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Document 62020TJ0364
Judgment of the General Court (Fifth Chamber, Extended Composition) of 28 February 2024.#Kingdom of Denmark v European Commission.#State aid – Public financing of Fehmarn Belt fixed rail-road link – Aid granted by Denmark to Femern – Decision declaring the aid compatible with the internal market – Action for annulment – Whether separable – Admissibility – Concept of ‘undertaking’ – Concept of ‘economic activity’ – Activities involving the construction and operation of a fixed rail-road link – Effect on trade between Member States and distortion of competition.#Case T-364/20.
Judgment of the General Court (Fifth Chamber, Extended Composition) of 28 February 2024.
Kingdom of Denmark v European Commission.
State aid – Public financing of Fehmarn Belt fixed rail-road link – Aid granted by Denmark to Femern – Decision declaring the aid compatible with the internal market – Action for annulment – Whether separable – Admissibility – Concept of ‘undertaking’ – Concept of ‘economic activity’ – Activities involving the construction and operation of a fixed rail-road link – Effect on trade between Member States and distortion of competition.
Case T-364/20.
Judgment of the General Court (Fifth Chamber, Extended Composition) of 28 February 2024.
Kingdom of Denmark v European Commission.
State aid – Public financing of Fehmarn Belt fixed rail-road link – Aid granted by Denmark to Femern – Decision declaring the aid compatible with the internal market – Action for annulment – Whether separable – Admissibility – Concept of ‘undertaking’ – Concept of ‘economic activity’ – Activities involving the construction and operation of a fixed rail-road link – Effect on trade between Member States and distortion of competition.
Case T-364/20.
Court reports – general – 'Information on unpublished decisions' section
ECLI identifier: ECLI:EU:T:2024:125
Provisional text
JUDGMENT OF GENERAL COURT (Fifth Chamber, Extended Composition)
28 February 2024 (*)
(State aid – Public financing of Fehmarn Belt fixed rail-road link – Aid granted by Denmark to Femern – Decision declaring the aid compatible with the internal market – Action for annulment – Whether separable – Admissibility – Concept of ‘undertaking’ – Concept of ‘economic activity’ – Activities involving the construction and operation of a fixed rail-road link – Effect on trade between Member States and distortion of competition)
In Case T‑364/20,
Kingdom of Denmark, represented by C. Maertens and M. Søndahl Wolff, acting as Agents, and by R. Holdgaard and J. Pinborg, lawyers,
applicant,
supported by
Kingdom of Belgium, represented by L. Van den Broeck, acting as Agent, and by J. Vanden Eynde, lawyer,
by
Federal Republic of Germany, represented by J. Möller and R. Kanitz, acting as Agents,
and by
Grand Duchy of Luxembourg, represented by A. Germeaux and T. Schell, acting as Agents,
interveners,
v
European Commission, represented by S. Noë, acting as Agent,
defendant,
THE GENERAL COURT (Fifth Chamber, Extended Composition),
composed, at the time of the deliberations, of D. Spielmann, President, U. Öberg, R. Mastroianni, M. Brkan (Rapporteur) and I. Gâlea, Judges,
Registrar: H. Eriksson, Administrator,
having regard to the written part of the procedure,
further to the hearing on 8 November 2022,
gives the following
Judgment
1 By its action under Article 263 TFEU, the Kingdom of Denmark seeks the annulment of Commission Decision C(2020) 1683 final of 20 March 2020 on the State aid SA.39078 – 2019/C (ex 2014/N) which Denmark implemented for Femern A/S (OJ 2020 L 339, p. 1), in so far as, in the first sentence of Article 2 of that decision, it classified as State aid, within the meaning of Article 107(1) TFEU, the measures consisting of capital injections and a combination of State loans and State guarantees in favour of Femern A/S (‘the contested decision’).
I. Background to the dispute
A. The Fehmarn Belt Fixed Link project
2 The Fehmarn Belt Fixed Link project between Denmark and Germany (‘the project’) was approved by the treaty between the Kingdom of Denmark and the Federal Republic of Germany concerning the Fehmarn Belt fixed link, signed on 3 September 2008 and ratified in 2009 (‘the Fehmarn Belt Treaty’).
3 The project consists of, on the one hand, a rail and road tunnel (‘the Fixed Link’), and, on the other, road hinterland connections in Denmark (‘the road connections’) and rail hinterland connections in Denmark (‘the rail connections’) (together ‘the rail and road hinterland connections’).
4 The Fixed Link takes the form of an immersed tunnel under the Baltic Sea between Rødby on the island of Lolland in Denmark and Puttgarden in Germany; it will be approximately 19 kilometres long and will consist of an electrified railway line and a motorway. The rail connections will include the expansion and upgrade of the existing rail link between Ringsted (Denmark) and Rødby, covering approximately 120 kilometres, which is owned by Banedanmark, the Danish State public rail infrastructure manager.
5 The project was preceded by a planning phase. The European Commission was given notification of financing of that phase, as regards the Fixed Link and the rail and road hinterland connections. By its decision of 13 July 2009 in Case N 157/09 – Financing of the planning phase of the Fehmarn Belt fixed link referred to in the Official Journal of the European Union of 27 August 2009 (OJ 2009 C 202, p. 2), the Commission concluded, first, that the measures relating to the financing of the planning of the project may not constitute State aid in so far as Femern had acted as a public authority, and, second, that those measures would in any event be compatible with the internal market. It therefore decided not to raise any objections within the meaning of Article 4(2) and (3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1).
6 Following an update of 2015 fixed prices provided by the Danish authorities, the total costs for the planning and construction of the Fixed Link were estimated at 52.6 billion Danish kroner (DKK) (approximately EUR 7.1 billion) and the costs related to the planning and construction of the upgrading of the rail and road hinterland connections were estimated at DKK 9.5 billion (approximately EUR 1.3 billion), giving an estimated total cost of DKK 62.1 billion (approximately EUR 8.4 billion) for the project.
7 Pursuant to Article 6 of the Fehmarn Belt Treaty and the Lov nr 575 om anlæg og drift af en fast forbindelse over Femern Bælt med tilhørende landanlæg i Danmark (Law No 575 on the construction and operation of the Fehmarn Belt Fixed Link and Danish hinterland connections) of 4 May 2015 (‘the Construction Law’), two public undertakings were entrusted with the execution of the project.
8 The first, Femern, established in 2005, is responsible for the financing, construction and operation of the Fixed Link. The second, Femern Landanlæg A/S, formed in 2009, was appointed to manage the construction and operation of the hinterland connections in Denmark. Femern Landanlæg is a subsidiary of Sund & Bælt Holding A/S, which is owned by the Danish State. Femern became a subsidiary of Femern Landanlæg following the latter’s establishment.
9 The works relating to the construction of the Fixed Link are carried out by Femern under construction contracts subject to public procurement procedures.
10 The construction of the necessary upgrading of the road connections is undertaken by the Danish Highways Directorate on behalf of the Danish State, and is financed by Femern Landanlæg. The road connections will be part of the general Danish road infrastructure network, which is financed, operated and maintained by the Danish Highways Directorate. The construction and operation of the rail connections are carried out by Banedanmark on behalf of the Danish State and are financed by Femern Landanlæg.
11 According to the notification by the Kingdom of Denmark of 22 December 2014, addressed to the Commission pursuant to Article 108(3) TFEU, the project is financed by Femern and Femern Landanlæg, through capital injections, State-guaranteed loans and loans from the Danish authorities. As from the entry into service of the Fixed Link, Femern will receive the charges paid by users of the Fixed Link in order to discharge its debt and will pay dividends to Femern Landanlæg which the latter will use to discharge its own debt. Femern Landanlæg will also receive 80% of the fees paid by the railway operators for use of the rail connections, charged by Banedanmark, as ownership of those connections will be shared by it and Banedanmark.
B. Events prior to the dispute
12 During 2014 and 2015, the Commission received five complaints, the first of which was lodged on 5 June 2014, claiming that the Kingdom of Denmark had granted unlawful State aid that was incompatible with the internal market to Femern and Femern Landanlæg.
13 During that same period, the Commission’s departments sent several requests for information to the Danish authorities, which replied and provided further information on a number of occasions.
14 By letter of 22 December 2014, in accordance with Article 108(3) TFEU, the Danish authorities notified the Commission of the financing model for the project.
15 On 23 July 2015, the Commission adopted Decision C(2015) 5023 final on State aid SA.39078 (2014/N) (Denmark) for the financing of the Fehmarn Belt Fixed Link project, referred to in the Official Journal of 2 October 2015 (OJ 2015 C 325, p. 5, ‘the Construction Decision’). The operative part of that decision consisted of two parts.
16 In the first part, the Commission had considered that the measures granted to Femern Landanlæg for the planning, construction and operation of the rail and road hinterland connections did not constitute State aid within the meaning of Article 107(1) TFEU.
17 In the second part, the Commission had considered that, even if the measures granted to Femern for the planning, construction and operation of the Fixed Link did constitute State aid within the meaning of Article 107(1) TFEU, they were compatible with the internal market pursuant to Article 107(3)(b) TFEU.
18 Thus, following the preliminary examination stage, the Commission had decided not to raise any objections with regard to the measures notified by the Danish authorities.
19 By judgments of 13 December 2018, Scandlines Danmark and Scandlines Deutschland v Commission (T‑630/15, not published, EU:T:2018:942), and of 13 December 2018, Stena Line Scandinavia v Commission (T‑631/15, not published, EU:T:2018:944), the General Court annulled the Construction Decision in so far as the Commission had decided not to raise objections with regard to the measures granted by the Kingdom of Denmark to Femern for the planning, construction and operation of the Fixed Link, and dismissed the action as to the remainder.
20 First of all, as regards the public financing granted to Femern Landanlæg for the financing of the planning, construction and operation of the rail connections, the Court rejected as unfounded the pleas alleging that the Commission had made errors of fact and of law in considering that that financing did not constitute State aid on the ground that it was not liable to distort competition or affect trade between Member States within the meaning of Article 107(1) TFEU.
21 Next, as regards the public financing granted to Femern for the construction and operation of the Fixed Link, the Court upheld the action on the ground that the Commission had failed to fulfil its obligation under Article 108(3) TFEU to initiate the formal investigation procedure owing to the existence of serious difficulties.
C. Administrative procedure
22 Following the delivery of the judgments of 13 December 2018, Scandlines Danmark and Scandlines Deutschland v Commission (T‑630/15, not published, EU:T:2018:942), and of 13 December 2018, Stena Line Scandinavia v Commission (T‑631/15, not published, EU:T:2018:944), which were upheld by the Court of Justice by the judgment of 6 October 2021, Scandlines Danmark and Scandlines Deutschland v Commission (C‑174/19 P and C‑175/19 P, EU:C:2021:801), the Commission, by letter of 14 June 2019, informed the Danish authorities of its decision to initiate the formal investigation procedure, laid down in Article 108(2) TFEU, in respect of the measures granted to Femern for the part of the project relating to the financing of the Fixed Link (‘the Opening Decision’).
23 The Opening Decision was published on 5 July 2019 in the Official Journal (OJ 2019 C 226, p. 5). In that decision, on the basis of the information available at the time of initiation of the formal investigation procedure, the Commission, inter alia, expressed its doubts concerning the possibility that Femern might be considered to be exercising an economic activity.
D. Contested decision
24 On 20 March 2020, the Commission adopted the contested decision.
25 The contested decision covers the measures granted to Femern for the planning, construction and operation of the Fixed Link. However, unlike the Construction Decision, the contested decision does not concern the measures granted to Femern Landanlæg relating to the financing of the rail and road hinterland connections.
26 According to Article 1 of the contested decision, the measures consisting of the depreciation of assets, the fiscal loss carry forward, the joint taxation regime, the railway fees, the use of State property free of charge, and the State guarantees for the derivatives do not constitute State aid in favour of Femern in the sense of Article 107(1) TFEU.
27 By contrast, according to Article 2 of the contested decision, the measures consisting of capital injections and a combination of State loans and State guarantees in favour of Femern, which Denmark at least partially put into effect unlawfully, constitute State aid within the meaning of Article 107(1) TFEU. Following the modification of those measures as set out in the revised notification which followed the Opening Decision, they are compatible with the internal market on the basis of Article 107(3)(b) TFEU.
E. Forms of order sought
28 The Kingdom of Denmark, supported by the Kingdom of Belgium, the Federal Republic of Germany and the Grand Duchy of Luxembourg, claim that the Court should:
– annul Article 2 of the contested decision in so far as the measures consisting of capital injections and a combination of State loans and State guarantees in favour of Femern, which Denmark at least partially put into effect unlawfully, constitute State aid within the meaning of Article 107(1) TFEU;
– order the Commission to pay the costs.
