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Document 62022CJ0588
Judgment of the Court (Fourth Chamber) of 7 November 2024.#Ryanair DAC v European Commission.#Appeal – State aid – Article 107(3)(b) TFEU – Finnish air-transport market – Aid granted to an airline by the Republic of Finland in the context of the COVID-19 pandemic – Temporary Framework for State aid measures – Recapitalisation of Finnair plc – Decision by the European Commission not to raise any objections – Aid to remedy a serious disturbance in the economy – Principles of proportionality and of non-discrimination.#Case C-588/22 P.
Judgment of the Court (Fourth Chamber) of 7 November 2024.
Ryanair DAC v European Commission.
Appeal – State aid – Article 107(3)(b) TFEU – Finnish air-transport market – Aid granted to an airline by the Republic of Finland in the context of the COVID-19 pandemic – Temporary Framework for State aid measures – Recapitalisation of Finnair plc – Decision by the European Commission not to raise any objections – Aid to remedy a serious disturbance in the economy – Principles of proportionality and of non-discrimination.
Case C-588/22 P.
Judgment of the Court (Fourth Chamber) of 7 November 2024.
Ryanair DAC v European Commission.
Appeal – State aid – Article 107(3)(b) TFEU – Finnish air-transport market – Aid granted to an airline by the Republic of Finland in the context of the COVID-19 pandemic – Temporary Framework for State aid measures – Recapitalisation of Finnair plc – Decision by the European Commission not to raise any objections – Aid to remedy a serious disturbance in the economy – Principles of proportionality and of non-discrimination.
Case C-588/22 P.
ECLI identifier: ECLI:EU:C:2024:935
JUDGMENT OF THE COURT (Fourth Chamber)
7 November 2024 (*)
( Appeal – State aid – Article 107(3)(b) TFEU – Finnish air-transport market – Aid granted to an airline by the Republic of Finland in the context of the COVID-19 pandemic – Temporary Framework for State aid measures – Recapitalisation of Finnair plc – Decision by the European Commission not to raise any objections – Aid to remedy a serious disturbance in the economy – Principles of proportionality and of non-discrimination )
In Case C‑588/22 P,
APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 7 September 2022,
Ryanair DAC, established in Swords (Ireland), represented initially by V. Blanc, F.-C. Laprévote, E. Vahida, avocats, and D. Pérez de Lamo and S. Rating, abogados, and subsequently by F.-C. Laprévote, E. Vahida, avocats, and D. Pérez de Lamo and S. Rating, abogados,
appellant,
the other parties to the proceedings being:
European Commission, represented by M. Farley, L. Flynn and F. Tomat, acting as Agents,
defendant at first instance,
French Republic,
Republic of Finland, represented by A. Laine and H. Leppo, acting as Agents,
interveners at first instance,
THE COURT (Fourth Chamber),
composed of C. Lycourgos, President of the Third Chamber, acting as President of the Fourth Chamber, S. Rodin (Rapporteur) and O. Spineanu-Matei, Judges,
Advocate General: M. Szpunar,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By its appeal, Ryanair DAC seeks to have set aside the judgment of the General Court of the European Union of 22 June 2022, Ryanair v Commission (Finnair II; COVID-19) (T‑657/20, ‘the judgment under appeal’, EU:T:2022:390), by which the General Court dismissed its action for annulment of Commission Decision C(2020) 3970 final of 9 June 2020 on State aid SA.57410 (2020/N) – Finland – COVID-19: Recapitalisation of Finnair (OJ 2020 C 310, p. 6; ‘the decision at issue’).
The background to the dispute and the decision at issue
2 The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.
3 On 3 June 2020, the Republic of Finland notified the European Commission, in accordance with Article 108(3) TFEU, of a planned aid measure in the form of a recapitalisation (a rights issue) of an amount which, depending on the final terms of the rights issue, could range from EUR 499 million to EUR 512 million (‘the measure at issue’). The new shares were offered to all of the shareholders of the beneficiary, Finnair plc, in pro rata proportion to their existing shares in its capital.
4 The measure at issue is based on Article 107(3)(b) TFEU. It followed the grant of a State guarantee for Finnair, which the Commission, in Decision C(2020) 3387 final of 18 May 2020 on State aid SA.56809 (2020/N) – Finland COVID-19: State loan guarantee for Finnair (OJ 2020 C 269, p. 2), declared to be compatible with the internal market in the light of sections 3.2 and 3.4 of the Commission Communication of 19 March 2020, entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’ (OJ 2020 C 91 I, p. 1), as amended on 3 April (OJ 2020 C 112 I, p. 1) and 8 May 2020 (OJ 2020 C 164, p. 3) (‘the Temporary Framework’). That State guarantee covered 90% of a loan of EUR 600 million obtained by Finnair from a pension fund.
5 On 9 June 2020, the Commission adopted the decision at issue by which it declared the measure at issue to be compatible with the internal market on the basis of Article 107(3)(b) TFEU. In that regard, the Commission assessed the compatibility of each measure forming part of the overall transaction, namely the State guarantee and the recapitalisation. In particular, it examined whether there were any effects from cumulation of the two measures and determined whether the possible cumulative effects were compatible with the internal market.
The action before the General Court and the judgment under appeal
6 By application lodged at the Registry of the General Court on 30 October 2020, Ryanair brought an action for annulment of the decision at issue.
7 In support of that action, Ryanair put forward four pleas in law, alleging, first, infringement of Article 107(3)(b) TFEU; second, infringement of the principles of non-discrimination on grounds of nationality, of the freedom to provide services and of the freedom of establishment; third, infringement of its procedural rights owing to the fact that the Commission had refused to initiate the formal investigation procedure, despite the existence of serious doubts as to the compatibility of the measure at issue with the internal market; and, fourth, infringement of the second paragraph of Article 296 TFEU.
8 By the judgment under appeal, the General Court held first of all that the action was admissible since Ryanair was an interested party with an interest in safeguarding the procedural rights available to it under Article 108(2) TFEU and was claiming, by the third plea of that action, that its procedural rights had been infringed.
9 As regards that third plea, the General Court held that it was entitled to examine the substantive arguments put forward by the appellant in the first and second pleas in its action, to which it referred in that third plea, in order to determine whether they were such as to support the latter plea, relating to the existence of doubts that justified the initiation of the formal investigation procedure under Article 108(2) TFEU.
10 As regards the fourth plea in that action, alleging that failure to state reasons vitiated the decision at issue, the General Court observed that such a failure went to an issue of infringement of essential procedural requirements and was a matter of public policy which had to be raised by the EU Courts of their own motion and did not relate to the substantive legality of that decision.
11 The General Court, after, in the first place, examining and rejecting Ryanair’s third plea, while taking into consideration its first and second pleas, and, in the second place, its fourth plea, dismissed the action in question in its entirety.
Forms of order sought by the parties to the appeal
12 By its appeal, Ryanair claims that the Court of Justice should:
– set aside the judgment under appeal;
– annul the decision at issue;
– order, first, the Commission to bear its own costs and to pay those incurred by the appellant and, second, the interveners at first instance to bear their own costs or, in the alternative,
– set aside the judgment under appeal, and
– refer the case back to the General Court and reserve the costs.
13 The Commission contends that the Court of Justice should:
– dismiss the appeal and
– order the appellant to pay the costs.
14 The Republic of Finland contends that the Court of Justice should dismiss the appeal.
The appeal
15 Ryanair puts forward four grounds in support of its appeal. The first ground of appeal alleges that the General Court erred in law and distorted the facts by failing to recognise the existence of ‘serious doubts’ concerning misapplication of the Temporary Framework and Article 107(3)(b) TFEU. The second ground of appeal claims that the General Court erred in law and distorted the facts by failing to recognise the existence of ‘serious doubts’ concerning infringement of the principles of non-discrimination and proportionality. The third ground of appeal alleges that the General Court erred in law and distorted the facts by failing to recognise the existence of ‘serious doubts’ concerning infringement of the fundamental freedoms of establishment and the provision of services. The fourth ground of appeal claims that the General Court erred in law by holding that the Commission had not infringed its obligation to state reasons under the second paragraph of Article 296 TFEU and by failing to state reasons for the judgment under appeal.
