JUDGMENT OF THE GENERAL COURT (Fourth Chamber)
27 April 2022 (*)
(State aid – Measures granted by Slovenia to a municipal network of dispensing pharmacies – Preliminary examination phase – Decision of the Commission finding no State aid and, possibly, that there is existing aid – Decision adopted without initiating the formal investigation procedure under Article 108(2) TFEU – Serious difficulties)
In Case T‑392/20,
Petra Flašker, residing in Grosuplje (Slovenia), represented by K. Zdolšek, lawyer,
applicant,
v
European Commission,
represented by P. Arenas and C. Georgieva, acting as Agents,
defendant,
supported by
Republic of Slovenia,
represented by B. Jovin Hrastnik, acting as Agent,
intervener,
THE GENERAL COURT (Fourth Chamber),
composed of S. Gervasoni, President, L. Madise (Rapporteur) and P. Nihoul, Judges,
Registrar: E. Coulon,
having regard to the written part of the procedure,
having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,
gives the following
Judgment
1        By its action based on Article 263 TFEU, the applicant, Ms Petra Flašker, a pharmacist in Grosuplje (Slovenia), seeks the annulment of Commission Decision C(2020) 1724 final of 24 March 2020 closing the examination of measures concerning the public pharmacy Lekarna Ljubljana in the light of the State aid rules in Articles 107 and 108 TFEU (Case SA.43546 (2016/FC) – Slovenia).
Background to the dispute
2        In 1979, an entity called Lekarna Ljubljana o.p. was established in Ljubljana (Slovenia), then part of the Socialist Federal Republic of Yugoslavia, which was responsible for the distribution of pharmaceutical products through pharmacies. According to what the Slovenian authorities told the European Commission, that entity had been provided with ‘assets’ enabling it to fulfil its function. According to the applicant, currently a professional dispensing pharmacist, that entity was an ‘organisation of associated labour’, which did not have a market economic activity and did not have capacity to own property.
3        Following Slovenia’s independence, the Institutes Act, which covers, inter alia, public institutions entrusted with services of general economic interest, was adopted in 1991. Article 48 of that law provides: ‘The Institute shall acquire the resources for its work from the funds of the founder, the sale of goods and services, and from other sources laid down in this Act.’
4        The following year, the Pharmacies Act was adopted. That act provides for the coexistence of public pharmacy institutes and private pharmacies, and for municipalities to be responsible for the provision of pharmacy services in their territory. Private pharmacies receive authorisation to operate through a concession granted by the municipality concerned following calls for tenders. Public pharmacy institutes are established by the municipalities which participate in their management, and they are governed by their founding acts. There are now, according to the Commission, approximately 25 public pharmacy institutes in Slovenia, operating nearly 200 pharmacies, and 100 private pharmacies.
5        On the basis of the acts referred to in paragraphs 3 and 4 above, in 1997, the Municipality of Ljubljana, by ordinance, created the public pharmacy institute Javni Zavod Lekarna Ljubljana (‘Lekarna Ljubljana’), stipulating that it was the legal successor of Lekarna Ljubljana o.p. and that it assumed the rights and obligations of the latter.
6        Lekarna Ljubljana now operates approximately 50 public pharmacies in Slovenia, predominantly in Ljubljana, but also in around 15 other municipalities. In Grosuplje, where the applicant operates her private pharmacy, two pharmacies of Lekarna Ljubljana are established.
7        By an official complaint lodged with the Commission on 27 April 2016 following prior contact with its services, the applicant complained of the existence of State aid, within the meaning of Article 107 TFEU (‘State aid’), in favour of Lekarna Ljubljana. The measures identified during the investigation of that complaint include ‘the granting of assets under management’ on terms which, according to the applicant, do not correspond to market conditions. The applicant mentions business premises as such assets.
8        Numerous exchanges took place between the Commission and the Slovenian authorities, on the one hand, and the applicant, on the other. On two occasions, the Commission sent the applicant a preliminary assessment to the effect that the measures identified did not constitute State aid. The applicant maintained her complaint each time by providing additional information, and was supported in 2018 by 16 other private pharmacies in Slovenia.
9        On 24 March 2020, the Commission sent to the Republic of Slovenia Decision C(2020) 1724 final, closing the examination of measures concerning the public pharmacy Lekarna Ljubljana in the light of the State aid rules in Articles 107 and 108 TFEU (Case SA.43546 (2016/FC) – Slovenia). The contested decision was adopted without the Commission having initiated the formal investigation procedure provided for in Article 108(2) TFEU. The Commission concluded in recital 73 of that decision that the examination of the four measures in favour of Lekarna Ljubljana, identified below by the applicant during the investigation, namely the benefit of a long-term lease granted by the Municipality of Skofljica (Slovenia) free of charge, the grant of assets under management by the Municipality of Ljubljana, the exemption from concession fees by several municipalities and the relief of its obligation to share profits with several municipalities, did not reveal the existence of State aid. However, as regards the grant of assets under management, the Commission states, previously in recitals 37 to 40 of the contested decision, that, if the grant of such assets could have constituted State aid, then it would be ‘existing aid’.
