In the EU legal order, the principle avenue to challenge acts and omissions of EU institutions are actions for annulment (Art. 263 TFEU) to the GC (Sect. 3.1 below). It is also possible to intervene in actions for annulment, in order to either support the applicant or the Commission, though this is not to be considered as a judicial avenue in its own right (Sect. 3.2 below). The action for annulment is rather complemented by the possibility for national courts to refer questions as to the validity of EU acts to the Court under Art. 267 TFEU, in cases where the validity of an EU act features in an existing national dispute (Sect. 3.3 below). In the State aid context, there is additionally the possibility to file a complaint to the Commission to inform it of an existing or potential breach (Sect. 3.4 below).
Leaving aside the special legal avenues available to Member States, this section explains to what extent these legal avenues are available to different applicants, contrasting in particular aid recipients and their competitors, on the one hand, with any other applicant, in particular civil society, on the other hand.
Direct actions before the CJEU: annulment action (Art. 263 TFEU)
Direct actions for annulment of EU institutions decisions are provided for by Art. 263(4) TFEU, according to which “Any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.” Since Commission State aid decisions are only addressed to Member States, this admissibility test applies to all other applicants, including beneficiaries of the aid, their competitors and any third party.
As is well known, the CJEU has interpreted the terms “individual” and “direct” concern, very restrictively. According to long-established case law (the Plaumann case), “persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of those factors distinguishes them individually just as in the case of the person addressed.”Footnote 25 To the extent that a State aid scheme is considered a regulatory act, applicants still needs to demonstrate to be “directly concerned” by the decision, i.e. the contested scheme must directly affect their legal position.Footnote 26
Under this test, the admissibility of aid beneficiaries is generally recognised for challenging individual aid measures and often for challenging aid schemes. Competitors of the aid beneficiary are considered “interested parties” and can therefore challenge Commission decisions on the ground of Art. 108(2) TFEU alleging a violation of their procedural rights, without any additional requirements.Footnote 27 In order to challenge a Commission’s final decision adopted after a formal investigation based on Art. 106(2) or 107(3) TFEU, competitors needs to demonstrate instead that their competitive position is affected by the grant of aid.Footnote 28
However, for all other applicants it is close to impossible to demonstrate being directly and individually concerned by the grant of aid because of the restrictive CJEU case law. Even the “lower” standard of “direct” concern, has in practice never been fulfilled by an applicant seeking to protect general interest such as the environment.Footnote 29 This standard de facto excludes other categories of potential applicants including civil society from relying on Art. 263 TFEU to challenge EU State aid decisions.
Based on Art. 130 of the Rules of Procedures of the Court, a natural or legal person can apply to intervene in an existing action for annulment. Given that this possibility only exists if an action has already been filed by another applicant and because of the limited role an intervener can play (support claims filed by the applicant or the Commission etc), it is not equivalent to a right to challenge EU State aid decisions. However, it is mentioned here briefly to give a full picture of the avenues available to contest the legality of State aid decisions.
The admissibility threshold for such applications to intervene is high. First, having filed a complaint or observations to the Commission in the course of the State aid assessment procedure is not sufficient (for none of the categories of applicants).Footnote 30 Moreover, the Commission in any event regularly considers that individuals and NGOs are not “interested parties” to file formal complaints.
