Case T‑69/18

Verband Deutscher Alten- und Behindertenhilfe, Landesverband Niedersachsen/Bremen und Hamburg/Schleswig-Holstein eV
and
CarePool Hannover GmbH

v

European Commission

Judgment of the General Court (Eighth Chamber), 14 April 2021

(State aid – Independent social action – Subsidies granted to associations in a regional working group for charity action – Rejection of a complaint – Decision not to raise any objections at the end of the preliminary examination stage – Action for annulment – Status of interested party – Safeguarding of procedural rights – Substantial effect on competitive position – Admissibility – No serious difficulties – No substantial alteration to existing aid)

1. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action brought by the parties concerned within the meaning of Article 108(2) TFEU – Action seeking to safeguard the procedural rights of the parties concerned – Admissibility – Views of the parties concerned heard by the Commission in the context of the preliminary examination of the aid – Irrelevant

   (Art. 108(2) and Art. 263, fourth para., TFEU; Council Regulation 2015/1589, Art. 1(h))

   (see paragraphs 56-63, 69-78)

2. State aid – Planned aid – Examination by the Commission – Preliminary review and main review – Compatibility of aid with the internal market – Existing aid – Difficulties of assessment – Commission’s duty to initiate the main review procedure – Serious difficulties – Concept – Objective nature – Burden of proof – Circumstances enabling the existence of such difficulties to be determined

   (Art. 108(2) and (3) TFEU)

   (see paragraphs 90-95, 99, 106, 107, 119-122, 127)

3. Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Decision not to open the formal investigation procedure – Classification of the measure at issue as existing aid – Brief summary of reasons leading the Commission to conclude that there were no serious difficulties of assessment – Sufficient statement of reasons

   (Art. 296, second para., TFEU)

   (see paragraphs 107-119, 131)

4. Actions for annulment – Natural or legal persons – Concept of ‘regulatory act’ within the meaning of the fourth paragraph of Article 263 TFEU – Any measure of general application other than legislative acts – Commission decision classifying the measure at issue as existing aid – Legal effects in relation to a general and abstract category of persons – Included

   (Art. 263, fourth para., TFEU)

   (see paragraphs 142-152)

5. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Decision on State aid – Competitor of the undertaking receiving the aid – Right to bring an action – Conditions – Judicial review – Scope

   (Art. 108(2) and (3) and Art. 263, fourth para., TFEU)

   (see paragraphs 153-161)

6. Actions for annulment – Natural or legal persons – Regulatory acts entailing implementing measures – Concept – Criteria for assessment

   (Art. 263, fourth para., TFEU)

   (see paragraphs 162-169)

7. State aid – Existing aid and new aid – Classification as existing aid – Criteria – Aid scheme implemented prior to the entry into force of the EEC Treaty – Determination – Date of the legally binding measure requiring the competent national authority to grant the aid

   (Art. 107(1) TFEU)

   (see paragraphs 174-177, 180)

8. State aid – Existing aid and new aid – Measure altering an existing aid scheme – Alteration not affecting the substance of the scheme

   (Art. 108 TFEU; Council Regulation No 659/1999, Art. 1(c); Commission Regulation No 794/2004)

   (see paragraphs 187-203)

Résumé

The Land of Lower Saxony (Germany) has implemented various measures for the benefit of entities in the field of independent social action, operating in that Land. Those national measures include financial support which has been granted since 1956, on the basis of legislation and regulations which have evolved over time, to independent umbrella charitable associations (‘the financial support’). Those associations provide, through member associations, services which may be of an economic nature, such as outpatient, inpatient or mixed care, or of a non-economic nature, such as the support and accommodation of the homeless, spiritual support or support for refugees.

The applicants, Verband Deutscher Alten- und Behindertenhilfe, Landesverband Niedersachsen/Bremen und Hamburg/Schleswig-Holstein eV and CarePool Hannover GmbH, two private entities which provide certain services similar to those mentioned above or represent undertakings which provide such services, believe that they have suffered harm as a result of the financial support. Arguing that they were in competition with the charitable associations benefiting from that support, the applicants made two separate complaints to the European Commission, seeking, inter alia, to have that support classified as aid which was unlawful and incompatible with the internal market.

After examining the legislative changes which had taken place since 1956, and without opening the formal investigation procedure, the Commission, by decision of 23 November 2017, ( 1 ) considered that the substance of the financial support at issue had not been altered since 1956 and that, in so far as it constituted aid within the meaning of Article 107(1) TFEU, that support had to be classified as existing aid within the meaning of Article 1(b)(i) of the regulation laying down detailed rules for the application of Article 108 TFEU. ( 2 )

The applicants brought an action for annulment against the contested decision, which was dismissed by the Eighth Chamber of the General Court. In its judgment, it closely examined whether the action was admissible inasmuch as those parties had contested the merits of that decision, in the light of the case-law resulting from the judgment in Scuola Elementare Maria Montessori. ( 3 )

Findings of the General Court

In the first place, inasmuch as the applicants’ action sought to contest the Commission’s implicit refusal to open the formal investigation procedure, the General Court pointed out that the applicants, which had argued that they were, on the one hand, an undertaking competing with the beneficiaries of the financial support at issue and, on the other, a trade association defending the interests of such competing undertakings, whose interests might be affected by the financial support, were interested parties within the meaning of Article 108(2) TFEU and Article 1(h) of the regulation laying down detailed rules for the application of Article 108 TFEU. Thus, in so far as their action sought to safeguard their procedural rights, it had to be regarded as admissible.