29 The Commission contends that the Court should:
– declare the action inadmissible or, in the alternative, unfounded;
– order the Kingdom of Denmark to pay the costs.
II. Law
A. Admissibility
30 Without raising a plea of inadmissibility by a separate document on the basis of Article 130 of the Rules of Procedure of the General Court, the Commission maintains that the action is inadmissible. In its submission, the head of claim for partial annulment aimed at the first sentence of Article 2 of the contested decision, according to which the measures consisting of capital injections and a combination of State loans and State guarantees in favour of Femern constitute State aid within the meaning of Article 107(1) TFEU, is inadmissible on the ground that the second sentence of Article 2 of the contested decision, namely the finding that those measures are compatible with the internal market, is not severable from the first sentence of that article.
31 The Kingdom of Denmark, supported by the Grand Duchy of Luxembourg, disputes the inadmissibility of that head of claim.
32 It should be noted that Article 263 TFEU draws a clear distinction between the right of EU institutions and Member States, on the one hand, to bring an action for annulment and the right of natural and legal persons, on the other hand, to do so, in that the second paragraph of that article gives all Member States the right to contest the legality of decisions of the Commission by means of an action for annulment without having to establish any legal interest in bringing proceedings. Unlike natural and legal persons, a Member State need not therefore prove that an act of the Commission which it is contesting produces legal effects with regard to that Member State in order for its action to be admissible (see, to that effect, order of 27 November 2001, Portugal v Commission, C‑208/99, EU:C:2001:638, paragraphs 22 and 23; judgment of 20 September 2019, Germany v ECHA, T‑755/17, EU:T:2019:647, paragraph 334).
33 However, in order for an act of the Commission to be the subject of an action for annulment, it must be intended to have legal effects even where, in the event that it is a Member State which intends to bring such an action, those effects are not to deploy with regard to the Member State itself (see, to that effect, order of 27 November 2001, Portugal v Commission, C‑208/99, EU:C:2001:638, paragraph 24).
34 In the present case, it must be stated that the Kingdom of Denmark seeks the annulment of Article 2 of the contested decision solely in so far as the measures consisting of capital injections and a combination of State loans and State guarantees in favour of Femern, partially put into effect unlawfully, constitute State aid within the meaning of Article 107(1) TFEU. It follows that, as the Commission emphasises, the present action is not aimed at the second sentence of Article 2 of the contested decision, namely at the finding that those measures are compatible with the internal market.
35 It must be considered that, in the context of an action for annulment of a decision declaring aid measures to be compatible with the internal market, notwithstanding the importance of the classification of the measure as State aid within the meaning of Article 107(1) TFEU, the declaration of compatibility is nonetheless capable of being severed, on a provisional basis, and partial annulment is therefore possible and is justified by the fact that that declaration is favourable to the Member State (see, to that effect and by analogy, judgment of 23 October 1974, Transocean Marine Paint Association v Commission, 17/74, EU:C:1974:106, paragraph 21).
36 If annulment also covers the compatibility of the measures at issue with the internal market, it cannot be ruled out that the Commission, in a new decision, will conclude that a State aid is incompatible. A Member State cannot therefore be required to ensure that its heads of claim seeking the annulment of a decision declaring aid compatible with the internal market are also directed against the part of the operative part of a decision whereby the measures are declared to be compatible with the internal market. In addition, errors in the classification of measures as State aid within the meaning of Article 107(1) TFEU do not necessarily mean that the declaration of compatibility is vitiated by an error of assessment and deprived of legal effects. That may be the case, inter alia, where only a part of the measures was incorrectly classified as State aid, but where it is found that the Commission correctly classified the other measures as State aid. In such a situation, pending a new Commission decision, the partial annulment of the contested act would allow the Member State to continue to pay the financing granted under the measures whose classification as State aid is not vitiated by error and for which the declaration of compatibility would thus continue to be effective.
37 Therefore, the classification of national measures as State aid within the meaning of Article 107(1) TFEU and the examination of the compatibility of aid measures with the internal market constitute assessments which differ as to their nature and which, from the aspect of the admissibility of the present action of the Member State concerned, should be regarded as autonomous legal assessments. It follows that, having regard to the circumstances of the present case, the Commission’s argument relating to the non-severable nature of the two sentences of Article 2 of the contested decision, on the ground that the classification as State aid is the necessary and logical premiss of its compatibility, must be rejected.
38 Furthermore, the Commission’s argument that the action for annulment would be ineffective unless the Court were to annul Article 2 of the contested decision in its entirety, which, however, would go beyond the form of order sought by the Kingdom of Denmark, must be rejected. In application of Article 266 TFEU, the institution whose act has been declared void is to be required to take the necessary measures to comply with the annulment judgment. Accordingly, if the present action were upheld and entailed the partial annulment of the contested act, the Commission would be required to comply with that partial annulment.
39 It follows from the foregoing considerations that the present action is admissible.
B. Substance
40 In support of its action, the Kingdom of Denmark raises two pleas, alleging, first, that the Commission was wrong to find that the financing of Femern constitutes State aid within the meaning of Article 107(1) TFEU and, second, that the Commission made an error of assessment in finding that Femern exercises an economic activity in competition with third parties before the Fixed Link is brought into service.
41 The first plea is divided into four parts, whereby the Kingdom of Denmark maintains that, in the contested decision, the Commission was wrong to find, first, that Femern’s activities are not connected with the exercise of public powers; second, that Femern offers transport services on a market in competition with other operators; third, that Femern is an economic operator pursuing a commercial policy; and, fourth, that the financing of Femern distorts competition and affects trade between Member States. The second plea concerns a line of argument whereby the Kingdom of Denmark denies, in essence, that Femern’s activities may be considered to be of an economic nature before the Fixed Link is brought into service.
42 In so far as the first three parts of the first plea and the second plea relate to the classification of Femern’s activities as activities of an economic nature, the Court considers it appropriate to examine them before dealing with the fourth part of the first plea, which concerns the conditions relating to the distortion of competition and the effect on trade between Member States, provided for in Article 107(1) TFEU.
1. The first part of the first plea, concerning the lack of connection of Femern’s activities with the exercise of public powers
43 In the first part of the first plea, the Kingdom of Denmark puts forward three complaints. First, the Commission is criticised for having interpreted the concept of ‘activity coming within public authority or connected with the exercise of public powers’ restrictively. Second, the Kingdom of Denmark alleges that the Commission was wrong to ascribe importance to the fact that a private operator provides services that might be considered as an alternative to Femern’s activities. Third, the Commission failed to take account of available information showing that certain of Femern’s activities are connected with the exercise of public powers.
(a) The first complaint, alleging that the concept of ‘activity coming within public authority or connected with the exercise of public powers’ is interpreted too restrictively
44 The Kingdom of Denmark, supported by the Kingdom of Belgium and the Grand Duchy of Luxembourg, claims, in essence, that the Commission applied too restrictive an interpretation of the concept of ‘public powers’ by limiting them to powers connected with the essential functions of the State. More specifically, the Kingdom of Denmark, supported by the Grand Duchy of Luxembourg, submits that it follows from the case-law that the exercise of public powers is not confined solely to the essential functions of the State, which are merely one of a number of examples of activities typically coming within those powers.
45 In addition, the Kingdom of Denmark maintains that the Commission did not take account of paragraph 13 of its Notice on the notion of State aid as referred to in Article 107(1) [TFEU] (OJ 2016 C 262, p. 1, ‘the Notice on the notion of State aid’). In the Kingdom of Denmark’s submission, it follows from paragraph 13 that a State is free to define the activities which form part of public powers and those which do not. Thus, the Kingdom of Denmark maintains that what is decisive for the purpose of establishing the existence of such powers is that they form part of the powers of the public authorities as actually organised in the Member State concerned. In the present case, the Kingdom of Denmark maintains that the activities involving the construction and operation of road and rail infrastructures, as organised in Denmark, means that they are activities connected with the exercise of public powers, including where they are exercised on the Fixed Link owned by a public entity such as Femern.
46 Likewise, the Kingdom of Denmark claims, in essence, that in order to determine whether Femern’s activities involved public powers, it is necessary to take account of the fact that Femern is entrusted with public service tasks which cannot be carried out by private operators. In that regard, according to the Kingdom of Belgium, in order to determine whether the exercise of an activity involves the use of public powers, it is necessary to take into account that the activity is carried out in pursuit of a public interest objective that is not aimed solely at the profitability of the activity.
47 Furthermore, the Kingdom of Belgium claims that the concept of ‘essential functions of the State’ used by the Commission in the contested decision is not clearly defined in EU law, that the list of functions set out in Article 4(2) TEU is not exhaustive and that the case-law does not advocate a restrictive interpretation of the concept of ‘public powers’.
48 The Commission disputes that line of argument.
49 As a preliminary point, it should be made clear that, in the present judgment, the concepts of ‘activity forming part of the exercise of public power’ and ‘activity connected with the exercise of public powers’ overlap. Such an approach corresponds to that taken by the Commission in the contested decision and also to paragraphs 17 and 18 of the Notice on the notion of State aid. In that regard, in its written answer to a question put by the Court, the Commission confirmed that there is no difference between those expressions, which constitute lexical variants of the same legal concept.
50 In the first place, as regards the argument that the Commission was wrong to consider that activities forming part of the exercise of public power or connected with the exercise of public powers are those connected with the essential functions of the State, it should be borne in mind that activities forming part of the exercise of public power (judgment of 4 May 1988, Bodson, 30/87, EU:C:1988:225, paragraph 18) or connected with the exercise of public powers (judgments of 19 January 1994, SAT Fluggesellschaft, C‑364/92, EU:C:1994:7, paragraph 30, and of 24 March 2022, GVN v Commission, C‑666/20 P, not published, EU:C:2022:225, paragraph 70) are not of an economic nature that justifies the application of the competition rules laid down in the FEU Treaty.
51 In the present case, by following the approach recommended in paragraph 17 of the Notice on the notion of State aid, the Commission, in recitals 190 and 191 of the contested decision, considered that an entity may be considered to be acting as a public authority or to be exercising public powers when its activity is linked with the essential functions of the State or is connected with those functions by its nature, its aims and the rules to which it is subject.
52 First, it must be noted that among the activities involving the exercise of public powers are, in particular, the control and supervision of air space (judgment of 19 January 1994, SAT Fluggesellschaft, C‑364/92, EU:C:1994:7, paragraph 30); the maintenance, improvement and development of air traffic safety (judgment of 26 March 2009, SELEX Sistemi Integrati v Commission, C‑113/07 P, EU:C:2009:191, paragraph 76); anti-pollution surveillance in an oil port (judgment of 18 March 1997, Diego Calì & Figli, C‑343/95, EU:C:1997:160, paragraph 22); and the control and safety of maritime traffic (judgment of 20 September 2019, Port autonome du Centre et de l’Ouest and Others v Commission, T‑673/17, not published, EU:T:2019:643, paragraph 91). In addition, it has been held that a data collection activity in relation to undertakings, on the basis of a statutory obligation on those undertakings to disclose the data and powers of enforcement related thereto, falls within the exercise of public powers (judgment of 12 July 2012, Compass-Datenbank, C‑138/11, EU:C:2012:449, paragraph 40). Furthermore, the provision, free of charge, of functionalities which ensure that e-procurement is conducted throughout the territory of a Member State in accordance with the procurement directives and the procurement legislation and which was set up by a ministry for that purpose is considered to form part of the exercise of public powers (judgment of 28 September 2017, Aanbestedingskalender and Others v Commission, T‑138/15, not published, EU:T:2017:675, paragraph 71). Likewise, municipal authorities, in their role as competent authority within the meaning of Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70 (OJ 2007 L 315, p. 1), act as public authority when they set the rules for financial compensation to transport undertakings under a legal obligation, within the framework established by that regulation (judgment of 24 March 2022, GVN v Commission, C‑666/20 P, not published, EU:C:2022:225, paragraph 73).
53 Thus, it follows from the case-law that the concept of ‘activity connected with the exercise of public powers’ covers, in particular, activities which involve the use of prerogatives that derogate from the generally applicable rules of law, such as regulatory or coercive powers, or the use of public power privileges which are binding on citizens and undertakings, or activities intended to ensure compliance with the regulations in force.
54 Second, it should be observed that essential State functions are not defined in the Treaties. In that regard, it follows from Article 4(2) TEU that essential State functions include ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. Since the list set out in that provision is not exhaustive, essential State functions cannot be limited to preserving territorial integrity and maintaining law and order or to safeguarding national security.
