JUDGMENT OF THE GENERAL COURT (Ninth Chamber)
21 May 2025 (*)
( State aid – State measures amending the existing aid granted to the Lithuanian public service broadcasting organisation LRT – Rejection of a complaint – Decision not to raise any objections – Action for annulment – Status as an interested party – Safeguarding of procedural rights – Admissibility – Serious difficulties – Substantial alteration to existing aid )
In Case T‑72/22,
Interneto žiniasklaidos asociacija, established in Vilnius (Lithuania),
All Media Lithuania UAB, established in Vilnius,
All Media Radijas UAB, established in Vilnius,
represented by K. Kačerauskas, lawyer,
applicants,
v
European Commission, represented by L. Nicolae, acting as Agent,
defendant,
supported by
Lietuvos nacionalinis radijas ir televizija VšĮ,
established in Vilnius (Lithuania), represented by D. Miniotas, lawyer,
and by
European Broadcasting Union (EBU),
established in Grand-Saconnex (Switzerland), represented by D. Waelbroeck, D. Fosselard and J. Bracker, lawyers,
interveners,
THE GENERAL COURT (Ninth Chamber),
composed of L. Truchot, President, H. Kanninen and T. Perišin (Rapporteur), Judges,
Registrar: A. Marghelis, Administrator,
having regard to the written part of the procedure,
further to the hearing on 22 March 2024,
gives the following
Judgment
1        By their action under Article 263 TFEU, the applicants, Interneto žiniasklaidos asociacija, All Media Lithuania UAB and All Media Radijas UAB, seek the annulment of the letter from the European Commission bearing the reference COMP.C.4/KK/ASz/ao D(2021)7942463 of 25 November 2021 on State aid SA.57787 (2020/FC) – Lithuania – State aid to public service broadcaster LRT
- LT (‘the contested letter’).
Background to the dispute
2        The first applicant, Interneto žiniasklaidos asociacija, is a trade association established in Vilnius (Lithuania). According to the application, it represents the interests of companies operating in the online media sector.
3        The second and third applicants, All Media Lithuania and All Media Radijas, are private limited liability companies established in Vilnius. According to the application, they operate in the media sector, including television and radio broadcasting activities.
4        Lietuvos nacionalinis radijas ir televizija VšĮ (Lithuanian national radio and television; ‘LRT’) is a public service broadcaster owned by the Lithuanian State and headquartered in Vilnius. It was established by Resolution No. I-208 of 10 May 1990 on the approval of the Statute of the Lithuanian National Radio and Television, adopted by the Lithuanian Parliament.
5        The LRT Statute provides that LRT’s objectives are ‘to collect and disseminate information about Lithuania and the world and to publish it in the correct Lithuanian language; to create, disseminate and preserve cultural values; to build a tolerant and humane society; to promote moral and civic education; to develop radio and television communications and technical capabilities’. In order to carry out its public service mission, LRT has the right to ‘organise open radio and television competitions, festivals, forums, exhibitions, etc.; have art groups; publish books and periodicals; produce and broadcast commercial programmes, advertising; establish direct contact with foreign organisations and companies.’ LRT’s funds consist of ‘allocations from the State budget as well as income from commercial activities, publishing, advertising and other sources, donations from public organisations and individuals.’
6        LRT was reorganised by the įstatymas Nr. I-1571 Lietuvos nacionalinio radijo ir televizijos (Law No I-1571 on the Lithuanian National Radio and Television) of 8 October 1996 (Žin. 1996 No 102-2319; ‘the Law on LRT’).
7        The Law on LRT was amended inter alia in 2015 (‘the 2015 amendments’) and in 2020 (‘the 2020 amendments’).
8        As regards the LRT funding scheme, it is apparent from the documents before the Court that Article 15(1) of the Law on LRT, in the version in force before Lithuania’s accession to the European Union, provided that LRT was to be funded from the State budget, revenue from taxes levied by the State for LRT’s services to the public, revenue from sales of radio and television programmes, advertising and publishing, and revenue from commercial activities. As the revenue from taxes levied by the State for LRT’s services to the public increased, LRT’s funding from the State budget would decrease.
