JUDGMENT OF THE GENERAL COURT (Second Chamber)
11 October 2023 (*)
(Culture – Creative Europe Programme (2014 to 2020) – MEDIA Sub-programme – Call for proposals EACEA/22/2019 – EACEA decision rejecting an application for failing to meet the eligibility criteria – Commission decision dismissing the administrative appeal against the EACEA decision – Concept of ‘European company’ – Grant open only to applicants owned, directly or by majority participation, by nationals of a Member State of the European Union or by nationals of other European countries participating in the sub-programme – Errors of law and of assessment – Equal treatment – Proportionality)
In Case T‑760/21,
DCM Film Distribution GmbH, established in Berlin (Germany), represented by A. Huttenlauch, M. Klasse and P. Hesse, lawyers,
applicant,
v
European Commission, represented by H. van Vliet, T. Isacu de Groot and E. Stamate, acting as Agents,
defendant,
supported by
European Education and Culture Executive Agency (EACEA), represented by H. Monet, S. Dorémus and N. Sbrilli, acting as Agents,
intervener,
THE GENERAL COURT (Second Chamber),
composed of A. Marcoulli, President, J. Schwarcz and W. Valasidis (Rapporteur), Judges,
Registrar: P. Cullen, Administrator,
having regard to the written part of the procedure,
further to the hearing on 22 March 2023,
gives the following
Judgment
1 By its action under Article 263 TFEU, the applicant, DCM Film Distribution GmbH, seeks the annulment of Commission Implementing Decision C(2021) 7095 final of 28 September 2021, dismissing the administrative appeal brought under Article 22(1) of Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ 2003 L 11, p. 1) against the decision of the European Education and Culture Executive Agency (EACEA) of 2 July 2021 rejecting its application for a grant in the context of the call for proposals ‘Support for the distribution of non-national films – Distribution and Sales Agents Automatic Support’ (EACEA/22/2019) (‘the contested decision’).
Background to the dispute
2 The applicant is a company incorporated under German law which is active in the distribution and production of cinematographic works.
3 Pursuant to Commission Implementing Decision 2013/776/EU of 18 December 2013 establishing the [EACEA] and repealing Decision 2009/336/EC (OJ 2013 L 343, p. 46), the EACEA is entrusted with the management of EU programmes in the fields of education, audiovisual and culture.
4 Acting under the control of the European Commission, the EACEA acts in accordance with Regulation No 58/2003.
5 In the implementation of European programmes, the Commission entrusted the EACEA with certain management tasks for the Creative Europe Programme, established by Regulation (EU) No 1295/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Creative Europe Programme (2014 to 2020) and repealing Decisions No 1718/2006/EC, No 1855/2006/EC and No 1041/2009/EC (OJ 2013 L 347, p. 221).
6 The Creative Europe Programme is a support programme for the cultural and creative sector within the European Union. It includes, in particular, the MEDIA Sub-programme, which was entrusted to the EACEA on behalf of the Commission.
7 As part of the MEDIA Sub-programme, the EACEA published, on 19 September 2019, the call for proposals EACEA/22/2019: ‘Support for the distribution of non-national films – Distribution and Sales Agent Automatic Support’ (‘the call for proposals at issue’).
8 On 8 September 2020, the applicant submitted its application in connection with the call for proposals at issue.
9 The call for proposals at issue was accompanied by guidelines adopted on the basis of Regulation No 1295/2013 (‘the Guidelines’).
10 The Guidelines are divided into two parts. Part A sets outs general information about the objectives, priorities, criteria and rules applicable to all calls for proposals. Part B specifically concerns the call for proposals at issue.
11 Section 6.1 of Part B of the Guidelines sets out the eligibility criteria for applicants for funding. Applicants must, in particular, be ‘European companies’ within the meaning of those provisions.
12 By decision of 2 July 2021, the EACEA rejected the applicant’s application as ineligible on the ground that the applicant ‘[was] not owned, whether directly or by majority participation (i.e. majority of shares), by nationals of Member States of the European Union or nationals of the other European countries participating in the MEDIA Sub-programme’.
13 On 29 July 2021, the applicant lodged an administrative appeal with the Commission seeking a review of the legality of the EACEA’s decision of 2 July 2021 pursuant to Article 22(1) of Regulation No 58/2003.
14 By the contested decision, and after receiving the applicant’s observations, the Commission dismissed the administrative appeal referred to in paragraph 13 above and confirmed the legality of the EACEA’s decision of 2 July 2021. In essence, after establishing that the applicant’s majority shareholders were all Swiss nationals and noting that the Swiss Confederation had not participated in the funding of the MEDIA Sub-programme for the period from 2014 to 2020, the Commission concluded that the applicant could not be considered a European company within the meaning of Section 6.1 of Part B of the Guidelines.
Form of order sought
15 The applicant claims that the Court should:
– annul the contested decision;
– order the Commission to pay the costs.
16 The Commission contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
17 The EACEA contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs, including those incurred by the intervener.
Law
18 The applicant raises, in essence, five pleas in law in support of its action.
19 The first plea alleges an error of law in the definition of the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines and the annex to Commission Implementing Decision C(2019) 6151 final of 23 August 2019 on the financing of the Creative Europe Programme and the adoption of the work programme for 2020 (‘the 2020 annual work programme’). The second plea alleges an error of assessment in the application of that section to the present case. The third plea alleges breach of the principle of transparency and the principle of equal treatment and non-discrimination. The fourth plea alleges a misuse of powers. The fifth and last plea alleges a failure to observe the principle of proportionality.
