CJ, 14-09-2023, nr. C-466/21 P

The Commission maintains that the General Court interpreted the concept of ‘indirect competitor’ too broadly, which led it to conclude incorrectly that DLH was an ‘interested party’ within the meaning of the case-law of the Court of Justice. On the one hand, the General Court failed to observe the requirements set out in the judgments in Kronoply and Austria v Scheucher-Fleisch and Others,14.in which, as regards proof of the existence of indirect competition, the Court of Justice held that it was necessary to show, first, that the beneficiary of the aid and the indirect competitor were in a competitive relationship, at least with respect to a part of their activities, and, secondly, that the aid is such as to affect the competitive position of that competitor. On the other hand, the General Court failed to ascertain the actual effects of the aid in question on Frankfurt Main airport, in particular on its profitability, and on the flights provided both by DLH from Frankfurt Main airport and by Ryanair from Frankfurt-Hahn airport.

Although it is true, as the Commission states, that in paragraphs 45 and 46 of the judgment under appeal the General Court appears to have sought to characterise the relationship between the beneficiary of the aid at issue, FFHG, and the applicant, DLH, as being one of indirect competition, the interpretation in the case-law, as regards the question whether an undertaking which is not a direct competitor of the beneficiary of the aid is an ‘interested party’, is far more extensive than that put forward by the Commission.

As regards the first complaint, by which the Commission criticises the General Court for not having considered that the existence of indirect competition presupposes that the applicant and the beneficiary of the aid are in competition at least with respect to a part of their activities, it should be noted that that complaint is based on the judgments in Kronoply and Austria v Scheucher-Fleisch.

I do not believe that the Commission's proposed interpretation of those judgments can be endorsed by the Court.

In the judgment in Kronoply, the Court categorised as an ‘interested party’ an undertaking which was not a direct competitor of the beneficiary of the aid but required the same raw material for its production process. However, it is not at all apparent from that judgment that, in so doing, the Court intended to limit recognition of that status, in a general manner, solely to undertakings which were in a competitive relationship with the beneficiary of the aid, at least with respect to a part of their activities.

In the case that gave rise to the judgment in Austria v Scheucher-Fleisch, the aid in question consisted in subsidies granted under a programme intended to encourage the production, treatment, processing and sale of agricultural products in Austria by means of a quality label and benefited all undertakings operating in the chain specific to that label, including certain slaughtering and butchering undertakings and their retail customers.

The applicants, which were undertakings specialising in the slaughter and butchering of animals that were not entitled to use that label, were held to be interested parties, as direct competitors of undertakings engaged in the same activity and entitled to use the quality label as well as indirect competitors of retailers using that label. The Court thus recognised that undertakings, such as the applicants, which did not operate at the same stage of production as retailers and, consequently, were not in a competitive relationship with them in relation to any part of their activities, may have the status of indirect competitors. 15.

Moreover, those judgments are part of a line of case-law in which the Court has, in my view, considered that undertakings which are not direct competitors of a beneficiary have the status of ‘interested party’ in a wider range of situations than that claimed by the Commission in the present case. A good illustration of that approach by the Court is set out in the judgment in 3F.

The case giving rise to that judgment concerned Danish rules, including fiscal measures, applicable to the Danish International Register of Shipping. In accordance with those rules, that register allowed shipowners whose vessels were registered in it to employ seafarers who were nationals of non-member countries and to pay them wages on the basis of their national laws that were lower than the wages which would have been paid under Danish law. In addition, all seafarers employed on those vessels were exempted from income tax, which meant that the seafarers' wage claims against the shipowners were reduced.

In its judgment, the Court accepted that a seafarers' trade union could be categorised as an ‘interested party’ on the ground that the aid in question was likely to have a specific effect on its situation and that that effect concerned its ‘competitive position’ not on the market in which the shipowners operated, but on the market for the supply of labour vis-à-vis other seafarers' trade unions whose members were employed on vessels entered in the abovementioned register. 16.

Considered together with the judgments in Kronoply and Austria v Scheucher-Fleisch, the judgment in 3F could indicate that the concept of ‘interested party’ requires proof that the grant of aid has an effect on the applicant's competitive position, irrespective of whether that effect concerns a different market from that on which the beneficiary of the aid operates.