9        Following the 2015 amendments, Article 15(1) of the Law on LRT, in the version amended by those amendments, provided that LRT’s funding was to come from the State budget, revenue from sales of radio and television programmes, informational notices, publishing and revenue from commercial activities. Thus, revenue from commercial advertising was no longer a source of funding for LRT. Furthermore, Article 15(3) of that law, as amended by the 2015 amendments, laid down a formula to determine the amount of funds to which LRT was entitled from the State budget annually. This amounted to 1.5% of the State budget and municipal budget revenues from personal income tax and 1.3% from excise duties actually received in the previous year. In addition, that provision stipulated that the amount of funds allocated to LRT was not to be less than the amount calculated on the basis of all actual revenues from personal income tax and excise duties in 2012.
10      Following the 2020 amendments, in accordance with Article 15(3) of the Law on LRT, in the version amended by those amendments, the formula established by the 2015 amendments to determine the amount of funds to which LRT is entitled from the State budget annually was adjusted and those funds now amount to 1% of the State budget and municipal budget revenues from personal income tax and 1.3%
from excise duties actually received in the previous year. Moreover, the amount of funds allocated to LRT must not be less than the funds allocated to LRT from the State budget in 2019.
11      On 21 June 2020, the applicants submitted a complaint to the Commission, alleging that the changes made to the LRT funding scheme by the 2015 and the 2020 amendments were sufficiently substantial to trigger the notification requirement
under
Article 108(3) TFEU. The applicants argued that, since the Commission was not notified of those changes, LRT’s funding had, since
1 January 2015, constituted unlawful State aid prohibited by Article 107(1) TFEU.
12      On 2 July 2020, the Commission forwarded a non-confidential version of the complaint to the Lithuanian authorities, which submitted their observations on 29 September 2020, arguing that the LRT funding scheme constituted existing aid.
13      On 26 February 2021, the applicants submitted additional information to the Commission.
14      On 30 April 2021, the Commission forwarded the observations of the Lithuanian authorities to the applicants and expressed the preliminary view that the LRT funding scheme constituted existing aid.
15      On 1 July 2021, the applicants submitted their observations on the Commission’s preliminary views and asked the Commission to initiate a formal investigation procedure (‘the applicants’ observations of 1 July 2021’). In the alternative, in the event that the Commission took the view that the LRT funding scheme constituted existing aid, the applicants asked the Commission to initiate a review of the compatibility of that measure.
16      On 25 November 2021, the Commission sent the contested letter to the applicants. In that letter, first, it stated that the LRT funding scheme constituted existing aid within the meaning of Article 1(b)(i) of 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), that is to say, aid which was put into effect before, and is still applicable after, the entry into force of the FEU Treaty in the Member State concerned. Secondly, in the Commission’s view, the 2015 and 2020 amendments were not severable from the original LRT funding scheme. Thirdly, it concluded that the 2015 and 2020 amendments could not be regarded as substantial alterations to existing aid, since they did not affect the central elements of the original LRT funding scheme. Thus, according to the Commission, the 2015 and 2020 amendments did not constitute new aid. Fourthly, the Commission reached the preliminary view that LRT’s funding was prima facie in line with the Communication from the Commission on the application of State aid rules to public service broadcasting (OJ 2009 C 257, p. 1; ‘the Broadcasting Communication’) and Article 106(2) TFEU. It noted however that it was not required to reach a conclusion as to the compatibility of the aid with the internal market, as it constituted existing aid. The Commission observed that, according to the case-law, it had a broad discretion in exercising its powers under Article 108(1) TFEU, and that the appropriate measures proposed under that provision were merely proposals and produced no binding legal effects. Accordingly, the Commission concluded that it was not under an obligation to investigate the existing aid and propose appropriate measures within the meaning of
Article 108(1) TFEU.
17      On 11 January 2022, the applicants sent additional information to the Commission.
Forms of order sought
18      The applicants claim that the Court should:
–        annul the contested letter;
–        order the Commission to pay the costs.
19      The Commission and the interveners, LRT and European Broadcasting Union (EBU), contend that the Court should:
–        dismiss the application;
–        order the applicants to pay the costs.