The first and second pleas, alleging an error of law in the interpretation of the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines and the 2020 annual work programme, and an error of assessment in the application of those provisions to the applicant’s situation
20 The applicant submits, in essence, that the Commission made an error of law and an error of assessment in refusing to classify it as a ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines.
21 The applicant divides the first plea, alleging an error of law, into two parts. According to the applicant, the Commission, first, disregarded the literal meaning of the concept of ‘European company’, as is apparent from the wording of Section 6.1 of Part B of the Guidelines and the 2020 annual work programme, and second, adopted an interpretation of that concept which is not in line with the objectives of Regulation No 1295/2013.
22 In support of the first part of the first plea, the applicant submits, in the first place, that the Commission incorrectly interpreted the criterion relating to the nationality of the applicant company. According to the applicant, the term ‘national’ used in Section 6.1 of Part B of the Guidelines applies to both natural and legal persons, in accordance with the interpretation required by the unity of EU law, which should have led the Commission to take account, in particular, of Article 199(4) TFEU when interpreting that term.
23 In the second place, the applicant maintains, in essence, that only the direct or ‘immediate’ participation, whether it be through the ownership of all shares or the majority of shares, by the shareholders in the applicant company is relevant for the purpose of assessing its eligibility for the funding provided for in the call for proposals at issue. In particular, the concept of ‘majority participation’ provided for in Section 6.1 of Part B of the Guidelines cannot be interpreted as referring to the concept of ‘indirect’ or ‘ultimate’ ownership of the applicant company when assessing its eligibility for the purpose of those provisions. It is submitted that the concept of ‘majority participation’ therefore refers only to direct majority participation as opposed to direct ownership, which refers to the concept of ‘direct participation’ where all the shares of the applicant company are owned by one direct shareholder. Such an interpretation is consistent with the concept of ‘European company’ as stems from Article 54 TFEU.
24 In support of the second part of the first plea, the applicant submits, in essence, that the interpretation of the concept of ‘European company’ adopted by the Commission disregards the general and specific objectives of the MEDIA Sub-programme, as defined in Articles 3, 4 and 9 of Regulation No 1295/2013. Adopting the nationality of the ultimate shareholders of the applicant company as the decisive criterion without taking into account the actual impact which the invested funds might have on the European cultural and creative sector cannot achieve those objectives. In the light of the objectives pursued by that sub-programme, the main criterion for obtaining funding should be that the grants benefit European culture and the competitiveness of the European cultural and creative sector. Such a criterion is to be assessed by means of relevant indicators of the objectives sought, such as the nationality of the applicant company, the location of its registered office, the place of its strategic, operational and editorial supervision, the place where its personnel carry out their activities or the place where it is tax resident.
25 Since the objective of the MEDIA Sub-programme is to strengthen the promotion of ‘European works’, the Commission’s interpretation also results in the concept of ‘European work’, on which the Creative Europe Programme is based, being disregarded. That concept corresponds to that defined in Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) (OJ 2010 L 95, p. 1).
26 As a result of the error of law made, the applicant, in support of its second plea, argues that the Commission made an error of assessment in finding, first, that the applicant could not be regarded as ‘directly owned’, within the meaning of Section 6.1 of Part B of the Guidelines, by DCM Holding GmbH and, second, that, in order to classify the applicant as a ‘European company’ within the meaning of that provision, no account could be taken of past and future use of funds paid under the MEDIA Sub-programme.
27 The Commission, supported by the EACEA, disputes the applicant’s arguments. The Commission contends, in particular, that the first part of the first plea is inadmissible. First, the applicant did not annex to the application the Guidelines or the 2020 annual work programme alleged to have been disregarded, contrary to the requirement in Article 76(f) of the Rules of Procedure of the General Court, read in conjunction with Article 85(1) of those rules. Second, the applicant did not raise that line of argument in the context of the review initiated under Article 22(1) of Regulation No 58/2003.
Preliminary observations
28 It should be pointed out that recital 1 of Regulation No 1295/2013 states that the FEU Treaty confers on the Union the task of contributing to the flowering of cultures of Member States, while respecting their national and regional diversity and at the same time ensuring that the conditions necessary for the competitiveness of the Union’s industry exist.
29 In that context, Regulation No 1295/2013 establishes, in accordance with Articles 1 and 2 thereof, ‘the Creative Europe Programme for support to the European cultural and creative sectors … implemented for the period from 1 January 2014 to 31 December 2020’.
30 The general objectives of the Creative Europe Programme are, in accordance with Article 3 of Regulation No 1295/2013, first, to ‘safeguard, develop and promote European cultural and linguistic diversity and to promote Europe’s cultural heritage’ and, second, to ‘strengthen the competitiveness of the European cultural and creative sectors, in particular of the audiovisual sector, with a view to promoting smart, sustainable and inclusive growth’.
31 In accordance with Article 4 of Regulation No 1295/2013, the specific objectives assigned to the Creative Europe Programme include ‘support[ing] the capacity of cultural and creative sectors to operate transnationally and internationally’, ‘promot[ing] the transnational circulation of cultural and creative works’, ‘strengthen[ing] the financial capacity of [small and medium-sized enterprises] and micro, small and medium-sized organisations in the cultural and creative sectors in a sustainable way’, and ‘foster[ing] policy development, innovation, creativity, audience development and the creation of new business and management models’.
32 In accordance with Article 5(1) of Regulation No 1295/2013, the Creative Europe Programme recognises ‘the intrinsic and economic value of culture’ and, to that end, supports ‘actions and activities with a European added value in the cultural and creative sectors’.