10      The reasons given in those recitals are set out below. After recalling the provisions of Article 48 of the Institutes Act, cited in paragraph 3 above, and stating, first, that the Municipality of Ljubljana, on that basis, had to provide Lekarna Ljubljana with assets for its establishment and initial operation and, secondly, that any asset acquired by Lekarna Ljubljana, including by its own means, is registered as an ‘asset under management’ in accordance with the public accounting rules, it is stated that, according to the Slovenian authorities, in 1979, the Municipality of Ljubljana provided Lekarna Ljubljana o.p. with the necessary assets for its operation, that in 1997 those assets were transferred to Lekarna Ljubljana upon its succession and that all other assets acquired successively by both entities since 1979 were acquired by themselves on the market on market terms. The only assets under management which could constitute State aid are therefore those from the initial provision of assets to Lekarna Ljubljana o.p., transferred in 1997 to Lekarna Ljubljana.
11      Reference is then made to Annex IV to the Act of Accession annexed to the Treaty of Accession to the European Union of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic, and to the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 33) (‘the Act annexed to the Treaty of Accession’), in particular point 3 on competition policy. It is stated that, under paragraph 1 of point 3, ‘the following aid schemes and individual aid put into effect in a new Member State before the date of accession and still applicable after that date shall be regarded upon accession as existing aid within the meaning of Article [108(1) TFEU]: (a) aid measures put into effect before 10 December 1994 …’.
12      It is also recalled that Article 1(c) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9) defines ‘new aid’ as ‘all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid’. It is also recalled that Article 4(1) of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EU) 2015/1589 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2004 L 140, p. 1) provides that ‘for the purposes of Article 1(c) of [Council] Regulation (EC) No 659/1999 [of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1)], an alteration to existing aid shall mean any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the common market’.
13      It is concluded from this that, in so far as the grant of assets under management gave rise to State aid, it would then be existing aid, since that aid was granted when Lekarna Ljubljana o.p. was set up in 1979. The latter’s replacement by Lekarna Ljubljana in 1997 is purely administrative in nature, since the legal context has not changed, nor has the use and conditions of use of the assets concerned. That substitution cannot therefore constitute an alteration to existing aid and the aid in question is therefore still aid of that type.
Procedure and forms of order sought
14      The Republic of Slovenia lodged no statement in intervention nor did it submit any observations on the Commission’s response to a written question put by the Court by way of a measure of organisation of procedure.
15      The applicant claims that the Court should annul the contested decision and order the Commission to pay the costs.
16      The Commission contends that the action should be dismissed and that the applicant should be ordered to pay the costs.
Law
17      Although, in the application, the applicant claims that the contested decision itself should be annulled, the pleas and arguments in the action concern only the assessment, in the light of the rules on State aid, of the grant of assets under management to Lekarna Ljubljana and not of the three other measures also examined by the Commission following the complaint (see paragraph 9 above). The view must therefore be taken that the action relates only to the assessment, in the contested decision, of the grant of assets under management. To that extent, the applicant puts forward three grounds for annulment.
18      In the first place, the contested decision is vitiated by contradictory reasoning which amounts to an infringement of the obligation to state reasons for acts of the institutions, laid down in Article 296 TFEU. The grant of assets under management is classified as existing aid, whereas the general conclusion of the contested decision is that all the measures criticised in the complaint do not constitute State aid.
19      In the second place, the contested decision is vitiated by errors of fact and an error in the legal characterisation of the facts concerning the grant of assets under management, resulting in an infringement of Articles 107 and 108 TFEU. In essence, the applicant claims in that respect that: the Commission’s analysis is based solely on the Slovenian authorities’ statement that no asset was transferred under management to Lekarna Ljubljana after 1979; that the Commission did not take into account evidence to the contrary adduced by the applicant in support of her complaint; that, as regards the assets transferred to Lekarna Ljubljana o.p. in 1979, the conditions surrounding the activity of distribution through dispensing pharmacies changed fundamentally from 1992, that the conditions specifically concerning Lekarna Ljubljana also changed compared to those in 1979, but also subsequently in 2007, so that the benefit of those assets for Lekarna Ljubljana since 1997, that is to say after the date of 10 December 1994 referred to in the Act annexed to the Treaty of Accession (see paragraph 11 above), cannot be classified as a simple continuation of existing aid; that other assets have been transferred to Lekarna Ljubljana since 1997, in particular in 2008 and 2009, as evidenced by public documents and the increase in the value of the assets under management of Lekarna Ljubljana in its accounts; that the Commission was thus wrong to conclude that there was no unlawful State aid, that is to say new unauthorised aid, and failed to assess that aid in the light of Article 107 TFEU.
20      In the third place, according to the applicant, the Commission could not lawfully adopt the contested decision without initiating the investigation procedure provided for in Article 108(2) TFEU. According to the applicant, without the formal examination which that procedure entails, the Commission could not be sure either that the grant of assets under management to Lekarna Ljubljana would not give rise to State aid or, conversely, that that aid was compatible with the internal market in the light of Article 107 TFEU. The applicant states that the Commission was faced with serious difficulties in that regard, as demonstrated by the errors complained of in the second plea, but also by the duration and high number of exchanges with the stakeholders, in particular with the Slovenian authorities.