Law
Admissibility
20      The applicants submit that the present action is admissible, inasmuch as, first, the contested letter amounts to a decision adopted by the Commission subject to judicial review under Article 263 TFEU and, secondly, they have standing to bring proceedings, since they are regarded as interested parties within the meaning of Article 1(h) of Regulation 2015/1589 and
directly and individually concerned by the contested letter, for the purposes of the fourth paragraph of Article 263 TFEU.
21      The Commission, supported by EBU, does not dispute that the contested letter is a challengeable act. It notes, however, that the nature of the contested letter as a challengeable act is limited to its finding concerning existing aid and does not extend to its preliminary view as to the compatibility of LRT’s funding with the internal market.
22      As regards the applicants’ standing to bring proceedings, in its defence, the Commission does not dispute that the applicants compete with LRT and that they do not need to show that they are directly and individually concerned by the contested letter, to the extent that the single plea put forward by the applicants should be understood as aiming to safeguard their procedural rights due to the failure to initiate a formal investigation procedure.
23      However, in its response to the measure of organisation of procedure addressed by the Court to the parties, the Commission, supported by the interveners, claims that none of the three parts of the single plea in law relied on by the applicants and none of the specific arguments raised in the context of those three parts seeks to safeguard their procedural rights under Article 108(2) TFEU. It argues that none of the applicants’ submissions identifies specific evidence capable of demonstrating the existence of serious difficulties encountered by the Commission in its assessment. According to the Commission, the applicants seek, rather, to call into question the merits of the contested letter.
Whether the contested letter is open to challenge
24      In accordance with the first paragraph of Article 263 TFEU, acts against which an action may be brought are acts intended to produce legal effects vis-à-vis third parties.
25      In order to determine whether the contested letter contains a decision against which an action for annulment may be brought, it should be noted that, under the second subparagraph of Article 12(1) of Regulation 2015/1589, the Commission must examine without undue delay any complaint submitted by an interested party regarding allegedly unlawful aid. When it receives such a complaint, the Commission must initiate the preliminary examination stage provided for in Article 108(3) TFEU. In that context, it must examine whether the measure in question constitutes aid and, if so, whether that aid is compatible with the internal market (see, to that effect, order of 10 October 2017, Alex v Commission, T‑841/16, not published, EU:T:2017:724, paragraph 29 and the case-law cited, and judgment of 27 April 2022, Flašker v Commission, T‑392/20, not published, EU:T:2022:245, paragraph 30 and the case-law cited).
26      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 stage 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 formal investigation procedure, provided for by Article 108(2) TFEU, or to adopt a definitive decision rejecting the complaint (see, to that effect, judgment of 27 April 2022, Flašker v Commission, T‑392/20, not published, EU:T:2022:245, paragraph 31 and the case-law cited).
27      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, judgment of 27 April 2022, Flašker v Commission, T‑392/20 EU:T:2022:245, paragraph 33 and the case-law cited).
28      The adoption by the Commission of such a position, based on the information supplied by the interested parties, constitutes a decision (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 58 and the case-law cited), which is definitive and therefore cannot be characterised as a mere provisional measure (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraph 53 and the case-law cited).
29      In order to determine whether an act adopted by the Commission constitutes a decision under Article 4 of Regulation 2015/1589, it is necessary, according to the case-law, to examine the substance of that act. The form in which the act is presented, namely whether it is duly named by its author, it is sufficiently reasoned or it mentions the provisions providing the legal basis for it, has, in principle, no bearing on the nature thereof. The fact that the act is not referred to as a ‘decision’ is also irrelevant, in principle. Finally, it is immaterial whether or not the act was notified to the Member State concerned, since compliance with that step cannot alter the substance of the act (see order of 10 October 2017, Alex v Commission, T‑841/16, not published, EU:T:2017:724, paragraph 32 and the case-law cited).
30      It is in the light of the principles referred to in paragraphs 25 to 29 above that the Court must determine whether, in the contested letter, the Commission, at the end of the preliminary examination stage, adopted its definitive position on the complaint lodged by the applicants.