33 The Creative Europe Programme, as stated in paragraph 6 above, contains a MEDIA Sub-programme, provided for in Article 6(a) of Regulation No 1295/2013. It is open to the participation of the Member States, in accordance with Article 8(2) of that regulation. Other European countries, listed exhaustively in paragraph 3 of that article, are also eligible to participate, provided that those countries ‘pay additional appropriations and that, for the MEDIA Sub-programme, they meet the conditions set out in [the Audiovisual Media Services Directive]’.
34 In accordance with Article 8(3)(c) of Regulation No 1295/2013 and provided that it satisfies the conditions referred to in Article 8(3), ‘the Swiss Confederation, on the basis of a bilateral agreement with that country’, is eligible to participate in the Creative Europe Programme.
35 Article 9 of Regulation No 1295/2013 defines the priorities of the MEDIA Sub-programme. Those priorities concern, first, the field of reinforcing the European audiovisual sector’s capacity to operate transnationally and, second, that of promoting transnational circulation.
36 All actions financed by the Creative Europe Programme benefit, in general, from grants, the use of which is regulated by Article 22 of Regulation No 1295/2013, which provides, in paragraph 1, that the Commission is to implement the Creative Europe Programme in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1).
37 Regulation No 966/2012 was replaced by Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1), applicable to the present proceedings.
38 Article 22(2) of Regulation No 1295/2013 provides, in that context, that the Commission is to ‘adopt by means of implementing acts an annual work programme concerning the Sub-programmes’ and states that ‘for grants, the annual work programme shall include the priorities, the eligibility, selection and award criteria, and the maximum rate of co-financing’.
39 In that regard, the 2020 annual work programme emphasises, in its first part, devoted, in particular, to the programme’s objectives and policy framework, the dual societal and economic objective of the programme, which contributes to the Commission’s policy priorities, in particular with regard to jobs, growth, investment and the digital single market.
40 The 2020 annual work programme states, in its second part, relating, inter alia, to the implementation of the Creative Europe Programme, that calls for proposals adopted in that context are financed, in particular, under the budget line titled ‘Strengthening the financial capacity for [small and medium-sized enterprises] and organisations in the European cultural and creative sectors’.
41 The 2020 annual work programme also states that certain management activities of the Creative Europe Programme, as stated in paragraph 5 above, were delegated to the EACEA and that the calls for proposals managed by the EACEA make reference to the Guidelines. It states that the guidelines ‘[provide] detailed information on application and selection procedures, criteria and other modalities relating to the calls and [aim] to assist those interested in developing projects or receiving financial support under the Programme and to help them understand its objectives and the supported actions’.
42 The 2020 annual work programme states that eligible applicants for the MEDIA Sub-programme are ‘entities (private companies, non-profit organisations, associations, charities, foundations, municipalities/Town Councils, etc.) established in one of the countries participating in [that] Sub-programme and owned directly or by majority participation, by nationals from such countries’. In that regard, the programme states that natural persons may not apply for a grant except self-employed persons or equivalent where the company does not possess legal personality separate from that of the natural person.
43 In that context, Section 2 of the call for proposals at issue, concerning the criteria for the eligibility of applicants, provides that ‘applicants must be a European cinema/theatrical distributor [and] must be registered in one of the countries participating in the MEDIA Sub-programme and owned directly or by majority participation, by nationals from such countries’. It states that, provided that it meets the conditions laid down in Article 8 of Regulation No 1295/2013, ‘the Swiss Confederation, on the basis of a bilateral agreement to be concluded with that country’ is in particular eligible.
44 In that regard, Section 6 of Part B of the Guidelines, relating to eligibility criteria, states as follows:
‘(6) ELIGIBILITY CRITERIA
Applications which comply with the following criteria will be subject to an in-depth evaluation.
6.1 Eligible applicants
…
The scheme is opened to European companies active in the audiovisual sector.
European company:
Company owned, whether directly or by majority participation (i.e. majority of shares), by nationals of Member States of the European Union or nationals of the other European countries participating in the MEDIA Sub-Programme and registered in one of these countries. …
…’
45 Lastly, Section C.3 of the eForm by means of which the applicant’s application file was submitted, in accordance with Section 6 of the call for proposals at issue and Section 3 of the Guidelines (‘the application form’), states that ‘if some shareholders of the applicant are companies [that applicant] must inform the [EACEA] [of] the names of their shareholders and state precisely on an explanatory sheet the information requested to prove that the company is held either directly or by majority share by citizens of Member States of the European Union (or by citizens of other states participating in the MEDIA Programme) and established in those countries’.
The merits of the first and second pleas
46 As a preliminary point, it should be observed that, while the 2020 annual work programme refers to the concept of ‘national’ in its definition of the eligibility criteria for the MEDIA Sub-programme, it does not define or refer to the concept of ‘European company’ in the definition of those criteria, which are set out in paragraph 42 above.
47 The applicant cannot, therefore, properly maintain that the Commission’s interpretation of the concept of ‘European company’ disregarded the literal meaning given to that concept by the 2020 annual work programme, which does not define it. Thus formulated, such a complaint is therefore irrelevant because it stems from an inaccurate reading of the text on which it is based. Moreover, the applicant does not specify which provisions of the 2020 annual work programme the Commission allegedly disregarded in its interpretation of that concept, with the result that such a complaint must, in any event, be rejected as inadmissible.
48 That said, it should be recalled that, in accordance with settled case-law, when a provision of EU law is being interpreted, account must be taken not only of its wording and the objectives it pursues, but also of its context and the provisions of EU law as a whole (see judgment of 11 March 2020, X (Recovery of additional import duties), C‑160/18, EU:C:2020:190, paragraph 34 and the case-law cited).