Potential interveners must rather demonstrate that they have an interest in the solution of the case. For environmental NGOs, the admissibility standard is two-fold: “for applications for leave to intervene submitted by environmental organisations, the requirement for a direct and existing interest in the result of the case means either that the scope of the activities of such organisations should coincide with that of the region and sector concerned by the proceedings before the Court or, where the scope of their activities is wider, that they should be actively involved in protection programmes or studies relating to the region and sector concerned, the viability of which could be jeopardised if the contested measure were to be adopted”.Footnote 31 The coincidence between the field of action and the region is assessed on a very strict geographical basis. For instance, whereas Greenpeace España was permitted to intervene against aid for electricity produced from indigenous coal plants in Spain, the pan-European scope of action of ClientEarth and Stiching Greenpeace Council (established respectively in the UK and the Netherlands) disqualified them from intervening in the same case.Footnote 32 Even Naturschutzbund Deutschland eV (NABU), one of the largest environmental associations in Germany, did not fulfil this strict geographical coincidence criterion in the action against aid for the German-Denmark fixed link because it is also active outside of Germany.Footnote 33 Conversely, Danish environmental NGO Danmarks Naturfredningsforening could intervene in a case relating to aid allegedly granted by Germany to shops selling beverages and situated near the German border with Scandinavian countries because “the purpose of the applicant to intervene is confined to protection of the environment in Denmark”.Footnote 34
Alternatively, NGOs must demonstrate that “they are actively involved in protection programs or studies concerning the region and the sector concerned, the viability of which could be jeopardised if the contested measure were to be adopted”. This criterion as well is narrow: it is not sufficient for NGOs to demonstrate that they conduct numerous activities against electricity production from coal in various EU countries if the contested aid relates only to coal in Spain, for example.Footnote 35 However engaging in campaigns, commissioning studies and reports specifically related to the contested project and exposing its impacts, support the admissibility of an NGO intervention.Footnote 36
In recent orders though, the GC did not offer this alternative criteria and merely required that “first, the remit of those organisations, as derived from their objective laid down, as the case may be, in their articles of association, has a direct link with the subject matter of that case and, second, that that case raises questions of principle which are liable to affect the interests defended by the organisations in question”.Footnote 37 Pursuant to this order, Aktionsbündnis gegen eine feste Fehmarnbeltquerung, established in Germany, was left to intervene in the action against the Commission decision authorising aid for the construction of the Fehmarn Link between Denmark and Germany, because “the purpose of that association, as stated in its statutes, is to oppose the implementation of the project at issue”.Footnote 38
The General Court estimates that these criteria offer “a broad interpretation of the right of associations to intervene, intended to facilitate assessment of the context of such cases whilst avoiding multiple individual interventions which would compromise the effectiveness and proper course of the procedure”.Footnote 39 However, as the analysis above shows, the current legal situation is far from clear.
The admissibility of an applicant to refer a question for preliminary ruling to the Court in a State aid matter depends, primarily, of their admissibility to bring an action before a national court. A good example of a preliminary ruling reference brought by an association and individuals before a French court is the Vent de Colère case, relating to support schemes for renewable energy production in France.Footnote 40 However, according to the principle of procedural autonomy, admissibility before national courts depends on national procedural rules and is not harmonised in the EU.
In practice, for applicants other than aid recipients or competitors, standing at national level to challenge national aid measures, in order to then obtain a preliminary reference to the Court to contest the validity of the Commission State aid decision is far from guaranteed. A recent study for the Commission concludes that “broad legal standing is granted by law and in practice in less than half of the Member States (13 out of then 28).”Footnote 41 The same study confirms that judges are often hesitant to refer questions as to the validity of EU acts,Footnote 42 national court proceedings involving preliminary questions take many yearsFootnote 43 and are often prohibitively expensive,Footnote 44 all of which constitute formidable barriers to the effective use of this mechanism. Preliminary questions on State aid matters are particularly rare.Footnote 45
Complaints to the Commission
In accordance with Art. 24(2) Council Regulation 2015/1589, any interested party may submit a complaint “to inform” the Commission of alleged unlawful aid or misuse of aid.Footnote 46 The Commission then follows up on the complaint and retains full control over the procedure. The complaint is therefore not an administrative or judicial remedy but a formalised possibility to inform the Commission of a possible breach, with a view to the Commission relying on Art. 108 TFEU to put a halt to the breach, if it considers that appropriate. It is not a possibility to challenge the Commission’s decisions in themselves, with a subsequent possibility to appeal to the courts.
Having clarified that, access to the complaint procedure is also limited to “interested parties”, as opposed to for instance a regular complaint to the Commission with the aim of starting infringement proceedings under Art. 258 TFEU. Interested parties are defined in Art. 1(h) Regulation 2015/1589 as “any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations”. While this definition is in principle phrased in a broad and open manner (“any person … whose interests might be affected”), the Commission regularly denies requests from environmental NGOs on this basis stating that they are not “interested parties” for the purposes of the Regulation, for their market position not being affected by the grant of aid. The Commission nevertheless suggested, in the course of the communication before the Aarhus Convention Compliance Committee mentioned below, that environmental NGOs could be considered interested parties, and their complaints admissible, if they allege breaches of environmental law by the beneficiary of aid.Footnote 47