Moreover, the recent judgment delivered by the Court in Ja zum Nürburgring v Commission17. seems to have considerably broadened the scope of that concept.

In that judgment, the appellant association was recognised as an ‘interested party’ on the ground that the aid in question had been granted, in the context of the sale of the assets of the Nürburgring complex, to a private undertaking seeking to maximise profits and that this undermined the applicant's general interest objectives, as well as its very existence, which was specifically linked to the Nürburgring race track. 18.

Consequently, the Commission's complaint that the General Court erred in law in not requiring DLH to prove that it is in competition, if only partial, with Frankfurt-Hahn airport cannot, in my view, be upheld.

Concerning the second complaint, by which the Commission criticises the General Court for implicitly considering that it is not necessary to ascertain the actual effects produced by the grant of the aid for the purposes of categorising as an ‘interested party’ an undertaking which is not in competition with the beneficiary of the aid, it should be pointed out that the Commission refers once again to the judgments in Kronoply and Austria v Scheucher-Fleisch.

In my view, those judgments cannot serve to demonstrate that, in order to adopt a correct interpretation of the concept of ‘interested party’, the General Court should have ascertained the effects of the aid in question on Frankfurt Main airport, in particular on its profitability, and on the flights provided both by DLH from Frankfurt Main airport and by Ryanair from Frankfurt-Hahn airport.

As regards the first of those judgments, the Court of Justice upheld the General Court's reasoning to the effect that the applicants had demonstrated that there had been an increase in the price of wood and that, despite the fact that those applicants had not established that such an increase was the result of the aid in question, it could not be ruled out that there had been negative effects for them. Far from making a finding concerning an actual effect of the grant of the aid, the Court of Justice referred to the increase in the price of wood solely for the purpose of strengthening its conclusion that there was a purely potential adverse effect on the applicants' market position as a result of the grant of that aid. 19.

As regards the second judgment, none of the paragraphs in it seems to me to contain a finding by the Court that the aid for retailers had actual effects on the applicants (slaughtering and butchering undertakings not entitled to use the label).

Moreover, the judgments in 3F and Nürburgring, examined above, only confirm that a finding that the aid has actual effects is not necessary for the purpose of concluding that an undertaking which is not a direct competitor of the beneficiary may be categorised as an ‘interested party’.

In my view, this second complaint cannot therefore be upheld.

The Commission argues that the General Court misinterpreted the concept of ‘interested party’ in that it did not require DLH to demonstrate that the grant of the aid in question affected ‘its legal interests or its legal situation’.

In that regard, it is important to recall that the Court of Justice has consistently held that the concept of ‘interested party’ applies, inter alia, to an undertaking which is not a direct competitor of the beneficiary of the aid, provided that it demonstrates that ‘its interests could be adversely affected by the grant of the aid’ and, for that purpose, ‘establishes, to the requisite legal standard, that the aid is likely to have a specific effect on its situation’. 20. However, it does not seem to me to follow from that case-law that only undertakings whose legal interests or legal situation are likely to be affected may be recognised as having the status of ‘interested party’.

In support of its interpretation, the Commission cites the judgments in 3F and Nürburgring. With regard to the first judgment, it appears to take the view that the appellant, a seafarers' trade union, was recognised as having the status of ‘interested party’ on the ground that the grant of the aid had affected its legal situation by altering its negotiating position vis-à-vis certain Danish shipowners, which, in my view, reflects a misunderstanding of the judgment. As already explained above, that status derived, according to the Court of Justice, from the effect on that union's competitive position in relation to other seafarers' trade unions in the negotiation of collective agreements, which had consequent repercussions on that union as regards its ability to recruit members. 21. In those circumstances, no change in the appellant's legal situation was required. As regards the second judgment, the Commission maintains that the change in the legal situation allowing the conclusion that the appellant is an ‘interested party’ is explained by the fact that the general interest objective pursued by that appellant had been rendered ‘legally impracticable’ in so far as the beneficiary of the aid and purchaser of the Nürburgring complex was a private undertaking. Thus, the Commission appears to be alluding to the fact that the grant of the aid in question might result in a future change in the appellant's legal status. For my part, I am of the view that the Court's conclusion is based on the incompatibility between the objective pursued by the appellant and the objective of the undertaking receiving the aid, to the exclusion of any consideration relating, for example, to the possible winding-up of the appellant subsequently. 22.