The first ground of appeal
Arguments of the parties
16 By its first ground of appeal, which consists of four parts, Ryanair complains that the General Court, in paragraphs 25 to 131 of the judgment under appeal, erred in law and distorted the facts in rejecting the first four parts of the third plea in its action at first instance, which alleged that the Commission should have had serious doubts concerning infringement of Article 107(3)(b) TFEU and the Temporary Framework by the measure at issue.
17 By the first part of the first ground, Ryanair submits that the General Court erred in law and vitiated the judgment under appeal by distortion of the facts by finding, in paragraph 57 of the judgment under appeal, that the measure at issue was necessary in order to achieve one of the objectives laid down in Article 107(3)(b) TFEU, namely to remedy a serious disturbance in the Finnish economy.
18 In that regard, first, it argues that the General Court was wrong to hold, in paragraphs 29 to 31 of the judgment under appeal, that the measure at issue could be regarded as compatible with the internal market under that provision, even if that measure was not capable, in itself, of remedying the serious disturbance in the Finnish economy caused by the COVID-19 pandemic. In addition, contrary to what is in essence stated in paragraphs 43 and 44 of the judgment under appeal, Ryanair did not argue that the mere fact that Finnair is neither a bank nor a railway network manager meant that it was not important for the Finnish economy.
19 Second, the General Court erred in law and distorted the facts in that, in paragraphs 39 to 41 of the judgment under appeal, it did not properly exercise its jurisdiction and accepted at face value the Commission’s findings on the importance of Finnair to the Finnish economy. According to Ryanair, the General Court, inter alia, ignored the fact that the decision at issue included information which suggested that Finnair’s contribution to the economy and Finland’s connectivity was not systemic, but could be partly or entirely replaced, particularly in the short term, as was apparent from certain facts put forward by Ryanair. In addition, the General Court’s reasoning is vitiated by an error of law in that it systematically places the burden of proof on the appellant, whereas, according to the principles on the allocation of that burden, it is the Commission and the Member State notifying that aid which must provide proof of the compatibility of aid with the internal market.
20 Third, the General Court erred in law in finding, in paragraphs 49 to 53 of the judgment under appeal, that the Commission was not required, for the purpose of assessing the compatibility of the measure at issue with the internal market, to demonstrate that, in the absence of aid, Finnair would necessarily have ceased all its operations. The test set out by the General Court, that it was sufficient to find that that measure was necessary in view of the serious difficulties that Finnair was experiencing to maintain its operations because of the risks weighing on its solvency, amounts to a ‘critical weakening’ of the applicability conditions for Article 107(3)(b) TFEU. Furthermore, the General Court’s statement, in paragraph 53 of the judgment under appeal, that Finnair had sought other financing solutions, similar to those referred to by the appellant in its written pleadings, before submitting a written request for recapitalisation to the Republic of Finland, but had not succeeded in obtaining financing, did not appear in the decision at issue.
21 By the second part of its first ground of appeal, Ryanair complains, in essence, that the General Court erred in law and manifestly distorted the evidence in finding, in paragraphs 59 to 103 of the judgment under appeal, that the measure at issue had particular characteristics and enabled the Commission to find that that measure was compatible with the internal market, even though it did not meet certain requirements laid down in section 3.11 of the Temporary Framework.
22 First, contrary to what was stated by the General Court, the characteristics of the measure at issue are not ‘exceptional’ or constitute ‘exceptional circumstances’ for the purposes of the case-law referred to in paragraph 62 of the judgment under appeal. If mere ‘particular’ circumstances could justify the Commission’s departure from rules it itself laid down in its communications, the Commission would be able to disapply the requirements of the Temporary Framework regularly. Furthermore, the fact that the Commission amended the Temporary Framework after the adoption of the decision at issue could not ensure that it had in the meantime observed the principles of legal certainty, the protection of legitimate expectations and equal treatment.
23 Second, the General Court erred in holding, in paragraphs 72 to 100 of the judgment under appeal, that the particular characteristics of the measure at issue justified a departure from several requirements laid down in the Temporary Framework. In particular, in rejecting Ryanair’s arguments that the Commission had infringed Article 107(3)(b) TFEU and the Temporary Framework, inasmuch as it had considered that it was possible to derogate from the step-up mechanism for increasing remuneration, the prohibition on acquisitions and the ban on making dividend payments, set out in points 61, 74 and 77 of the Temporary Framework, the General Court erred in law and distorted the facts.
24 In the first place, the General Court misinterpreted the Temporary Framework and erred in law in paragraphs 72 to 82 of the judgment under appeal by endorsing the Commission’s finding that the step-up mechanism was not necessary, and even not suitable, since the Republic of Finland had not increased its shareholding in Finnair after the recapitalisation. However, it is apparent from point 56 of the Temporary Framework that the objective of that mechanism is not as such to decrease the State’s shareholding, but to ensure that the funds used for the recapitalisation, and the aid it contains, are ultimately repaid, and that the market distortions generated by that aid are eliminated or alleviated. In that context, the General Court also failed to take account of certain facts. Accordingly, in paragraph 74 of the judgment under appeal, the General Court wrongly asserted, in essence, that the objective of that mechanism is to restore the status quo ante, although that it not apparent from points 61 and 62 of the Temporary Framework.
25 In the second place, the General Court wrongly considered, in paragraphs 85, 86, 89 and 90 of the judgment under appeal, and, in particular, contrary to points 44 and 54 of the Temporary Framework, that the prohibition set out in those points on acquiring a shareholding, until the beneficiary of a recapitalisation measure carried out in the context of the COVID-19 pandemic has redeemed at least 75% of the funds corresponding to that measure, was not necessary to provide an incentive to the Republic of Finland to exit Finnair’s capital, on the ground that such a redemption would lead that Member State to reduce its share in the capital of that company to a level below that which it held before the COVID-19 pandemic. In addition, the applicant asserts that a prohibition on acquisitions for a period of three years foreseen in the measure at issue is not sufficient to remedy the Commission’s error.
26 In the third place, the General Court, in paragraphs 93 to 95 and 99 of the judgment under appeal, erred by holding that a prohibition on paying dividends for as long as the funds used for the recapitalisation measure have not been fully repaid was not necessary to incentivise the Republic of Finland’s exit from Finnair’s capital ‘given the particular characteristics of that measure’. Furthermore, the General Court held, in paragraphs 96 to 98 of the judgment under appeal, that ‘it was important in the present case to allow the payment of dividends since that constituted an incentive for private shareholders and investors to subscribe to new shares’, in particular in ‘a downbeat investment climate’, without explaining such a justification for the derogation in question.
27 By the third part of its first ground of appeal, Ryanair complains that the General Court erred in law, in paragraphs 114 to 131 of the judgment under appeal, by rejecting its line of argument concerning failure by the Commission to assess Finnair’s significant market power, within the meaning of point 72 of the Temporary Framework.
28 First, the General Court, without actually carrying out a proper judicial review, largely repeated the Commission’s arguments by stating, in paragraph 117 of the judgment under appeal, that ‘since the measure at issue sought as far as possible to maintain the entirety of Finnair’s operations and did not target particular routes, it must be held that it was capable of having the same effects on all the combinations of routes that Finnair could operate owing to the slots and other assets which it succeeded in retaining’. That reasoning does not correspond to the wording of point 72 of the Temporary Framework, the Commission’s practice or the Court of Justice’s case-law, and, in addition, it is logically flawed since the decision at issue does not refer to any commitment from Finnair to maintain all its routes.