49 In those circumstances, as is apparent from paragraphs 48, 49 and 54 to 56 of the judgment of 29 June 2022, Leonine Distribution v Commission (T‑641/20, not published, EU:T:2022:403), having regard to the wording of Section 6.1 of Part B of the Guidelines, the aim of the Automatic Scheme for the widest possible transnational distribution of European films and the context of which that provision forms part, the concept of ‘European company’, within the meaning of that provision, must be interpreted as referring to a company in which the majority or all of the shares are held by one or more natural persons who are nationals of one of the States or countries referred to in that section, either that such natural person(s) hold(s) the capital of that company directly, where no level of shareholding exists between such natural person(s) and the company concerned, or that such natural person(s) participate(s) indirectly through a plurality of shareholding companies (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 57).
50 In that context, the grant awarded under the call for proposals at issue under the MEDIA Sub-programme benefits, to the greatest possible extent, companies owned by natural persons who are nationals of one of the Member States of the European Union or of one of the other European countries participating in that sub-programme, with the result that the European Union, in accordance with the task entrusted to it by the FEU Treaty, set out in recital 1 of Regulation No 1295/2013 and recalled in paragraph 28 above, ensures in particular that the conditions necessary for the competitiveness of its industry exist (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 58).
51 Contrary to what the applicant claims, such an interpretation responds to both the general and specific objectives, laid down by Regulation No 1295/2013, under which the Creative Europe Programme aims, in particular, as is apparent from paragraphs 30 and 31 above, to increase the competitiveness of the European cultural and creative industries by means of the sustainable reinforcement of the financial capacity of companies in those sectors (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 59).
52 The applicant’s arguments do not call that interpretation into question.
53 In the first place, as regards the applicant’s arguments raised in support of the first part of the first plea, it should be noted, first, that a company ‘owned by majority participation’, within the meaning of Section 6.1 of Part B of the Guidelines, should not be confused with a company ‘owned directly by majority participation’, as the scope of that provision would otherwise be disregarded (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 61).
54 Moreover, the application form, which must be accompanied by all of the documents referred to therein, in accordance with Section 3 of the Guidelines, relating to eligibility criteria, expressly authorises applications from companies some of the shareholders of which are also companies themselves.
55 In so far as the wording of Section 6.1 of Part B of the Guidelines expressly provides that the concept of ‘majority participation in the applicant company’ refers to the holding of the majority of the shares in that company, such an assumption will be fulfilled, a fortiori, in the event that majority participation, within the meaning of that provision, leads to all the shares in that company being held (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 53).
56 In addition, the wording of Section 6.1 of Part B of the Guidelines likewise does not, in the absence of an express statement to that effect, support the view, as taken by the applicant, that a company which is ‘directly owned’ refers, within the meaning of that provision, to a company whose shareholders directly own, in all cases, all of its shares.
57 Second, contrary to what is submitted, in essence, by the applicant, a company directly owned by a legal person with the nationality of one of the Member States of the European Union or of one of the other European countries participating in the MEDIA Sub-programme cannot be regarded, for the purpose of applying Section 6.1 of Part B of the Guidelines, as a company directly owned by one or more natural persons from those Member States or European countries. Suffice it to note, in that regard, that a natural person cannot be confused legally with a company, which is capable of constituting a legal person distinct from the natural persons of which it is composed.
58 It should also be noted that Article 199(4) TFEU, relied on by the applicant to argue that the term ‘national’ within the meaning of the Guidelines and the 2020 annual work programme also refers to legal persons, relates to the association of the Overseas Countries and Territories (OCTs) with the European Union. The applicant does not explain why the fact that, in accordance with Article 199(4) TFEU, ‘participation in tenders and supplies shall be open on equal terms to all natural and legal persons who are nationals of a Member State or of one of the countries and territories’ is relevant to the assessment of the concept of ‘national’ within the meaning of Section 6.1 of Part B of the Guidelines and the 2020 annual work programme. The applicant cannot, therefore, reasonably rely on it to argue that the term ‘national’ within the meaning of that section or the 2020 annual work programme must refer to legal persons.
59 Consequently, the Commission cannot have disregarded ‘the unity of EU law’ by not taking into account Article 199 TFEU in its interpretation of the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines.
60 In addition, although Regulation No 1295/2013 expressly recognises, in Article 5 thereof, the economic value of culture, the applicant’s interpretation, as previously set out in paragraph 57 above, would potentially lead to the financing – under an EU programme, and on a budget line dedicated to reinforcing the financial capacity of companies in the European cultural and creative sectors – of actions and activities without European added value in the cultural and creative sectors, by allowing the profits generated by such activities to benefit the ultimate shareholders of companies which are not nationals of one of the Member States of the European Union or of one of the other European countries participating in the MEDIA Sub-programme (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 63).
61 The interpretation of the concept of ‘European company’, within the meaning of Section 6.1 of Part B of the Guidelines, proposed by the applicant would therefore undermine the very purpose of the 2020 annual work programme, as set out in paragraph 39 above, which is to contribute to the Commission’s policy priorities with regard to jobs, growth and investment in the European cultural and creative industries, and its application would weaken the competitive position of European companies and the ability of the European Union to attain the objective of the Automatic Scheme, which is to provide funds to distributors and sales agents for further investment in the promotion and distribution of European films.
62 Third, it is necessary to reject as ineffective the applicant’s argument that the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines should be interpreted in the light of the first paragraph of Article 54 TFEU under which European companies are those ‘formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union’.