Moreover, the irrelevance of the criterion relating to a change in an applicant's legal interests or legal situation in the context of that assessment should be of no surprise. As explained earlier in this Opinion, locus standi as an ‘interested party’, in relation to a decision declaring aid to be compatible at the end of the preliminary examination procedure for aid, is intended to relax the condition requiring an applicant to be ‘individually concerned’ for the purposes of the fourth paragraph of Article 263 TFEU, as interpreted by the Court in the Plaumann line of case-law. Accordingly, the status of ‘interested party’ is an expression of the relevant legal test for assessing the condition of individual concern laid down by the FEU Treaty. As already explained, individual concern relates to the applicant's factual situation and not to his or her legal situation.

In view of the foregoing, the General Court did not err in law in categorising DLH as an ‘interested party’ solely on the basis of its economic interests.

The other complaints put forward by the Commission in that regard cannot, in my view, cast doubt on the interpretation proposed.

Contrary to the view taken by the Commission, the requirement for the applicant's legal interests or legal situation to be affected cannot be inferred from a parallel with the case-law on direct effect for the purposes of the fourth paragraph of Article 263 TFEU, 23. from a parallel with the case-law relating to the concept of ‘interest in the result of a case’, as set out in the second paragraph of Article 40 of the Statute of the Court of Justice of the European Union, or from the judgment in Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci (‘the judgment in Montessori ’)24.

The first line of case-law concerns the interpretation of the condition of being ‘directly concerned’ and is therefore of no relevance, for the reasons set out above.

The second line of case-law concerns a provision of the Statute of the Court according to which the right to intervene in cases before the Court of Justice of the European Union is open to the bodies, offices and agencies of the Union and to any other person which can establish an interest in the result of a case. According to that settled case-law, an interest in the result of a case must be understood as being a direct and present interest in the granting of the form of order sought by the party whom the prospective intervener wishes to support, which means it is necessary to ascertain whether the applicant for leave to intervene is directly affected by a Commission decision and whether its interest in the result of the case is established. As the Commission points out, the Court has made it clear that, in principle, an interest in the result of the case can be considered to be sufficiently direct only to the extent to which that result is likely to alter the legal position of the person seeking leave to intervene. 25. However, that assessment is analogous to that of direct effect for the purposes of the fourth paragraph of Article 263 TFEU and, as such, cannot be transposed to the context of the interpretation of the concept of ‘interested party’. In any event, that interpretation is the outcome of a balance, specific to interventions, struck between the requirement to facilitate assessment of the context of cases and the requirement to avoid multiple individual interventions which would compromise the effectiveness and proper course of the procedure. 26.

The judgment in Montessori27. is irrelevant in this context, as the Court has already ruled in the judgment in Nürburgring. The judgment in Montessori did not discuss whether a person or undertaking was an ‘interested party’, but instead whether, in the light of a Commission decision which left intact all of the effects of the national measures at issue establishing an aid scheme, the legal position of a complainant who alleged that those measures placed it at a competitive disadvantage had been directly affected. 28.

The Commission and the Land also criticise a number of aspects of the General Court's findings concerning the relationship between DLH and Ryanair, set out in paragraphs 51 to 54 of the judgment under appeal.

The Commission submits principally that, as regards the existence of competition between DLH and Ryanair, in paragraphs 52 and 53 of the judgment under appeal the General Court failed to observe the obligation to address all of its arguments.

First of all, it must be remembered that, in the context of an appeal, the purpose of review by the Court of Justice is inter alia to ascertain whether the General Court addressed, to the requisite legal standard, all the arguments put forward by the appellant. Moreover, it must be pointed out that the plea alleging that the General Court failed to address arguments relied on at first instance amounts essentially to relying on non-observance of the obligation to state reasons which derives from Article 36 of the Statute of the Court of Justice of the European Union, applicable to the General Court by virtue of the first paragraph of Article 53 of that statute, and from Article 117 of the Rules of Procedure of the General Court. It is important to add, however, that, in accordance with the settled case-law of the Court of Justice, the General Court is not required to provide an account which follows exhaustively and one by one all the arguments put forward by the parties to the case, and that the General Court's reasoning may therefore be implicit, as long as it enables the persons concerned to know why it has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review. 29.