21      By the written question referred to in paragraph 14 above, the Court asked the Commission whether the contested decision closes the investigation of the measures covered in the case of State aid SA.43546 (2016/FC), in particular as regards the grant of assets under management to Lekarna Ljubljana and, if so, whether the Commission considered that those measures, in so far as they may constitute existing aid as referred to in Article 108(1) TFEU, were still compatible with the internal market and, if not, whether the Commission pursued with the Slovenian authorities the investigation of the compatibility with the internal market of those measures which constitute existing aid. In its observations on the Commission’s reply, the applicant adds that the question put by the Court in itself shows that the contested decision is vitiated by an inadequate statement of reasons, contrary to the obligation to state reasons, since its exact scope is not apparent from its wording.
22      The Court considers it appropriate to examine the third plea for annulment first. Since this plea refers in particular to the arguments put forward in the context of the second plea, alleging that the Commission committed errors of fact and an error in the legal characterisation of the facts, the Court will examine the third plea taking those arguments into consideration.
Applicable rules and principles
23      Among the elements of the procedural framework for the review by the Commission of State aid referred to in Article 107(1) TFEU, those which are relevant in the present case are set out below.
24      Article 108 TFEU provides:
‘1.      The Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measures required by the progressive development or by the functioning of the internal market.
2.      If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the internal market having regard to Article 107, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.
…
3.      The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the internal market having regard to Article 107, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’
25      Article 1 of Regulation 2015/1589 provides:
‘For the purposes of this Regulation, the following definitions shall apply:
(a)      “aid” means any measure fulfilling all the criteria laid down in Article 107(1) TFEU;
(b)      “existing aid” means:
(i)      without prejudice to … point 3 and the Appendix of Annex IV to [the Act annexed to the Treaty of Accession] … all aid which existed prior to the entry into force of the TFEU in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the TFEU in the respective Member States;
(ii)      authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;
(iii)      aid which is deemed to have been authorised pursuant to Article 4(6) of Regulation … No 659/1999 or to Article 4(6) of this Regulation, or prior to Regulation … No 659/1999 but in accordance with this procedure;
(iv)      aid which is deemed to be existing aid pursuant to Article 17 of this Regulation;
(v)      aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the internal market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Union law, such measures shall not be considered as existing aid after the date fixed for liberalisation;
(c)      “new aid” means all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;
(d)      “aid scheme” means any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount;
(e)      “individual aid” means aid that is not awarded on the basis of an aid scheme and notifiable awards of aid on the basis of an aid scheme;
(f)      “unlawful aid” means new aid put into effect in contravention of Article 108(3) TFEU;
…’
26      Article 17 of Regulation 2015/1589, entitled ‘Limitation period for the recovery of aid’, provides:
‘1.      The powers of the Commission to recover aid shall be subject to a limitation period of 10 years.
2.      The limitation period shall begin on the day on which the unlawful aid is awarded to the beneficiary either as individual aid or as aid under an aid scheme. Any action taken by the Commission or by a Member State, acting at the request of the Commission, with regard to the unlawful aid shall interrupt the limitation period. Each interruption shall start time running afresh. The limitation period shall be suspended for as long as the decision of the Commission is the subject of proceedings pending before the Court of Justice of the European Union.
3.      Any aid with regard to which the limitation period has expired shall be deemed to be existing aid.’
27      Article 4(1) of Regulation No 794/2004, as amended by Commission Regulation (EU) 2015/2282 of 27 November 2015 (OJ 2015 L 325, p. 1), provides: ‘For the purposes of Article 1(c) of Regulation [2015/1589], an alteration to existing aid shall mean any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the common market. However an increase in the original budget of an existing aid scheme by up to 20% shall not be considered an alteration to existing aid.’
28      Annex IV to the Act annexed to the Treaty of Accession contains specific provisions on aid granted in a Member State which joined the European Union in 2004. The full text of the provision of that act cited in the contested decision (see paragraph 11above), that is to say paragraph 1 of point 3, is worded as follows:
‘The following aid schemes and individual aid put into effect in a new Member State before the date of accession and still applicable after that date shall be considered upon accession as existing aid within the meaning of Article [108(1) TFEU]:
(a)      aid measures put into effect before 10 December 1994;
(b)      aid measures listed in the Appendix to this Annex;
(c)      aid measures which prior to the date of accession were assessed by the State aid monitoring authority of the new Member State and found to be compatible with the acquis, and to which the Commission did not raise an objection on the ground of serious doubts as to the compatibility of the measure with the common market, pursuant to the procedure set out in paragraph 2.
All measures still applicable after the date of accession which constitute State aid and which do not fulfil the conditions set out above shall be considered as new aid upon accession for the purpose of the application of Article [108(3) TFEU].
…’
29      It is apparent from the contested decision that the Commission did not find that the grant of assets under management to Lekarna Ljubljana corresponded to a measure falling within points (b) and (c) of the first paragraph of the provision of the Act annexed to the Treaty of Accession cited in paragraph 28 above.
30      As the Court has pointed out, the Commission must, under Article 12(1) of Regulation 2015/1589, carry out an examination where it has in its possession information regarding alleged unlawful aid from whatever source. The examination of a complaint, on the basis of that provision, gives rise to the initiation of the preliminary examination stage under Article 108(3) TFEU and obliges the Commission to examine, immediately, the possible existence of aid and its compatibility with the common market (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 49 and the case-law cited).
