CELEX: 62017CJ0687
Appeal
State aid
Aid granted by the Netherlands authorities for the creation and introduction of the TenderNed electronic procurement platform
Decision that the measure does not constitute State aid, within the meaning of Article 107(1) TFEU

By their appeal, Aanbestedingskalender BV, Negometrix BV, CTM Solution BV, Stillpoint Applications BV and Huisinga Beheer BV seek to  have set aside the judgment of the General Court of the European Union of 28 September 2017,
Aanbestedingskalender and Others
v
Commission
(T‑138/15, not published, EU:T:2017:675; ‘the judgment under appeal’), by which the General Court dismissed their action seeking annulment of Commission Decision C(2014) 9548 final of 18 December 2014 on State aid SA.34646 (2014/NN) (ex 2012/CP) — The Netherlands E-procurement platform TenderNed (‘the decision at issue’).

Background to the dispute and the decision at issue
The background to the case is set out in paragraphs 2 to 19 of the judgment under appeal, as follows:
‘2      TenderNed is an e-procurement platform which was set up and is operated by PIANOo Expertisecentrum Aanbesteden, a sub-department of the Netherlands Ministry of Economic Affairs, Agriculture and Innovation …
3      TenderNed offers a number of functionalities, made available to contracting authorities and special sector entities … free of charge. It provides the following functionalities:
–      a publication module, which can be used for the publication of tender notices as well as associated tender documents (“the publication module”);
–      a tendering (submission) module, offering functionalities such as the exchange of questions and answers, and the uploading and downloading of tenders and bids. That module also includes a “virtual company” section in which economic operators can introduce and manage their data (“the submission module”);
–      an e-guide, which supports interested parties in using TenderNed (“the e-guide”).
4      The publication module is divided into two parts, one part for the publication of, inter alia, tender notices … and a second part for the uploading of associated tender documents to the TenderNed platform.
5      TenderNed also sends statistical information to the national parliament and to the European Commission concerning public procurement in the Netherlands.
…
6      On 6 April 2012, Stichting Crow, Negometrix, CTM Solution and Stillpoint Applications (“the complainants”) lodged a complaint (“the complaint”) with the Commission, seeking a declaration that the financing provided by the Kingdom of the Netherlands for the creation and introduction of the electronic procurement (“e-procurement”) platform TenderNed constituted unlawful State aid.
…
10      On 14 January 2013, the Commission sent a letter to the complainants containing a preliminary view on their complaint. In that letter, the Commission stated that the measure at issue did not  involve State aid  a priori. On 23 July 2013, the Commission sent another letter to the complainants, informing them that it had also arrived at the provisional conclusion that, a priori, the measure at issue did not constitute State aid.
11      On 4 November 2014, the complainants sent the Commission a formal request to act pursuant to Article 265 TFEU, asking the Commission to adopt a formal position on the measure at issue within two months.
…
12      On 18 December 2014, the Commission adopted [the decision at issue].
…
19      In recital 70 of the [decision at issue], the Commission concluded that the measure at issue did not involve State aid within the meaning of Article 107(1) TFEU.’

The procedure before the General Court and the judgment under appeal
By application lodged at the Registry of the General Court on 25 March 2015, the appellants brought an action seeking to have the decision at issue annulled.
The Kingdom of the Netherlands and the Slovak Republic intervened in support of the form of order sought by the Commission.
In support of their action, the applicants raised a single plea in law, alleging infringement of Article 107(1) TFEU on the basis that the Commission made a manifest error of assessment and an error of law by concluding that the services provided by TenderNed could be regarded as non-economic services of general interest.
After dismissing that plea, the General Court, by the judgment under appeal, dismissed the action and ordered the applicants to pay the costs.

Forms of order sought
The appellants claim that the Court should:
–      set aside, in whole or in part, the judgment under appeal in so far as it dismissed the action brought by the appellant in Case T‑138/15 and, consequently:
–      annul the decision at issue, in whole or in part; and/or
–      in the alternative, set aside, in whole or in part, the judgment under appeal in so far as it dismissed that action and refer the case back to the General Court for an adjudication on the merits in the light of the guidance with which the Court will provide it; and
–      order the Commission to pay the costs of the proceedings at both instances.
The Commission contends that the Court should dismiss the appeal and order the appellants to pay the costs. The Kingdom of the Netherlands contends that the action should be dismissed.

The appeal
In support of their appeal, the appellants raise a single ground of appeal, alleging that the General Court erred in law, incorrectly assessed the relevant facts and failed to state appropriate and consistent reasons, in concluding in paragraph 116 of the judgment under appeal that the single plea in law submitted at first instance should be dismissed and, consequently, the action as a whole, in holding that the Commission was entitled to find that the activities performed by TenderNed, in particular the submission module, were not of an economic nature and that the measure at issue did not involve State aid within the meaning of Article 107(1) TFEU.
The appellants have divided that ground of appeal into four parts.