It should be noted that, in its pleadings at first instance, the Commission strongly disputed the claim that the flights offered by Ryanair from Frankfurt-Hahn airport were in competition with the flights to the same destinations offered by DLH from Frankfurt Main airport.

In that regard, the Commission had in particular pointed out, first, that DLH used Frankfurt Main airport as a hub and that the vast majority of its passengers were transit passengers, whereas Ryanair operates low-cost flights from Frankfurt-Hahn airport in the context of ‘point-to-point’ traffic and, secondly, that the alleged evidence adduced by DLH before the General Court did not contain any information supporting the existence of such competition, such as data on changes in passenger numbers and the profitability of air routes operated by DLH in parallel with Ryanair. 30.

The paragraphs of the judgment under appeal referred to in the Commission's complaints, in particular paragraph 52 thereof, reflect an almost presumptive approach concerning the issue of the existence of competition between DLH and Ryanair, with the General Court merely affirming that the fact that the destinations served by those companies are the same ‘is such as to indicate that competition exists’. It seems to me that, in so doing, the General Court cannot be regarded as having implicitly addressed the arguments put forward by the Commission, which specifically sought to call into question whether there is necessarily a link between the premiss (the fact that the destinations served are the same) and the conclusion (the existence of competition). In my view, therefore, that reasoning can in no way be regarded as sufficient to enable the Commission to understand why its arguments were rejected and to enable the Court of Justice to exercise its power of judicial review.

It follows that the reasoning set out in paragraphs 51 to 54 of the judgment under appeal is vitiated by a failure to state reasons and that, consequently, the Court should uphold the present complaint.

In the light of that conclusion, it is not necessary to examine the other complaints put forward by the Land and the Commission relating to that part of the General Court's reasoning.

The Commission complains, in essence, that the General Court relied on the alleged competition between Frankfurt Main airport and Frankfurt-Hahn airport and on the impact of the aid at issue on Frankfurt Main airport in order to establish the admissibility of DLH's action, although no such arguments were put forward in the application for annulment.

Although the Commission relies on an infringement of the rules governing the burden of proof, it seems to me that a closer examination of the Commission's complaint reveals that it is rather intended to challenge the General Court's disregard of the rule that the parties should be heard.

I point out here that, according to the case-law of the Court, the rule that the parties should be heard does not merely confer on each party to proceedings the right to be apprised of the documents produced and observations made to the Court by the other party and to discuss them. It also implies a right for the parties to be apprised of the matters raised by those courts of their own motion, on which they intend basing their decision, and to discuss them. In order to satisfy the requirements relating to the right to a fair hearing, it is important for the parties to be apprised of, and to be able to debate and be heard on, the matters of fact and of law which will determine the outcome of the proceedings. 31.

In paragraph 50 of the judgment under appeal, the General Court seems to consider that the airports of Frankfurt-Hahn and Frankfurt Main are competitors.

In the part of its application concerning the admissibility of its action for annulment, DLH makes no mention of competition between those two airports and puts forward a line of argument based almost solely on the competitive relationship between it and Ryanair.

It should be noted that, in the introductory part of that application (paragraph 48), as well as in the part concerning the merits of the decision at issue (paragraphs 117 and 118), DLH seeks to demonstrate that the subsidy to Ryanair by FFHG enabled that airline to move to larger airports, in particular Frankfurt Main airport, and that the manager of the latter airport is now pursuing a strategy of attracting low-cost airlines. In that context, DLH criticises the Commission's delimitation of the catchment area of Frankfurt-Hahn airport in its analysis of the compatibility of the aid in question with the internal market, and in particular paragraph 46 of the decision at issue.

I consider, however, that, in those circumstances, only a particularly sympathetic interpretation of that application, requiring a logical approach aimed at uncovering the implicit but necessary meaning of its wording, could lead to the inference that DLH considers that those two airports are in a competitive relationship and therefore result in that factor being taken into account in the assessment of whether DLH has demonstrated to the requisite legal standard that the aid in question is likely to have a specific effect on its situation.