31      In the present case, it must be held that, as is apparent from paragraphs 11 to 16 above, on 21 June 2020, the applicants submitted a complaint with the Commission, alleging that the changes made to the LRT funding scheme by the 2015 and 2020 amendments were sufficiently substantial to trigger the notification requirement
under
Article 108(3) TFEU. On 30 April 2021, the Commission expressed its preliminary view that the LRT funding scheme constituted existing aid. On 1 July 2021, the applicants submitted their observations on the Commission’s preliminary views and asked it to initiate a formal investigation procedure. On 25 November 2021, the Commission sent the applicants the contested letter, in which it concluded that the 2015 and 2020 amendments could not be regarded as substantial alterations to existing aid, since they did not affect the central elements of the original LRT funding scheme. Thus, the Commission stated that the 2015 and 2020 amendments did not constitute new aid and that, consequently, there was no need to initiate the formal investigation procedure. The Commission stated that it did not intend to take any action in response to the applicants’ complaint.
32      It follows from the foregoing that, in the contested letter, the Commission formed a definitive opinion on the classification of the 2015 and 2020 amendments as existing aid and thus brought the preliminary examination procedure to an end, since the investigation that had been initiated did not lead to the conclusion that there had been substantial alterations to existing aid.
33      As is apparent from the case-law cited in paragraphs 27 and 28, such a decision, by which the Commission classifies the measure at issue as existing aid and thus implicitly refuses to initiate the formal investigation procedure laid down in Article 108(2) TFEU, constitutes a decision under Article 4 of Regulation 2015/1589 and, consequently, an act open to challenge for the purposes of Article 263 TFEU (see, to that effect, judgment of 18 November 2010, NDSHT v Commission, C‑322/09 P, EU:C:2010:701, paragraphs 52, 60 and 62).
34      In the light of the foregoing considerations, the contested letter must be classified as a decision adopted under Article 4 of Regulation 2015/1589, in so far as the Commission classified the 2015 and 2020 amendments as existing aid, and, consequently, as a challengeable act.
Standing to bring proceedings
35      It must be recalled that, in the context of the procedure for reviewing State aid provided for in Article 108 TFEU, the preliminary examination of aid under Article 108(3) TFEU, which is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid in question, must be distinguished from the formal investigation procedure under Article 108(2) TFEU. It is only in connection with that investigation, which is designed to enable the Commission to be fully informed of all the facts of the case, that the Treaty imposes an obligation on the Commission to give the parties concerned notice to submit their comments (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 56
and the case-law cited).
36      It follows that, where, without initiating the formal investigation procedure under Article 108(2) TFEU, the Commission finds, by a decision taken on the basis of Article 108(3) TFEU, that aid is compatible with the internal market, the persons intended to benefit from those procedural guarantees may secure compliance therewith only if they are able to challenge that decision before the EU Courts. For those reasons, an action for the annulment of such a decision brought by a person who is concerned within the meaning of Article 108(2) TFEU is to be declared to be admissible where that person seeks, by instituting proceedings, to safeguard the procedural rights available to him or her under that provision (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 57
and the case-law cited).
37      That is also the case where, without initiating the formal investigation procedure, the Commission maintains that, in so far as the contested measure constitutes aid, within the meaning of Article 107(1) TFEU, it should be classified as existing aid and, in doing so, it refuses by implication to initiate the formal investigation procedure provided for by Article 108(2) TFEU (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 58
and the case-law cited).
38      By contrast, if the applicant calls into question the merits of a decision appraising the aid taken on the basis of Article 108(3) TFEU or after the formal investigation procedure, the mere fact that it may be regarded as ‘concerned’
within the meaning of Article 108(2) TFEU cannot suffice to render the action admissible. The applicant must therefore demonstrate that it has a particular status, for the purposes of the judgment of 15 July 1963, Plaumann v Commission (25/62, EU:C:1963:17). That applies in particular where the applicant’s position on the market concerned is substantially affected by the aid to which the decision in question relates (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 37 and the case-law cited).
39      In the present case, by classifying the measure as existing aid, the Commission refused by implication to initiate the procedure provided for by Article 108(2) TFEU in respect of that aid which the applicants considered to be unlawful aid. The adoption by the Commission of such a position, based on the information supplied by the interested parties, constitutes a decision not to initiate the formal investigation procedure under
Article 108(2) TFEU, against which an interested party
may bring an action to safeguard the procedural rights available to him or her under that provision.