The first part of the single ground of appeal

Arguments of the parties
By the first part of the single ground of appeal, the appellants argue that the General Court erred in law in holding that, for the purposes of assessing whether an activity is economic or non-economic, it is necessary to determine (only) whether the activities in question are connected with the exercise of public powers.
According to the appellants, the General Court, in asserting, in paragraph 38 of the judgment under appeal, that it must be ascertained whether those activities, by their nature, their aim and the rules to which they are subject, are connected with the exercise of public powers or whether they have an economic character which justifies the application of the EU competition rules, has made use of a criterion which does not follow from the case-law of the Court of Justice.
In the appellants’ opinion, a simple ‘connection’, even if it is a connection by their nature, by their aim and by the rules to which the activities are subject, is not sufficient to classify those activities as activities falling within the exercise of public powers, if the criterion stemming from the judgment of 12 July 2012,
Compass-Datenbank
(C‑138/11, EU:C:2012:449), is not to be deprived of its full meaning. The Court of Justice held in that judgment that, when an entity exercises an activity which can be separated from the exercise of its public powers, that entity, in relation to that activity, acts as an undertaking, while, if that economic activity cannot be separated from the exercise of those public powers, the activities exercised by that entity as a whole remain activities connected with the exercise of those public powers. According to the appellants, compliance with that criterion is much more difficult than with a mere criterion of ‘connection’.
The Commission, supported by the Netherlands Government, considers that that first part of the single ground of appeal is unfounded.

Findings of the Court
In paragraph 38 of the judgment under appeal, the General Court held that ‘in order to determine whether TenderNed’s activities, as defined in [the decision at issue], form part of the exercise of public powers or whether they can be classified as economic activities, it must be verified whether those activities, by their nature, their aim and the rules to which they are subject, are connected with the exercise of public powers or whether they have an economic character which justifies the application of the EU competition rules (see, to that effect, judgments of 18 March 1997,
Diego Cali & Figli
, C‑343/95, EU:C: 1997:160, paragraphs 16, 18 and 23 and the case-law cited, and of 28 February 2013,
Ordem dos Técnicos Oficiais de Contas
, C‑1/12, EU:C:2013:127, paragraph 40 and the case-law cited)’.
In that respect, it must be noted that, in each of the two judgments cited in paragraph 38 of the judgment under appeal, the Court of Justice examined whether the activities at issue are connected, by their nature, their aim and the rules to which they are subject, with the exercise of public powers. It follows that the General Court, in holding that it is necessary to determine whether TenderNed’s activities are connected, by their nature, their aim and the rules to which they are subject, with the exercise of those powers, has faithfully adopted the criterion stemming from that case-law of the Court of Justice.
In the judgment of 12 July 2012,
Compass-Datenbank
(C‑138/11, EU:C:2012:449), the Court relied on the same criterion of connection with the exercise of public powers. Indeed, in paragraph 36 of that judgment, it was held that the activities which are connected with the exercise of such powers are not of an economic nature justifying the application of the rules of competition laid down in the FEU Treaty.
Thus, as noted in paragraph 38 of the judgment of 12 July 2012,
Compass-Datenbank
(C‑138/11, EU:C:2012:449), in so far as a public entity carries on an economic activity, since that activity is not connected to the exercise of its public powers, that entity, in relation to that activity, acts as an undertaking, while, if that same economic activity cannot, however, be separated from other activities connected with the exercise of public powers, the activities exercised by that entity as a whole remain activities connected with the exercise of those public powers.
The ‘separation’ criterion put forward by the appellants, is in fact referred to by the Court, in  paragraph 38, only in the particular situation where certain activities of a public entity do not, as such, form part of the exercise of public powers and must be considered, in isolation, to be economic activities.
It follows that the General Court did not err in law when it described the criterion according to which TenderNed’s activity must be classified.
In those circumstances, the first part of the single ground of appeal must be rejected as unfounded.

