Case T‑268/21
(publication by extracts)
Ryanair DAC
v
European Commission
Judgment of the General Court (Tenth Chamber), 24 May 2023
(State aid – Italian air transport market – Compensation scheme for airlines with an Italian operating licence – Decision not to raise any objections – Aid intended to make good the damage caused by an exceptional occurrence – Obligation to state reasons)
1. Action for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision finding State aid compatible with the internal market without opening the formal investigation procedure – Action by interested parties within the meaning of Article 108(2) TFEU – Action designed to safeguard the procedural rights of the persons concerned – Whether permissible
(Arts 108(2) and (3) and 263, fourth para., TFEU; Council Regulation 2015/1589, Art. 1(h))
(see paragraphs 10-15)
2. Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Decision not to open the formal investigation procedure – Brief summary of reasons leading the Commission to conclude that there were no serious difficulties assessing compatibility of the aid concerned with the internal market – None –Insufficient statement of reasons
(Art. 296, second para., TFEU)
(see paragraphs 20-38)
Résumé
The General Court annuls the Commission’s decision to approve an aid measure consisting in subsidies paid by Italy to Italian airlines in the context of the COVID-19 pandemic
The Commission failed to provide a statement of reasons for its finding that the measure at issue was not contrary to EU law provisions other than those governing State aid
In October 2020, the Italian Republic notified the European Commission of an aid measure consisting in subsidies paid out of a EUR 130 million compensation fund to certain airlines holding an Italian licence (‘the measure at issue’). That measure was intended to make good the damage suffered by eligible airlines as a result of travel restrictions and other containment measures taken to limit the spread of the COVID-19 pandemic.
Under one of the conditions of eligibility provided for by the measure at issue, in order to benefit from it, airlines had to apply to their employees whose home base was in Italy and to employees of third-party undertakings taking part in their activities remuneration equal to or higher than the minimum remuneration established by the national collective agreement applicable to the air transport sector, concluded by the employers’ organisations and trade unions considered to be the most representative at national level (‘the minimum remuneration requirement’).
Without opening the formal investigation procedure provided for Article 108(2) TFEU, the Commission decided not to raise objections to the measure at issue, on the ground that it was compatible with the internal market. (1)
An action for annulment was brought by the airline Ryanair before the General Court, who annuls that decision on grounds of failure to provide a statement of reasons, as provided for in Article 296 TFEU.
Findings of the Court
According to settled case-law, a decision not to initiate the formal investigation procedure in respect of notified aid must set out the reasons for which the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market. Although a succinct statement of reasons is sufficient for that purpose, it must disclose in a clear and unequivocal fashion the reasons for which the Commission considered that it was not faced with such difficulties.
The Court finds that that has not been done here, however.
First of all, it observes that, in the contested decision, the Commission affirmed both that the minimum remuneration requirement was indissolubly linked to the measure at issue and that that requirement was not inherent in the objective of that measure without, however, setting out in a clear and unequivocal manner the reasoning which led it to make those two statements.
The Court further finds that the conclusion in the contested decision, to the effect that the minimum remuneration requirement was not contrary to ‘other provisions of Union law’ than Articles 107 and 108 TFEU, was also vitiated by a failure to state reasons.
On that point, it observes that the only EU law provision, other than Articles 107 and 108 TFEU, in the light of which the Commission examined that requirement was Article 8 of the Rome I Regulation, (2) which lays down special conflict-of-law rules relating to individual contracts of employment. However, the Commission still failed to set out, in the contested decision, the reasons substantiating its view that that article was the only relevant provision, other than Articles 107 and 108 TFEU, in the light of which it had to examine the compatibility of the minimum remuneration requirement with EU law. Accordingly, the Commission failed to set out in a clear and transparent manner the reasons why it had found that that requirement did not constitute an infringement of ‘other provisions of Union law’.
That failure to state reasons is illustrated by the fact that, when examining the minimum remuneration requirement, the Commission took account of a complaint filed by the Italian Low Fares Airline Association contesting the compatibility of Italian rules providing for a minimum remuneration requirement similar to that included in the measure at issue with the freedom to provide services under Article 56 TFEU. In view of that context, the Commission was a fortiori in a situation in which it had to rule on the relevance of Article 56 TFEU for the purposes of its examination of the compatibility of the measure at issue with the internal market.
In the light of the foregoing, the Court concludes that the Commission infringed the obligation to state reasons imposed on it by Article 296 TFEU and, consequently, annuls the contested decision.