81 of the judgment

EU&-OPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

16/17


Austria ( AMA ) establis~hed by public law, whosefunction was to promote agricultuial marketing,and who encouraged the production, treatment,processing and sale of agricultural products inAustria by means of ceitain quality labels, the AMVAbio-label and AMVA quality label (the AMVA labels).

Scheucher Fleisch GmbH and the other appli-cants had to pay contributions to AMA, but theyw~ere nonetheless not entitled to use the AMA labelsfor their ow~n products. T1he contested aid measurew~ s in principle of a general nature as it applied toan abstract category of undertakings, i e. the groupot undertakings, w~hose prodiucts fulfilledi the AMAlabels requirements.

T1he Commission had held that the contestedAustrian AMA label arrangement w~ s compatiblewxith the common market as it complied with theconditions imposed by Points 13 and 14 of theCommunity Guidelines for State aid in the agricul-tural sectoi and the Guidelines foi State aid foradveirtising.

The Commission pleaded that the applicationshould be dismissed as inadmissible.

The CFI consideied that Scheuchei FleischGmbH-and the other applicants had essentially putfoiward three different pleas in law in support oftheii action, and that the applicants were both chal-lenging the Commission's refusal to initiate the for-mal investigation procedure and the substance ofthe decision apprais~ing the aid as such.In light of this finding, the CFI stressed that ithad to analyse first whether the applicants hadstanding to bring proceedings to enforce their pro-cedural rights and, second, w~hether they had stand-ing to bring proceedings to challenge the contesteddecision's substance. 4 The CF I thus again applyedthe dual locus standi approach.

Tihe CFI held that the applicants did have locusstandi to challenge the Commission's failure toopen the formal review procedure as they wxereparties concerned w~ithin Article 88 (3) EC and asthey had invoked pleas in law specifically address-ing the Commission's failure to open this proce-dure.

The CFI observed that the Austrian authoiitieshad alieady implemented the contested aid at thedate upon which the contested Commission deci-sion was adopted and that the possibility of the5 Cf. paragraph 0 of the judgment.55Cf. patagraph 54 of the judgment.

Austrian authorities deciding not to giant the aid inquestion theiefoie was puiely theoretical. Theapplicants weie theiefoie directly concerned bythe contested decision within the sense of Ar-tidle 230 (4) EQ.The CFI also found that the applicants weie individu lly concerned by the contested decision. Inthat regard, the CF I concurred with the applicantsthat the beneficiaries of the aid in question w~erenot only retailers, but all undertakings forming partof the chain of production and distribution specificto the AMA labels The applicants were accordingto the CFI competitors of the slaughtering andbutchering undertakings entitled to the AMA labelsas they all operated in Austria.

Tihe CF I furthermore rejected aCommission pleain law, that the applicants had exhausted theirrights to make comments pursuant to Article 88 2EC as a iesult of the applicants having lodged thecomplaint against the contested aid)s3

Howevei, the CFI held that Scheucher FleischGmbH-and the othei applicants had not establishedthat they weie subst nti lly ffectedl by the contest-ed aid. Consequently, the CFI refused to grant theiraction locus standi to challenge the substance of theCommission's decision.

Following this conclusion, the CFI went on totest, which pait of the applican ts' pleas in law wasadmissible and which was not. The CFI held in thisrespect that the applicants' first and fouith paits oftheir first plea in lawx lack of notification to theCommission of the aid in question and breachof the principle that the Commission must act w~ithin a reasonable time as well as their third plea inlaw,, infringement of the 'standstill clause laiddowxn by Article 88(3 EC and Article 3 of Regu-lation No 659,/1999 -had to be dismissed asinadmissible, since these pleas did not seek to safe-guard the applicants' procedural rights under Ar-tidle 88(2) BC.

Howxever as the applicants had expresslyinvoked a plea in law, on the Commission's failureto open the foimal review procedure, the CFI heldthat it was capable of ieinterpreting the applicants'third part of their first plea in law -bieach of theduty to state reasons -and theii second plea in law-bieach of Article 87 (3) c) EC as arguments in

support of the Commission hav ing been confrontedwith seiious difficulties which would hav e justi-fied the initiation of the foirmal rev ew piroceduirepursuant to Article 88 2) EC.

EUR QPEAN STATE AID LAW QUARTERLY

ESt L 2 2

8/13/2019 2010EurStAidLQ331

17/17

Documents

2010EurStAidLQ331