31      Article 15(1) of Regulation 2015/1589, which is applicable to the examination of a complaint concerning allegedly unlawful aid, requires the Commission to close that preliminary examination phase by adopting a decision pursuant to Article 4(2), (3) or (4) of that regulation, that is to say a decision finding no State aid, a decision concluding, where State aid is identified, that there are no doubts as to its compatibility with the internal market or a decision to initiate the procedure provided for in Article 108(2) TFEU, and that institution is not authorised to persist in its failure to act during the preliminary examination stage. Once that stage of the procedure has been completed the Commission is bound, consequently, either to initiate the next stage of the procedure, provided for by Article 108(2) TFEU, or to adopt a definitive decision rejecting the complaint (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 50 and the case-law cited).
32      Where the Commission finds, following examination of a complaint and at the end of the preliminary examination stage, that there is no State aid within the meaning of Article 107 TFEU, it refuses by implication to initiate the procedure provided for in Article 108(2) TFEU (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 51 and the case-law cited).
33      As regards the situation in which the Commission concludes, following the examination of a complaint and at the end of the preliminary examination stage, that the measures complained of constitute existing aid, it should be noted that existing aid is of course subject to the constant review provided for in Article 108(1) TFEU and must be regarded as lawful so long as the Commission has not found that it is incompatible with the internal market. However, when the Commission receives a complaint about allegedly unlawful aid, by classifying the measure as existing aid, it subjects it to the procedure laid down in Article 108(1) TFEU and thus implicitly refuses to initiate the procedure laid down in Article 108(2) TFEU in respect of that aid which the complainant considers to be unlawful aid, that is to say new aid put into effect without the requisite authorisation (see, to that effect, judgments of 24 March 1993, CIRFS and Others v Commission, C‑313/90, EU:C:1993:111, paragraphs 25 and 26, and of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 52 and the case-law cited). It should be noted that those considerations concern existing aid within the meaning of the systems of existing aid referred to in Article 108(1) TFEU, but that, similarly, where the Commission considers that the measure at issue is individual existing aid, in other words past existing aid not granted under an aid system, it also refuses implicitly to initiate the procedure laid down in Article 108(2) TFEU in respect of that aid.
34      In such situations, the persons intended to benefit from the procedural guarantees afforded by that provision may secure compliance therewith only if they are able to challenge before the EU judicature the decision refusing to initiate the procedure provided for in that provision, both where that decision is taken on the ground that the Commission regards the aid as compatible with the internal market and where, in its view, the very existence of aid must be discounted or where it considers that there is existing aid (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 54).
35      As regards the conditions under which the Commission is required to initiate the procedure provided for in Article 108(2) TFEU in respect of a measure likely to constitute aid, as has been held on numerous occasions, when the Commission examines aid measures in the light of Article 107 TFEU in order to determine whether they are compatible with the internal market, it is required to initiate that procedure where, after the preliminary examination stage, it has not been able to overcome all the difficulties preventing a finding that those measures are compatible with the internal market. The same principles must apply where the Commission also has doubts as to whether the measure under examination is aid within the meaning of Article 107(1) TFEU (see, to that effect, judgment of 22 December 2008, British Aggregates v Commission, C‑487/06 P, EU:C:2008:757, paragraph 113 and the case-law cited). As regards measures which the Member State concerned claims to be existing aid, if the information in the Commission’s possession suggests, in the context of a provisional assessment, that it is likely that the measures at issue actually constitute existing aid, the Commission must then deal with them, if they are covered by a system of aid, within the procedural framework laid down in Article 108(1) and (2) TFEU. On the other hand, if that information is not such as to justify that provisional conclusion or if the Member State provides no information on the matter, the Commission must deal with those measures within the procedural framework provided for in Article 108(3) and (2) (see, to that effect, judgment of 10 May 2005, Italy v Commission, C‑400/99, EU:C:2005:275, paragraphs 47 and 55).
36      Thus, where the Commission examines a measure in the light of Articles 107 and 108 TFEU and, following a preliminary examination which it carried out under Article 108(3) TFEU, it is faced with persistent difficulties or doubts, in other words serious difficulties, either as regards the classification of that measure as State aid or as regards its classification as existing aid or new aid, or as regards its compatibility with the internal market if it considers that there is new aid, it is required to initiate the procedure provided for in Article 108(2) TFEU.
37      The present case must be examined in the light of those principles.
Assessment in the present case
38      The contested decision states that, in so far as the assets under management of Lekarna Ljubljana constitute State aid, they amount to existing aid. More specifically, as is stated in paragraphs 10 and 13 above, the Commission takes the view that the assets under management incorporated by Lekarna Ljubljana o.p. and Lekarna Ljubljana after 1979 do not constitute State aid and that the assets under management which were initially granted to Lekarna Ljubljana o.p. in 1979 and which were transferred to Lekarna Ljubljana in 1997, in so far as they may constitute State aid, constitute existing aid. In response to the Court’s written question referred to in paragraphs 14 and 21 above, the Commission stated that the contested decision closes the examination of the measures at issue, in particular on the ground that, if the assets under management which were initially granted to Lekarna Ljubljana o.p. in 1979 and which were transferred to Lekarna Ljubljana in 1997 constituted existing aid, it would amount to individual aid and not a system of aid within the scope of the constant review provided for in Article 108(1) TFEU, under which the compatibility with the internal market of the systems of aid existing in the Member States must be determined by the Commission. It stated that it had therefore not taken a decision on the compatibility with the internal market of any existing aid in the form of the assets under management which were initially granted to Lekarna Ljubljana o.p. in 1979 and which were transferred to Lekarna Ljubljana in 1997.