40      According to Article 1(h) of Regulation 2015/1589, an interested party is ‘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.’ In other words, there is an indeterminate group of persons to whom notice must be given. That provision does not, however, rule out the possibility that an undertaking which is not a direct competitor of the beneficiary of the aid can be categorised as an ‘interested party’, provided that that undertaking demonstrates that its interests could be adversely affected by the grant of the aid. Thus, it is necessary for that undertaking to establish, to the requisite legal standard, that the aid is likely to have a specific effect on its situation (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 70
and the case-law cited).
41      As is clear from the case-law, if an applicant is recognised as having the specific status of ‘interested party’, within the meaning of Article 1(h) of Regulation 2015/1589, in connection with the specific subject matter of the action, that status is sufficient to distinguish it individually, for the purposes of the fourth paragraph of Article 263 TFEU, where that action seeks to safeguard the applicant’s procedural rights under Article 108(2) TFEU (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 69 and the case-law cited; see also, to that effect, judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 56).
42      In the present case, the applicants are the authors of the complaints which led to the adoption of the contested letter. They actively participated in the preliminary examination procedure. Moreover, as they submit, while the first applicant is a trade association defending the interests of undertakings competing with the beneficiary of the alleged aid, the second and third ones are two undertakings competing with that beneficiary and their interests could be affected by the grant of the alleged aid.
43      Therefore, it must be held that the applicants have established that they have the status of interested parties for the purposes of Article 108(2) TFEU and of Article 1(h) of Regulation 2015/1589, which, moreover, is not disputed by the Commission. Accordingly, the applicants are entitled to challenge the contested letter in so far as, by their action, they seek to safeguard their procedural rights.
44      As stated in paragraph 36 above, an action brought by a party concerned within the meaning of Article 108(2) TFEU, for annulment of the decision not to initiate a formal investigation procedure pursuant to that provision, must be considered to be admissible where that party seeks, by bringing that action, to safeguard the procedural rights available to him or her under that provision (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 59
and the case-law cited).
45      In that regard, it is important to recall that, according to the case-law, when an applicant seeks the annulment of a decision under Article 4(3) of Regulation 2015/1589, that applicant essentially contests the fact that the Commission adopted the decision in relation to the aid at issue without initiating the formal investigation procedure, thereby infringing the applicant’s procedural rights. In order to have its action for annulment upheld, the applicant may invoke any plea capable of showing that the assessment of the information and evidence which the Commission had at its disposal during the preliminary examination procedure for the measure notified should have raised doubts as to the compatibility of that measure with the internal market. The use of such arguments cannot, however, have the consequence of changing the subject matter of the application or of altering the conditions of its admissibility. On the contrary, the existence of doubts about its compatibility is precisely the evidence which must be adduced in order to show that the Commission was required to initiate the formal investigation procedure (see judgment of 21 December 2022, Landwärme v Commission, T‑626/20, EU:T:2022:853, paragraph 28 and the case-law cited).
46      Consequently, since this is an action challenging the legality of a decision adopted under Article 4(3) of Regulation 2015/1589, without initiating the formal investigation procedure, it is, in principle, necessary to consider all the complaints and arguments raised by the applicant in the pleas in law relied on, in order to assess whether they make it possible to identify serious difficulties or doubts facing the Commission and requiring it to initiate the formal investigation procedure. In such an action, pleas challenging the compatibility of the aid are therefore to be assessed by the Court in the light of the existence of a serious difficulty, without it being necessary to declare them inadmissible (see judgment of 21 December 2022, Landwärme v Commission, T‑626/20, EU:T:2022:853, paragraph 29 and the case-law cited).
47      It also follows from the case-law that an applicant has the right, in order to demonstrate the infringement of its procedural rights on account of the doubts that the measure at issue should have raised as to its compatibility with the internal market, to put forward arguments aimed at demonstrating that the Commission’s finding as to the compatibility of that measure with the internal market was incorrect, which, a fortiori, is such as to establish that the Commission should have harboured doubts in its assessment of the compatibility of that measure with the internal market. Accordingly, the Court is entitled to examine the substantive arguments made by the applicant, in order to determine whether they are such as to support the plea in law alleging the existence of doubts justifying initiation of the formal investigation procedure (see judgment of 21 December 2022, Landwärme v Commission, T‑626/20, EU:T:2022:853, paragraph 30 and the case-law cited).