The second and third parts of the single ground of appeal

Arguments of the parties
By the second and third parts of the single ground of appeal, which overlap to a large extent and which must therefore be considered together, the appellants allege that the General Court erred in law and wrongly assessed the relevant facts by holding, in paragraphs 39 to 52 of the judgment under appeal, that the functionalities offered by TenderNed should be understood as being linked to each other and forming different facets of one and the same activity.
In the first place, the appellants submit that the General Court failed to apply the ‘separation’ criterion and did not conduct a separate analysis of each of the different activities carried out. In addition, the appellants submit that it in no way follows from the judgment of 26 March 2009,
Selex  Sistemi Integrati
v
Commission
(C‑113/07 P, EU:C:2009:191), that the functionalities of TenderNed can be classified as facets of the same activity and that those functionalities must not be regarded as distinct activities requiring individual assessment in order to establish whether they can be separated from each other. In the appellants’ submission, the General Court should have analysed separately the various activities of TenderNed and, if that examination had led to some of those activities being found to be economic in nature, should have assessed whether those economic activities could be separated from the exercise of public powers.
In the second place, according to the appellants, the General Court erred in its assessment of the facts by holding, in paragraph 45 of the judgment under appeal, that TenderNed had been created and implemented by the Kingdom of the Netherlands in order to comply with its obligations under the new public procurement directives adopted in 2014, when in fact it was created long before they were adopted.
The General Court also overlooked the fact that the Netherlands legislature did not regard the various functionalities of TenderNed as forming part of a whole, which, according to the appellants, is clear from the explanatory memorandum to the relevant Netherlands legislation. The appellants point out, in this context, that, while the Netherlands legislature expressly considered the publication module to be a service of general economic interest, it did not concern itself in any way with the question of whether the submission module, as an economic activity, was of general economic interest or not. Indeed, it considered that part of TenderNed’s activities to be a ‘simple’ economic activity.
Furthermore, the Netherlands legislature itself regarded the submission module as distinct from the publication module. Moreover, in the appellants’ view, the day-to-day practical operation of TenderNed confirms that the publication module, on the one hand, can be separated from the submission module, on the other.
In addition, the General Court wrongly held, in paragraph 48 of the judgment under appeal, that it is as a whole that TenderNed assists in achieving the objective of harmonisation and technical integration in the field of public procurement and that TenderNed’s activities as a whole constitute facets of the same activity. The mere fact that two activities contribute to the same objective is not sufficient for them to be considered to be facets of the same activity. The appellants point out, in that respect, that that same activity is carried out in a large number of Member States by private companies.
The appellants also argue that, in paragraph 49 of the judgment under appeal, the General Court wrongly accepted the Commission’s argument that if TenderNed’s activities were reduced to those of a mere notice board, that would not allow the contracting entities to comply with all their obligations. In that respect, they maintain, in particular, that the General Court did not state how TenderNed’s failure to offer a submission module would have such a consequence, while use of submission modules developed by private entities was possible until TenderNed became active and continues to be possible.
The Commission and the Netherlands Government contend that those parts of the ground of appeal should be rejected.

Findings of the Court
By the second and third parts of their single ground of appeal, on the one hand, the appellants claim that the General Court, in essence, erred in law in holding, in paragraph 41 of the judgment under appeal, that it is appropriate to ‘verify whether the functionalities offered by TenderNed are independent of each other, so that it is necessary to demonstrate that each of them, taken separately, is connected with the exercise of public powers, or whether, on the contrary, those functionalities should be seen as forming part of a whole from which they cannot be separated, so that the question whether TenderNed’s activity is connected with the exercise of public powers must be verified by taking account of the interaction between them’. On the other hand, the appellants criticise the General Court for having held, in paragraph 52 of that judgment, on the basis of an incorrect assessment of the facts, that ‘the functionalities offered by TenderNed’ must actually be ‘understood as being linked to each other and forming different facets of the same activity’, and any connection they have with the exercise of public powers must, therefore, be assessed globally, taking account of the interaction between those facets.
However, it must be noted that, in paragraphs 72 to 96 of the judgment under appeal, the General Court examined, on the basis of an individual analysis of TenderNed’s functionalities, whether each of them could be connected with the exercise of public powers and concluded that that was the case.
It follows that the objections raised by the appellants cannot lead to the judgment under appeal being set aside.
In those circumstances, the second and third parts of the single ground of appeal must be rejected as ineffective.

The fourth part of the single ground of appeal

Arguments of the parties
The appellants submit that the General Court found, in paragraphs 54 to 60 and 91 of the judgment under appeal, that TenderNed’s activities, in particular the submission module, were connected with the exercise of public powers.
They take the view that the General Court should have drawn a distinction between, on the one hand, the task of the Kingdom of the Netherlands of ensuring compliance with the rules on public procurement, which is a public power, and, on the other, the provision by TenderNed of the technical means enabling contracting entities to comply with their obligations, which is not connected with the exercise of public powers.
In addition, the appellants submit that, while Article 22(1) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65) provides that Member States are to ensure that all communication and information exchanges under that directive, and in particular electronic submission, are performed using electronic means of communication, that does not mean that the making available of such electronic means forms, in itself, part of the exercise of public powers.
They also point out that the General Court, on the one hand,  incorrectly considered, in paragraph 107 of the judgment under appeal, that the existing commercial platforms did not offer the conditions relating to price, objective quality characteristics, continuity and access to the services that would be necessary to fulfil the general interest objectives pursued by the Netherlands authorities and, on the other, incorrectly considered that that was a relevant criterion for assessing the economic nature of the activity in question.
The Commission and the Netherlands Government contend that that part of the single ground of appeal should be rejected.