39      Following the preliminary examination carried out by the Commission, which was closed by the contested decision, as regards the assets under management of Lekarna Ljubljana, the applicant complains about the existence of new aid, in particular through an alteration to existing aid. For its part, the Commission, through the contested decision, adopted in that regard a mixed decision, combining the type of decision provided for in Article 4(2) of Regulation 2015/1589, according to which, ‘where the Commission, after a preliminary examination, finds that the … measure does not constitute aid, it shall record that finding by way of a decision’, and a decision of a type not provided for in that regulation, finding merely that, assuming that a measure constitutes aid, it amounts to existing aid.
The assets under management incorporated by Lekarna Ljubljana o.p. and Lekarna Ljubljana after 1979
40      The Commission considers in the contested decision, on the basis of the information available to it, that the assets under management which Lekarna Ljubljana o.p. and Lekarna Ljubljana incorporated after 1979 certainly do not constitute State aid. They were all acquired on the private market without any public support, as is stated in recital 36 of the contested decision. That conclusion of the Commission is based on the assurances given to that effect by the Slovenian authorities, but neither the contested decision nor the Commission’s written pleadings before the Court refer to specific evidence adduced in that regard.
41      For its part, the applicant states that it produced, inter alia, a document which was submitted to the Municipal Council of Ljubljana by the Mayor of Ljubljana in 2013, prepared by the city administration, which shows that Lekarna Ljubljana operates, inter alia, in buildings granted under management by the municipality and that, in 2008 and 2009, it granted new properties to Lekarna Ljubljana under the management agreement concluded with it. The document in question also states that Lekarna Ljubljana bore only the operating costs in respect of those buildings, but not the rent. In addition, in response to the Commission’s first preliminary assessment referred to in paragraph 8 above, the applicant claimed that the increase in the value of the assets under management in the successive annual reports of Lekarna Ljubljana could not be explained by profit accumulation, since that argument, put forward in those reports, was contradicted by the level of profits in the accounts of the institute. The applicant states in that regard that, in recital 71 of the contested decision, the Commission indicates that the Slovenian authorities maintained that Lekarna Ljubljana has always transferred its surpluses to the Municipality of Ljubljana. The increase in assets under management can therefore be explained only by making some of those assets available free of charge.
42      The legality of a State aid decision must be assessed on the basis of the information available to the Commission at the time it adopted the decision (see, to that effect, judgments of 10 July 1986, Belgium v Commission, 234/84, EU:C:1986:302, paragraph 16; of 22 December 2008, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 81; and of 23 November 2017, SACE and Sace BT v Commission, C‑472/15 P, not published, EU:C:2017:885, paragraph 76). Thus, the Commission cannot be criticised for not having taken into consideration, in the context of the procedure for reviewing State aid, factual information which was not brought to its attention in good time during that procedure or of which it is not obvious that it should have become aware of its own motion in the context of its supervisory function (see, to that effect, judgment of 15 March 2001, Prayon-Rupel v Commission, T‑73/98, EU:T:2001:94, paragraph 50).
43      Moreover, the review of legality carried out by the Court on the existence of serious difficulties goes beyond the search for a manifest error of assessment (see, to that effect, judgments of 19 May 1993, Cook v Commission, C‑198/91, EU:C:1993:197, paragraphs 31 to 38; of 15 June 1993, Matra v Commission, C‑225/91, EU:C:1993:239, paragraphs 34 to 39; and of 15 March 2001, Prayon-Rupel v Commission, T‑73/98, EU:T:2001:94, paragraph 47).
44      In the present case, as regards the issue whether the Commission, without having to consider itself to be faced with serious difficulties, could take the view that, after the grant in 1979 to Lekarna Ljubljana o.p. of the assets needed to commence its activities, all the other assets successively acquired by it and Lekarna Ljubljana were in themselves subject to market conditions, it is apparent that, as the Commission submits in its defence, the applicant has not demonstrated that, during the administrative procedure, it disclosed the document submitted to the Ljubljana City Council in 2013, referred to in paragraph 41 above. The applicant is imprecise in the reply as to the manner in which that piece of evidence was disclosed to the Commission. She refers to an internet link in the email submitting her response to the Commission’s first preliminary assessment, but the Commission denies in the rejoinder that that link produces the document in question, and it must be stated that the sources of information accompanying that internet link mentioned at the end of the reply do not include the Municipality of Ljubljana. That document submitted to the Ljubljana City Council in 2013, which is a document concerning specific operations and not information of a general nature on the legal and economic context of the measures at issue about which the Commission itself should have enquired in view of what is stated in paragraph 42 above, cannot therefore be taken into consideration when determining whether or not the Commission should consider itself to be facing serious difficulties when determining whether State aid had been granted to Lekarna Ljubljana o.p. or to Lekarna Ljubljana in the form of a grant of assets under management after 1979.