Since the General Court thus infringed the rule that the parties should be heard, I propose that the Court uphold the present complaint.

The Land argues that the General Court erred in law in holding, in paragraph 50 of the judgment under appeal, that the aid at issue could put competitive pressure on Frankfurt Main airport that may adversely affect its customers, including DLH.

Having suggested that the Court of Justice uphold the preceding complaint concerning infringement of the burden of proof as regards the absence of a claim that there was a competitive relationship between Frankfurt-Hahn and Frankfurt Main airports, I shall address the present complaint purely in the alternative.

Before assessing this complaint, it is necessary to point out that the relevant legal framework in the present case was clarified in the judgment recently delivered by the Court in the Solar Ileias Bompaina case.

That case concerned Greek rules which had the effect of reducing the feed-in tariffs paid to producers using renewable energy sources, such as the appellant, and were intended to make good the deficit on a special account previously established through the legislative process in order to finance feed-in tariffs, inter alia, for those producers. That account was financed mainly through a special contribution charged to consumers and through additional sources such as revenue from relevant market operators. According to the appellant, those rules resulted in the grant of aid to electricity suppliers because no contribution was payable by them. If those suppliers had been asked to contribute in order to make good that deficit, the appellant's financial position would, in its view, have been more favourable, since it would not have been necessary to reduce the feed-in tariffs from which it benefited.

As regards the question whether the aid was likely to have a specific effect on the appellant's situation, the Court stated in that judgment that, although the adverse effect on the interests of that appellant may be only potential, a risk of a specific effect on those same interests must be capable of being demonstrated to the requisite legal standard. 32. In other words, according to the Court, the relevant criterion is whether there is a potential causal link, established to the requisite legal standard, between the alleged aid and the actual prejudice to the interests or market position of the undertaking concerned. 33.

In accordance with those principles, the Court of Justice upheld the General Court's finding that the appellant had not explained how the alleged exemption of electricity suppliers could have influenced the setting of the new feed-in tariffs applicable to it, given that the adjustments made were intended principally to offset the overcompensation previously granted to those producers. 34.

It is helpful, for the purposes of interpretation, to take a step back in order to remember that, as explained in point 30 of this Opinion, the case-law has broadened the circle of persons who can be categorised as ‘interested parties’, because it has decoupled that status from the existence of a competitive relationship between the applicant and the beneficiary of the aid.

As a result of that broadening, the evidential requirement regarding the potential causal link between the aid and actual prejudice to the applicant's situation seems to be the real floodgate guarding against an action challenging a Commission decision, such as the decision at issue, from being transformed into a kind of actio popularis. Thus, in my view, the Court seems to call for that link to be construed in a relatively strict manner, although it is to be borne in mind that it requires only proof of a purely potential, rather than actual, effect on the applicant's situation.

That approach entails, in my view, a requirement to prove that the aid at issue, in itself, and not merely the existence of a potential conflict of interests between its beneficiary and the applicant, is likely to have an effect on the applicant's interests. 35.

In paragraph 50 of the judgment under appeal, the General Court held, in essence, that since Frankfurt Main airport is the main centre of operations for DLH's flights and is located in the vicinity of the airport which is the beneficiary of the aid at issue, DLH has an interest in ensuring that the operation of Frankfurt Main airport is not disrupted by any adverse effect which the grant of the aid at issue may have on that airport's competitive position.

There is, in my view, a manifest break in the causal chain thus established.

The General Court has not found any evidence that possible competitive pressure on Frankfurt Main airport would have a negative impact on its customers, such as DLH. In that regard, I agree with the Land's observation that a line of reasoning based on general competition policy considerations could even lead to the opposite premiss, since competitive pressure might induce Frankfurt Main airport to offer better contractual terms to the airlines operating there.

In the light of the above considerations, I suggest that, if the Court of Justice reaches the conclusion that the complaint examined previously must be rejected, it should hold that the reasoning in paragraph 50 of the judgment under appeal contains an error of law and, consequently, uphold the present complaint.