29 Second, Ryanair argues that the General Court erred in law and misinterpreted the Temporary Framework by endorsing, in paragraphs 120 to 124 of the judgment under appeal, without any proper assessment or explanation, the finding by the Commission that Finnair did not have significant market power at Helsinki Airport (Finland). The General Court was wrong, in particular, to take the view, in paragraph 124 of the judgment under appeal, that the appellant had not adduced any concrete evidence to establish that there was a lack of competitive constraint on the various routes operated by Finnair. In any event, Ryanair maintains that it produced a series of indicia to that effect.
30 By the fourth part of its first ground of appeal, Ryanair complains that the General Court erred in law in rejecting, in paragraphs 104 to 111 of the judgment under appeal, its arguments alleging that the Commission had infringed the obligation to weigh the beneficial effects of the measure at issue against its adverse effects on trading conditions and the maintenance of undistorted competition.
31 More specifically, the General Court’s assessment, in particular in paragraph 110 of the judgment under appeal, that that obligation did not apply with respect to aid granted under Article 107(3)(b) TFEU is based on an incorrect interpretation, first, of that provision, read in conjunction with Article 107(3)(c) TFEU, and, second, of paragraphs 20 and 39 of the judgment of 22 September 2020, Austria v Commission (C‑594/18 P, EU:C:2020:742), which the General Court carried out in paragraphs 106 and 107 of the judgment under appeal.
32 The Commission and the Republic of Finland contend that the first ground of appeal should be rejected as unfounded. The Commission also contends that this ground is in part inadmissible.
Findings of the Court
33 It should be observed as a preliminary point that, by the decision at issue, the measure at issue was declared compatible with the internal market under Article 107(3)(b) TFEU, which provides that aid ‘to remedy a serious disturbance in the economy of a Member State’ may be considered to be compatible with the internal market.
34 By the first complaint of the first part of its first ground of appeal, Ryanair submits that the General Court erred in law in finding, in paragraphs 29 to 31 of the judgment under appeal, that that provision did not require that the measure at issue be capable, in itself, of remedying the serious disturbance in the Finnish economy.
35 In that regard, although the derogation from the principle that State aid is incompatible with the internal market provided for in Article 107(3)(b) TFEU must be interpreted strictly, the terms used to define that derogation must not, however, be construed in such a way as to restrict its scope unduly or to deprive it of its effects. A derogation must be interpreted in a manner consistent with the objectives which it pursues (judgment of 23 November 2023, Ryanair v Commission, C‑209/21 P, EU:C:2023:905, paragraph 88 and the case-law cited).
36 It is in no way apparent from the wording of Article 107(3)(b) TFEU, read in the light of the objective of that provision, which is to allow Member States to remedy a serious disturbance in their economy, that aid may only be declared compatible with the internal market on the basis of that provision if it ensures, in itself, that the serious disturbance in the economy of a Member State is remedied. Aid may, as appropriate, be intended to remedy such a serious disturbance in the economy and contribute to achieving the objective expressly referred to in that provision without, however, being sufficient in itself to attain that objective (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 28).
37 In that regard, the Court of Justice has already held that, in order to be able to be declared compatible with the internal market pursuant to a derogation under Article 107(2) and (3) TFEU, an aid measure, inter alia, must only contribute to the attainment of an objective set out therein (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 29 and the case-law cited).
38 Moreover, the interpretation of Article 107(3)(b) TFEU suggested by Ryanair would deprive that provision of much of its effectiveness. If, in order to be able to seek to apply that provision, the Member States were required to grant aid to all undertakings of particular importance to their economy, in such a way that that aid alone guarantees that the serious disturbance in the economy is remedied, without being able to reserve that aid to a limited number of those undertakings, or even just one, those Member States would often be deterred from granting aid under Article 107(3)(b) TFEU, because of the costs it would involve (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 30 and the case-law cited).
39 It follows that the objective pursued by Article 107(3)(b) TFEU does not mean that a Member State cannot, without that being dictated by a desire to favour one undertaking over its competitors, choose, for objective reasons, to grant only a single undertaking the benefit of a measure adopted under that provision (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 31 and the case-law cited).
40 It follows from the foregoing that the General Court did not err in law in finding, in paragraphs 30 and 31 of the judgment under appeal, that Article 107(3)(b) TFEU does not require that the aid at issue be capable, in itself, of remedying the serious disturbance in the economy of the Member State concerned and that State aid may be authorised under that provision, in the form of aid schemes or individual aid, provided that all the conditions for its application are met, if they contribute to remedying that serious disturbance in the economy.
41 The first argument of the first complaint of the first part of the first ground of appeal must therefore be rejected as unfounded.
42 In so far as Ryanair, by that first complaint, also challenges the statement in the second sentence of paragraph 44 of the judgment under appeal, from which it is apparent that Ryanair asserted, in connection with earlier Commission decisions, that the mere fact that Finnair was neither a bank nor a railway network manager meant that it was not important for the Finnish economy, it is sufficient to point out that that statement was made for the sake of completeness since it appears after the General Court, in the first sentence of paragraph 44, had rejected the line of argument put forward by the appellant relating to the relevance of those decisions, on the ground that the lawfulness of the decision at issue had to be assessed solely in the context of Article 107(3)(b) TFEU, and not in the light of an alleged earlier decision-making practice of the Commission.
43 Accordingly, the first complaint of the first part of the first ground of appeal must be rejected as being in part unfounded and in part ineffective.
44 Inasmuch as Ryanair, by the second complaint of the first part of the first ground of appeal, complains that the General Court, in paragraphs 39 to 41 of the judgment under appeal, erred in law and distorted the facts submitted to it when it reviewed the assessment on which the decision at issue is based according to which the measure at issue was, in view of Finnair’s importance for the Finnish economy, appropriate to remedy a serious disturbance in that economy it should be pointed out that, in accordance with settled case-law, it follows from the second subparagraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union that the General Court has exclusive jurisdiction, first, to establish the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it, and, second, to assess those facts (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 103 and the case-law cited).
45 It follows that the appraisal of the facts by the General Court does not constitute, save where the clear sense of the evidence produced before it is distorted, a question of law which is subject, as such, to review by the Court of Justice (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 104 and the case-law cited).
46 Where an appellant alleges distortion of the evidence by the General Court, that person must, under Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice, indicate precisely the evidence alleged to have been distorted by the General Court and show the errors of appraisal which, in that person’s view, led to such distortion. In addition, according to settled case-law, that distortion must be obvious from the documents in the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence (judgment of 25 June 2020, SatCen v KF, C‑14/19 P, EU:C:2020:492, paragraph 105 and the case-law cited).
47 In the present case, Ryanair complains, in essence, that the General Court endorsed the Commission’s analysis and failed to determine whether the evidence available to the latter supported the conclusion it had reached. However, it must be stated, first, that the General Court exercised its power of review in paragraphs 39 to 41 of the judgment under appeal by examining the evidence put forward by the Commission. Second, in its claim of distortion of the facts, Ryanair merely makes assertions and fails to show that the General Court might have committed any kind of distortion in its assessment in order to reach, on the basis of a detailed examination of the decision at issue in that regard in paragraphs 37 to 56 of that judgment, the conclusion that, in paragraphs 41 and 57 thereof, owing in particular to Finnair’s importance for the Finnish economy, the measure at issue was appropriate for remedying the serious disturbance in that economy caused by the COVID-19 pandemic, in accordance with Article 107(3)(b) TFEU.
48 In so far as Ryanair maintains, moreover, that the General Court thereby reversed the burden of proof which, in its view, should have rested with the Commission, it should be borne in mind that it is in principle for the person who alleges facts in support of a claim or argument to provide proof of their reality (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 37 and the case-law cited).
49 It follows that the second complaint of the first part of the first ground of appeal is unfounded.
50 The third complaint of the first part of the first ground of appeal alleges that the General Court erred in holding in paragraph 49 of the judgment under appeal that the Commission, for the purpose of assessing the compatibility of the measure at issue with the internal market, was not required to satisfy itself that Finnair would necessarily have ceased all of its operations in the absence of that measure.