45      Nevertheless, the Commission acknowledges that another document, namely an extract from Lekarna Ljubljana’s annual report for 2012, was sent to it by the applicant. That document refers, in one of its paragraphs, to two properties which Lekarna Ljubljana has at its disposal, in respect of which a specific comment is made following the presentation of the total value of all the immovable property set out in the accounts of Lekarna Ljubljana, from which comment it is clear that that both those properties have a particular status and that they were transferred to it under management, but without any indication of the terms of that transfer. The extract from that paragraph, highlighted by the Commission in its defence, relates to another immovable property which, by contrast, was clearly purchased by Lekarna Ljubljana.
46      Furthermore, in its reply to the Commission’s first preliminary assessment, the applicant put forward other evidence, part of which was summarised in paragraph 41 above.
47      First of all, those factors include a quotation from Article 24 of the Physical Assets of the State and Local Government Act, at page 7 of that reply, which shows that the State and the local authorities may provide physical assets, free of charge, to public entities other than public companies, if that is in the public interest. A priori, Lekarna Ljubljana corresponds to that category of beneficiaries. Furthermore, it is true that not every grant by public authorities of physical assets to public entities necessarily constitutes State aid within the meaning of Article 107(1) TFEU, having regard in particular to the criterion that an entity does not receive an advantage where the public authority acts towards it in the same way that an investor in a market economy would (see, to that effect, judgments of 21 March 1991, Italy v Commission, C‑305/89, EU:C:1991:142, paragraphs 18 and 19, and of 11 July 1996, SFEI and Others, C‑39/94, EU:C:1996:285, paragraphs 58 to 61) or the criterion that trade between Member States must be affected by a public support measure in order for it to constitute such aid (see, to that effect, judgment of 19 December 2019, Arriva Italia and Others, C‑385/18, EU:C:2019:1121, paragraph 31 and the case-law cited). Nevertheless, that may sometimes be the case. The Court refers in that regard to the Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (OJ 2016 C 262, p. 1, paragraph 73 et seq., and paragraphs 197 and 210) and, for an example in which the Commission found that the conditions for the transfer of land gave rise to State aid, to Commission Decision 2002/14/EC of 12 July 2000 on the State aid granted by France to Scott Paper SA/Kimberly-Clark (OJ 2002 L 12, p. 1).
48      Next, the applicant reproduced several extracts from the public accounts of Lekarna Ljubljana and the Municipality of Ljubljana relating to the 2010s, and commented on them. The applicant complained of discrepancies between the municipality’s figures relating to the value of the assets granted under management to Lekarna Ljubljana (for example, EUR 35 036 742 on 31 December 2014) and Lekarna Ljubljana’s own figures relating to the value of its long-term assets and its assets granted under management (EUR 26 976 187 on the same date, that is to say a lower sum, even though it appears to relate to a broader scope). She highlighted the size of the increase in those assets in the accounts of Lekarna Ljubljana from one year to another (for example, the increase from EUR 26 976 187 on 31 December 2014 to EUR 31 973 809 one year later), like the increase, in the municipality’s accounts, in the value of the assets granted under management to Lekarna Ljubljana (from EUR 35 036 742 to EUR 42 790 897 for the same period). Lastly, she noted that a table drawn up by the municipality setting out the variations in the value of the assets granted under management to Lekarna Ljubljana from one year to the next indicates on numerous occasions that the increase is due to surplus income for the institute, which suggests that the assets granted under management include not only physical assets, but also monetary assets, even though Lekarna Ljubljana should normally pass on to the municipality its annual surplus income, after a deduction for investment needs. On that last point, it is true that the Commission states that Lekarna Ljubljana has always been entitled to invest its profits in the needs of its pharmaceutical business, in particular in premises. However, it is not possible to know by merely looking at those public accounts, what, among the assets granted under management to Lekarna Ljubljana, corresponds respectively to real assets that would have been given to it free of charge or on preferential terms by the Municipality of Ljubljana, to real assets acquired under market conditions by Lekarna Ljubljana or to financial or monetary assets. Contrary to what the Commission argues, in essence, it was not for the applicant to prove beyond all doubt that the assets under management of Lekarna Ljubljana included assets corresponding to State aid, but rather for the Commission, when faced with a situation of uncertainty in that regard, to carry out more thorough investigations.