63 Irrespective of the applicant’s interpretation of the first paragraph of Article 54 TFEU, which defines the concept of ‘European company’, suffice it to note that that paragraph expressly reserves its application to the provisions of Chapter 2 of Title IV of the FEU Treaty, which concerns the right of establishment of nationals of a Member State in the territory of another Member State. That provision is therefore not relevant to the present dispute.
64 Fourth, contrary to the applicant’s assertion, the application form, the sole purpose of which is to enable the EACEA, by means of a table which applicants are asked to complete, to obtain the information needed to examine their applications, is not intended to lay down the eligibility criteria for the call for proposals at issue, which are set out in the relevant provisions of that call for proposals and of the Guidelines, but is intended merely to enable applicants to submit their applications in the light of those criteria.
65 In that regard, the applicant cannot reasonably maintain that the application form did not allow for ‘an interpretation of the concept of “European company” as applied by the Commission’ because, in essence, it did not enable it to appreciate that the nationality of the ultimate shareholders of the applicant company would be taken into account. That application form expressly states, as is apparent from paragraph 45 above, that, where some shareholders of the applicant company are themselves companies, the information collected must enable the applicant company to prove that it is owned directly or by majority participation by citizens, that is to say, natural persons from one of the countries participating in the MEDIA Sub-programme.
66 In addition, as regards the applicant’s arguments raised in support of the second part of the first plea, it should be observed, first, that the use by the beneficiary company of the grants awarded, under the call for proposals at issue, in the context of the MEDIA Sub-programme, which relates to the conditions governing the eligibility of actions eligible for funding in that regard, as defined, in particular, in Section 6.2 of Part B of the Guidelines, has no bearing on the assessment, and for the application, of the eligibility criteria relating to applicants, which are covered by Section 6.1 of those provisions (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 66).
67 In those circumstances, the applicant is not justified in claiming that the definition of the concept of ‘European company’ adopted in the present case disregards, in the light of the objectives of the MEDIA Sub-programme, the actual impact of the use of the funds on the audiovisual sector or that, in order to assess that concept, account should be taken of ‘[the applicant company’s] prior investment behaviour, planned investments and actual added value achieved with the funds [received in the past]’.
68 Consequently, the facts relied on in support of the second plea that the films produced by the applicant ‘are indeed paradigmatic European cultural productions’, that the applicant is committed to ‘contributing to European culture’ and that, for those reasons, the applicant is capable of achieving the objectives of the MEDIA Sub-programme, have no bearing on the applicant’s classification as a ‘European company’.
69 Second, although the priorities of the MEDIA Sub-programme are taken into account in the interpretation of Section 6.1 of Part B of the Guidelines, in particular in order to ensure the widest possible implementation of those priorities, such an interpretation cannot go beyond the actual wording of those provisions (judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 69).
70 Therefore, it cannot be inferred from the objectives assigned to the Creative Europe Programme, as set out in the articles relied on by the applicant and recalled in paragraphs 30 and 31 above, that the concept of ‘European company’, within the meaning of Section 6.1 of Part B of the Guidelines, must be interpreted as referring to a company registered in a Member State of the European Union or in a country participating in the MEDIA Sub-programme whose registered office, place of its strategic, operational and editorial supervision, place where its personnel carry out their activities or place where it is tax resident are situated in that Member State or country.
71 In that regard, the applicant submits, in particular, as it stated during the hearing, that it should be regarded as a German company and hence a European company, within the meaning of Section 6.1 of Part B of the Guidelines, on the ground that the applicant and its majority shareholders are subject to corporation tax and income tax in Germany. According to the applicant, the failure to take into account, as an eligibility criterion for the call for proposals at issue, the place where the applicant company and its shareholders are tax resident is, in essence, incompatible with the general and specific objectives of the MEDIA Sub-programme.
72 It should nevertheless be recalled, as is apparent from paragraph 49 above, that the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines refers to the nationality of the natural persons who own the majority of the shares in the company applying for the call for proposals at issue and does not refer to their tax residence. Although, as stated in paragraph 50 above, the relevant legal framework also takes account of the place of registration or establishment of that company, it does not provide for account to be taken of its place of tax residence.
73 The interpretation of Section 6.1 of Part B of the Guidelines cannot go beyond the actual wording of that provision, as pointed out in paragraph 69 above. Consequently, it cannot be inferred from the objectives assigned to the Creative Europe Programme that the concept of ‘European company’ should be interpreted as referring to a company which is registered in a Member State of the European Union and, together with the majority of its shareholders, is subject to tax in that Member State, in accordance with paragraph 70 above.
74 Therefore, it is necessary to reject the applicant’s argument that the failure to take into account the place of tax residence of the applicant company and the natural persons who own it is incompatible with the MEDIA Sub-programme of the Creative Europe Programme.
75 Moreover, it is not apparent either from Regulation No 1295/2013 or from the 2020 annual work programme that the Commission was required to take into account the place of tax residence of the applicant company or its majority shareholders as an eligibility criterion for the call for proposals at issue. The Commission enjoys a very broad discretion in establishing rules on the eligibility criteria for grant applicants. That is the case, inter alia, in the implementation of the Creative Europe Programme (see, to that effect, order of 15 November 2017, Pilla v Commission and EACEA, T‑784/16, not published, EU:T:2017:806, paragraph 97).
76 In any event, the applicant has adduced no evidence to suggest that a company which is tax resident in a Member State of the European Union or which is majority-owned by shareholders who are subject to tax in the same Member State contributes more to the objectives of the MEDIA Sub-programme than a company which is not tax resident there or whose majority shareholders are likewise not subject to tax there. Similarly, the applicant has not adduced any evidence to show that a company whose majority shareholders are nationals of a country participating in the MEDIA Sub-programme is more likely than a company whose majority shareholders are subject to tax in one of those countries to use the profits generated by participating in that sub-programme other than to strengthen European culture.