55 Thus, in connection with State aid, it has been held that anti-pollution surveillance in an oil port is a task in the public interest which forms part of the essential functions of the State as regards protection of the environment in maritime areas and that such surveillance is connected by its nature, its aim and the rules to which it is subject with the exercise of powers relating to the protection of the environment which are typically those of a public authority (judgment of 18 March 1997, Diego Calì & Figli, C‑343/95, EU:C:1997:160, paragraphs 22 and 23). It follows that, in certain circumstances, an entity’s activities may be considered to be connected with the exercise of powers of a public authority where they form part of the essential functions of the State.
56 Furthermore, as regards the Kingdom of Denmark’s argument that it follows from paragraph 36 of the judgment of 12 July 2012, Compass-Datenbank (C‑138/11, EU:C:2012:449), that the word ‘powers’ covers, more generally, the tasks of the public service or a public authority, it should be observed that, in holding that activities which fall within the exercise of public powers are not of an economic nature justifying the application of the FEU Treaty competition rules, the Court of Justice merely referred to settled case-law (see, to that effect, judgments of 11 July 1985, Commission v Germany, 107/84, EU:C:1985:332, paragraphs 14 and 15; of 19 January 1994, SAT Fluggesellschaft, C‑364/92, EU:C:1994:7, paragraph 30; and of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 24) without altering its scope. It follows that the Kingdom of Denmark cannot rely on that judgment to claim that the concept of ‘powers’ should be interpreted as including, more widely, tasks in the public interest. It should be observed, moreover, that, as follows from paragraph 40 of the judgment of 12 July 2012, Compass-Datenbank (C‑138/11, EU:C:2012:449), the Court of Justice considered that the activity at issue in that case fell within the exercise of public powers on the ground that the collection of data was based on a statutory obligation compliance with which could be ensured by the use of powers of enforcement.
57 It follows that the Commission did not err in law in considering that an entity acts as public authority or by exercising public powers where its activity is linked with the essential functions of the State by its nature, its aims and the rules to which it is subject.
58 In the second place, as regards the argument that the Commission did not take account of paragraph 13 of the Notice on the notion of State aid, from which it is apparent that the Member States are free to define the activities which form part of public powers and those which do not, it should be observed, as the Commission is fully entitled to submit, that paragraph 13 of that notice does not concern the criteria which determine whether an activity forms part of the exercise of public powers; those criteria are set out in paragraphs 17 and 18 of that notice.
59 In paragraph 13 of the Notice on the notion of State aid, it is stated that the question whether a market exists for certain services may depend on the way in which those services are organised in the Member State concerned and may thus vary from one Member State to another. In that regard, footnote 10, under paragraph 13 of that notice, contains a reference to the case-law on activities in the field of social security, which may be classified as economic activities or non-economic activities, depending on the way in which they are organised. Thus, for the purpose of their classification as economic activities carried out on a market or as non-economic activities, it must be determined whether the activities connected with social security implement the principle of solidarity as interpreted in the case-law, whether they are entirely non-profit-making and subject to control by the State (see, to that effect, judgments of 17 February 1993, Poucet and Pistre, C‑159/91 and C‑160/91, EU:C:1993:63, paragraphs 7 to 12, 15 and 18, and of 11 June 2020, Commission and Slovak Republic v Dôvera zdravotná poist’ovňa, C‑262/18 P and C‑271/18 P, EU:C:2020:450, paragraphs 29 to 35).
60 Furthermore, it should be observed that, for educational activities, the financing of such activities by public funds constitutes, when taking into consideration the way in which an activity is organised in a Member State, a relevant factor for distinguishing activities of an economic nature from non-economic activities (see, to that effect, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 39, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 50). In such a situation, the non-economic nature of the educational activities provided by certain public establishments which are integrated into a system of public education follows from the way in which those activities are organised in the Member State, namely the pursuit of an objective of public interest financed wholly or mainly by the public budget, without there being any need to determine whether those activities form part of the exercise of public powers.
61 It must be held, therefore, that the Kingdom of Denmark’s reading of paragraph 13 of the Notice on the notion of State aid must be rejected, since it confuses, on the one hand, activities which are not considered to be of an economic nature on the ground that they form part of the exercise of public powers (judgments of 19 January 1994, SAT Fluggesellschaft, C‑364/92, EU:C:1994:7, paragraph 30, and of 24 March 2022, GVN v Commission, C‑666/20 P, not published, EU:C:2022:225, paragraph 70) and, on the other hand, activities which are not of an economic nature on the ground that they do not consist in providing goods or services on a given market in competition with the activities of other operators which do seek to make a profit (see, to that effect, judgments of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 27, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 46).
62 In addition, as regards the Kingdom of Denmark’s assertion that, in essence, a Member State is free to define the activities which form part of public powers, it should be noted that the concepts of ‘undertaking’ and ‘economic activity’ are objective concepts which follow directly from the Treaty and which depend on elements of fact and not on the choices or subjective assessments of the national authorities (see, to that effect, judgment of 30 April 2019, Chambre de commerce et d’industrie métropolitaine Bretagne-Ouest (port de Brest) v Commission, T‑754/17, not published, EU:T:2019:270, paragraph 75).
63 Accordingly, the argument which the Kingdom of Denmark bases on paragraph 13 of the Notice on the notion of State aid is the consequence of a misinterpretation of that provision and must therefore be rejected.
64 In the third place, as regards the argument put forward by the Kingdom of Denmark and the Kingdom of Belgium that, in essence, in order to determine the existence of a public power, it is appropriate to take account of the pursuit of an objective of public interest, it must be noted that it has consistently been held that the fact that an entity is entrusted with some public-interest tasks does not prevent the activities at issue from being regarded as economic activities (judgments of 23 March 2006, Enirisorse, C‑237/04, EU:C:2006:197, paragraph 34, and of 16 December 2010, Netherlands and NOS v Commission, T‑231/06 and T‑237/06, EU:T:2010:525, paragraph 94).
65 It follows from the foregoing considerations that the complaint alleging that the concept of ‘activity forming part of the public authority or connected with the exercise of public powers’ was interpreted too restrictively must be rejected.
(b) The third complaint, alleging a failure to take into account available information showing that some of Femern’s activities are connected with the exercise of public powers
66 The Kingdom of Denmark claims that the Commission was wrong not to take account of certain items of available information showing that Femern’s activities, taken together or separately, are connected with the exercise of public powers.
67 The Kingdom of Denmark, supported by the Kingdom of Belgium and the Federal Republic of Germany, maintains that, in order to determine whether activities are connected with the exercise of public powers or constitute economic activities, it is necessary to carry out a concrete overall assessment of the nature and aims of the activities and of the rules to which they are subject. In the Kingdom of Denmark’s submission, in order to determine whether activities are connected with the exercise of public powers, the Commission is required to carry out a specific and detailed analysis of each of them.
68 First, the Kingdom of Denmark maintains that the construction and operation of the public roads and of the public railway network are activities falling within the exercise of public authority that no private operator can exercise. In that regard, first, the Kingdom of Denmark, supported by the Grand Duchy of Luxembourg, observes that Femern was entrusted with the tasks of highway authority and rail infrastructure manager normally assumed by the public authorities. As regards the task of highway authority entrusted to Femern with respect to the Fixed Link, the Kingdom of Denmark notes that that task entails, in particular, a power of decision in application of the Lov nr 1520 af 27. december 2014 om offentlige veje (Law No 1520 on public highways) of 27 December 2014 (‘the Law on public highways’). Second, the Kingdom of Denmark maintains that, in the context of the construction and operation of the Fixed Link, Femern was entrusted with the preparation of the safety plans for the Fixed Link.
69 Second, the Kingdom of Denmark, supported by the Grand Duchy of Luxembourg, submits that the Commission failed to take into consideration the fact that Femern’s activities are subject to close administrative and political supervision by both the Danish Minister for Transport and the Parliament, or of the fact that Femern is subject to public law obligations in a number of areas, particularly with regard to access to documents or public control of accounts, with the result that that entity is similar to a public administration.
70 Third, the Kingdom of Denmark, supported by the Federal Republic of Germany, observes that Femern is an entity entrusted by law with implementing international obligations.
71 Fourth, the Kingdom of Denmark takes issue with the Commission for not having taken into consideration that fact that, unlike the airport sector, the Danish rail and road infrastructures have not been liberalised, therefore Femern’s activities fundamentally differ from those of commercial undertakings.
72 Furthermore, the Kingdom of Denmark submits that the Commission unduly reversed the burden of proof in that it required the Kingdom of Denmark to explain the reasons why Femern’s activities must be considered to involve the exercise of public powers. In that regard, the Kingdom of Belgium claims that, since it is for the Commission to prove the existence of State aid, by not taking account, in the present case, of all the relevant elements of the operation at issue, the Commission did not provide sufficiently probative elements in its decision to show that Femern’s activities are not connected with the exercise of public powers.
73 The Commission disputes that line of argument.
74 Questioned at the hearing about the meaning and the scope of the complaint alleging that the Commission failed to take account of the public powers conferred on Femern, the Kingdom of Denmark explained that this complaint is sub-divided into two sub-complaints. Primarily, it is alleged that the Commission was wrong to consider that, taken as a whole, Femern’s activities are not connected with public powers. In the alternative, in the event that the Court does not uphold the first sub-complaint, the Kingdom of Denmark takes issue with the Commission for having erred in so far as the functions delegated to Femern in its capacity as highway authority and in its capacity as railway infrastructure manager and its obligation to prepare the safety plans for the Fixed Link were not regarded as being connected with the exercise of public powers.
(1) The first sub-complaint, alleging that the Commission was wrong to consider that, as such, the activities involving the construction and operation of the Fixed Link are not connected with the exercise of public power
75 By its first sub-complaint, the Kingdom of Denmark submits, primarily, that the Commission was wrong to find that, as such, the activities involving the construction and operation of the Fixed Link are not connected with the exercise of public power.
76 In the present case, in recital 191 of the contested decision, the Commission considered, in the context of an overall assessment of Femern’s activities, that the arguments of the Danish authorities concerning the aim, nature and rules governing those activities, which are set out in recital 190 of the contested decision, were not sufficient to conclude that Femern acted by exercising public power.
77 In order to challenge that finding, first, the Kingdom of Denmark maintains that the Commission failed to take account of the fact that Femern resembles a public administration owing to the fact that it is closely supervised by the public authorities and to its obligation to comply with the rules on access to documents or the auditing of its accounts.
78 In that regard, it should be noted that the fact that an entity is a public corporation placed under the authority of a minister does not in itself mean that it cannot be regarded as an undertaking for the purposes of the FEU Treaty (see, to that effect, judgment of 12 December 2000, Aéroports de Paris v Commission, T‑128/98, EU:T:2000:290, paragraph 109). Furthermore, since the State itself or a State entity may act as an undertaking (judgments of 12 July 2012, Compass-Datenbank, C‑138/11, EU:C:2012:449, paragraph 35, and of 20 September 2019, Port autonome du Centre et de l’Ouest and Others v Commission, T‑673/17, not published, EU:T:2019:643, paragraph 71), the fact that an entity may in certain respects be compared with a public administration owing to the close supervision carried out by the public powers and to the fact that it is required to comply with certain public-law rules applicable to public administrations, such as those relating to access to documents or to the auditing of the accounts, cannot preclude it from exercising an economic activity.
79 In addition, the fact that an entity is placed under the close supervision of the public powers and required to comply with certain public-law obligations applicable to public administrations does not in itself mean that that entity’s activities are connected with the exercise of public powers.
80 It follows that the fact that Femern is subject to the close supervision of the public powers and that it must comply with the rules on access to documents or the auditing of its accounts does not suffice to conclude that its activities are connected with the exercise of public powers. Moreover, the fact that Femern is subject to the close supervision of the public powers and that it is required to comply with the rules on access to documents or the auditing of its accounts does not in itself mean that it may be regarded as a public administration.
81 Second, as regards the argument that Femern is an entity entrusted by law with implementing international obligations, it must be considered that that argument cannot, as such, be sufficient to conclude that Femern’s activities are connected with the exercise of public powers.
82 In the present case, it should be observed that, during the formal investigation procedure, the Kingdom of Denmark did not rely on any specific provision of the Fehmarn Belt Treaty that would have allowed the Commission to find that that treaty entrusts Femern with activities connected with the exercise of public powers. Thus, in Section 3.1.1.2. of their observations of 26 August 2019, submitted to the Commission following the initiation of the formal investigation procedure, the Danish authorities stated only that Femern had been set up solely in order to enable the Kingdom of Denmark to implement an international agreement and that the sole purpose of its activities was to implement important planning decisions adopted by the Danish State. In footnote 9 to those observations, reference is made to Article 6 of the Fehmarn Belt Treaty and to the fact that, in the judgment of 19 January 1994, SAT Fluggesellschaft (C‑364/92, EU:C:1994:7), Eurocontrol was considered to be exercising an activity of public power on the basis of an agreement entered into between Member States.
