Case T‑642/19

JCDecaux Street Furniture Belgium

v

European Commission

Judgment of the General Court (First Chamber), 7 September 2022

(State Aid – Aid granted by Belgium to JCDecaux Street Furniture Belgium – Decision declaring the aid incompatible with the internal market and ordering its recovery – Advantage – Obligation to state reasons)

  1. State aid – Concept – Grant, attributable to the State, of an advantage by means of State resources – Grant to a private undertaking of the right to use furniture in public spaces without paying rent or taxes for a period longer than that stipulated in the original contract – Measure designed to compensate for damage caused to that undertaking in the performance of contractual obligations – Decision having the effect of mitigating the charges of the undertaking – Inclusion – Objectives pursued by the State – Irrelevant

    (Art. 107(1) TFEU)

    (see paragraphs 20-30, 42, 63)

  2. State aid – Concept – Assessment according to the private investor test – Assessment of all factors relevant to the transaction at issue and its context – Member State’s obligation to provide objective and verifiable evidence to show the economic nature of the transaction

    (Art. 107(1) TFEU)

    (see paragraphs 37-42)

  3. State aid – Concept – Selective nature of the measure – Distinction between the requirement for selectivity and the concomitant detection of an economic advantage, and between an aid scheme and individual aid

    (Art. 107(1) TFEU)

    (see paragraph 53)

  4. State aid – Concept – Measures designed to compensate for the cost of public service missions performed by an undertaking – First condition set out in the Altmark judgment – Clearly defined public service obligations – No recipient undertaking actually entrusted with carrying out public service obligations

    (Arts 106(2) and 107(1) TFEU)

    (see paragraphs 69-73)

  5. State aid – Concept – Measures designed to compensate for the cost of public service missions performed by an undertaking – Not included – Conditions set out in the Altmark judgment – Cumulative nature

    (Arts 106(2) and 107(1) TFEU)

    (see paragraph 74)

  6. State aid – Commission decision finding an aid partially incompatible with the internal market and ordering its recovery – Whether possible for the Commission to leave to the national authorities the task of calculating the precise amount to be recovered

    (Art. 108 TFEU)

    (see paragraph 96)

  7. State aid – Recovery of unlawful aid – Ten-year limitation period laid down in Article 17 of Regulation 2015/1589 – Point from which the limitation period starts to run – Date on which aid granted to the beneficiary

    (Art. 108(2) TFEU; Council Regulation 2015/1589, Art. 17(2))

    (see paragraphs 100, 101)

Résumé

The City of Brussels (Belgium) and JCDecaux Street Furniture Belgium (‘JCDecaux’) concluded two successive contracts for the provision of street furniture, some of which could be used for advertising purposes.

The first contract, dated 16 July 1984 (‘the 1984 contract’), provided that JCDecaux was to install in the City of Brussels bus shelter advertisements and street furniture of which JCDecaux would retain ownership. Under that contract, JCDecaux was permitted to use the bus shelters and street furniture for advertising for a period of 15 years running from the date of installation, without making any payment for rent, right of occupancy or fees, in return for offering the City of Brussels a number of benefits in kind.

In 1998, in the context of a new call for tenders, the City of Brussels listed in Annex 10 to the special tender specifications (‘Annex 10’) the bus shelters and street furniture in respect of which JCDecaux’s right of use had not yet expired under the terms of the 1984 contract.

JCDecaux won that call for tenders and signed a second contract with the City of Brussels dated 14 October 1999 (‘the 1999 contract’) under which ownership of the installed street furniture would pass to the City of Brussels in return for the payment of a price per display supplied. For its part, JCDecaux was to pay monthly rent to use the street furniture covered by the contract for advertising.

When the 1999 contract was implemented, some of the displays listed in Annex 10 were dismantled before the expiry dates stipulated in that annex, while others were kept in place after those dates. For the latter, unlike in the case of the displays covered by the 1999 contract, the applicant paid neither rent nor tax to the City of Brussels.

Having received a complaint, the European Commission found, by decision of 24 June 2019, ( 1 ) that JCDecaux had benefited from unlawful State aid incompatible with the internal market, in an amount equivalent to the rent and taxes not paid on the advertising displays installed under the 1984 contract and kept in place after the removal date stipulated in Annex 10 to the 1999 contract, between 15 September 2001 and 21 August 2010.