77 In those circumstances, although the Commission was not required to take into account the place of tax residence of the applicant company and the natural persons who owned it, the applicant cannot be considered a ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines, on the ground that its tax residence, like that of its shareholders, was in Germany.
78 Third, the applicant’s claim that the concept of ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines, as adopted in the present case, contradicts the concept of ‘European works’ in Regulation No 1295/2013, is also ineffective, in so far as the former concept is to be interpreted in the light of the definition given in Article 1(1)(n) of the Audiovisual Media Services Directive, read in conjunction with Article 1(3) of that directive.
79 In that regard, it should be noted that Article 1(1)(n) of the Audiovisual Media Services Directive defines the concept of ‘European works’ as including, inter alia, ‘works originating in Member States’ and ‘works originating in European third States party to the European Convention on Transfrontier Television of the Council of Europe and fulfilling the conditions of paragraph 3’.
80 Article 1(3) of the Audiovisual Media Services Directive provides as follows:
‘The works referred to in [point (n)] … of paragraph 1 are works mainly made with authors and workers residing in one or more of the States referred to in those provisions provided that they comply with one of the following three conditions:
(i) they are made by one or more producers established in one or more of those States;
(ii) the production of the works is supervised and actually controlled by one or more producers established in one or more of those States;
(iii) the contribution of co-producers of those States to the total co-production costs is preponderant and the co-production is not controlled by one or more producers established outside those States.’
81 Thus, the fact, relied on by the applicant, that it follows from Article 1(1)(n) of the Audiovisual Media Services Directive, read in conjunction with Article 1(3) of that directive, that ‘participations in the production company or its corporate structure, let alone the origin of the ultimate shareholders, do not factor into the qualification of the work’ cannot, in any event, preclude the shareholder structure of that company from being taken into account for the purpose of defining the concept of a ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines. Neither the purpose or effect of those provisions of that directive is to define the nationality of the shareholders of those companies producing or distributing European works within the meaning of that directive, or the arrangements for owning the shares in those same companies.
82 In that regard, the fact that the Commission, in its interim assessment report on the Creative Europe Programme for 2014 to 2020, addressed to the European Parliament and the Council, stated that the MEDIA Sub-programme ‘[would] support the strengthened promotion of European works envisaged by the Audiovisual Media Services Directive’, cannot be relied on to establish that the concept of ‘European company’, within the meaning of Section 6.1 of Part B of the Guidelines, had to take account of the concept of ‘European works’ within the meaning of that directive. The objective thus defined concerns the transmission of the production of European works and cannot, in any event, suffice to define the latter concept (see, to that effect, judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraphs 79 and 80).
83 While neither Section 6.1 of Part B of the Guidelines nor any provision of Regulation No 1295/2013 on the basis of which those guidelines were adopted refers to the Audiovisual Media Services Directive in order to define the concept of ‘European company’, the applicant has not adduced any relevant evidence to demonstrate that the contested decision, in so far as it applied that section, should have taken account of that directive.
84 In those circumstances, the applicant is not justified in claiming that it should have been regarded, for the application of Section 6.1 of Part B of the Guidelines, as being ‘directly owned’ by DCM Holding, on the ground that it is ‘of German nationality as it is registered, was established, has its headquarters and operates in Berlin, Germany’.
85 In that regard, it is apparent from the file and it is not disputed that, while all of the shares in the applicant are owned by DCM Holding, the shares in DCM Holding are itself owned in equal shares by four companies, each of which is 100% owned by natural persons of Swiss nationality. The applicant expressly acknowledges that ‘the natural persons behind these four companies are all natural persons of Swiss nationality’.
86 However, it is common ground that the Swiss Confederation did not conclude an agreement with the European Union for the period from 2014 to 2020 under the Creative Europe Programme and that it did not contribute to its financing. Applicant companies owned by Swiss nationals, at the date of the contested decision, could not therefore be permitted, in accordance with Article 8(3)(c) of Regulation No 1295/2013, to participate in the MEDIA Sub-programme.
87 It is thus apparent from the applicant’s capital structure that, unlike a ‘European company’ within the meaning of Section 6.1 of Part B of the Guidelines, as defined in paragraph 49 above, it is not directly owned by natural persons with the nationality of a Member State of the European Union or of another European country participating in the MEDIA Sub-programme.
88 In the light of all of the foregoing, the Commission did not make an error of law or assessment in confirming the EACEA’s assessment and the applicant’s ineligibility for the call for proposals at issue by finding that its ultimate shareholders were all Swiss nationals, with the result that, since the Swiss Confederation did not participate in the financing of the Creative Europe Programme for the period from 2014 to 2020 or conclude for that purpose an agreement with the European Union, it could not be regarded as being owned directly or by majority participation by nationals of a Member State or another European country participating in the MEDIA Sub-programme.
89 In those circumstances, the first and second pleas must be rejected, without it being necessary to rule on the admissibility of the first part of the first plea.
The third plea, alleging breach of the principle of transparency and of the principle of equal treatment and non-discrimination
90 The applicant submits that the contested decision is in breach of the principle of transparency, the principle of equal treatment and non-discrimination, as defined in Articles 188 and 197 of Regulation 2018/1046, and the principle of equality before the law guaranteed by Article 20 of the Charter of Fundamental Rights of the European Union. According to the applicant, the difference in treatment consequently results in a disadvantage which is neither justified nor proportionate to the objective that such treatment is supposed to pursue.