83 First, it must be noted that the activities involving the construction and operation of the Fixed Link are not comparable to those entrusted to Eurocontrol. It must be borne in mind that Eurocontrol’s activities had been excluded from the scope of the Treaty competition rules on the ground that activities relating to the control and supervision of air space, which entail in particular the use of rights and powers of coercion which derogate from ordinary law with respect to users of air space, are typically those of a public authority (see, to that effect, judgment of 19 January 1994, SAT Fluggesellschaft, C‑364/92, EU:C:1994:7, paragraphs 24 and 30).
84 Second, as regards Article 6 of the Fehmarn Belt Treaty, it should be observed that the first paragraph of that provision states that the Kingdom of Denmark is to set up a company responsible for the preparatory work, planning, design, obtaining of permits, conclusion of contracts, financing, operation and maintenance of the Fixed Link, and that that company is to be the owner of the Fixed Link. The second paragraph of that provision states that that company will be a company governed by Danish law and that its activities will be carried out in accordance with general commercial principles and international obligations, in particular those arising under EU law. The third paragraph of Article 6 of the Fehmarn Belt Treaty provides that the Kingdom of Denmark will receive all the profits of the company and bear the losses caused by its activities. The fourth paragraph states that the Kingdom of Denmark is to be entitled to alter the organisation of the company without prejudice to the obligations assumed in the context of the Fehmarn Belt Treaty and that the prior approval of the Federal Republic of Germany is necessary in the event of more than 50% of the shares being sold to entities not controlled by the Danish authorities. The fifth paragraph of Article 6 of the Fehmarn Belt Treaty provides that the Kingdom of Denmark is to ensure that the company carries out the tasks entrusted to it by that treaty.
85 It must be stated that Article 6 of the Fehmarn Belt Treaty, on which the Danish authorities relied during the formal investigation procedure, contains no provision that would have allowed the Commission to find that, as such, the activities involving the construction and operation of the Fixed Link are connected with the exercise of public powers.
86 Third, as regards the argument that the Commission did not take into account the fact that, in Denmark, the construction and operation of rail and road infrastructures are not liberalised, it must be considered that the fact that a sector of activity has not been liberalised does not constitute conclusive evidence that, as a matter of principle, an activity is connected with the exercise of public powers. In that sense, it should be observed that it is because of the way in which they are organised in the Member States, and not because they are connected with public powers, that certain activities have been regarded as not being of an economic nature. That applies to public educational activities financed, entirely or mainly, by public funds (see, to that effect, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 39, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 50), social security schemes applying the principle of solidarity (see, to that effect, judgments of 17 February 1993, Poucet and Pistre, C‑159/91 and C‑160/91, EU:C:1993:63, paragraphs 7 to 12, 15 and 18, and of 11 June 2020, Commission and Slovak Republic v Dôvera zdravotná poist’ovňa, C‑262/18 P and C‑271/18 P, EU:C:2020:450, paragraphs 30 to 34), or entities responsible for managing a national health system providing free health services (see, to that effect, judgments of 11 July 2006, FENIN v Commission, C‑205/03 P, EU:C:2006:453, paragraph 27, and of 4 March 2003, FENIN v Commission, T‑319/99, EU:T:2003:50, paragraphs 39 and 49). It follows that the fact that the activities involving the construction and operation of the Fixed Link are not liberalised does not mean that those services are connected with the exercise of public powers.
87 Fourth, as regards the argument that the Commission did not take account of the functions delegated to Femern as highway authority and as rail infrastructure manager, or of the fact that Femern is responsible for preparing the safety plans for the Fixed Link, it should be borne in mind that the fact that an entity enjoys public powers for the exercise of part of its activities does not in itself prevent it from being characterised as an undertaking within the meaning of the FEU Treaty provisions on the competition rules for its other economic activities (judgments of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 25; of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‑443/08 and T‑455/08, EU:T:2011:117, paragraphs 98 and 99; and of 20 September 2019, Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission, T‑696/17, EU:T:2019:652, paragraph 85).
88 According to the case-law, in so far as a public entity exercises an economic activity which can be separated from the exercise of its public powers, that entity, in relation to that activity, acts as an undertaking, while, if that economic activity cannot be separated from the exercise of its public powers, the activities exercised by that entity as a whole remain activities connected with the exercise of those public powers (judgments of 12 July 2012, Compass-Datenbank, C‑138/11, EU:C:2012:449, paragraph 38, and of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 82). It follows that there is no threshold below which all of an entity’s activities should be regarded as non-economic activities, even where its economic activities are in the minority (see, to that effect, judgments of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 83, and of 20 September 2019, Le Port de Bruxelles and Région de Bruxelles-Capitale v Commission, T‑674/17, not published, EU:T:2019:651, paragraph 104).
89 In the present case, it must be stated that the Kingdom of Denmark has adduced no evidence to show that the functions of highway authority and railway infrastructure manager carried out by Femern or the obligation to prepare the safety plans are inseparable from the economic activities identified by the Commission, namely the construction and operation of the Fixed Link. In any event, as is apparent from the examination of the second sub-complaint, in the circumstances of the present case, the Commission was entitled to consider that, in the exercise of those functions and for the preparation of the safety plans for the Fixed Link, Femern was not entrusted with any particular public power (see paragraphs 101 to 103 below).
90 It follows from the foregoing considerations that the information submitted to the Commission by the Danish authorities during the formal investigation procedure did not constitute elements which, taken individually or as a whole, were capable of leading to the finding that the entirety of Femern’s activities at issue, namely the construction and operation of the Fixed Link, are connected with the exercise of public powers.
91 The Commission was therefore entitled to consider, in recital 191 of the contested decision, that, in view of their nature, their aim and the rules to which they are subject, Femern’s activities do not constitute, as such, activities connected with the exercise of public power.
(2) The second sub-complaint, alleging that the Commission was wrong to find that Femern was given no particular public power
92 By its second sub-complaint, which is raised in the alternative, the Kingdom of Denmark takes issue with the Commission for having incorrectly considered that the functions delegated to Femern in its capacity as highway authority and in its capacity as railway infrastructure manager, and also the preparation of the safety plans for the Fixed Link, do not constitute activities connected with the exercise of public powers.
93 In that regard, in its written answer to the questions put by the Court, the Commission stated that it had not carried out a thorough examination of Femern’s specific activities on which the Kingdom of Denmark relies in these proceedings, on the ground that, during the formal investigation procedure, the Danish authorities relied solely on the assertion that the Fixed Link project as a whole should be considered to be connected with public powers and that they did not explicitly rely on or submit sufficiently specific arguments in relation to those activities.
94 At the hearing, the Kingdom of Denmark maintained that, during the administrative procedure, evidence had been produced concerning the functions delegated to Femern in its capacity as highway authority and in its capacity as rail infrastructure manager and also as regards the preparation of the safety plans for the Fixed Link, and that it was for the Commission, which bears the burden of proving the existence of State aid within the meaning of Article 107(1) TFEU, to ask for further information.
95 In that regard, it should be observed that, while it is for the Commission to prove that a measure satisfies the necessary conditions to be classified as State aid, it is then for the Member State which has dispensed or proposes to dispense that aid to show that that measure is not to be classified as aid.
96 It follows that where the Commission considers that an entity exercises economic activities, in order to enable it to ascertain whether certain of that entity’s activities must be precluded from the scope of Article 107(1) TFEU on the ground that they are connected with the exercise of public powers, the Member State concerned is required, within the framework of the duty of sincere cooperation between Member States and institutions as laid down in Article 4(3) TEU, to refer explicitly to the existence of such activities and to provide detailed explanations on the rules applicable to those activities and also all the necessary evidence to enable the Commission to verify that the activities in question are indeed connected with public powers (see, by analogy, judgment of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 146 and 147).
97 It follows that the Commission cannot be criticised for not having taken account of any information that might have been submitted to it during the administrative procedure but was not submitted, as the Commission is not required to examine of its own motion and on the basis of prediction what information might have been submitted to it (see, by analogy, judgments of 9 September 2009, Holland Malt v Commission, T‑369/06, EU:T:2009:319, paragraph 152, and of 6 April 2022, Mead Johnson Nutrition (Asia Pacific) and Others v Commission, T‑508/19, EU:T:2022:217, paragraph 106).
98 In the present case, it should be observed that, in the letter of 14 June 2019 to the Danish authorities, reproduced in the Opening Decision, the Commission set out, in recitals 84 to 89, the reasons why, following a prima facie analysis, Femern had to be considered to be exercising an economic activity. More specifically, in recital 85 of that decision, the Commission stated that the fact that the Fixed Link project pursues objectives in the public interest does not necessary mean that the activity in question forms part of the exercise of public powers. In addition, in recital 86 of that letter, the Commission also considered that the grant, by two sovereign States, of authorisations for the construction of a cross-border transport infrastructure comes within the exercise of public power does not necessarily mean that the transport services themselves also come within the exercise of public power.
99 Admittedly, as the Kingdom of Denmark observed at the hearing, the Commission, in recitals 84 to 89 of the letter of 14 June 2019, reveals some uncertainty as to whether Femern’s activity might be classified as an economic activity. The Commission therefore requested the Danish authorities to provide it with all the relevant documents and information, updated and in full, to enable it to assess, in particular, whether Femern’s activity is economic or non-economic in nature.
100 In response to that request, the Danish authorities, in their observations of 26 August 2019 on the initiation of the formal investigation procedure, developed a line of argument claiming, primarily, that all of Femern’s activities should be considered to be connected with public powers and, in the alternative, that only the activity involving the operation of the Fixed Link must be regarded as an activity of an economic nature.
101 However, it must be stated that, in those observations, the Danish authorities did not explicitly claim that the functions delegated to Femern in its capacity as highway authority and in its capacity as railway infrastructure manager, and also for the preparation of the safety plans for the Fixed Link, should be considered to be connected with the exercise of public power prerogatives, with the result that the associated costs should fall outside the scope of Article 107(1) TFEU.
102 First, as regards the functions delegated to Femern in its capacity as rail infrastructure manager and for the preparation of the safety plans, it must be stated that the Danish authorities did not mention those functions either in the observations of 26 August 2019 on the initiation of the formal investigation procedure or in the observations on the comments of the interested parties submitted during the formal examination procedure on 4 October 2019. In those circumstances, the Commission cannot be criticised for not having examined during the formal investigation procedure whether the functions of rail infrastructure manager and the preparation of the safety plans for the Fixed Link had to be excluded from the scope of Article 107(1) TFEU on the ground that those activities had to be regarded as being connected with the exercise of public powers.
103 Second, as regards the functions delegated to Femern in its capacity as highway authority, it should be observed that those functions were only specifically mentioned in the Danish authorities’ observations of 26 August 2019. More specifically, those functions were referred to as an illustration of a ‘public responsibility’ borne by Femern, an illustration put forward in support of a more general argument that, owing to their nature, all of Femern’s activities should be considered to be connected with the exercise of public powers. In addition, it must be stated that the evidence submitted to the Commission by the Danish authorities during the formal investigation procedure did not allow it to conclude that that activity is connected with such powers. Article 25 of the Construction Law, which is referred to in footnote 12 to the observations of 26 August 2019 on the initiation of the formal investigation procedure, merely states, in the first paragraph, that the coast-to-coast road link is a public route administered in accordance with the Law on public highways and that Femern is the highway authority. Admittedly, in the preparatory works for the Construction Law, which the Commission had at its disposal during the formal investigation procedure, it is stated that ‘it is proposed that Femern be responsible for administering the road links connected with the coast-to-coast link referred to in Article 1, read with Article 38, of the Law on public highways’ and that, ‘consequently, Femern will be the highway authority within the meaning of the legislation on public roads and will have a decision-making power in application of the Law on public highways and the measures adopted on the basis of that law’. However, it must be stated that the evidence available to the Commission during the formal investigation procedure contained no information on any powers which the road authorities have vis-à-vis third parties, in particular as regards the nature and the scope of the ‘decision-making power’ of those authorities. In addition, as the Kingdom of Denmark acknowledged at the hearing, it did not communicate the Law on public highways to the Commission during the formal investigation procedure. It must be observed, moreover, that, during that procedure, the Danish authorities did not expressly claim that the functions delegated to Femern in its capacity as highway authority should be connected with the exercise of public powers. It follows that the Commission cannot be criticised for not having examined those functions in detail.