49      While the contested decision, as regards the assets under management incorporated by Lekarna Ljubljana o.p. and Lekarna Ljubljana after 1979, merely refers to the Slovenian authorities’ assertion that all of those assets were acquired under market conditions, the evidence put forward by the applicant during the administrative procedure, referred to in paragraphs 45 to 48 above, shows a situation that is unclear as regards the nature and status of the assets under management of Lekarna Ljubljana. Moreover, the Commission states in the rejoinder that, in its reply to the Commission’s first preliminary assessment, the applicant stated that the conditions under which Lekarna Ljubljana received its assets under management were not known. However, the Commission itself has not clarified the issue on a documented basis, which it cannot criticise the applicant for failing to produce to it. It may indeed be much more difficult for a complainant to obtain the relevant information from the public authorities which may have granted State aid than for the Commission, which has extensive powers to that effect, deriving directly from the TFEU, but also from Regulation 2015/1589 (see, to that effect, judgments of 18 September 1995, SIDE v Commission, T‑49/93, EU:T:1995:166, paragraph 71, and of 28 September 1995, Sytraval and Brink’s France v Commission, T‑95/94, EU:T:1995:172, paragraph 77). It must be pointed out that the Commission’s second preliminary assessment, sent before the adoption of the contested decision, does not address that issue further, but refers to an analysis, which moreover was not ultimately accepted, according to which the dispensing of pharmaceutical products in Slovenia does not constitute an economic activity subject to the rules of the TFEU on State aid to undertakings.
50      It follows from the foregoing that, at the end of the preliminary examination which it carried out under Article 108(3) TFEU, the Commission did not dispel the doubts concerning whether all the assets under management incorporated by Lekarna Ljubljana o.p. and Lekarna Ljubljana after 1979 were incorporated by themselves under market conditions, as the Slovenian authorities stated, and, consequently, whether State aid was not provided to those entities through those assets.
Assets granted in 1979 to Lekarna Ljubljana o.p. in order to commence its activities
51      As regards the assets granted in 1979 to Lekarna Ljubljana o.p., which were necessary in order to commence its activities, the following matters, the existence of which is not disputed by the Commission, are apparent from the case file. The abovementioned assets were initially granted in the context of a State-managed economy, not part of the European Economic Community. The applicant submits in that regard, as is stated in paragraph  2 above, that Lekarna Ljubljana o.p., as an organisation of associated labour, could not own property. In 1992, the activity of dispensing pharmacies was opened up to competition, even though it was registered as a municipal public service involving the participation of municipal public institutes and private pharmacies, with the latter operating on the basis of municipal concessions. In that regard, in the contested decision, the Commission does not ultimately find that, since that opening up to competition, that activity is still non-economic in nature, in other words public pharmacy institutes and private pharmacies with a concession are not undertakings covered by Article 107 TFEU. In 1994, according to the applicant, the Municipality of Ljubljana was created. In 1997, by way of an ordinance, it created Lekarna Ljubljana, a public municipal institute, which legally assumed the rights and obligations of Lekarna Ljubljana o.p. The applicant submits that, at that time, there was already a dispensing pharmacy services market in which private operators offered goods and services. In 2007, according to the applicant, the ordinance creating Lekarna Ljubljana was amended in order to reflect formally its profit-making nature and the transfer to the municipal budget of its annual surplus income, after a deduction is made for its investment needs. In that regard, it is stated in recital 67 of the contested decision that that rule on the transfer of the annual surplus income to the municipal budget was relaxed in 2018. According to the applicant, the Pharmacy Act was also amended in 2007 to enable public municipal pharmacy institutes to operate outside the territory of their municipality of origin.
52      It has not been established that the applicant brought to the Commission’s attention during the administrative procedure all the matters referred to in paragrap h 51 above, even though the Commission does not dispute this. Nevertheless, those matters fall within the legal and economic context which the Commission had to consider sufficiently in its investigations in order to reach a decision with full knowledge of the facts. In that regard, it must be noted, as is apparent from paragraphs 11 to 13 above, that in the contested decision, in order to explain that the assets granted under management in 1979 to Lekarna Ljubljana o.p., and then transferred to Lekarna Ljubljana in 1997, constitute, in so far as they may be classified as State aid, existing aid, the Commission, after highlighting, first, the provisions of the Act annexed to the Treaty of Accession defining the existing aid on the date of accession and, secondly, the difference between new aid and existing aid as recalled in Regulation 2015/1589 and Regulation No 794/2004, merely indicated in recital 39 that the succession in 1997 between Lekarna Ljubljana o.p. and Lekarna Ljubljana was purely administrative and that the legal context, as well as the use and conditions for use of the assets in question, had not changed, so that the existing aid in place at that time had not been altered and remained aid of that type.
53      Account must be taken of the following, which is, in essence, correctly put forward by the applicant in her a pplication. Slovenia joined the European Union on 1 May 2004. First, the provisions of paragraph 1(a) of point 3 of Annex IV to the Act annexed to the Treaty of Accession, reproduced in paragraph 28 above and which are relevant to the present case, as is explained in paragraph 29 above, state that aid schemes and individual aid put into effect before 10 December 1994 in a new Member State and still applicable after the date of accession are to be regarded as existing aid at the time of accession. Secondly, according to the usual rules on State aid under Article 108(3) TFEU and the equivalent earlier provisions, recalled in Article 1(c) of Regulation 2015/1589, reproduced in paragraph 25 above, the alteration of existing aid gives rise to new aid (see, to that effect, judgment of 9 August 1994, Namur-Les assurances du crédit, C‑44/93, EU:C:1994:311, paragraph 13 and the case-law cited). It follows that aid implemented in Slovenia before 10 December 1994, and not covered, as in the present case, by other provisions, had to be regarded as existing aid on 1 May 2004 in so far as it had not been altered between those two dates, failing which it had to be regarded as new aid on that second date. An alteration of that aid after 1 May 2004 also made it new aid in the light of those usual rules. Consequently, in the present case, in order for the assets granted under management in 1979 to Lekarna Ljubljana o.p., then transferred in 1997 to Lekarna Ljubljana, in so far as they may be classified as State aid, constitute existing aid under the provisions referred to in this paragraph, no alteration of any such aid must have taken place between 10 December 1994 and the day on which the competent authority made a decision in that regard, in the present case the day when the contested decision was adopted.