51 As is apparent from the case-law cited in paragraph 36 above, when the Commission examines an aid measure in the light of Article 107(3)(b) TFEU, it must verify that that measure is necessary in order to contribute to remedying a serious disturbance in the economy of the Member State which adopted that measure. Accordingly, in the present case the Commission was required, subject to review by the General Court, to determine whether Finnair played an important role in the Finnish economy and whether the measure at issue would contribute to remedy the serious disturbance in that economy caused by the COVID-19 pandemic. In that regard, as the General Court observed, in essence, in paragraph 49 of the judgment under appeal, and contrary to what the appellant claims, a cessation of Finnair’s operations in the absence of intervention by the Republic of Finland was not the only possibility enabling the Commission to find that the measure at issue would contribute to remedying such a disturbance in that economy, since that objective may also be achieved, inter alia, where it is demonstrated that the undertaking concerned is experiencing serious difficulties in maintaining its operations because of the risks weighing on its solvency. As the General Court observed in paragraphs 50 and 51 of the judgment under appeal, the Commission described those difficulties and risks in detail in the decision at issue.
52 The General Court was thus entitled to find, without erring in law, in paragraph 49 of the judgment under appeal that the Commission was not obliged to show specifically that Finnair would necessarily have ceased all its operations in the absence of the measure at issue.
53 In so far as Ryanair also argues that the circumstance referred to by the General Court in paragraph 53 of the judgment under appeal, concerning Finnair’s search for other financing solutions, does not appear in the decision at issue, it is true that, according to the case-law of the Court of Justice, in reviewing the legality of acts under Article 263 TFEU, the Court of Justice and the General Court cannot, under any circumstances, substitute their own reasoning for that of the author of the contested act (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 117 and the case-law cited).
54 However, it should be observed that the Commission, in recital 87 of the decision at issue, stated, in essence, that Finnair had no other potential recapitalisation scheme capable of replacing the rights issue. Accordingly, in paragraph 53 of the judgment under appeal, the General Court, responding to arguments put forward by the appellant in relation to other market financing solutions, and in the context of its unfettered assessment of the facts and evidence, merely provided some clarification of that aspect, already addressed in the decision at issue, without substituting its own reasoning for that of the decision.
55 It follows that the third complaint of the first part of the first ground of appeal must be rejected as unfounded and that, consequently, the first part of the first ground of appeal must be rejected in its entirety.
56 By the second part of the first ground of appeal, Ryanair complains that the General Court in essence erred in law and distorted the evidence in finding, in paragraphs 59 to 103 of the judgment under appeal, that the characteristics of the measure at issue were of a particular nature and enabled the Commission to find that the measure was compatible with the internal market, even though it did not meet certain requirements laid down in section 3.11 of the Temporary Framework, namely those relating to, first, a step-up mechanism for increasing the remuneration of the State with the aim of incentivising the beneficiary of a recapitalisation measure to buy back the State capital injections; second, a prohibition on acquiring shareholdings in certain undertakings; and, third, a prohibition on paying dividends.
57 In that regard, it should first be observed that it is apparent from settled case-law, referred to by the General Court in paragraphs 61 and 62 of the judgment under appeal, that, for the purpose of assessing the compatibility of aid measures with the internal market under Article 107(3) TFEU, the Commission enjoys wide discretion, the exercise of which involves complex economic and social assessments (see, to that effect, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 38 and the case-law cited).
58 However, by adopting guidelines, such as those set out in the Temporary Framework, in order to establish the criteria on the basis of which it proposes to assess the compatibility, with the internal market, of aid envisaged by the Member States, and by announcing, through their publication, that they will henceforth apply to the cases to which they relate, that institution imposes a limit on the exercise of the discretion granted to it in that respect by, inter alia, Article 107(3)(b) TFEU, and cannot, as a general rule, depart from those guidelines, at the risk of being found to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see, to that effect, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraphs 39 and 40; see also, by analogy, judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 90).
59 While the Commission, in the area of State aid, is thus bound as a rule by the guidelines that it issues, such as the Temporary Framework, it remains the case that the adoption of such guidelines does not relieve the Commission of its obligation to examine the specific exceptional circumstances relied on by a Member State, in a particular case, for the purpose of requesting the direct application of Article 107(3)(b) TFEU (see, to that effect, judgments of 8 March 2016, Greece v Commission, C‑431/14 P, EU:C:2016:145, paragraph 72, and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 93).
60 Accordingly, the Member States retain the right to notify the Commission of proposed State aid which does not meet the requirements established in such guidelines and the Commission may authorise such proposed aid in exceptional circumstances (see, to that effect, judgments of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 43, and of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 92).
61 Indeed, point 16 of the Temporary Framework states that ‘notification of alternative approaches [other than those set out in that framework] – both aid schemes and individual measures – remains possible’.
62 In the present case, as the General Court stated in paragraph 63 of the judgment under appeal, the Republic of Finland had notified the measure at issue to the Commission under Article 107(3)(b) TFEU. The Commission carried out an assessment of that measure in the light of section 3.11 of the Temporary Framework, while taking the view that certain of the requirements laid down therein, namely those referred to in paragraph 56 above, were not to be applied given the specific features of the measure at issue.
63 In that regard, it should be observed as a preliminary point that in the second part of its first ground of appeal Ryanair does not dispute that the Commission may, in exceptional circumstances for the purposes of the case-law referred to in paragraphs 59 and 60 above, depart from guidelines such as the Temporary Framework when it assesses the compatibility of an aid measure with the internal market under Article 107(3)(b) TFEU. It merely submits, in essence, that the General Court erred in law and distorted the facts in finding, in paragraphs 65 to 103 of the judgment under appeal, that, as per the assessments made in that regard in the decision at issue, the conditions for such a derogation were met in the present case with respect to the requirements of the Temporary Framework referred to in paragraph 56 above and that, consequently, the fact that those requirements had not been complied with did not mean that the Commission should have had doubts as to the compatibility of the measure at issue with the internal market such as to lead to the adoption of a decision to initiate the formal investigation procedure.
64 In so far as, by that second part, the appellant criticises the General Court’s assessment that the specific features of the measure at issue could constitute exceptional circumstances for the purposes of the case-law referred to in paragraphs 59 and 60 above, it must be held that that assessment is not vitiated by any error of law. In fact, the General Court applied that case-law correctly by examining whether the Commission had been entitled to find that specific exceptional circumstances existed in this instance which, in a particular case, may enable it to authorise an aid measure under Article 107(3)(b) TFEU, even though that measure does not meet all the requirements of the Temporary Framework.
65 In that regard, in paragraphs 65 to 100 of the judgment under appeal, the General Court was right to examine whether such circumstances existed in the light of all the relevant factors of the case, namely having regard, first, to the more general regulatory context of the measure at issue and, second, and more particularly, to the specific features of that measure.
66 Accordingly, as regards the context, the General Court made relevant reference in paragraph 67 of the judgment under appeal to the context of the COVID-19 pandemic, amid which the Temporary Framework and the measures planned by the Member States were adopted. As the General Court observed in that paragraph of the judgment under appeal, that context was characterised by circumstances of a particular urgency and a developing situation that required immediate action at both Member State and EU level as well as several amendments of the framework in a short space of time, with the result that the Commission did not foresee all the measures in that framework that the Member States might adopt for economic operators affected by the crisis in question.
67 As regards the assessments in paragraphs 72 to 100 of the judgment under appeal, Ryanair submits that the General Court erred in law and distorted the facts in holding that the characteristics of the measure at issue enabled the Commission to depart from the requirements of the Temporary Framework as referred to in paragraph 56 above.
68 In that regard, it should be observed that in paragraph 68 of the judgment under appeal the General Court pointed at the outset to the existence of very particular characteristics of the measure at issue and, in paragraph 69 thereof, correctly stated that it would examine the evidence which the appellant had brought before it in order to determine whether that evidence was capable of raising doubts as to the compatibility of the measure at issue with the internal market. The General Court then proceeded to carry out a detailed assessment of the decision at issue as regards the specific features of that measure.