The action for annulment brought by JCDecaux against the contested decision is dismissed by the Court which provides, in that connection, clarifications regarding the concept of ‘economic advantage’, for the purposes of Article 107(1) TFEU, and the point from which the limitation period for the recovery of aid starts to run in the context of a contract for the use of street furniture for advertising.

Findings of the Court

In the first place, as regards the existence of an economic advantage, for the purposes of Article 107(1) TFEU, the Court begins by rejecting the reasoning that the use of displays listed in Annex 10 after the expiry dates stipulated for that use enabled the economic balance of the 1984 contract to be maintained by compensating JCDecaux for the disadvantage it suffered as a result of the early removal of a number of displays listed in that annex.

In that regard, the Court notes, first of all, that the concept of ‘State aid’ is an objective legal concept defined directly by Article 107(1) TFEU, which does not distinguish between the causes or the objectives of State aid measures, but defines them in relation to their effects. Consequently, the fact that the objective of a State measure is to maintain the economic balance between the parties to a contract or that that objective is consistent with the principles of national law cannot rule out ab initio the classification of such a measure as State aid.

Furthermore, since the 1999 contract made the use of street furniture in the territory of the City of Brussels subject to the payment of rent and taxes, the use by JCDecaux of the displays listed in Annex 10 after the expiry dates stipulated in that annex, without paying rent or taxes to the City of Brussels, had the effect of mitigating those charges.

Finally, the compensation mechanism established by the 1984 contract could not be deemed to be conduct which, in similar circumstances, a market economy operator of a size comparable to that of the bodies managing the public sector might have been prompted to adopt.

There is no evidence in the documents before the Court that the City of Brussels carried out an evaluation of the actual loss incurred by JCDecaux as a result of the early removal of certain displays listed in Annex 10 or of the profit that could be earned from keeping in place other displays listed in that annex. Nor did it monitor the implementation of the compensation mechanism established by the 1984 contract. Furthermore, irrespective of whether or not a written formalisation of that mechanism was necessary, in a judgment of 2016, the cour d’appel de Bruxelles (Court of Appeal, Brussels, Belgium) found that, by failing to adhere to the expiry dates stipulated by Annex 10 for the use of certain displays listed in that annex, JCDecaux had used those displays without right or title.

Accordingly, the Commission was right to consider that the retention and use by JCDecaux of a number of displays listed in Annex 10 after the expiry dates stipulated in that annex constituted an economic advantage for the purposes of Article 107(1) TFEU, even if the retention of those displays was a compensation mechanism established by the 1984 contract.

The Court also rejects the complaint alleging that the Commission made a manifest error of assessment and an error of law in finding that JCDecaux had saved on rent and taxes, which constituted an advantage.

Since one of the conditions laid down in the 1999 contract for the use of street furniture for advertising was the payment of rent, the Commission was right to conclude that the fact that JCDecaux continued to use of a number of displays listed in Annex 10 after the expiry dates without fulfilling such an obligation constituted an advantage conferred through State resources for the purposes of Article 107(1) TFEU.

As regards the taxes, the Court notes that, with effect from 2001, the City of Brussels had introduced a tax on temporary advertising in and on public property. Although the exemption from that tax could be justified if street furniture were used for advertising by the City of Brussels for its own purposes, such an exemption was not applicable where that street furniture was used for advertising by a third party. Consequently, the Commission was right to conclude that, by granting the tax exemption to JCDecaux until the 2009 tax year, the City of Brussels conferred an advantage through State resources. Furthermore, the Belgian authorities had themselves stated, during the formal investigation procedure before the Commission, that the City of Brussels had concluded that exempting street furniture used for advertising by third parties from tax solely on the ground that it was owned by the City of Brussels, when the City of Brussels was not the operator, was unfair to operators of other advertising displays.

In the second place, the Court holds that the Commission was right to consider that the point from which the limitation period for the recovery of aid started to run was not the date of the decision to grant the alleged compensation, but the date from which JCDecaux actually benefited from the advantage consisting of the non-payment of rent and taxes, namely the date on which the displays listed in Annex 10, which were kept in place after the expiry dates stipulated for them in that annex, should have been removed.

( 1 ) Commission Decision C(2019) 4466 final of 24 June 2019 on State aid granted by Belgium to JCDecaux Belgium Publicité (SA.33078 (2015/C) (ex 2015/NN)) (‘the contested decision’).