104 It follows from the foregoing considerations that, in the circumstances of the present case, the Commission was not wrong to conclude, in recital 194 of the contested decision, that Femern did not receive any particular public powers.
105 The second sub-complaint raised in the alternative by the Kingdom of Denmark must therefore be rejected.
106 The complaint alleging failure to take into account available information allowing some of Femern’s activities to be connected with the exercise of public powers must therefore be rejected in its entirety.
(c) The second complaint, alleging that the Commission was wrong to take into consideration the existence of services that could be substituted for the Fixed Link
107 The Kingdom of Denmark claims that, in its examination for the purposes of determining whether Femern’s activities are connected with the exercise of public powers, the Commission erred by attributing importance to the fact that a private operator offers ferry services regarded as an alternative to those offered by Femern. In the Kingdom of Denmark’s contention, the fact that a private operator offers substitutable services should have no impact on the finding that Femern’s activities are connected with the exercise of public powers.
108 The Kingdom of Denmark claims, in essence, that the activities involving the construction and operation of road and rail infrastructures come within the exercise of public powers and that the existence of a relationship of substitution between those infrastructures and alternative means of transport should not call that assertion into question. Since the making available of the Danish road and rail networks does not come under Article 107(1) TFEU, the Kingdom of Denmark also maintains that the Commission did not provide sufficient information to explain the reasons why Femern’s activities are distinguished from the making available of those networks.
109 According to the Kingdom of Denmark, the establishment of a system of payment for the use of a road infrastructure by users cannot be a decisive factor for classifying the making available of that infrastructure as an economic activity in competition with private operators that offer alternative solutions to the road network.
110 The Kingdom of Denmark submits that, in the Construction Decision, the Commission considered that, since the national rail network was managed and operated on a closed market where no competition is exercised, the public financing granted to Femern Landanlaeg was not capable of affecting trade between Member States, even though certain air links or ferry links might constitute alternatives to certain rail links. The Kingdom of Denmark therefore maintains that the criterion of substitutability applied by the Commission in its examination of Femern’s rail transport services differs from and is stricter than that which the Commission applied in its overall examination of the Danish public railway network.
111 The Commission disputes that line of argument.
112 It follows from the examination of the third complaint in paragraphs 74 to 106 above that the Commission was entitled to consider that it was not apparent from the material on the file that Femern’s activities, as such, were connected with the exercise of public power or that Femern had been entrusted with public powers. It follows that the Kingdom of Denmark’s line of argument in the context of the present complaint is based on the incorrect assumption that the activities involving the construction and operation of the Fixed Link are connected with the exercise of public powers.
113 Furthermore, contrary to the Kingdom of Denmark’s assertion, the Commission cannot be criticised for having examined whether, in the context of the operation of the Fixed Link, the services that will be offered by Femern may replace those offered by operators seeking to make a profit on a given market. In doing so, the Commission applies a test that allows it to determine whether that operation activity constitutes an economic activity (see, to that effect, judgments of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 27, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 46).
114 As regards the argument that, in essence, the Commission ought to have carried out a detailed examination of the characteristics of the Danish road and rail networks in order to establish whether the activities involving the construction and operation of the Fixed Link were connected with the exercise of public powers, it should be observed that the Kingdom of Denmark has not placed any material on the file that would allow the activities involving the construction or operation of road and rail networks to be considered, as a whole, to be connected with the exercise of public powers. In addition, as the Commission rightly observes, the contested decision is concerned solely with the financing of the Fixed Link and not with the financing of the entire Danish road and rail networks, and the characteristics of the latter networks are therefore not relevant for the purpose of determining whether Femern’s activities at issue in the present case are of an economic nature. It follows that the Kingdom of Denmark’s argument cannot succeed.
115 As regards the argument whereby the Commission is criticised for having used a stricter substitutability test in the contested decision than that applied in the Construction Decision, with result that the assessment carried out in the present case is insufficient and contradictory, it is sufficient to observe that the existence of substitutable transport services is not a relevant factor for the purpose of determining the existence of activities connected with the exercise of public powers. In any event, contrary to the Kingdom of Denmark’s assertion, it should be stated that, in the Construction Decision and in the judgments of 13 December 2018, Scandlines Danmark and Scandlines Deutschland v Commission (T‑630/15, not published, EU:T:2018:942), and of 13 December 2018, Stena Line Scandinavia v Commission (T‑631/15, not published, EU:T:2018:944), the question of possible competition between the rail connections and ferry operators or air link operators did not arise, and therefore the Kingdom of Denmark’s line of argument cannot succeed.
116 As for the argument that the establishment of a system of payment for the use of a road infrastructure by users is not a decisive criterion for classifying the making available of that infrastructure as an economic activity owing to the existence of a relationship of substitution on a market with operators which seek to make a profit offering alternative solutions to the road network, it must be rejected. As will be explained in the context of the third part of the present plea, in paragraphs 148 to 153 below, the payment of charges is a factor which, while not decisive, is at least relevant for the purpose of classifying the making available of the infrastructure as an economic activity and the Commission was therefore entitled to take it into account.
117 In addition, since the Commission was entitled to find that Femern had received no particular public power, the argument seeking to compare a relationship of substitution between the transport infrastructures and the alternative means of transport with the relationship of substitution that exists between, on the one hand, the activities of the police and of the justice system and, on the other hand, the activities of private security companies and arbitration cannot succeed. In that regard, it must be observed that the activities of the police and the justice system form by their nature part of the public authority in that they entail the use of powers outside the scope of the general law and of public powers which are binding on citizens and on undertakings. That is not the case for the activities of private security undertakings or arbitration. The same must be said with respect to the activities involving the construction and operation of a transport infrastructure such as the Fixed Link.
118 Consequently, the complaint alleging an error arising from the fact that the existence of services substitutable for the Fixed Link were taken into consideration must be rejected.
119 It follows from the foregoing considerations that the first part of the first plea, alleging that the Commission was wrong to consider that Femern’s activities do not involve the exercise of public powers, must be rejected in its entirety.
2. The second part of the first plea, alleging that the finding that Femern offers transport services on a market in competition with other operators is incorrect
120 The Kingdom of Denmark, supported by the Kingdom of Belgium, claims that the Fixed Link is not in competition with the ferry operators, just as a rail infrastructure is not in direct competition with the road, buses or airports.
121 According to the Kingdom of Denmark, any effects on competition are the result of the decision to build the Fixed Link, which is covered by the exercise of public authority. Therefore, the fact that commercial activities exist alongside activities involving the exercise of public powers does not automatically mean that the latter activities are economic activities.
122 In addition, the Kingdom of Denmark claims that even if Femern’s activities were not considered to be connected with the exercise of public powers, Femern would not be in competition with the ferry operators. In that sense, the Kingdom of Denmark submits that Femern is entrusted with the construction and operation of the Fixed Link in a way that allows the macroeconomic advantages to be optimised. Thus, the fact that Femern’s activities have impacts on the national economy and related markets, in particular the market for services offered by the ferry operators, does not mean that the construction and operation of the Fixed Link may be considered to be in competition with private operators on a market for the supply of transport services.
123 The Kingdom of Denmark maintains that, in any event, Femern could not be in competition on a market for transport services at the planning and construction stage of the Fixed Link.
124 The Kingdom of Belgium submits that there is no competition with private ferries, in so far as the public intervention is limited to making up for shortcomings in the private initiative.
125 The Commission disputes that line of argument.
126 In that regard, it should be noted that, according to settled case-law, for the purposes of the application of the provisions of EU competition law, an undertaking is any entity engaged in an economic activity, and any activity consisting in offering goods and services on a given market is an economic activity (judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission, C‑288/11 P, EU:C:2012:821, paragraph 50, and of 24 March 2022, GVN v Commission, C‑666/20 P, not published, EU:C:2022:225, paragraph 69).
127 In the present case, in recital 193 of the contested decision, the Commission found that there is a market for transport services for crossing the Fehmarn Belt, on which a ferry operator, which is an undertaking operating under market conditions, already operates. Consequently, the Commission considered that the transport services provided by Femern are in competition with the transport services offered by that ferry operator.
128 First, it must be stated that the Kingdom of Denmark does not dispute the existence of a market for services for crossing the Fehmarn Belt between Rødby and Puttgarden which are provided by a ferry operator and acknowledges that bringing the Fixed Link into service will also have an effect on several types of undertakings, such as ferry operators, bus companies or undertakings active in the carriage of goods by road.
129 Second, although the Kingdom of Denmark disputes the existence of a competitive relationship between the services offered by Femern and those provided by the ferry operator, it should be observed that, as is apparent from Femern’s 2016 financial analysis, the level of prices is a factor taken into account by consumers in the choice to use, in order to cross the Fehmarn Belt, the Fixed Link or ferries.
130 It must therefore be held that there is a relationship of substitution between the services that will be offered by Femern and those offered by the ferry operator. Consequently, as the Commission correctly claims, even if Femern and the ferry operator offer services the characteristics of which differ in certain respects, it must be considered that they operate on the same market, namely the market for transport services for crossing the Fehmarn Belt, on which consumers will have the choice, on the assumption that the services offered by the ferry operator will be maintained after the Fixed Link has been brought into service, between the services offered by that operator and those offered by Femern in the context of the operation of the Fixed Link.
131 In addition, it should be observed that the Kingdom of Denmark does not dispute the other foreseeable scenario, referred to in recitals 237 and 360 of the contested decision, in which the implementation of the Fixed Link is likely to result in the ferry services disappearing from the link between Rødby and Puttgarden. Such a possibility supports the existence of a relationship of substitution between the services offered by the ferry operator serving that link and the services that will be offered by Femern.
132 Thus, in the circumstances of the present case, contrary to the Kingdom of Denmark’s assertion, it must be considered that the services offered by Femern in the context of the operation of the Fixed Link will be in direct competition with those offered, for crossing the Fehmarn Belt, by another transport provider, namely the ferry operator serving the link between Rødby and Puttgarden, which – and this is not disputed by the Kingdom of Denmark – is an undertaking seeking to make a profit.
133 Furthermore, it should be observed that the Commission also identified a wider market for transport services, namely the market for transport links which constitute an alternative for crossing the Fehmarn Belt. In that sense, it follows from a reading of recital 193 in conjunction with recital 237 of the contested decision that the Commission also took into account the market for transport services for crossing the western Baltic Sea, namely the links between Denmark, Germany and Sweden, on which ferry operators also operate, of which, as is apparent from Femern’s 2016 financial analysis, part of the traffic might be absorbed by the Fixed Link.
134 As regards the line of argument that, in essence, Femern could not be in competition with other transport providers because of considerations relating to the exercise of public powers, it must be rejected.
135 First, in so far as that line of argument put forward by the Kingdom of Denmark maintains that there would be no competition between the Fixed Link and the ferry operators because the effects, on competition, of bringing the Fixed Link into service are the consequence of a decision of the public authorities adopted in the exercise of their public powers, it cannot succeed. It should be observed that the fact that a Member State makes use of such powers to establish an entity entrusted with constructing and operating an infrastructure does not necessarily mean that the activities of that entity are also connected with the exercise of public powers.
136 Second, in so far as the Kingdom of Denmark maintains that any effects that Femern’s activities might have on competition would be irrelevant on the ground that those activities would be connected with the exercise of public powers, such a line of argument must be rejected. As already stated (see paragraphs 74 to 106 above), the Commission was entitled to find, in the circumstances of the present case, that Femern’s activities, as such, did not form part of the exercise of public authority and that, in the light of the material on the file, Femern was not entrusted with public powers.
137 As regards the argument alleging that the effects of Femern’s activities on the national economy and the related markets would be of no relevance for the purpose of establishing a competitive relationship between it and the ferry operators, on the ground that those activities seek to optimise Denmark’s macroeconomic advantages, it should be observed that that argument amounts, in essence, to claiming that the finding that an entity carries out activities while pursuing an objective in the public interest precludes that entity from being considered to be in competition with operators seeking to make a profit. As stated in paragraph 64 above, the fact that an entity is entrusted with some public-interest tasks does not prevent the activities at issue from being regarded as economic activities. It should be noted that it follows from settled case-law that Article 107(1) TFEU does not distinguish according to the causes or objectives of State interventions, but defines them according to their effects (judgments of 2 July 1974, Italy v Commission, 173/73, EU:C:1974:71, paragraph 27, and of 6 April 2022, Mead Johnson Nutrition (Asia Pacific) and Others v Commission, T‑508/19, EU:T:2022:217, paragraph 80).