54      In that regard, it is common ground that on 10 December 1994 Lekarna Ljubljana o.p. still existed, that the Municipality of Ljubljana had just been created and that the Pharmacies Act of 1992, opening up the sector to the market economy, had already been adopted. However, there is no information in the contested decision as to whether private pharmacies had already obtained municipal concessions on that date and whether Lekarna Ljubljana o.p. still held a monopoly in its area of activity. The ‘starting point’ is therefore uncertain. According to the applicant, in 1997, when Lekarna Ljubljana o.p. was replaced by Lekarna Ljubljana, the market was competitive. Bearing in mind the information provided by the applicant, which has not been refuted, Lekarna Ljubljana may show some fairly considerable differences compared with the entity which it succeeded in 1997: it has the capacity to acquire properties, and, according to recital 36 of the contested decision, it does so, which also raises the question whether, therefore, continuing to make immovable assets under management available without property can still be justified; since at least 2007, it aims to make a profit seeking to generate resources to finance activities other than its own; in addition, since 2007, it may also extend its activity beyond the territory of the Municipality of Ljubljana, which it has done. Moreover, its financial results, as highlighted by the applicant in her reply to the Commission’s first preliminary assessment, may reflect an activity which is experiencing net growth. In the absence of a more detailed examination which the Commission was required to carry out on its own initiative with regard to the development of the legal and economic context of the activity in question, in the light of its supervisory obligations referred to in paragraphs 35, 36 and 42 above, all those factors prevent it from being certain that there was no alteration to the possible aid at issue since 10 December 1994. The Commission’s assertion that the succession in 1997 between Lekarna Ljubljana o.p. and Lekarna Ljubljana was purely administrative and that the legal context, as well as the use and conditions of use of the assets in question, had not changed, is at the very least insufficiently substantiated in that regard.
55      It follows from the foregoing that, after the preliminary examination which it carried out pursuant to Article 108(3) TFEU, the Commission also failed to dispel the doubts as to whether the assets granted under management in 1979 to Lekarna Ljubljana o.p., and subsequently transferred in 1997 to Lekarna Ljubljana, in so far as they may be characterised as State aid, on which the Commission has not stated its position, constituted existing aid or new aid within the meaning of Article 1(b) of Regulation 2015/1589, in view of the various categories of existing aid listed in the provision.
56      Without it being necessary to examine the applicant’s arguments relating to the length of that preliminary examination procedure and to the large number of exchanges between the Commission and the stakeholders, in particular the Slovenian authorities, which it caused, it follows from the findings made in paragraphs 50 and 55 above, and bearing in mind the case-law referred to in paragraphs 35 and 36 above, that the Commission was faced with serious difficulties which should have led it to initiate the procedure provided for in Article 108(2) TFEU in the present case. The detailed examination involved in that procedure would, moreover, have enabled the Commission, where necessary, to take an informed decision on the following questions: the very presence of State aid, within the meaning of Article 107 TFEU, in the case of the grant to Lekarna Ljubljana of assets under management free of charge or preferentially by the Municipality of Ljubljana, the classification of such assets as existing aid or new aid and their classification as individual aid or aid coming under an aid system. That would have enabled the Commission to provide informed guidance for the subsequent procedure, if necessary, in order to assess the compatibility with the internal market of the measures which turned out to be aid, whether existing or new, and which require such an assessment.
57      The third plea for annulment and, consequently, the action must be upheld, without there being any need to examine the applicant’s criticisms of the reasoning of the contested decision expressed in the first plea for annulment and in the commentary on the Commission’s answer to the Court’s written question, or to examine separately the second plea for annulment. It follows that the contested decision must be annulled in so far as it concerns the assessment, in the light of the rules on State aid, of the grant of assets under management to Lekarna Ljubljana.
Costs
58      Under Article 134(1) of the Rules of Procedure of the General Court, 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 been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
59      Under Article 138(1) of the Rules of Procedure, the Member States which intervened in the proceedings are to bear their own costs. The Republic of Slovenia must therefore bear its own costs.
On those grounds,
THE GENERAL COURT (Fourth Chamber)
hereby:
1.      Annuls Commission Decision C(2020) 1724 final of 24 March 2020 closing the examination of measures concerning the public pharmacy Lekarna Ljubljana in the light of the State aid rules in Articles 107 and 108 TFEU (Case SA.43546 (2016/FC) – Slovenia) in so far as it concerns the assets under management of Lekarna Ljubljana;
2.      Orders the European Commission to bear its own costs and to pay those of Petra Flašker;
3.      Orders the Republic of Slovenia to bear its own costs.
Gervasoni
Madise
Nihoul
Delivered in open court in Luxembourg on 27 April 2022.
E. Coulon
S. Papasavvas
Registrar
President
*      Language of the case: English.