62021TJ0167_RES
Case T‑167/21
European Gaming and Betting Association
v
European Commission
Judgment of the General Court (Ninth Chamber) of 15 November 2023
(State aid – State measure extending gambling licences granted by the Netherlands – Decision finding no State aid – Failure to initiate the formal investigation procedure – Serious difficulties – Procedural rights of interested parties)
Aid granted by a Member State – Examination by the Commission – Preliminary review and main review – Commission’s duty to initiate the main review procedure in the event of serious difficulties – Circumstances enabling the existence of such difficulties to be established – Insufficiency or incompleteness of the examination carried out by the Commission
(Art. 108(2) and (3) TFEU; Council Regulation 2015/1589, Art. 4)
(see paragraphs 29-39, 44-51)
Résumé
The Netherlands legislation on gambling is based on a system of exclusive authorisations, or licences, under which the organisation or promotion of gambling is prohibited unless an administrative authorisation has been issued to that effect.
Pursuant to a general policy rule adopted by the Netherlands State Secretary for Security and Justice, the Netherlands Gambling Authority renewed six expiring licences relating to, inter alia, the organisation of lotteries and sports and horse betting (together, ‘the contested measure’).
Considering that that general policy rule and the renewal of the six exclusive licences constituted State aid in favour of the legacy licence holders, an association comprising European online gaming and betting operators, European Gaming and Betting Association (‘the applicant’) lodged a complaint with the European Commission.
The Commission rejected that complaint without initiating the formal investigation procedure provided for in Article 108(2) TFEU. (
1
)
In its decision, the Commission considered that, as no advantage was conferred on the licence holders, the contested measure did not constitute State aid within the meaning of Article 107(1) TFEU. In that regard, the Commission pointed out that the Netherlands legislation required the licence holders to pay the proceeds of their gambling activities to bodies that serve the common interest specified in the licences, after deducting their expenditure and reasonable costs.
The General Court, before which the applicant had brought an action for annulment, annuls that Commission decision, on the ground that the Commission did not examine whether the contested measure conferred an indirect advantage on the bodies to which the licence holders had to remit part of their proceeds and, so doing, it excluded that that issue could give rise to serious difficulties in the classification of that measure as State aid which only the formal investigation procedure laid down in Article 108(2) TFEU could have resolved. In that context, the Court clarifies the scope of the examination that must be carried out by the Commission when it is called upon to ascertain whether a particular measure constitutes State aid within the meaning of Article 107(1) TFEU.
Findings of the Court
In support of its action, the applicant relied on, inter alia, infringement of its procedural rights by the Commission’s refusal to initiate the formal investigation procedure under Article 108(2) TFEU, while the preliminary examination for the purposes of Article 108(3) TFEU did not eliminate all doubts as to the existence of aid. In that regard, the applicant submitted, in essence, that the Commission was wrong to conclude in the contested decision that no doubts persisted with regard to whether the contested measure conferred an advantage on its beneficiaries.
According to settled case-law, the lawfulness of a decision by the Commission not to raise objections, based on Article 4(3) of Regulation 2015/1589, (
2
) depends on whether the assessment of the information and evidence which the Commission had or could have had available to it during the preliminary examination procedure should objectively have raised doubts as to the compatibility of an aid measure with the internal market, given that any such doubts must lead to the initiation of a formal investigation procedure.
In that context, the applicant argued, inter alia, that the Commission had information and evidence available to it which made it possible to suspect that there was an indirect advantage benefitting the bodies to which the licence holders had to remit part of their proceeds generated by gambling activities. However, by failing to examine this, the applicant claimed that the Commission was not able to resolve all doubts regarding the existence of State aid.
In that connection, the Court finds that it is clear from the Netherlands legislation on gambling submitted to the Commission for assessment that the licence holders had to remit part of their proceeds to the bodies that serve the common interest designated in the licences.
The Court goes on to highlight that the Commission based its analysis that there was no advantage for the licence holders specifically on their obligation to remit part of their proceeds to bodies that serve the common interest.
It follows that, when the contested decision was adopted, the Commission had information available to it which should have led it to examine whether the Netherlands legislation on gambling was designed in such a way as to channel the proceeds generated by the activity of the licence holders in question towards, primarily, bodies that serve the common interest designated by those licences, which could constitute an indirect advantage and, therefore, State aid for those bodies.
Moreover, paragraph 115 of the Commission Notice on the notion of State aid (
3
) specifies that an indirect advantage can be conferred on undertakings other than those to which State resources have been directly transferred. In addition, paragraph 116 of that notice states that the notion of ‘indirect advantage’ covers the situation in which the measure is designed in such a way as to channel its secondary effects towards identifiable undertakings or groups of undertakings.
The Commission should therefore have sought to ascertain whether the contested measure conferred an indirect advantage on bodies that serve the common interest and, therefore, whether it constituted aid for those bodies.
Due to the complete absence of appropriate investigation by the Commission of that question at the preliminary examination stage, while the remittance of part of the proceeds generated by the activity of the licence holders to bodies that serve the common interest designated by those licences constituted one of the main features of the legislation at issue, the Court finds that the fact that this issue was not examined in the contested decision does not make it possible to rule out the existence of serious difficulties in that connection.
As a result, the Court upholds the claim that the applicant’s procedural rights were infringed due to the Commission’s failure to assess whether the licences at issue conferred an indirect advantage on the bodies to which the holders of those licences had to remit part of their proceeds generated by gambling activities.
(
1
)	Commission Decision C(2020) 8965 final of 18 December 2020 in Case SA.44830 (2016/FC) – Netherlands – Prolongation of gambling licences in the Netherlands (‘the contested decision’), referred to in the Official Journal of the European Union of 15 January 2021 (OJ 2021 C 17, p. 1).
(
2
)	Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9).
(
3
)	Commission Notice on the notion of State aid as referred to in Article 107(1) [TFEU] (OJ 2016 C 262, p. 1).