138 As for the argument that there is no competition between Femern and the ferry operators on the ground that the public intervention is limited to making good the shortcomings in the private initiative, it must be rejected. As stated in paragraph 126 above, in order to determine whether an entity exercises an economic activity, the Commission must establish whether that entity offers goods or services on a market in competition with operators seeking to make a profit. In the present case, as may be seen from recital 193 of the contested decision, there is already a private operator offering services for crossing the Fehmarn Belt. Likewise, there are also private undertakings which provide transport services on other links which constitute an alternative for crossing that belt.
139 As regards the argument that Femern cannot be in competition on the market for transport services at the construction stage of the Fixed Link, it must also be rejected. As will be made clear in the context of the examination of the second plea in paragraphs 185 to 207 below, in the circumstances of the present case the Commission was entitled to conclude, without making an error of assessment, that the activities involving the construction and operation of the Fixed Link were inseparable.
140 It follows from the foregoing considerations that the second part of the first plea, alleging that the Commission was wrong to find that Femern offers transport services on a market in competition with other operators, must be rejected in its entirety.
3. The third part of the first plea, alleging that the finding that Femern is an operator pursuing a commercial policy is incorrect
141 The Kingdom of Denmark claims that Femern cannot operate the Fixed Link as an operator in a market economy following a market-economy logic and cannot, therefore, operate the Fixed Link on a commercial basis. In that respect, the Kingdom of Denmark submits that Femern acts, essentially, on the instructions of the Danish Minister for Transport, who will also be responsible for setting the amount of the tolls, taking account of macroeconomic and political considerations, and makes clear that its profits will be allocated to the financing of infrastructures on Danish territory. The Grand Duchy of Luxembourg maintains in that regard that, since Femern is not subject to the profit-maximisation rule, its profits contribute to the financing of the public terrestrial infrastructure and it has no autonomy to take decisions, Femern cannot be regarded as exercising an economic activity.
142 In addition, according to the Kingdom of Denmark, supported by the Federal Republic of Germany and the Grand Duchy of Luxembourg, the fact that Femern’s activities are financed by charges levied on users is not sufficient for Femern to be regarded as operating in accordance with a market logic. In that regard, the Grand Duchy of Luxembourg maintains that the method of financing the Fixed Link, by taxation or by users, is not a relevant factor for distinguishing non-economic activities from economic activities. In addition, the Kingdom of Denmark maintains that the Commission did not take sufficient account of the lack of freedom in relation to tariffs, which is a relevant indication for establishing that Femern is not an undertaking.
143 Furthermore, according to the Kingdom of Denmark, the fact that Femern will collect the charges when the Fixed Link is brought into service should not have the consequence that its activities connected with the exercise of public powers become activities of an economic nature.
144 The Commission disputes that line of argument.
145 In the first place, as regards the arguments whereby it is maintained that the Fixed Link will not be operated commercially, it should be noted that, according to the case-law applicable in State aid matters, services normally provided for remuneration are services that may be classified as economic activities, while the essential characteristic of remuneration lies in the fact that it constitutes consideration for the service in question (see, to that effect, judgments of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 47, and of 20 September 2019, Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission, T‑696/17, EU:T:2019:652, paragraph 75).
146 In addition, in State aid matters, the fact that an activity is not carried out by private operators or the fact that it is not profitable is not a relevant criterion for the purposes of its classification as an economic or non-economic activity. It is settled case-law that, first, the concept of an ‘undertaking’, in the context of competition law, encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed, and, second, any activity consisting in offering goods and services on a given market is an economic activity (judgments of 25 October 2001, Ambulanz Glöckner, C‑475/99, EU:C:2001:577, paragraph 19, and of 20 September 2019, Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission, T‑696/17, EU:T:2019:652, paragraph 46). It follows that the economic or non-economic nature of an activity does not depend on the private or public status of the entity engaged in it or the profitability of that activity (judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission, C‑288/11 P, EU:C:2012:821, paragraph 50, and of 15 December 2016, Spain v Commission, T‑808/14, not published, EU:T:2016:734, paragraph 55).
147 It is in the light of those principles that the Court must examine the arguments put forward by the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg.
148 Contrary to the arguments put forward, in essence, by the Kingdom of Denmark and the Grand Duchy of Luxembourg, the fact that access to the Fixed Link is subject to payment of charges constitutes a relevant factor for the purpose of classifying the operation of the Fixed Link as an economic activity.
149 In that regard, it must be made clear that the FEU Treaty provisions on competition and, more specifically, the rules on State aid do not require that the Member States demand payment for access to the transport infrastructures, but leave to their discretion the question whether access must be free of charge or subject to payment of economic consideration.
150 Thus, where a Member State decides, when implementing its transport policy, that an infrastructure will be made available free of charge in the common interest, that may indicate that that infrastructure is not the subject of economic exploitation. On the other hand, where a Member State decides, as in the present case, to make access to the infrastructure subject to payment of a charge in order to generate revenue allocated, as follows from recital 192 of the contested decision, in particular to repayment of the debt incurred for the planning and construction of the Fixed Link, the infrastructure must be considered to be the subject of economic exploitation (see, to that effect, judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‑443/08 and T‑455/08, EU:T:2011:117, paragraphs 93 and 94).
151 In the present case, it must be noted that, in recital 192 of the contested decision, the Commission observed that Femern provides a transport service to citizens and undertakings that will be subject to payment of a charge for the use of the road section and of the rail infrastructure.
152 It follows that, in recital 194 of the contested decision, the Commission was able to consider, without making an error of assessment, that the operation of the Fixed Link is governed by an economic logic, given that it is financed by users’ fees.
153 Therefore, in so far as the Commission found, first, in recital 193 of the contested decision, that Femern will offer, inter alia, transport services for crossing the Fehmarn Belt on which an operator seeking to make a profit operates and, second, in recitals 192 and 194 of the contested decision, that access to the Fixed Link will be subject to payment of charges to Femern, which constitutes consideration for the provision of the service, it was entitled to find that the activity involving operation of the Fixed Link constituted an economic activity.
154 The arguments put forward by the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg, alleging that the rules to which Femern is subject would not allow it to engage in a commercial exploitation of the Fixed Link, cannot call into question that finding.
155 In that regard, it must be noted that, in order to preclude the economic character of an activity consisting in offering goods or services on a market, it is not sufficient to claim that the operator of the infrastructure does not act on a purely commercial profit-maximisation basis, that it puts the public interest before a return on its investment, that it does not seek to make a profit and that it systematically reinvests its profits (see, to that effect, judgment of 30 April 2019, Chambre de commerce et d’industrie métropolitaine Bretagne-Ouest (port de Brest) v Commission, T‑754/17, not published, EU:T:2019:270, paragraph 80).
156 In addition, since the economic or non-economic character of an activity does not depend on the private or public status of the entity engaged in that activity or on the profitability of the activity, it follows that, even if the revenue from that activity is required to be reinvested in non-economic activities, the paid activities constitute participation in a market capable of undermining the objectives of competition law, so that an obligation to reinvest the revenue is not a barrier to the economic character of an activity (see, to that effect, judgment of 12 September 2013, Germany v Commission, T‑347/09, not published, EU:T:2013:418, paragraph 50).
157 Thus, the arguments based on the assertion that Femern does not pursue a profit-maximisation objective and must reinvest its profits for the financing of the infrastructures cannot succeed. Furthermore, the fact, on which the Kingdom of Denmark relies, namely that the amount of the charges for using the Fixed Link is not determined on the basis of a market-based logic, in the sense that the pricing structure is far removed from that employed on the market by private operators, is no bar to the finding that the operation of the Fixed Link is an economic activity.
158 Furthermore, the argument alleging that Femern acts, for the essential elements, such as the commencement date of the works, on the instructions of the Danish Minister for Transport must also be rejected. The question whether the activities in question carried out by an entity are economic in nature does not depend on the fact that a private investor would not be in a position to carry them out on the same conditions (see, by analogy, judgment of 16 July 2014, Zweckverband Tierkörperbeseitigung v Commission, T‑309/12, not published, EU:T:2014:676, paragraph 76).
159 In addition, as regards the argument that the Commission did not take sufficient account of Femern’s lack of freedom to set the amount of the charges for using the link, it should be observed that it is true, as is apparent from Article 42(2) of the Construction Law, that the principles governing the amount of the charges are laid down by the Danish Minister for Transport. However, the Kingdom of Denmark acknowledges in its application that, on the basis of Article 42(3) of that law, Femern may amend the general rebate schemes and introduce new schemes, provided that the overall level of revenues is not appreciably affected. Accordingly, in recital 197 of the contested decision, the Commission did not make an error of assessment in finding that Femern has a certain discretion in deciding its own pricing.
160 The mere fact that the Danish Minister for Transport sets the amount of the charges on the basis of macroeconomic considerations related to transport policy cannot suffice to conclude that the activity involving the operation of the Fixed Link is not an economic activity.
161 Furthermore, the circumstance, which came about after the contested decision, that Femern is no longer authorised to alter the amount of the charges following the adoption, while the judicial proceedings were pending, of a new law, the effect of which is that only the Danish Minister for Transport is authorised to set the amount of those charges, cannot be taken into consideration. The legality of an EU measure is assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted (judgments of 7 February 1979, France v Commission, 15/76 and 16/76, EU:C:1979:29, paragraphs 7 and 8, and of 12 December 1996, Altmann and Others v Commission, T‑177/94 and T‑377/94, EU:T:1996:193, paragraph 119). It follows that elements post-dating the adoption of the EU measure cannot be taken into account in assessing the legality of that measure (judgments of 27 September 2006, Roquette Frères v Commission, T‑322/01, EU:T:2006:267, paragraph 325, and of 11 February 2015, Spain v Commission, T‑204/11, EU:T:2015:91, paragraph 123). Thus, when adopting the contested decision, the Commission was entitled to take into consideration the fact that, to a certain extent, Femern could influence the amount of certain charges for access to the infrastructure.
162 It follows from the foregoing that the arguments put forward by the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg seeking to assert that the rules to which Femern is subject would not allow it to engage in a commercial operation of the Fixed Link, whether taken individually or together, do not call into question the finding that the operation of the Fixed Link is an economic activity.
163 In the second place, as regards the line of argument that, in essence, Femern’s activities connected with public powers cannot become economic activities because charges are levied for using the Fixed Link, it is sufficient to observe that that argument is based on the incorrect premiss that the Commission ought to have considered that certain of Femern’s activities were connected with the exercise of public powers (see paragraphs 75 to 106 above). Accordingly, that line of argument cannot succeed.
164 The third part of the first plea must, therefore, be rejected in its entirety.
4. The second plea, alleging that the Commission was wrong to find that the activities involving the construction and operation of the Fixed Link are inseparable
165 By its second plea, the Kingdom of Denmark disputes not only the merits of the finding that the activities involving the construction and operation of the Fixed Link are inseparable, but also the reasons stated in that respect in the contested decision.
(a) The statement of reasons in the contested decision concerning the inseparable nature of the activities involving the construction and operation of the Fixed Link
166 The Kingdom of Denmark submits that the contested decision is insufficiently reasoned as regards the finding that Femern would exercise an economic activity as from the construction phase.
167 In addition, the Kingdom of Denmark also maintains that, in recital 201 of the contested decision, the Commission did not set out its reasons for finding that Femern’s promotional or marketing or information activities constitute economic activities.
168 The Commission disputes that line of argument.
169 According to settled case-law, the statement of reasons required by 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 question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court 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 go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements 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 (see judgment of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 166 and the case-law cited, and judgment of 27 January 2021, KPN v Commission, T‑691/18, not published, EU:T:2021:43, paragraph 161). In particular, the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned. It is sufficient if it sets out the facts and the legal considerations of fundamental importance in the context of the decision (judgments of 11 January 2007, Technische Glaswerke Ilmenau v Commission, C‑404/04 P, not published, EU:C:2007:6, paragraph 30, and of 24 September 2019, Fortischem v Commission, T‑121/15, EU:T:2019:684, paragraph 41).
170 In this instance, as regards the reasons stated for the inseparability of the activities involving the construction and operation of the Fixed Link, it should be pointed out that, in recital 189 of the contested decision, the Commission first of all referred to the case-law according to which the operation of an airport was regarded as an economic activity and according to which the same applied to the construction of a runway at a commercial airport. Although the Commission states that that case-law related specifically to airports, it observed that the principles developed by the Court of Justice and the General Court are also applicable to the construction of other infrastructures. In that regard, footnote 89 to recital 189 of the contested decision, refers to paragraph 202 of the Notice on the notion of State aid, which states that the principles developed by the Courts of the European Union are applicable to the construction of other infrastructures that are indissociably linked to an economic activity. Furthermore, in recital 189 of the contested decision, the Commission also refers to the recent case-law of the General Court relating to port infrastructures, citing in footnote 90, the judgment of 20 September 2019, Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission (T‑696/17, EU:T:2019:652).