91 The applicant puts forward four arguments.
92 First, the applicant submits that, in the light of the objectives of Regulation No 1295/2013, it is in a situation comparable to that of companies which are majority-owned by nationals of the Federal Republic of Germany, since it has, in accordance with Article 54 TFEU, its registered office, administration, principal place of business, and, furthermore, its tax residence, in that Member State. In the light of those factors attesting to its ‘link’ to Germany, the applicant submits that it should be regarded as a ‘European company’ for the purposes of eligibility for the MEDIA Sub-programme.
93 Second, the very wording of the Guidelines results, according to the applicant, in a breach of the principle of equal treatment as between a publicly listed company, the nationality of which is determined according to the location of the stock exchange, and a company, such as the applicant, the nationality of which, for the purpose of assessing its eligibility for financing, does not take account of such a factor.
94 Third, the applicant argues that the difference in treatment results in a disadvantage for the applicant, since it does not have access to the funding provided for in the call for proposals at issue for the distribution of European films at film markets. According to the applicant, that disadvantage is all the more detrimental for the applicant as it is also ineligible for funding in the country of origin of its majority owners, because it has neither its seat nor its residence in Switzerland.
95 Fourth, the difference in treatment resulting from the contested decision is neither justified nor proportionate to the aims pursued by the MEDIA Sub-programme as defined in Regulation No 1295/2013, since, in essence, it has no relevance for the creative quality and output of the applicant company.
96 The Commission, supported by the EACEA, disputes the applicant’s arguments.
97 Article 20, headed ‘Equality before the Law’, of the Charter of Fundamental Rights, provides that ‘everyone is equal before the law’.
98 In accordance with Article 188(a) of Regulation 2018/1046, grants are subject to the principle of equal treatment.
99 As regards the eligibility criteria for the grant award procedure, Article 197 of Regulation 2018/1046 is worded as follows:
‘1. The eligibility criteria shall determine the conditions for participating in a call for proposals.
2. Any of the following applicants shall be eligible for participating in a call for proposals:
(a) legal persons;
…
3. The call for proposals may lay down additional eligibility criteria which shall be established with due regard for the objectives of the action and shall comply with the principles of transparency and non-discrimination.
…’
100 It follows from settled case-law that the principle of equal treatment and non-discrimination requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (see judgment of 14 April 2005, Belgium v Commission, C‑110/03, EU:C:2005:223, paragraph 71 and the case-law cited; judgment of 26 September 2013, IBV & Cie, C‑195/12, EU:C:2013:598, paragraph 50).
101 A breach of the principle of equal treatment as a result of different treatment thus presupposes that the situations concerned are comparable, having regard to all the elements which characterise them. It must be recalled that the elements which characterise different situations, and hence their comparability, must in particular be determined and assessed in the light of the subject matter and purpose of the European Union act which makes the distinction in question. The principles and objectives of the field to which the act relates must also be taken into account (judgment of 26 September 2013, IBV & Cie, C‑195/12, EU:C:2013:598, paragraphs 51 and 52).
102 The principle of equal treatment between candidates in a procedure for the award of grants also implies an obligation of transparency in order to enable verification that it has been complied with (see, by analogy, judgment of 12 December 2002, Universale-Bau and Others, C‑470/99, EU:C:2002:746, paragraph 91 and the case-law cited).
103 As a preliminary point, it should be noted that the applicant does not support its complaint alleging breach of the principle of transparency with any arguments that are different from those relied on in support of its complaints alleging breach of the principle of equal treatment and non-discrimination. Furthermore, it does not dispute the EACEA’s claims that the documents relating to the call for proposals at issue were adequately publicised and that the eligibility criteria were drafted in such a way as to ensure that all similar cases were treated in the same way.
104 That said, it should be observed, in the first place, that the complaint alleging breach of the principle of equal treatment and non-discrimination is based on a false premiss. As noted in paragraphs 62 and 63 above, the Commission was not required to take account of the criteria set out in Article 54 TFEU, as recalled in paragraph 92 above, in order to assess the eligibility criteria for the MEDIA Sub-programme set out in Section 6.1 of Part B of the Guidelines and to apply them to the applicant's case. The applicant cannot therefore reasonably argue that by meeting the criteria set out in Article 54 TFEU, it is, for that reason, in a comparable situation to companies which are owned by nationals of a Member State and which meet, therefore, the criteria set out in Section 6.1 of Part B of the Guidelines.
105 Furthermore, all of the criteria set out in Article 54 TFEU, which relate, in essence, to the conditions for establishing a company, clearly cannot correspond to the first of the two cumulative criteria set out by Section 6.1 of Part B of the Guidelines, relating to the nationality of the natural persons who directly or by majority participation own that company. Compliance with the criteria relied on by the applicant cannot therefore lead to the conclusion that, in the light of the definition of a ‘European company’, the applicant is in situation comparable to that of a company meeting all of the criteria laid down by that provision.
106 In any event, it should be noted that, in the light of the objective of the Creative Europe Programme, recalled in paragraph 51 above, of strengthening the competitiveness of the European cultural and creative sectors, in particular that of the audiovisual sector, through the sustainable reinforcement of the financial capacity of companies in those sectors, a company, such as the applicant, owned by majority participation by nationals of a third country, here by shareholders of Swiss nationality, the Swiss Confederation cannot be regarded either as being in a situation comparable to that of a company owned by majority participation by nationals of a Member State or as being in a situation comparable to that of a company owned by nationals of another European country participating in the financing of the MEDIA Sub-programme, since the Swiss Confederation, as noted in paragraph 86 above, did not participate in the financing of that programme over the period covered by the contested decision.
