Case T‑525/21

E. Breuninger GmbH & Co.

v

European Commission

 Judgment of the General Court (Second Chamber, Extended Composition), 21 December 2022

(Action for annulment – State aid – Framework system to establish a federal compensation scheme in Germany for losses caused by lockdown decisions – Decision not to raise any objections – Aid to make good the damage caused by natural disasters or other exceptional occurrences – No interest in bringing proceedings – Inadmissibility)

1.      Action for annulment – Admissibility criteria – Interest in bringing proceedings – To be considered of the Court’s own motion

(Art. 263 TFEU)

(see paragraph 17)

2.      Action for annulment – Natural or legal persons – Interest in bringing proceedings – Need for a vested and present interest – Action capable of securing a benefit for the applicant – Action directed against a Commission decision not to raise objections to a notified aid scheme – Action brought by an undertaking fulfilling the requirements for eligibility to take part in the notified aid scheme – Company not meeting an additional non-notified eligibility requirement – No interest in bringing proceedings – Inadmissibility

(Art. 263 TFEU, fourth paragraph)

(see paragraphs 18-30, 33)

Résumé

The General Court dismisses as inadmissible the action brought by the retail undertaking Breuninger against the Commission’s decision approving aid granted by Germany to offset losses suffered as a result of lockdown during the COVID-19 crisis.

Breuninger erred in considering that it was excluded from the aid scheme as notified, and the undertaking therefore has no interest in having the Commission decision annulled.

On 21 May 2021, the Federal Republic of Germany notified the European Commission of an aid scheme in the form of temporary economic support for companies whose activities had been suspended as a result of the measures taken by the Federal Government and the Länder to deal with the pandemic in Germany in the context of the COVID-19 crisis (‘the federal compensation scheme’).

Under this federal compensation scheme, federal, regional and local administrative authorities may, under certain conditions, provide direct subsidies to companies that suffered losses between 16 March 2020 and 31 December 2021 as a result of decisions to enter into lockdown.

By decision of 28 May 2021, (1) the Commission declared that scheme compatible with the internal market pursuant to Article 107(2)(b) TFEU. Under that provision, aid to make good the damage caused by natural disasters or exceptional occurrences is compatible with the internal market.

The German undertaking E. Breuninger GmbH & Co, which is active, inter alia, in the retail sector, brought an action for annulment of the Commission’s decision. However, the action is dismissed as inadmissible by the Second Chamber (Extended Composition) of the General Court, which raises of its own motion that undertaking’s failure to establish the requisite interest in bringing proceedings before the Court.

Findings of the Court

Since the conditions governing the admissibility of an action relate to the absolute bar to proceeding with an action, which it must determine of its own motion, the Court points out that an action for annulment brought by a natural or legal person is admissible only in so far as that person has an interest in the annulment of the contested measure. Such an interest presupposes that the annulment of the measure in question is capable, in itself, of having legal consequences and that the action may thus, if successful, procure an advantage for the party who brought it.

As regards the question whether the applicant has an interest in bringing proceedings for the annulment of the contested decision, the Court notes that the applicant’s action is based on the incorrect premiss that it was not eligible for the federal compensation scheme on account of the condition, laid down in Article 2(2) of that scheme, that undertakings pursuing mixed activities, some of which are not at all affected by the lockdown, may benefit from the federal compensation scheme only if the prohibited activities represent at least 80% of their turnover. Since the online trading activities pursued by the applicant were considered to be related to its retail activities, all the activities were required to be affected, within the meaning of that provision, by the lockdown decisions ordered during the COVID-19 pandemic.

On the other hand, it became apparent from the discussions in the course of the judicial proceedings that the fact that it was impossible for the applicant to obtain financial assistance under the federal aid programme was in fact due to the application by the German authorities of an eligibility requirement not notified to the Commission, requiring that at least 30% of the applicant’s total turnover had been affected by the lockdown decisions.

However, in so far as the action brought by the applicant relates exclusively to the legality of the contested decision, by which the Commission declared the notified federal scheme compatible with Article 107(2)(b) TFEU, the application by the German authorities of an additional eligibility requirement which is not expressly or implicitly mentioned in that scheme is not relevant to the present proceedings.

In the light of the foregoing, and of Article 2(2) of the federal compensation scheme, as declared compatible with Article 107(2)(b) TFEU in the contested decision, the applicant was eligible for aid under that scheme. Thus, the Court finds that the annulment of that decision would not procure any advantage for the applicant. Consequently, it dismisses its action as inadmissible for lack of interest in bringing proceedings.

The General Court adds, however, that it is open to the applicant to bring an action before the German courts, which will have to examine, if necessary after having referred a question to the Court of Justice for a preliminary ruling, whether the addition of a supplementary eligibility requirement by the German authorities is akin to the alteration of existing aid, and, therefore, to new aid subject to the notification obligation under Article 108(3) TFEU.

1      Commission Decision C (2021) 3999 final of 28 May 2021 on State aid SA.62784 (2021/N) – Germany COVID-19 – Federal Damage Compensation Scheme (OJ 2021 C 223, p. 25; ‘the contested decision’).