171 Next, in recital 192 of the contested decision, the Commission stated that Femern’s revenues from road and rail are meant, inter alia, to finance the total cost of planning, construction and operation of the Fixed Link.
172 Lastly, in recital 198 of the contested decision, the Commission, after concluding that the operation of the Fixed Link constitutes an economic activity, considered that the construction of the infrastructure operated by Femern also constitutes an economic activity, on the basis of the judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C‑288/11 P, EU:C:2012:821), and of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117).
173 It must be stated that the Commission referred to the judgments of the Court of Justice and of the General Court concerning airport infrastructures, to the recent cases before the General Court concerning port infrastructures and to the Notice on the notion of State aid. It must therefore be considered that the Commission intended to apply a principle according to which, in the case of an infrastructure which is the subject of economic operation, the construction activity is also of an economic nature where the two activities are inseparably linked. In the present case, the Commission established the existence of an economic link between the two activities because the operational revenues were to be used to repay, in particular, the debt incurred for the planning and construction of the Fixed Link.
174 It follows that the Commission stated to the requisite legal standard the reasons why the activities of constructing and operating the Fixed Link are inseparable.
175 As regards the argument that, in essence, the Commission did not sufficiently state the reasons for its conclusion that Femern’s promotional, marketing and information activities constitute economic activities, it should be observed that, in recital 201 of the contested decision, the Commission stated, in essence, that those activities contributed to the planning, construction and operation of the Fixed Link and that, even if the promotional, marketing and information activities should be considered to be information activities, they would still contribute to Femern’s economic activity. In that regard, the Commission observed that it is not unusual for undertakings to be required to inform the public about their activities. In addition, it considered that, in principle, those information obligations do not entail the exercise of public powers. Thus, it is clear from recital 201 of the contested decision that the Commission considered that the promotional, marketing and information activities constitute economic activities because they are connected with Femern’s principal activities, namely the construction and operation of the Fixed Link. It must therefore be considered that the Commission stated sufficient reasons in the contested decision as regards the economic nature of the promotional, marketing and information activities.
(b) The merits of the contested decision as regards the inseparable nature of the activities involving the construction and operation of the Fixed Link
176 The Kingdom of Denmark submits that the Commission made an error of assessment in finding that the construction activity cannot be dissociated from the activity involving the operation of the Fixed Link.
177 In that regard, first, the Kingdom of Denmark, supported by the Federal Republic of Germany and the Grand Duchy of Luxembourg, submits that the Commission was wrong to consider that it follows from the judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C‑288/11 P, EU:C:2012:821), and of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117), that a construction activity, that is to say, an upstream activity, is necessarily an economic activity when the operation activity, that is to say, a downstream activity, is an economic activity. Only in certain circumstances can the future commercial operation of an infrastructure have the effect that the construction of that infrastructure is also an economic activity, notably where an airport runway is part of the airport’s existing economic activity. According to the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg, the present case differs from the earlier cases, since it relates to the initial construction of an infrastructure the operation of which will take place in the future.
178 Second, the Kingdom of Denmark maintains that it is necessary to take account of the fact that Femern will not carry out an economic activity before the Fixed Link is brought into service, so that, during the construction phase, the entity is not active on any market in competition with other operators. In that regard, the Kingdom of Denmark claims that it is only if Femern is able to penetrate the relevant market rapidly that it might be regarded as a competitor of the undertakings already operating on that market.
179 Third, the Kingdom of Denmark claims, in essence, that since Femern does not operate on a liberalised market, it cannot be considered to be exercising an economic activity.
180 Fourth, according to the Kingdom of Denmark, it follows from paragraph 84 of the judgment of 30 April 2019, UPF v Commission (T‑747/17, EU:T:2019:271), that the existence of an economic link between two activities is not sufficient for a finding that those activities are inseparable, so that the financing of the planning and construction of the Fixed Link through the levying of tolls in the context of the operation of that link does not necessarily mean that the activities are inseparable.
181 Fifth, the Kingdom of Denmark maintains that the Commission’s conclusion that the construction and operation activities are inseparable does not take account of the fact that the circumstances may change between now and the time when the Fixed Link is brought into service, in particular the fact that the Danish authorities might decide to alter the conditions for the operation of the Fixed Link.
182 Sixth, the Kingdom of Denmark submits that classification as an undertaking should be given a strict interpretation, on the ground that the classification of Femern as an undertaking before the Fixed Link is brought into service has adverse consequences, in so far as Femern would be required to pay interest due for the period of unlawfulness. In addition, according to the Kingdom of Denmark, a restrictive interpretation of the concept of ‘undertaking’ would be more in keeping with related areas, in particular with the national regulations on commercial practices.
183 The Commission disputes those arguments.
184 As a preliminary point, it must be held that the Kingdom of Denmark has not put forward any substantiated argument to challenge the merits of the classification of the promotional, marketing or information activities as activities of an economic nature.
185 As regards the arguments that the Commission erred in considering that the activities involving the construction and operation of the Fixed Link are inseparable, it must be noted that the case-law has recognised that commercial operation and the construction of transport infrastructures with a view to such commercial operation are capable of constituting economic activities (see, to that effect, judgments of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 65, and of 20 September 2019, Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission, T‑696/17, EU:T:2019:652, paragraph 47). That case-law has its origins in the judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117), to which the Commission refers in recital 198 of the contested decision, where the General Court had held that the Commission could properly conclude that the activity involving the operation of an airport and the activity involving the construction of a new runway at an airport were inseparable since the airport fees would be the major source of revenue for financing that new runway and the exploitation of that new runway would be part of the airport’s economic activity (judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‑443/08 and T‑455/08, EU:T:2011:117, paragraph 94). In addition, in that judgment the General Court had also held that it was not necessary to dissociate the activity involving the construction of the new runway from the subsequent use of the runway, on the ground that, having regard to its nature and purpose, the construction of the runway was not, in itself, an exercise of public powers (judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‑443/08 and T‑455/08, EU:T:2011:117, paragraph 99). In that case, the Court of Justice held that the General Court had not erred in law in holding that the Commission had correctly considered the construction of the new runway to constitute an economic activity, with the consequence that the capital contributions, subject to the amount to be deducted from them in respect of expenses linked to the performance of public duties, constituted State aid (judgment of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission, C‑288/11 P, EU:C:2012:821, paragraph 43).
186 Thus, where the operation of an infrastructure is the subject of economic operation and the fees for its use are the major source of financing its construction, the activities involving the construction and operation of that infrastructure are economic activities, with the exception, where the Member State expressly relies on them during the administrative procedure, of any public duties that would entail the exercise of public powers.
187 It is in the light of those considerations that the Court must examine the arguments put forward by the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg.
188 First, contrary to the assertions made, in essence, by the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg, the principles and criteria relating to the inseparability of the activities involving the construction and operation of a transport infrastructure, laid down in the judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C‑288/11 P, EU:C:2012:821), and of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117), and set out in paragraph 185 above, cannot be limited solely to a situation involving the extension of an existing infrastructure.
189 It is true that, in the case that gave rise to the judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C‑288/11 P, EU:C:2012:821), and of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117), what was at issue was the extension of a pre-existing runway.
190 However, where, as in the present case, there is a market for transport services on which operators seeking to make a profit are already operating, the construction of a new transport infrastructure intended to be the subject of economic exploitation is just as likely as the extension of a pre-existing infrastructure to disrupt competition on that market. Accordingly, it must be considered that, for the purposes of assessing the inseparable nature of the activities involving the construction and operation of an infrastructure, the case of the construction of a new infrastructure that is intended to be the subject of future economic exploitation is comparable with the case of the construction of an extension of a pre-existing transport infrastructure which is the subject of economic exploitation.
191 It follows that it is necessary to reject the argument that, in essence, the principles and criteria relating to the inseparability of the activities involving the construction and operation of a transport infrastructure, laid down in the judgments of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C‑288/11 P, EU:C:2012:821), and of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission (T‑443/08 and T‑455/08, EU:T:2011:117), cannot be transposed to the present case.
192 Second, as regards the argument that, in essence, Femern would not be present on any market during the construction phase, it should be noted that it is common ground between the parties that Femern is responsible for both the construction and the operation of the Fixed Link.
193 In that regard, as is apparent from the examination of the second and third parts of the first plea, since Femern’s operation of the Fixed Link will consist in offering services on a market on which an operator seeking to make a profit is operating for consideration, the Commission did not err in law in finding that the operation of the Fixed Link constitutes an economic activity.
194 In addition, it should be noted that, in recital 192 of the contested decision, the Commission established, without being contradicted on that point by the Kingdom of Denmark, that the revenues from the operation of the infrastructure will be used, inter alia, to repay the loans incurred for the planning and construction of the Fixed Link. In doing so, the Commission, contrary to the assertion, in essence, of the Kingdom of Denmark, the Federal Republic of Germany and the Grand Duchy of Luxembourg, did not assume, but established, taking account of the specific circumstances of the case, that the construction of the Fixed Link cannot be separated from its future economic operation. Likewise, as the Kingdom of Denmark acknowledges, the economic operation of the Fixed Link is also intended to finance its construction with the aim of achieving a financial balance for the entire project. In that regard, at the hearing, the Court asked the Commission how the finding, in recital 192 of the contested decision that, in essence, Femern’s revenues from road and rail are meant to finance the total cost of planning, construction and operation of the Fixed Link, could be reconciled with the assertion, in recital 323 of that decision, that if it were possible to set prices at a level that compensates for all construction and operation costs, no funding gap would be present and no State aid would be needed. The Commission replied that, unlike recital 323 of the contested decision, recital 192 refers to the planning and construction costs deducted from the amount of the aid and that there is thus no inconsistency between those two recitals.
195 Thus, since the purpose of the economic operation of the Fixed Link is to repay the debt incurred for its construction, and in so far as Femern is responsible for the activities involving the construction and operation of the Fixed Link, in order to maintain the effectiveness of the rules on State aid, it cannot be accepted that the activities involving the construction and operation of the Fixed Link should be separated on the ground that the Fixed Link will be brought into service only when its construction has been completed.
196 Otherwise, in so far as Femern is responsible for both the construction and the operation of the Fixed Link, if, as the Kingdom of Denmark maintains, the construction activity were to be considered to be separable from the operation and therefore as non-economic, the preferential financing obtained for the construction of the Fixed Link could not be classified as State aid. It would follow that, in the circumstances of the present case, at the stage of the operation of the Fixed Link, Femern would benefit from the possibility of operating a subsidised infrastructure, which would confer on it an economic advantage which it would not have obtained under normal market conditions (see, to that effect and by analogy, judgments of 11 July 1996, SFEI and Others, C‑39/94, EU:C:1996:285, paragraph 62, and of 15 March 2018, Naviera Armas v Commission, T‑108/16, EU:T:2018:145, paragraphs 119 and 120). As is apparent from paragraph 223 of the Notice on the notion of State aid, an operator of an infrastructure is deemed to receive an economic advantage where what it pays for the right to exploit the infrastructure is less than what it would pay to exploit a comparable infrastructure under normal market conditions.
197 It follows that the Commission was entitled to conclude that the construction of the Fixed Link was inseparable from its future economic exploitation. The Commission was therefore fully entitled to consider that Femern is an undertaking, both for the activity involving the operation of the Fixed Link and for the activity involving its construction.
198 Consequently, the Kingdom of Denmark’s argument that Femern cannot be considered to be in competition with undertakings operating on the market for transport services for crossing the Fehmarn Belt, at the stage of construction of the Fixed Link, or on the ground that it would not be able to penetrate that market rapidly, must be rejected.
199 Third, it is true, as the Kingdom of Denmark submits, that, in themselves, the activities involving the construction and the operation of the Fixed Link are not liberalised, in that the Construction Law attributes the exercise of those activities solely to Femern.
200 However, it must be stated that the activity of operating the Fixed Link will consist in offering services for crossing the Fehmarn Belt which is – and the Kingdom of Denmark does not dispute this – a liberalised market on which a private operator is already operating. Furthermore, as follows from paragraph 133 above, the Commission also identified a wider market, namely the market for transport services for links which constitute an alternative to crossing the Fehmarn Belt and on which ferry operators are also operating.