69 Accordingly, in the first place, in paragraphs 72 to 82 of the judgment under appeal, concerning the requirement relating to the step-up mechanism to increase the remuneration of the State provided for by the Temporary Framework, the General Court was right to confirm the Commission’s assessment in the decision at issue that that mechanism, given its objective of incentivising the beneficiary to buy back the State capital injection, was not suitable for recapitalisations such as that concerned in the present case, relating to companies already partly owned by the State and in which the latter and private investors were subscribing to the capital increase in proportion to their previous shareholding, since its application would require the Republic of Finland to reduce its shareholding in Finnair’s capital to a level below what it was before implementation of the measure at issue.
70 It is necessary to state in that regard that, as is apparent from paragraph 71 of the judgment under appeal, which the appellant has not challenged in the present appeal, that assessment by the General Court follows the assertion, which is not vitiated by an error of law, that neither the wording of point 61 nor the content of section 3.11.7 of that framework relieved the Commission of its obligation to ascertain whether the step-up mechanism was suitable for the case at hand, taking account of the characteristics of the measure at issue, and, if that was not the case, to apply Article 107(3)(b) TFEU directly.
71 In the framework of such a determination, the General Court concluded, in paragraph 76 of the judgment under appeal, that, in view of the very particular characteristics of the measure at issue, the Commission had rightly found that the requirement for a step-up mechanism, as provided for in points 61 and 62 of the Temporary Framework and which incentivises the beneficiary to buy back the equity stake acquired by the State, was not suitable.
72 That finding does not suffer from any error of law. Indeed, as the General Court stated in paragraph 74 of the judgment under appeal, and contrary to what the appellant claims, the objective of that mechanism is to restore the status quo ante. That is confirmed in particular by point 44 of the Temporary Framework, which states that recapitalisation measures should not go beyond ‘restoring the capital structure of the beneficiary to the one predating the COVID-19 outbreak’ and, in any event, must not exceed the minimum needed to ensure the viability of the beneficiary. As the General Court stated in paragraph 75 of the judgment under appeal, the application of points 61 and 62 of that framework in a context where the State acquires new shares in proportion to its previous shareholding would lead to it reducing its holding in the capital of the beneficiary to a level below what it was before the measure at issue was implemented, which would bring about a change in the capital structure of that undertaking.
73 Furthermore, as regards the General Court’s examination of the appellant’s other arguments relating to that issue, in paragraphs 78 to 82 of the judgment under appeal, it is sufficient to observe that, as is apparent from that paragraph 82, the General Court, in essence, carried out an assessment of the facts and evidence, which enabled it to conclude that, in the particular case of Finnair, in which the aid measure is neutral for its capital structure, there is significant simultaneous participation by the private sector, sufficient remuneration for the State and, accordingly, less risk of a distortion of competition, the Commission had in the decision at issue established to the requisite legal standard, in accordance with the case-law cited in paragraph 59 above, that the present case differed from the situations covered by the Temporary Framework. The appellant seeks to challenge that assessment, without, however, advancing any arguments capable of demonstrating that the General Court distorted those facts and that evidence, in accordance with the case-law referred to in paragraph 46 above.
74 In the second place, in paragraphs 83 to 90 of the judgment under appeal, concerning the requirement under the Temporary Framework that prohibits the beneficiary of the aid from acquiring a stake of more than 10% in competing undertakings or those in the same line of business, as long as at least 75% of the funds used for recapitalisation measures in the COVID-19 pandemic have not been repaid, the General Court carried out a thorough examination of the Commission’s assessments in the decision at issue, and held that the application of that requirement to the measure at issue, by which the State did not increase its share in the capital of the undertaking concerned, was not appropriate since that requirement would also have the effect of obliging the Republic of Finland to reduce its stake in Finnair’s capital to a level below that which existed before the COVID-19 pandemic.
75 In that regard, first, the appellant disputes that finding made by the General Court by referring to the arguments which it raised in order to contest paragraphs 72 to 82 of the judgment under appeal. In particular, it argues that the General Court misinterpreted points 44 and 54 of the Temporary Framework as well as the latter’s general objectives. However, it is sufficient to observe that those arguments have been rejected in the examination carried out above regarding the criticism directed at the assessment in the aforementioned paragraphs 72 to 82, and that, in any event, the review carried out by the General Court in paragraphs 83 to 90 of the judgment under appeal concerned the scope of point 74 of that framework and not points 44 and 54.
76 Second, with respect to the appellant’s argument, that the prohibition provided for by the measure at issue on carrying out acquisitions for a period of three years does not suffice to remedy the error which the Commission allegedly committed by failing to ensure compliance with the requirement concerned, it is necessary to take note of the fact that the General Court, in paragraph 88 of the judgment under appeal, asserted that the appellant did not dispute the actual period of that prohibition, as proposed by the Republic of Finland and accepted by the Commission. Since, in the appeal, the appellant has not challenged that assertion made by the General Court, it cannot raise such kind of an argument that was not made at first instance.
77 In the third place, in paragraphs 91 to 99 of the judgment under appeal, concerning the requirement relating to the prohibition on paying dividends as long as the funds corresponding to the recapitalisation measure have not been repaid, the General Court took note, inter alia, of a specific characteristic of the measure at issue referred to in the decision at issue, namely that that measure was based on substantial private sector participation in such a manner that the State’s share of Finnair’s capital would remain unchanged; it considered that it was important in the present case to allow the payment of dividends since that constituted an incentive for private shareholders and investors to subscribe to new shares and thus to provide Finnair with new private capital, particularly in view of the deterioration in the investment climate in the aviation sector brought about by the COVID-19 pandemic.
78 In addition, the General Court found in paragraph 99 of the judgment under appeal, in essence, that, moreover, the appellant had not adduced any evidence capable of showing that a situation in which a State enters the capital of a private undertaking by means of an aid measure, thus necessarily increasing that State’s share in the capital of that undertaking, is comparable to the situation at issue, characterised by a contribution of both public and private capital, on the same terms and in proportion to the previous shareholding in the capital of that undertaking. It must be stated that the appellant does not provide a detailed challenge to that assessment, but merely refers again to the arguments seeking to contest paragraphs 72 to 82 of the judgment under appeal, which have been rejected in the examination of the criticism directed against the General Court’s assessment in those paragraphs, whereas the assessment in paragraph 99 is sufficient to justify the finding in paragraph 100 of that judgment, according to which the decision at issue established to the requisite legal standard, in accordance with the case-law cited in paragraph 59 above, that the present case differed from the situations covered by the Temporary Framework and that, consequently, the fact that the Commission lifted the prohibition on paying dividends did not constitute evidence of the existence of doubts as to the compatibility of the measure at issue with the internal market.
79 In those circumstances, the General Court did not err in law in finding, in paragraph 101 of the judgment under appeal, that the mere fact that the Commission derogated from the application of certain requirements of the Temporary Framework in order to take account of the specific exceptional circumstances, in terms of the case-law referred to in paragraph 59 above, of the measure at issue is not sufficient to demonstrate that it should have had doubts as to the compatibility of that measure with the internal market, which should have led to the adoption of a decision to initiate the formal investigation procedure.
80 In the light of the foregoing, the second part of the first ground of appeal must be rejected as unfounded.
81 As regards the first complaint of the third part of the first ground of appeal, Ryanair, in essence, first criticises the General Court for having endorsed, in paragraph 117 of the judgment under appeal, an assessment made by the Commission and thus for not having performed an effective judicial review. In that regard, it must be found that the mere fact that the General Court, in the framework of its own unfettered evaluation of the facts, confirmed an assessment made by the Commission so as to reach the conclusion that the Commission had been right to find, in the decision at issue, that it could determine Finnair’s market power by examining the competitive constraint on that airline at the airports where it held slots, does not establish that the General Court failed properly to exercise its power of review in that respect or, in particular, that it disregarded the principles governing the allocation of the burden of proof, as referred to in paragraph 48 above. In the present case, it is clear from paragraphs 115 to 130 of the judgment under appeal that the General Court performed a sufficient review of the Commission’s assessment in the decision at issue.