48      It should be noted that, although the principles enshrined in the case-law referred to in paragraphs 45 to 47 above have been developed in the light of the decisions not to raise objections referred to in Article 4(3) of Regulation 2015/1589, they also apply to decisions finding that the measure concerned constitutes existing aid, such as that at issue in the present case.
49      In that regard, it must be borne in mind that it is not for the EU Courts to interpret an action brought by an applicant to challenge exclusively the merits of a decision assessing the aid measure at issue as seeking, in fact, to safeguard the procedural rights available to the applicant under Article 108(2) TFEU, where the applicant has not expressly raised a plea to that effect, as to do so would change the subject matter of the action (see judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa, C‑466/21 P, EU:C:2023:666, paragraph 101 and the case-law cited).
50      However, an applicant’s arguments that seek specifically to show that the Commission should have initiated the formal investigation procedure are admissible where the action in support of which those arguments are relied on in effect seeks the annulment of the decision not to initiate that formal procedure and where, according to the actual wording of the application, the applicant submits that the failure to initiate the formal investigation procedure prevented it from benefiting from the procedural guarantees to which it is entitled (see judgment of 14 September 2023, Land Rheinland-Pfalz v Deutsche Lufthansa, C‑466/21 P, EU:C:2023:666, paragraph 102 and the case-law cited).
51      In the present case, it is apparent from reading the application that, by their action, the applicants complain, inter alia, that the Commission failed to initiate the formal investigation procedure even though, in the light of the information which they had submitted to it, the Commission could not have been unaware of the existence of doubts as to whether the 2015 and 2020 amendments constituted substantial alterations to the existing aid at issue. In support of their arguments, the applicants rely on a single plea in law, by which they claim that the Commission failed to investigate with the diligence required by the principle of sound administration enshrined in Article 41 of the Charter of Fundamental Rights of the European Union.
52      In particular, in paragraph 50 of their application, the applicants state that, by rejecting their complaint without an appropriate legal basis, the Commission infringed their procedural right conferred by Regulation 2015/1589 and prevented them from submitting their observations in a formal investigation procedure, which should have been initiated by the Commission.
53      In the light of the foregoing considerations, the single plea in law must be regarded as alleging infringement of the procedural rights available to the applicants
under Article 108(2) TFEU in so far as, after handling their complaint, the Commission wrongly refused to initiate the formal investigation procedure by classifying the 2015 and 2020 amendments as existing aid.
54      Consequently, it must be concluded that the applicants have standing to bring proceedings in so far as they seek, by their single plea in law, to safeguard their procedural rights. The action is thus admissible.
Substance
55      In their single plea in law, the applicants rely, in essence, on a body of evidence intended to demonstrate the serious difficulties which the Commission should have encountered during the preliminary examination concerning the classification of the 2015 and 2020 amendments as existing aid. Such difficulties are revealed by indications relating, first, to the procedure for the adoption of the contested letter and, secondly, to the content of the contested letter. The Court therefore is of the opinion that, while the applicants formally divided the single plea in law into three parts, the plea in fact comprises two parts: the first part, which concerns evidence relating to the procedure for the adoption of the contested letter, and the second part, which concerns evidence relating to the content of the contested letter.
56      It is appropriate to recall at the outset the principles governing the review of legality, on the basis of Article 263 TFEU, of a decision not to raise objections, before examining the body of evidence put forward by the applicants.
Judicial review as to the existence of serious difficulties
57      According to the case-law, the formal investigation procedure under Article 108(2) TFEU is essential whenever the Commission has serious difficulties in determining whether aid is compatible with the internal market. Thus, the Commission may confine itself to the preliminary examination under Article 108(3) TFEU when taking a decision in favour of aid only if it is able to satisfy itself, after an initial examination, that that aid is compatible with the internal market. If, by contrast, the initial examination leads the Commission to the opposite conclusion or even if it does not enable it to resolve all the difficulties involved in determining whether the aid is compatible with the internal market, the Commission is under a duty to carry out all the requisite consultations and for that purpose to initiate the procedure under Article 108(2) TFEU (see judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 90
and the case-law cited).
