Joined Cases T‑202/10 RENV II and T‑203/10 RENV II
Stichting Woonlinie and Others
v
European Commission
(State aid — Social housing — Aid scheme for social housing corporations — Existing aid — Member State’s commitments — Decision declaring aid compatible with the internal market — Article 17 of Regulation No (EC) No 659/1999 — Service of general economic interest — Article 106(2) TFEU — Definition of public service mission)
Summary — Judgment of the General Court (Eighth Chamber, Extended Composition), 15 November 2018
1. Action for annulment — Actionable measures — Preparatory measures — Not included — Letter from the Commission expressing doubts as to the compatibility of an aid with the internal market and proposing appropriate measures — Act constituting a step in the preparation of a decision finding that the aid is incompatible with the internal market — Not included
(Art. 263 TFEU; Council Regulation No 659/1999, Art. 17)
2. State aid — Examination by the Commission — Aid scheme — Concept — Payment of individual aid — Included
(Art. 108 TFEU; Council Regulation No 659/1999, Art. 1(d))
3. State aid — Examination by the Commission — Aid scheme — Concept — Requirement of a legislative provision as the basis for that scheme — None
(Art. 108 TFEU; Council Regulation No 659/1999, Art. 1(d))
4. Judicial proceedings — Introduction of new pleas during the proceedings — Conditions — Amplification of an existing plea
(Rules of Procedure of the General Court, Art. 84(1))
5. State aid — Definition — Measures designed to compensate for the cost of public service missions undertaken by an undertaking — Not included — Conditions set out in the Altmark judgment — Cumulative nature
(Art. 107(1) TFEU)
6. State aid — Definition — Measures designed to compensate for the cost of public service missions undertaken by an undertaking — Distinction between the Altmark test, intended to determine whether there is State aid, and the Article 106(2) TFEU test, intended to establish whether that aid is compatible with the internal market
(Arts 106(2) and 107(1) TFEU)
7. Competition — Undertakings entrusted with the operation of services of general economic interest — Definition of services of general economic interest — Member States’ discretion — Limits — Monitoring by the Commission and judicial review limited to cases of manifest error
(Arts 106(2) and 107(1) TFEU)
8. State aid — Existing aid — Measures designed to compensate for the cost of public service missions undertaken by an undertaking — Examination by the Commission of the compatibility of the aid within the common market — Need to take into account the risk of overcompensation only as regards the future
(Arts 106(2) and 107(1) TFEU)
9. Competition — Undertakings entrusted with the operation of services of general economic interest — Evaluation of additional costs generated by the public service task — Discretion of the Commission
(Art. 106(2) TFEU)
1. Since a letter from the Commission under Article 17 of Regulation No 659/1999, laying down detailed rules for the application of Article 108 TFEU, expressing doubts as to the compatibility of an aid scheme with the internal market and proposing appropriate measures, constitutes a first step in the preparation of a decision declaring the aid scheme incompatible with the internal market and those doubts have been confirmed by that decision, an applicant cannot be prevented from invoking an illegality vitiating the assessment contained in that letter in support of its appeal against that decision.
(see para. 41)
2. It is apparent from Article 1(d) of Regulation No 659/1999 laying down detailed rules for the application of Article 108 TFEU, that the fact that individual aid is provided does not exclude the existence of a scheme on the basis of which that aid is granted.
In that regard, the fact that the Commission receives complaints relating to individual sales of goods at prices below market price does not preclude the existence of an aid scheme pursuant to which that individual aid was granted.
(see para 50)
3. The requirement of a legislative provision as the basis for an aid scheme does not form part of the definition of an aid scheme within the meaning of Article 1(d) of Regulation No 659/1999 laying down detailed rules for the application of Article 108 TFEU.
(see para. 51)
4. See the text of the decision.
(see para. 63)
5. See the text of the decision.
see paras 72-74
6. See the text of the decision.
(see paras 76, 77)
7. Even though the Member State enjoys a wide discretion in determining what it regards as a service of general economic interest (SGEI), that does not, however, mean that it is not required to show to the requisite legal standard that the scope of an SGEI is necessary and proportionate in relation to a real public service need. The burden of proving that the SGEI is delimited in a sufficiently clear manner lies with the national authorities. The absence of any evidence provided by the Member State establishing that those criteria have been met or disregarded is liable to constitute a manifest error of assessment which the Commission is required to take into consideration.
Given, on one hand, the wide discretion enjoyed by a Member State in defining an SGEI mission and the conditions of its implementation and, on the other, the scope of the control, limited to manifest error, which the Commission is entitled to exercise in that regard, the General Court’s review of the Commission’s assessment in that regard must also observe the same limit and, accordingly, its review must be confined to ascertaining whether the Commission properly found or rejected the existence of a manifest error by the Member State.
(see paras 81, 82, 98)
8. The Commission’s examination of existing aid can lead only to a decision which produces effects in the future. Therefore, only if the Commission considers that the financing system in question presents a risk of over-compensation for the future may it be prompted to propose appropriate measures.
In those circumstances, whilst it is possible that, as part of the constant review of an existing aid, examining whether there has been any over-compensation in the past may possibly, depending on the particular circumstances of the case, be relevant to an assessment of the compatibility of that existing aid with the internal market, the fact nevertheless remains that an examination of that kind is not, in itself, absolutely necessary for a proper assessment of the need to propose appropriate measures for the future and determination of what those measures should be. The risk or otherwise of over-compensation for the future ultimately depends essentially on the specific detailed arrangements of the financing scheme itself, and not on the fact that the scheme has, in practice, led to over-compensation in the past.
In that regard, in a letter under Article 17 of Regulation No 659/1999 laying down detailed rules for the application of Article 108 TFEU, containing a preliminary assessment by the Commission, the latter does not have to show that the ancillary activities of the companies in question effectively benefit from State aid or that cross-subsidisation actually took place.
(see paras 120, 154-156)
9. A clear definition of a service of general economic interest (SGEI) is necessary to ensure compliance with the requirement that aid be proportional, that is, to guarantee that the compensation awarded does not exceed what is necessary to discharge the public service mission.
In that regard, by requesting the national authorities to define the social housing SGEI in relation to a target group of socially disadvantaged households, the Commission asked them to clearly determine the public service missions for which the compensation was granted. That precise definition thus makes it possible to determine the costs incurred in the delivery of the SGEI and to avoid on one hand, cases of overcompensation and, on the other, activities carried out by housing corporations outside the scope of the SGEI being assisted by State aid, in order to avoid cross-subsidisation.
(see paras 148, 149)