82 Second, Ryanair has not demonstrated in what way the assessment in paragraph 117 of the judgment under appeal would constitute an error of law, it not being possible, in particular, for such an error to arise from an alleged previous decision-making practice of the Commission (see, to that effect, judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 33 and the case-law cited).
83 Third and last, as regards the argument that the General Court’s assessment departed from the wording of point 72 of the Temporary Framework, it is sufficient to observe that, as the General Court stated in paragraph 114 of the judgment under appeal, which has not been disputed by the appellant in the appeal, the concept of ‘significant market power’ appearing in that point is not defined by the Temporary Framework, nor does it provide any guidance as to the approach to be taken in order to define the markets concerned. Furthermore, it must be held that the finding in paragraph 116 of the judgment under appeal, that the measure at issue enables Finnair to preserve slots and assets that may be used on any of its routes, does not contain any logical flaw, but stems from the finding that that measure seeks to maintain the viability of that airline.
84 It follows that the first complaint of the third part of the first ground of appeal must be rejected as being unfounded.
85 By the second complaint of this third part, the General Court is criticised, in essence, for having confirmed, in paragraphs 120 to 124 of the judgment under appeal, the Commission’s conclusion that Finnair did not have significant market power at Helsinki Airport, whereas the appellant had provided evidence to the contrary. In that regard, it is sufficient to note that the appellant is thus seeking in reality to call into question the unfettered assessment of the facts and evidence which the General Court made in relation to that conclusion, without making any allegation of distortion by the General Court, for the purposes of the case-law referred to in paragraph 46 above. Consequently, the second complaint must be rejected as inadmissible.
86 It follows from the foregoing that the third part of the first ground of appeal must be rejected as being in part inadmissible and in part unfounded.
87 By the fourth part of the first ground of appeal, Ryanair maintains in essence that the General Court, in paragraphs 106 and 107 of the judgment under appeal, erred in law in finding that the Commission was not obliged under Article 107(3)(b) TFEU to weigh the beneficial effects of the measure at issue against its adverse effects on trading conditions and the maintenance of undistorted competition.
88 In that regard, it should be observed that, in paragraph 20 of the judgment of 22 September 2020, Austria v Commission (C‑594/18 P, EU:C:2020:742), the Court of Justice pointed to the differences between the wording of Article 107(3)(b) TFEU and Article 107(3)(c) TFEU, and found, in particular, that only the first of those provisions laid down the condition that the aid at issue must pursue an objective of common interest. The Court concluded from this that Article 107(3)(c) TFEU did not make the compatibility of aid subject to that condition.
89 For a similar reason, also based on a comparison of the wording of those provisions, as the General Court held, in essence, in paragraph 106 of the judgment under appeal, in the absence of any reference in Article 107(3)(b) TFEU to demonstrating that there has been no effect on trading conditions to an extent contrary to the common interest and, therefore, to the need to weigh up the beneficial effects and the adverse effects of the aid concerned, that provision cannot be interpreted, unlike Article 107(3)(c) TFEU, as requiring the Commission to carry out such a balancing exercise for the purpose of assessing the compatibility of the measure at issue with the internal market (see, to that effect, judgment of 23 November 2023, Ryanair v Commission, C‑209/21 P, EU:C:2023:905, paragraph 85).
90 That difference in the assessment of the compatibility with the internal market of the aid referred to in Article 107(3)(b) TFEU and the aid referred to in Article 107(3)(c) TFEU can be explained by the particular nature of the aid referred to in Article 107(3)(b) TFEU, which pursues objectives of an exceptional nature and of particular weight consisting either in promoting the execution of an important project of common European interest or in remedying a serious disturbance in the economy of a Member State. Aid measures which contribute to one of those objectives, provided that they are necessary and proportionate, may therefore be considered to ensure a fair balance between their beneficial effects and their adverse effects on the internal market and are therefore in the common interest of the European Union (judgment of 23 November 2023, Ryanair v Commission, C‑209/21 P, EU:C:2023:905, paragraph 86).
91 Therefore, since Article 107(3)(b) TFEU reflects the balancing of the effects of State aid referred to in that provision carried out by the authors of the FEU Treaty, the Commission is not required to carry out a new balancing of those effects when it examines the compatibility of aid which is envisaged to be granted on the basis of that provision (judgment of 23 November 2023, Ryanair v Commission, C‑209/21 P, EU:C:2023:905, paragraph 87).
92 In the light of the foregoing, the General Court did not err in law in finding, in paragraphs 106 to 110 of the judgment under appeal, that the Commission was not obliged under Article 107(3)(b) TFEU to weigh the beneficial effects of the measure at issue against its adverse effects on trading conditions and the maintenance of undistorted competition.
93 It follows from the foregoing that the fourth part of the first ground of appeal must be rejected as unfounded and that consequently that ground of appeal must be dismissed in its entirety.
The second ground of appeal
Arguments of the parties
94 By its second ground of appeal, which has three parts and relates to paragraphs 132 to 149 of the judgment under appeal, Ryanair complains that the General Court erred in law and distorted the facts in assessing the third plea in its action at first instance in so far as that plea alleged infringement of the principles of non-discrimination and of proportionality.
95 By the first part of this ground of appeal, Ryanair submits that the General Court erred in law in finding, in paragraph 138 of the judgment under appeal, that individual aid gives rise to a difference in treatment, or even discrimination, which is inherent in its individual character. By holding that individual aid can never be discriminatory, the General Court precluded any comparability analysis altogether for assessing whether such discrimination existed.
96 By the second part of this ground of appeal, Ryanair argues that the General Court failed to apply in due fashion the principle of prohibition of any discrimination on grounds of nationality, a key tenet of the EU legal order. Although the General Court acknowledged, in paragraph 139 of the judgment under appeal, that the difference in treatment established by the measure at issue, in that it benefited only Finnair, could amount to discrimination, it wrongly held that such discrimination was to be assessed solely in the light of Article 107(3)(b) TFEU, on the ground that that provision was a special provision laid down by the Treaties, for the purposes of Article 18 TFEU.
97 By the third part of this ground of appeal, Ryanair submits that the General Court erred in law and distorted the facts when it applied the principle of proportionality.
98 In that regard, the General Court wrongly held, in paragraph 146 of the judgment under appeal, that the Commission had no obligation to assess whether the Republic of Finland should have widened the circle of beneficiaries of the measure at issue since Decision C(2020) 3387 final and the decision at issue established, to the requisite legal standard, the need to preserve Finnair’s contribution to the Finnish economy. The General Court’s reasoning in paragraphs 141 to 143 of the judgment under appeal amounts, in essence, to affirming that a company which best meets the objective pursued by an aid measure is entitled to obtain the entirety of that aid under Article 107(3)(b) TFEU, without taking into account the fact that other companies also contribute significantly to that objective, that being contrary to the principle of proportionality.
99 The Commission and the Republic of Finland contend that the second ground of appeal should be rejected as unfounded.
Findings of the Court
100 It should be observed, as a preliminary point, that, according to settled case-law, classification of a national measure as ‘State aid’ within the meaning of Article 107(1) TFEU requires all the following conditions to be fulfilled. First, there must be an intervention by the State or through State resources. Second, that intervention must be liable to affect trade between Member States. Third, it must confer a selective advantage on the recipient. Fourth, it must distort or threaten to distort competition (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 101 and the case-law cited).
101 It is therefore with regard to measures with such characteristics and such effects, in so far as they are liable to distort competition and affect trade between the Member States, that Article 107(1) TFEU sets out the principle that State aid is incompatible with the internal market (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 102).
102 In particular, the requirement of selectivity arising from Article 107(1) TFEU presupposes that the Commission will establish that the economic advantage, understood in the broad sense, arising directly or indirectly from a particular measure specifically benefits one or more undertakings. It falls to the Commission to show, in particular, that the measure in question creates differences between undertakings which, with regard to the objective of the measure, are in a comparable situation. It is necessary therefore that the advantage be granted selectively and that it be liable to place certain undertakings in a more favourable situation than that of others (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 103 and the case-law cited).