201 In such circumstances, contrary to what the Kingdom of Denmark claims in essence, the fact that the activities involving the construction and operation of the Fixed Link are not liberalised does not have the effect of precluding those activities from being classified as economic activities. Otherwise, in order to circumvent the application of the FEU Treaty rules on competition on a market which is liberalised and open to competition, it would be sufficient for a Member State to grant exclusive rights to an entity called on to offer services on that market.
202 It follows that the argument based on the Commission’s alleged failure to take account of the fact that Femern’s activities are not liberalised must be rejected.
203 Fourth, as regards the Kingdom of Denmark’s argument, based on paragraph 84 of the judgment of 30 April 2019, UPF v Commission (T‑747/17, EU:T:2019:271), that the construction and operation activities are separable, it should be noted that that paragraph concerned a different issue, namely whether the economic activities were dissociable from the activities connected with the exercise of public powers. In particular, in that case, in order to reject an argument alleging that the Commission had not determined the ports’ principal and ancillary activities, the General Court considered, in paragraph 83 of that judgment, that it was necessary to distinguish the ports’ economic activities and those connected with the exercise of public powers, observing that there is no threshold below which all the economic activities would be non-economic activities because the economic activities are in the minority. Next, in paragraph 84 of the abovementioned judgment, the General Court observed that it is only where it is established that the ports’ economic activities could not be separated from the activities connected with the exercise of public power prerogatives that all the activities might be regarded as being non-economic, while the fact that the economic activities finance the activities connected with the exercise of public powers is not sufficient to establish that the activities are inseparable.
204 As follows from the examination carried out in paragraphs 74 to 106 above, the Commission was, in the circumstances of the present case, entitled to find that Femern’s activities, in themselves, were not connected with the exercise of public authority and that Femern had not been given any particular public powers. In any event, as stated in paragraph 89 above, the Kingdom of Denmark has adduced no evidence to demonstrate that the functions of highway authority and railway infrastructure manager carried out by Femern, or the preparation of the safety plans for the Fixed Link which, in the Kingdom of Denmark’s submission, are connected with the exercise of public powers, are inseparable from the construction and operation of the Fixed Link. Therefore, in the circumstances of the present case, paragraph 84 of the judgment of 30 April 2019, UPF v Commission (T‑747/17, EU:T:2019:271), is irrelevant for the purpose of establishing that the activities involving the construction and operation of the Fixed Link are separable.
205 Fifth, as regards the argument that, in essence, it would be open to the Kingdom of Denmark to amend, between now and the time when the Fixed Link is brought into service, the procedure governing its operation in such a way that that activity would no longer be economic in nature, for example by making access to the infrastructure free for all users, it is sufficient to point out that, as stated in paragraph 161 above, it is settled case-law that the legality of a decision relating to State aid must be assessed on the basis of the information available to the Commission at the time when it adopted that decision. Consequently, the hypothetical scenarios to which the Kingdom of Denmark refers cannot be relevant for the purpose of assessing the legality of the contested decision.
206 Sixth, as regards the argument that the concept of ‘undertaking’ should be interpreted restrictively, on the ground that the finding that Femern’s activities are economic in nature adversely affects it because it would be liable for interest for the period of unlawfulness, within the meaning of paragraph 52 of the judgment of 12 February 2008, CELF and ministre de la Culture et de la Communication (C‑199/06, EU:C:2008:79), it cannot succeed. According to settled case-law, the notion of ‘State aid’, as defined in the FEU Treaty, is a legal concept which must be interpreted on the basis of objective factors (judgments of 16 May 2000, France v Ladbroke Racing and Commission, C‑83/98 P, EU:C:2000:248, paragraph 25, and of 24 September 2019, Fortischem v Commission, T‑121/15, EU:T:2019:684, paragraph 62). Accordingly, the concept of ‘economic activity’ cannot be given a strict interpretation on the ground that an undertaking would be required to pay interest in respect of the period of unlawfulness because a Member State failed to fulfil the obligation, laid down in Article 108(3) TFEU, not to put a measure capable of constituting aid within the meaning of Article 107(1) TFEU into effect so long as the Commission has not adopted a final decision concerning that measure.
207 In addition, the Court must also reject the argument alleging that the concept of ‘undertaking’ should be given a strict interpretation like that laid down in the Danish legislation on commercial practices. It should be borne in mind that domestic classifications cannot be decisive for the purpose of assessing the economic nature of an activity from the viewpoint of a provision EU law (see, by analogy, judgments of 12 December 2000, Aéroports de Paris v Commission, T‑128/98, EU:T:2000:290, paragraph 128, and of 3 April 2003, BaByliss v Commission, T‑114/02, EU:T:2003:100, paragraph 114).
208 It follows from the foregoing considerations that the second plea must be rejected in its entirety.
5. The fourth part of the first plea, alleging that the finding that the financing granted to Femern distorts competition and affects trade between Member States within the meaning of Article 107(1) TFEU is incorrect
209 The Kingdom of Denmark maintains that the fact that the Fixed Link will have an impact on transit routes by reducing the times and distances of journeys over all Danish, Scandinavian and northern German road and rail networks does not suffice to substantiate the assertion that the financing granted to Femern distorts competition and affects trade between Member States within the meaning of Article 107(1) TFEU.
210 According to the Kingdom of Denmark, the Commission ought to have carried out a concrete assessment in order to ascertain whether there is a genuine competitive relationship between the public transport infrastructure and the alternative links. In particular, the Kingdom of Denmark takes issue with the Commission for not having taken account of the fact that Femern is not in competition with the ferry operators.
211 In addition, according to the Kingdom of Denmark, for the purpose of assessing whether the financing granted to Femern distorts competition, the fact that the Fixed Link will absorb a part of the traffic of another public link, namely the Great Belt Bridge, which is part of the same legal structure as Femern, is not a relevant consideration.
212 The Commission disputes those arguments.
213 It should be noted that, in accordance with the case-law, as regards the conditions relating to the distortion of competition and the effect on trade for the purpose of categorising a national measure as State aid, it is necessary not to establish that the aid at issue has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition (judgments of 14 January 2015, Eventech, C‑518/13, EU:C:2015:9, paragraph 65, and of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 91).
214 As regards the condition relating to the distortion of competition within the meaning of Article 107(1) TFEU, it should be noted that, in principle, aid intended to release an undertaking from costs which it would normally have to bear in its day-to-day management or normal activities distorts the conditions of competition (judgments of 30 April 2009, Commission v Italy and Wam, C‑494/06 P, EU:C:2009:272, paragraph 54, and of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 96).
215 In the present case, it should be observed that, in recital 234 of the contested decision, the Commission found that Femern is an undertaking active on the market for transport services for crossing the Fehmarn Belt, so that the selective advantage conferred on it may strengthen its position as compared to other undertakings active on that market, in particular ferry operators and port operators.
216 Thus, the financing granted to Femern on preferential terms has the effect of reducing the costs of financing the construction of the Fixed Link and permits the operation of a subsidised infrastructure without consideration. It follows that Femern is thus released from costs which it would normally have had to bear in the context of its day-to-day management or of its normal activities. The Commission was therefore entitled to consider that the financing at issue granted to Femern is capable of distorting competition.
217 As regards the effect on trade between Member States, the adverse effect on such trade cannot be purely hypothetical or presumed. Thus, it is necessary to determine why the measure concerned is liable, by reason of its foreseeable effects, to have an impact on trade between Member States (judgments of 18 May 2017, Fondul Proprietatea, C‑150/16, EU:C:2017:388, paragraph 30, and of 15 May 2019, Achema and Others, C‑706/17, EU:C:2019:407, paragraph 90). In particular, when aid granted by a Member State strengthens the position of certain undertakings by comparison with other undertakings competing in trade between Member States, the latter must be regarded as affected by that aid (judgments of 14 January 2015, Eventech, C‑518/13, EU:C:2015:9, paragraph 66, and of 30 April 2019, UPF v Commission, T‑747/17, EU:T:2019:271, paragraph 92).
218 In that regard, it must be noted that the Commission found that the selective advantage granted to Femern strengthens its position on the market for transport services for the crossing of the Fehmarn Belt between Rødby and Puttgarden by comparison with the undertakings already operating on that market for that link between Denmark and Germany, in particular by comparison with the ferry operator offering transport services on that market. The Commission was therefore entitled to consider that the financing granted to Femern affects trade between Member States, a fortiori because whether that condition is satisfied or not is not dependent on the local or regional character of the transport services supplied (see, to that effect, judgments of 14 January 2015, Eventech, C‑518/13, EU:C:2015:9, paragraph 69, and of 29 July 2019, Azienda Napoletana Mobilità, C‑659/17, EU:C:2019:633, paragraph 31).
219 It follows that, contrary to the Kingdom of Denmark’s contention, the Commission was able to conclude, without making an error of assessment, that the financing granted to Femern distorts competition and affects trade between Member States within the meaning of Article 107(1) TFEU.
220 As regards the argument that, in essence, Femern would not be in competition with ferry operators, it has already been rejected in the context of the examination of the third part of the first plea (see paragraphs 129 to 132 above).
221 Lastly, the Kingdom of Denmark maintains that the Commission made an error of assessment in finding that the Fixed Link would be in competition with other infrastructures providing a means of crossing the western Baltic Sea, on the ground that they are managed by public undertakings. In so far as it constitutes an autonomous argument, that argument must be rejected as ineffective. It was sufficient for the Commission to find that, on the market for transport services for crossing the Fehmarn Belt, at issue in the present case, the financing granted to Femern under preferential conditions was capable of distorting competition and affecting trade between Member States, which the Commission did in recital 234 of the contested decision, where it finds that the financing offered to Femern a selective advantage that would strengthen its position by comparison with the undertakings present on the market in question, namely the market for transport services for the crossing of the Fehmarn Belt.
222 The fourth part of the first plea must, therefore, be rejected in its entirety.
223 In the light of all of the foregoing considerations, the action must be dismissed.
III. Costs
224 Under Article 134(1) of the Rules of Procedure, 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 Kingdom of Denmark has been unsuccessful, it must be ordered to pay the costs incurred by the Commission, in accordance with the form of order sought by the latter.
225 Under Article 138(1) of the Rules of Procedure, the Member States which have intervened in the proceedings are to bear their own costs. The Kingdom of Belgium, the Federal Republic of Germany and the Grand Duchy of Luxembourg must therefore bear their own costs.
On those grounds,
THE GENERAL COURT (Fifth Chamber, Extended Composition)
hereby:
1. Dismisses the action;
2. Orders the Kingdom of Denmark to bear its own costs and to pay those incurred by the European Commission;
3. Orders the Kingdom of Belgium, the Federal Republic of Germany and the Grand Duchy of Luxembourg to bear their own costs.
Spielmann |
Öberg |
Mastroianni |
Brkan |
Gâlea |
Delivered in open court in Luxembourg on 28 February 2024.
[Signatures]
Table of contents
I. Background to the dispute
A. The Fehmarn Belt Fixed Link project
B. Events prior to the dispute
C. Administrative procedure
D. Contested decision
E. Forms of order sought
II. Law
A. Admissibility
B. Substance
1. The first part of the first plea, concerning the lack of connection of Femern’s activities with the exercise of public powers
(a) The first complaint, alleging that the concept of ‘activity coming within public authority or connected with the exercise of public powers’ is interpreted too restrictively
(b) The third complaint, alleging a failure to take into account available information showing that some of Femern’s activities are connected with the exercise of public powers
(1) The first sub-complaint, alleging that the Commission was wrong to consider that, as such, the activities involving the construction and operation of the Fixed Link are not connected with the exercise of public power
(2) The second sub-complaint, alleging that the Commission was wrong to find that Femern was given no particular public power
(c) The second complaint, alleging that the Commission was wrong to take into consideration the existence of services that could be substituted for the Fixed Link
2. The second part of the first plea, alleging that the finding that Femern offers transport services on a market in competition with other operators is incorrect
3. The third part of the first plea, alleging that the finding that Femern is an operator pursuing a commercial policy is incorrect
4. The second plea, alleging that the Commission was wrong to find that the activities involving the construction and operation of the Fixed Link are inseparable
(a) The statement of reasons in the contested decision concerning the inseparable nature of the activities involving the construction and operation of the Fixed Link
(b) The merits of the contested decision as regards the inseparable nature of the activities involving the construction and operation of the Fixed Link …
5. The fourth part of the first plea, alleging that the finding that the financing granted to Femern distorts competition and affects trade between Member States within the meaning of Article 107(1) TFEU is incorrect
III. Costs
* Language of the case: Danish.