Action brought on 7 January 2005 by TV Danmark A/S and Kanal 5 Denmark Ltd., against the Commission of the European Communities

(Case T-12/05)

(2005/C 69/42)

Language of the case: English

An action against the Commission of the European Communities was brought before the Court of First Instance of the European Communities on 7 January 2005 by TV Danmark A/S, Skovlunde, (Denmark) and Kanal 5 Denmark Ltd., Hounslow (United Kingdom) represented by D. Vandermeersch, T. Müller-Ibold, K. Nordlander and H. Peytz, lawyers with an address for service in Luxembourg.

The applicant claims that the Court should:

Pleas in law and main arguments

The contested decision relates to an injection of capital and a conversion of a State loan into equity by the Danish Government for the benefit of TV2/Danmark A/S, which it considered necessary to avoid the bankruptcy of TV2 resulting from the repayment of amounts of illegal State aid ordered by the Commission in a decision of 19 May 2004 (1) establishing the Government's overcompensation of TV2's public service cost. In the contested decision, the Commission held that State aid might be involved in the Government's recapitalisation of TV2, but that if so it would be compatible with the common market under Article 86(2) EC.

The applicants submit that in adopting the decision, the Commission infringed Articles 86(2), 87(1), 88(2) and 253 EC, the Protocol annexed to the EC Treaty on the system of public broadcasting in the Member States, Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (2), and the Communication from the Commission on the application of the State aid rules to public service broadcasting (3).

In support of their application, the applicants submit that the Commission infringed Articles 87(1), 88(3) and 86(2) EC, when, after having found that the private investor principle, as applied to long-term investment, could not be invoked given the uncertainty surrounding the planned privatisation of TV2, it failed to establish and to quantify the State aid.

Secondly, the applicants submit that the Commission infringed Article 86(2) EC, the Protocol, and the Broadcasting Communication when it based itself on a definition of a service of a general economic interest which is too broad, too imprecisely worded and creates a distortion of competition and an effect on trade contrary to Article 86(2) EC. The applicants also claim that the Commission failed to establish that compliance with the Recovery Decision without the subsequent recapitalisation would obstruct TV2 in the performance of its public service tasks.

According to the applicants, the Commission furthermore failed to establish that the development of trade would not be affected by the recapitalisation to such an extent as is contrary to the interest of the Community.

Thirdly, the applicants submit that the Commission infringed Article 86(2) EC, the Protocol, and the Broadcasting Communication when it failed to establish TV2's net public service costs which could be funded by the State and committed manifest errors of assessment when applying the proportionality test.

Fourthly, the applicants submit that the contested decision infringes Articles 87 and 88 EC and the right to equal treatment as it perpetuates, contrary to the Commission's State aid recovery policy, the unlawful advantage of the illegal aid and the resulting distortion of competition.

Fifthly, the applicants submit that the Commission infringed Article 88(2) EC and Article 4(4) of the Procedural Regulation when it decided not to open the formal investigation procedure giving interested third parties the opportunity to be heard.

Finally, the applicants claim that the Commission infringed Article 253 EC when it failed to properly state its reasons for adopting the contested decision.

(1)  Commission Decision of 19 May 2004 in case C 2/2003 - State funding of TV2/Denmark

(2)  OJ L 83, p. 1

(3)  OJ 2001 C 320, p. 5