103 Where, as in the present case, the measure in question is envisaged as individual aid, the identification of the economic advantage is, in principle, sufficient to support the presumption that it is selective (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 104 and the case-law cited).
104 It follows that, as regards the first part of the second ground of appeal, by which Ryanair challenges paragraph 138 of the judgment under appeal, the General Court did not err in law by stating in essence in that paragraph that, by its nature, individual aid introduces a difference in treatment, or even discrimination, between the undertaking receiving that aid and all other undertakings which, in the light of the objective pursued by that aid, are in a comparable situation. Furthermore, contrary to what Ryanair claims, that assertion cannot be understood as meaning that the General Court considered that individual aid which, in its view, is contrary to the principle of non-discrimination is nevertheless compatible with the internal market, since it expressly stated at the end of that paragraph that EU law allows Member States to grant such aid, ‘provided that all the conditions laid down in Article 107 TFEU are satisfied’ (see, to that effect, judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 105, and of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 61).
105 Consequently, the first part of the second ground of appeal must be rejected as unfounded.
106 As regards the second part of the second ground of appeal, it must be observed that Article 107 TFEU provides, in paragraphs 2 and 3, for certain derogations from the principle that State aid is incompatible with the internal market, referred to in paragraph 101 above, such as that set out in Article 107(3)(b) TFEU concerning aid ‘to remedy a serious disturbance in the economy of a Member State’. Accordingly, State aid granted in accordance with the conditions laid down by those derogating provisions, notwithstanding the fact that it has the characteristics referred to in paragraph 100 above and produces the effects mentioned therein, is compatible or is capable of being declared compatible with the internal market.
107 It follows that, unless those derogating provisions are to be deprived of all practical effect, State aid which is granted in accordance with those conditions, namely, for the purposes of an objective recognised therein and within the limits of what is necessary and proportionate to the achievement of that objective, cannot be held to be incompatible with the internal market having regard solely to the characteristics or effects, referred to in paragraph 100 above, which are inherent in any State aid, that is to say, inter alia, for reasons relating to whether the aid is selective or distorts competition (judgments of 22 March 1977, Iannelli & Volpi, 74/76, EU:C:1977:51, paragraphs 14 and 15, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 107).
108 By the second part of its second ground of appeal, Ryanair alleges an error of law in that the General Court did not apply, in paragraph 139 of the judgment under appeal, the principle of non-discrimination on grounds of nationality laid down in Article 18 TFEU, but examined the measure at issue in the light of Article 107(3)(b) TFEU.
109 In that regard, it should be observed that it is clear from the case-law of the Court of Justice that the procedure provided for in Article 108 TFEU must never produce a result that is contrary to the specific provisions of the FEU Treaty. Accordingly, State aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market (judgments of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 96, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 109).
110 However, as regards Article 18 TFEU specifically, it is settled case-law that that article is intended to apply independently only to situations governed by EU law in respect of which the FEU Treaty lays down no specific prohibition of discrimination (judgments of 18 July 2017, Erzberger, C‑566/15, EU:C:2017:562, paragraph 25, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 110).
111 Since, as observed in paragraph 106 above, Article 107(2) and (3) TFEU provides for derogations from the principle that State aid is incompatible with the internal market, referred to in paragraph 1 of that article, and thus allows, in particular, differences in treatment between undertakings, subject to fulfilment of the requirements laid down by those derogations, the latter must be regarded as being ‘special provisions’ provided for in the Treaties, within the meaning of the first paragraph of Article 18 TFEU (judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 111, and of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 67).
112 It follows that the General Court did not err in law in finding, in paragraph 139 of the judgment under appeal, that Article 107(3)(b) TFEU constituted such a special provision and that it was necessary only to examine whether the difference in treatment brought about by the measure at issue was permitted under that provision.
113 In the light of the foregoing, the second part of the second ground of appeal must be rejected as unfounded.
114 In so far as Ryanair, by the third part of this ground of appeal, complains that the General Court erred in paragraph 146 of the judgment under appeal by holding that the Commission was under no obligation to examine whether the Republic of Finland should have widened the circle of beneficiaries of the measure at issue beyond Finnair, it is clear from the evaluation of the first part of the first ground of appeal, in particular from paragraph 38 above, that, even if the grant of that measure to other undertakings could have contributed to the attainment of the objective laid down in Article 107(3)(b) TFEU, that Member State was entitled to limit the benefit of that measure to a single undertaking.
115 More particularly, it follows from the case-law of the Court of Justice that aid granted under one of the derogations provided for in Article 107(2) and (3) TFEU cannot be held to be disproportionate, and thus incompatible with the internal market, merely because it benefits a single undertaking (judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 77 and the case-law cited).
116 It follows that, by holding in paragraph 146 of the judgment under appeal that the Commission was not obliged to examine, in order to assess the proportionality of the measure at issue, whether the circle of beneficiaries of that measure should have been widened, the General Court did not err in law. In addition, in paragraphs 140 to 145 of the judgment under appeal, the General Court, referring, moreover, to the detailed considerations which it set out in paragraphs 37 to 41 of that judgment, correctly applied the proportionality test in that it examined whether the grant of the measure at issue only to Finnair did not exceed the limits of what was appropriate and necessary in order to attain the legitimate objective pursued by the Republic of Finland.
117 As regards, lastly, the complaint alleging that the General Court distorted the facts, it must be held that Ryanair does not put forward any argument capable of demonstrating any distortion of the facts by the General Court, for the purposes of the case-law referred to in paragraph 46 above, when it examined the proportionality of the measure at issue.
118 In the light of the foregoing, the third part of the second ground of appeal and, consequently, that ground of appeal in its entirety must be rejected.
The third ground of appeal
Arguments of the parties
119 By its third ground of appeal, Ryanair complains that the General Court erred in law and distorted the facts in holding, in paragraph 155 of the judgment under appeal, that the appellant had failed to establish that the measure at issue was a barrier to the freedom of establishment or the freedom to provide services and that that obstacle was unjustified.
120 By the first part of this ground of appeal, Ryanair submits that the General Court’s assessment in paragraph 155, according to which Ryanair had not established how the exclusive character of the measure at issue was such as to deter air carriers from establishing themselves in Finland or from providing services from that country or to it, is contradictory and erroneous. The fact that airlines are excluded from a benefit reserved to Finnair is sufficient to show that the freedom to provide services and the freedom of establishment are discouraged, with no further demonstration being needed.
121 Ryanair argues that it showed to the requisite legal standard that the measure at issue in practice placed at a disadvantage only those air carriers whose registered office is in a Member State other than Finland. It provided evidence of that measure’s restrictive effect on the freedom to provide services.
122 By the second part of its third ground of appeal, Ryanair submits that it demonstrated that the restriction on the freedom to provide services and on the freedom of establishment resulting from that measure was not justified. The General Court should have examined whether that restriction was justified by an overriding reason relating to the general interest, was non-discriminatory and proportionate to the general interest aim pursued.
123 The Commission and the Republic of Finland contend that the third ground of appeal should be rejected as unfounded.
Findings of the Court
124 By the first and second parts of the third ground of appeal, which it is appropriate to examine together, Ryanair criticises the General Court, in essence, for errors of law in paragraph 155 of the judgment under appeal, in that it examined the fact that the measure at issue was of benefit only to Finnair solely in the light of the criteria of Article 107 TFEU, instead of determining whether that measure was justified in the light of the grounds referred to in the provisions of that treaty relating to the freedom to provide services or the freedom of establishment.
125 In that regard, as pointed out in paragraph 109 above, the procedure under Article 108 TFEU must never produce a result that is contrary to the specific provisions of the FEU Treaty. Accordingly, aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market.