Findings of the Court
In so far as the appellants submit that the General Court incorrectly found that the functionalities offered by TenderNed, in particular the submission module, formed part of the exercise of public powers, it should be recalled, as is clear from  paragraph 3 of the judgment under appeal, that TenderNed has two main functionalities, referred to as the ‘publication module’ and the ‘submission module’.
Having regard to those functionalities, it must also be pointed out that the General Court set out, in paragraphs 72 to 96 of the judgment under appeal, the reasons for its view that each of them, considered individually, was connected with the exercise of public powers.
As regards the publication module, the General Court pointed out,  in paragraphs 78 and 79 of the judgment under appeal, that, under the legal provisions in force, contracting entities are required to publish, on the notice board made available by TenderNed, both their tender notices and their award decisions for public contracts falling within the scope of the relevant directives. It concluded, in paragraphs 80 and 81 of that judgment, that TenderNed’s electronic publication of tender notices and award decisions issued by contracting entities is, in itself, connected with the exercise of public powers and does not constitute an economic activity.
However, it must be noted that, in their appeal, the appellants do not challenge that finding.
As regards the submission module, in order to find that there is a connection between that functionality and the exercise of public powers, the General Court held, in paragraph 96 of the judgment under appeal, that, as it had stated in paragraph 51 of that judgment, separating the submission module from the publication module and the e-guide, or even removing it entirely from the overall TenderNed framework, would interfere with TenderNed’s activities and undermine the objectives pursued by Directive 2014/24 and Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal sectors and repealing Directive 2004/17/EC (OJ 2014 L94, p. 243).
In that respect, it should be pointed out, on the one hand, that it is apparent from the case-law of the Court of Justice that two activities can be considered not able to be separated when one of them would be rendered largely useless in the absence of the other (see, to that effect, judgment of 12 July 2012,
Compass-Datenbank
, C‑138/11, EU:C:2012:449, paragraph 41) or where those two activities are closely linked (see, to that effect, judgment of 26 March 2009,
Selex Sistemi Integrati
v
Commission
, C‑113/07 P, EU:C:2009:191, paragraphs 76 and 77). On the other hand, as noted in paragraph 18 of the present judgment, if an economic activity carried out by a public entity nevertheless cannot be separated from other activities connected with the exercise of public powers, the activities of that entity as a whole must be regarded as being connected with the exercise of public powers.
It follows that the General Court was fully entitled to deduce from the factual assessments set out in paragraph 43 of the present judgment, which the appellants have not argued were subject to distortion, that the submission module cannot be separated from the publication module, so that those two activities must be regarded as being connected to the exercise of public powers.
Furthermore, as regards the complaint that the General Court wrongly considered, in paragraph 107 of the judgment under appeal, that the existing commercial platforms did not offer the conditions relating to price, objective quality characteristics, continuity and access to the services that would be necessary to fulfil the general interest objectives pursued by the Netherlands authorities, it should be noted that the appellants argue that that criterion cannot be relevant for assessing the economic nature of the activity at issue.
Even if that complaint were to be upheld, it cannot call into question the classification of TenderNed’s activities on the basis of the considerations set out in paragraphs 43 to 45 of the present judgment.
In the light of the foregoing considerations, the fourth part of the single ground of appeal must be rejected as ineffective.
It follows that the appeal must be dismissed in its entirety.

Costs
In accordance with Article 184(2) of the Rules of Procedure of the Court, where the appeal is unfounded, the Court is to make a decision as to costs. Under Article 138(1) of those Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the appellants have been unsuccessful, the appellants must be ordered to pay the Commission’s costs and to bear their own costs. Pursuant to Article 140(1) of those Rules, which provides that Member States which have intervened in the proceedings are to bear their own costs, the Kingdom of the Netherlands is to be ordered to bear its own costs.
On those grounds, the Court (Fifth Chamber) hereby:
1.
Dismisses the appeal;
2.
Orders Aanbestedingskalender BV, Negometrix BV, CTM Solution BV, Stillpoint Applications BV and Huisinga Beheer BV to pay the costs;
3.
Orders the Kingdom of the Netherlands to bear its own costs.
Regan
Jarukaitis
Juhász
Ilešič

Lycourgos
Delivered in open court in Luxembourg on 7 November 2019.
A. Calot Escobar

E. Regan
Registrar

President of the Fifth Chamber
*
Language of the case: English.