107 Moreover, the fact that the tax residence of the applicant’s shareholders is in Germany also has no bearing on the assessment of their nationality, with the result that the applicant cannot, for that reason, be in a situation comparable to that of a company owned directly or by majority participation by German nationals.
108 In the second place, Section 6.1 of Part B of the Guidelines states, as regards the concept of ‘European company’, that ‘when a company is publicly listed, the location of the stock exchange will be taken into account to determine its nationality’.
109 Although the applicant submits that, in the light of the rule laid down in Section 6.1 of Part B of the Guidelines for determining the nationality of a publicly listed company, the Commission treated comparable situations unequally, suffice it to note that the Commission did not apply that rule in support of the contested decision. Such a complaint is therefore ineffective for the purpose of assessing the present plea, alleging that the Commission’s interpretation of the concept of ‘European company’ within the meaning of that provision was contrary to the principles of transparency, equal treatment and non-discrimination. In any event, the applicant’s situation cannot be compared to that of a publicly listed company, which, unlike the applicant, is open to public participation.
110 Moreover, as the Commission observes, in order to assess whether a publicly listed company qualifies as a ‘European company’, the Guidelines do not preclude criteria other than the location of the stock exchange being taken into account, since the rule laid down in Section 6.1 of Part B of the Guidelines for determining the nationality of such a company merely requires that the location of the stock exchange be taken into account and does not make that location an exclusive criterion for assessing the nationality of such a company for the purpose of applying the eligibility criteria.
111 In those circumstances, the Commission, by the contested decision, did not treat comparable situations differently by confirming the EACEA’s decision to regard the applicant as ineligible for the call for proposals at issue on the ground that it was not owned either directly or by majority participation by nationals of a Member State or of another European country participating in the MEDIA Sub-programme.
112 In the third and last place, since the breach of the principle of equal treatment and non-discrimination alleged by the applicant has not been established, the applicant cannot reasonably plead damage allegedly resulting from a difference in treatment which was neither justified nor proportionate to the aim pursued.
113 In the light of all of the foregoing, the third plea must be rejected.
The fourth plea, alleging a misuse of powers
114 The applicant submits that the Commission, by ‘choosing an interpretation of the concept of European company that disregards EU law where several alternative interpretations are available’, misused its powers. It refers in that regard to the arguments it put forward in support of the first three pleas.
115 The Commission, supported by the EACEA, disputes the applicant’s arguments.
116 In the present case, it is apparent from the analysis of the first three pleas in the present action that the Commission did not make an error of law or assessment in its interpretation and application of the concept of ‘European company’ in support of the contested decision. Furthermore, the applicant’s plea is not accompanied by any evidence that is specific or distinct from that put forward in support of its first three pleas.
117 In those circumstances, the fourth plea must be rejected.
The fifth plea, alleging a failure to observe the principle of proportionality
118 The applicant submits that it would have been sufficient, in order to ensure that the MEDIA Sub-programme funds had been used in accordance with the objectives of Regulation No 1295/2013, for the Commission to award it the requested grant subject to the reservation, first, that it can subsequently justify its use and, second, that the transfer of profits to third countries is prevented, failing which the grant would have to be repaid.
119 Consequently, the applicant maintains that the ‘general’ refusal of its request for funding without examining the actual use of the funds is contrary to the principle of proportionality, expressly laid down by Article 5(4) TEU.
120 The Commission, supported by the EACEA, disputes the applicant’s arguments. In particular, the Commission contends that the plea is inadmissible on the ground that it was not raised in the applicant’s administrative appeal pursuant to Article 22(1) of Regulation No 58/2003.
121 It should be recalled that the principle of proportionality, as a general principle of EU law, requires that acts adopted by EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question; where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. That principle is recalled in Article 5(4) TEU and in Article 1 of Protocol (No 2) on the application of the principles of subsidiarity and proportionality, annexed to the EU Treaty and the FEU Treaty (judgments of 4 June 2020, Hungary v Commission, C‑456/18 P, EU:C:2020:421, paragraph 41, and of 20 September 2011, Evropaïki Dynamiki v EIB, T‑461/08, EU:T:2011:494, paragraph 142).
122 Suffice it to note that none of the provisions of the legislation applicable to the present dispute provides for the possibility, and a fortiori the obligation, to grant provisional funding to any company applying for the call for proposals at issue. The award of the grant is conditional on compliance with the eligibility conditions applicable to applicants and not, in any event, on the subsequent verification of the use of the grant awarded under the call for proposals at issue (see, to that effect, judgment of 29 June 2022, Leonine Distribution v Commission, T‑641/20, not published, EU:T:2022:403, paragraph 143).
123 In the present case, since the applicant did not meet the eligibility criteria laid down in Section 6.1 of Part B of the Guidelines, the Commission was required to confirm the EACEA’s position to reject the applicant’s application in the call for proposals at issue, and the fact that it did not take account of the use of the funds previously received or the proposed use of the funds requested cannot, therefore show that for that reason the contested decision was disproportionate.
124 In the light of the foregoing, the fifth plea must be rejected, without it being necessary to rule on its admissibility.
125 Accordingly, the action must be dismissed in its entirety.
Costs
126 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.
127 Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.
128 The EACEA is to bear its own costs, in accordance with Article 138(1) of the Rules of Procedure.
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1. Dismisses the action;
2. Orders DCM Film Distribution GmbH to bear its own costs and to pay those incurred by the European Commission;
3. Orders the European Education and Culture Executive Agency (EACEA) to bear its own costs.
Marcoulli | Schwarcz | Valasidis |
Delivered in open court in Luxembourg on 11 October 2023.
V. Di Bucci | | S. Papasavvas |