126 However, first, the restrictive effects which an aid measure has on the freedom to provide services or the freedom of establishment still do not constitute a restriction prohibited by the FEU Treaty, since it may be inherent in the very nature of State aid, such as its selective nature (judgment of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 132).
127 Second, it is clear from the case-law of the Court of Justice that, where the modalities of an aid measure are so indissolubly linked to the object of the aid that it is impossible to evaluate them separately, their effect on the compatibility or incompatibility of the aid viewed as a whole with the internal market must therefore of necessity be determined by means of the procedure prescribed in Article 108 TFEU (see, to that effect, judgments of 22 March 1977, Iannelli & Volpi, 74/76, EU:C:1977:51, paragraph 14, and of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 133).
128 In the present case, the choice of Finnair as beneficiary of the measure at issue is part of the object of that measure and, in any event, even if that choice were to be regarded as a modality of that measure, Ryanair does not dispute that such a modality is inextricably linked to that object, which consisted in remedying the serious disturbance in the Finnish economy caused by the COVID-19 pandemic, by guaranteeing Finnair sufficient liquidity to maintain its viability and preventing its possible insolvency from aggravating that disturbance, given the importance of that company for the Finnish economy. It follows that the effect of that choice on the internal market cannot be examined separately from the effect of the compatibility of that measure as a whole with the internal market by means of the procedure prescribed in Article 108 TFEU (see, by analogy, judgment of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 92).
129 It follows from the reasons above and from the case-law referred to in paragraph 107 above that the General Court did not err in law by holding in paragraph 155 of the judgment under appeal in essence that, in order to establish that the measure at issue, because it benefited only Finnair, constituted an obstacle to the freedom to provide services and the freedom of establishment, Ryanair should have demonstrated, in the present case, that that measure produced restrictive effects which went beyond those inherent in State aid granted in accordance with the requirements laid down in Article 107(3)(b) TFEU (see, by analogy, judgments of 28 September 2023, Ryanair v Commission, C‑320/21 P, EU:C:2023:712, paragraph 135, and of 30 May 2024, Ryanair v Commission, C‑353/21 P, EU:C:2024:437, paragraph 93).
130 However, the arguments advanced by Ryanair in support of the first and second parts of the third ground of appeal, taken together, seek to criticise the choice of Finnair as the sole beneficiary of the measure at issue and the consequences of that choice, even though that choice is inherent in the selective nature of that measure.
131 As to the remainder, concerning the appellant’s claim of a distortion of certain facts, it must be observed that the appellant has merely put that complaint forward without adducing any evidence in support of it.
132 It follows from the foregoing that the third ground of appeal must be dismissed.
The fourth ground of appeal
Arguments of the parties
133 By its fourth ground of appeal, Ryanair complains that the General Court erred in law in that it held, in paragraphs 160 to 168 of the judgment under appeal, that the Commission had not infringed its obligation to state reasons under the second paragraph of Article 296 TFEU and in that the General Court itself failed to state reasons for the judgment under appeal to the requisite legal standard.
134 In that regard, the applicant refers to certain aspects which the Commission failed to explain or which it did not assess in the decision at issue, in breach of that obligation. It also submits that the judgment under appeal does not enable it to ‘dispel the doubts’ which it has in relation to those aspects.
135 The Commission and the Republic of Finland contend that the fourth ground of appeal should be rejected as unfounded.
Findings of the Court
136 It should be borne in mind that, according to settled case-law, the statement of reasons required by the second paragraph of Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the court having jurisdiction to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to specify all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of the second paragraph of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 198 and the case-law cited).
137 Specifically, as regards a decision taken under Article 108(3) TFEU not to raise objections in respect of an aid measure, as in the present case, the Court has held previously that such a decision, which is taken within a short period of time, must simply set out the reasons why the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market, and that even a succinct statement of reasons for that decision must be regarded as sufficient for the purpose of satisfying the requirement to state adequate reasons laid down in the second paragraph of Article 296 TFEU, provided that it discloses in a clear and unequivocal fashion the reasons why the Commission considered that it was not faced with serious difficulties, the question whether the reasoning is well founded being a separate matter (see, to that effect, judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 199 and the case-law cited).
138 It is in the light of those requirements that it is necessary to examine whether the General Court erred in law in holding that the decision at issue was sufficiently reasoned.
139 Ryanair refers to specific aspects in respect of which the Commission, in breach of its obligation to state reasons, failed to take a view or did not assess in the decision at issue, namely Finnair’s systemic importance in terms of remedying the serious disturbance in the Finnish economy caused by the COVID-19 pandemic, the possibility of replacing Finnair with other airlines; the need for equity to deal with a short-term liquidity issue; the possibility of using other market financing options; the reasons why certain characteristics of the measure at issue constituted exceptional circumstances; the reasons why Finnair’s market power was not assessed in accordance with previous decision-making practice; the weighing of the beneficial and adverse effects of the measure at issue; and that measure’s compliance with the principles of non-discrimination, freedom of establishment and the freedom to provide services.
140 In that regard, it is apparent from paragraphs 160 to 166 of the judgment under appeal that the General Court, after referring to the criteria in the light of which it was necessary to assess the statement of reasons for the decision at issue, listed a series of factors and set out the reasons why those factors were either not relevant for the purposes of that decision or had been examined in that decision in such a way for the Commission’s reasoning to be understood.
141 It does not appear that the General Court, by those findings, disregarded the requirement to state reasons relating to a Commission decision taken pursuant to Article 108(3) TFEU, not to raise objections, as set out in the case-law referred to in paragraphs 136 and 137 above.
142 It should be observed in addition that the appellant does not claim in its appeal that it explicitly raised the issue before the General Court of insufficient reasoning in respect of other aspects of the decision at issue than those assessed in paragraphs 161 to 166 of the judgment under appeal.
143 Furthermore, in so far as the line of argument put forward in the fourth ground of appeal seeks in reality to demonstrate that the decision at issue was adopted on the basis of an insufficient or legally incorrect assessment by the Commission, that line of argument relates to the merits of that decision rather than to the requirement to state reasons as an essential procedural requirement, with the result that it must be rejected in the light of the case-law referred to in paragraph 137 above.
144 It follows from the foregoing that the General Court did not err in law in holding, in paragraphs 160 to 167 of the judgment under appeal, that the decision at issue was sufficiently reasoned.
145 Lastly, it must be held that Ryanair has not put forward any argument capable of demonstrating that the General Court itself failed to fulfil its obligation to state reasons when examining, in those paragraphs of the judgment under appeal, the fourth plea in the action at first instance, while the assertion by that company, that the judgment under appeal did not enable it to ‘dispel the doubts’ it has, in that regard, with respect to the decision at issue is irrelevant.
146 It follows from the foregoing that the fourth ground of appeal must be rejected as unfounded.
147 Since none of the grounds of appeal raised by the appellant has been upheld, the appeal must be dismissed in its entirety.
Costs
148 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs.
149 Article 138(1) of those rules, applicable to appeal proceedings pursuant to Article 184(1) thereof, provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the appellant has been unsuccessful and the Commission has applied for costs to be awarded against it, the appellant must be ordered to bear its own costs and to pay those incurred by the Commission.
150 Under Article 184(4) of those rules, where the appeal has not been brought by an intervener at first instance, the latter may not be ordered to pay costs in the appeal proceedings unless it participated in the written or oral part of the proceedings before the Court of Justice. Where an intervener at first instance takes part in the proceedings, the Court may decide that it is to bear its own costs. Since the Republic of Finland, intervener at first instance, participated in the proceedings before the Court, it must be ordered to bear its own costs.
On those grounds, the Court (Fourth Chamber) hereby:
1. Dismisses the appeal;
2. Orders Ryanair DAC to bear its own costs and to pay those incurred by the European Commission;
3. Orders the Republic of Finland to bear its own costs.
Lycourgos |
Rodin |
Spineanu-Matei |
Delivered in open court in Luxembourg on 7 November 2024.
A. Calot Escobar |
K. Lenaerts |
Registrar |
President |
* Language of the case: English.