The General Court added, in that regard, that the fact that the applicants had already benefited from certain ‘procedural rights’ inasmuch as their views had been heard by the Commission in the context of its preliminary examination could not affect the admissibility of that action. The concept of ‘procedural rights’ which interested parties have in the context of the procedure provided for in Article 108(2) TFEU is not to be confused with the sole right, for a complainant, to secure the opening of the formal investigation procedure, as part of which that complainant would be able, where appropriate, to submit comments.

Regarding the substantive question of whether the preliminary examination procedure had given rise to serious difficulties, which should have led the Commission to open the formal investigation procedure, the General Court took the view that the factors invoked by the applicants, including the duration of the preliminary examination procedure, the statement of reasons for the contested decision and the attitude of the Commission, assessed as a whole, did not attest to the existence of such difficulties as regards the classification of the financial support. Consequently, inasmuch as the action sought to safeguard the applicants’ procedural rights, the General Court dismissed it as unfounded.

In the second place, in so far as the applicants’ action sought to call into question the merits of the contested decision, in particular the Commission’s assessment that the financial support should be regarded as existing aid, the General Court recalled, first of all, that, under the fourth paragraph of Article 263 TFEU, natural or legal persons may bring an action against a decision constituting a regulatory act not entailing implementing measures and which is of direct concern to them.

As regards the condition relating to the existence of a regulatory act, the General Court examined, by reference to the judgment in Scuola Elementare Maria Montessori and the concept of ‘aid scheme’ laid down in Article 1(d) of the regulation laying down detailed rules for the application of Article 108 TFEU, whether the contested decision is of general application.

In that regard, first, the General Court took into account, inter alia, the fact that the Lower Saxony legislative measure provides that the financial support is to be granted to a category of persons envisaged in a general and abstract manner, namely umbrella associations operating in the independent charitable sector in that Land. Although it may be possible to ascertain with a greater or lesser degree of accuracy the number or even the identity of the persons to which the measure at issue in the present case applies at any given time, the General Court took the view that that cannot mean that it loses its regulatory character, as long as there is no doubt that the measure is applicable as a result of an objective situation of law or of fact which it specifies and which is in harmony with its ultimate objective.

Secondly, the General Court observed that the umbrella associations, which are the direct beneficiaries of the financial support, could accept new charitable organisations as local or regional members, to which those associations may transfer the funds made available to them. Those indirect beneficiaries of that support thus also constitute a category of persons envisaged in a general and abstract manner.

Thirdly and lastly, the General Court recalled that the Commission, in the contested decision, concluded that, in so far as the financial support had to be classified as aid, it was existing aid. Even assuming that the beneficiaries, direct or indirect, of the financial support at issue form a restricted class, that decision thereby preserves the effects of the general and abstract measure which that support constitutes with respect to an indefinite number of competitors of those beneficiaries, namely an additional category of persons envisaged in a general and abstract manner.

Having thus reached the conclusion that the contested decision constitutes a regulatory act and, thereafter, also pursuant to the judgment in Scuola Elementare Maria Montessori, that that decision is of direct concern to the applicants and does not entail implementing measures with regard to them, the General Court concluded that the action was also admissible inasmuch as it sought to call into question the merits of the contested decision.

In that regard, in relation to the classification of the financial support as constituting existing aid, the General Court, first, found that the financial support at issue was implemented prior to the entry into force of the EEC Treaty in the Federal Republic of Germany. Secondly, the General Court took the view, contrary to what the applicants had argued, that the financial support had not been the subject of a substantial alteration since it was instituted in 1956. Consequently, it upheld the contested decision inasmuch as the Commission considered that that measure, in so far as it constituted aid, had to be classified as existing aid within the meaning of Article 1(b)(i) of the regulation laying down detailed rules for the application of Article 108 TFEU.

( 1 ) Commission Decision C(2017) 7686 final of 23 November 2017 concerning State aid schemes SA.42268 (2017/E) – Deutschland, Staatliche Beihilfe zur Förderung wohlfahrtspflegerischer Aufgaben, and SA.42877 (2017/E) – Deutschland, CarePool Hannover GmbH, implemented by Germany in favour of charitable associations for social welfare projects (OJ 2018 C 61, p. 1, ‘the contested decision’).

( 2 ) Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9, ‘the regulation laying down detailed rules for the application of Article 108 TFEU’).

( 3 ) Judgment of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci (C‑622/16 P to C‑624/16 P, EU:C:2018:873).