58      The same applies where the Commission, following the examination of a complaint and after the preliminary examination stage, concludes that the measure at issue constitutes existing aid. In that situation, the purpose of the review of legality carried out by the Court is to examine whether the preliminary examination procedure gave rise to serious difficulties when analysing the contested measure and assessing whether it could be classified as existing aid. By contrast, it is not for the Court to review, as such, the Commission’s assessment of whether the contested measure could be classified as existing aid or the compatibility of that measure with the internal market, but only to assess whether, in that assessment, it encountered serious difficulties (see, to that effect, judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 91).
59      As the concept of ‘serious difficulties’ is objective in nature, proof of the existence of such difficulties, which must be looked for both in the circumstances in which the decision not to raise objections was adopted and in its content, must be furnished by the applicant seeking the annulment of that decision, by reference to a consistent body of evidence (see judgment of 14 September 2023, Commission and IGG v Dansk Erhverv, C‑508/21 P and C‑509/21 P, EU:C:2023:669, paragraph 70 and the case-law cited; see also, to that effect, judgment of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraphs 92 and 95 and the case-law cited).
60      In particular, if the examination carried out by the Commission during the preliminary examination procedure is insufficient or incomplete, this constitutes an indication of the existence of serious difficulties in the assessment of the measure at issue, which should have triggered the Commission’s obligation to initiate the formal investigation procedure (see judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 41
and the case-law cited).
61      In addition, the lawfulness of a decision at the end of the preliminary examination procedure such as that referred to in Article 4(2) of Regulation 2015/1589 falls to be assessed by the EU Courts, in the light not only of the information available to the Commission at the time when the decision was adopted, but also of the information which ‘could have been available’ to the Commission, which includes information which seemed relevant and which could have been obtained, upon request by the Commission, during the administrative procedure (see judgment of 17 November 2022, Irish Wind Farmers’ Association and Others v Commission, C‑578/21 P, not published, EU:C:2022:898, paragraph 56 and the case-law cited).
62      The Commission is required to conduct a diligent and impartial examination of the contested measures, so that it has at its disposal, when adopting the final decision establishing the existence and, as the case may be, the incompatibility or unlawfulness of the aid, the most complete and reliable information possible for that purpose (see judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 44
and the case-law cited).
63      It follows that the review by the Court of the legality of a decision not to initiate the formal investigation procedure on account of the absence of serious difficulties will go beyond simple consideration of whether or not there has been a manifest error of assessment. A decision adopted by the Commission without initiating the formal investigation procedure may be annulled, because of the failure to initiate the inter partes and detailed examination required under Article 108(2) TFEU, even if it is not established that the Commission’s assessments as to substance were wrong in law or in fact. The review carried out by the Court is therefore not limited (see judgment of 21 December 2022, Landwärme v Commission, T‑626/20, EU:T:2022:853, paragraph 70 and the case-law cited).
64      However, it should be noted that, according to the case-law, although it has no discretion in relation to the decision to initiate the formal investigation procedure, where it finds that such difficulties exist, the Commission nevertheless enjoys a certain margin of discretion in identifying and evaluating the circumstances of the case in order to determine whether or not they present serious difficulties (see judgment of 13 December 2018, Stena Line Scandinavia v Commission, T‑631/15, not published, EU:T:2018:944, paragraph 114 and the case-law cited).
65      Thus, although the Court has held that, when the existence and legality of State aid is being examined, it may be necessary for the Commission, where appropriate, to go beyond a mere examination of the facts and points of law brought to its notice, it cannot be inferred from that case-law that it is for the Commission, on its own initiative and in the absence of any evidence to that effect, to seek all information which might be connected with the case before it, even if such information is in the public domain (see judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 45
and the case-law cited).
66      Moreover, according to the case-law, it is not for the Commission to seek, examine and take into consideration all the relevant information, which necessarily includes information not brought to the attention of the Commission; information of which the Commission was unaware as regards its existence or its relevance to the examination of the notified measure, since such an obligation would greatly exceed the obligations of the Commission (see, to that effect, judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology, C‑57/19 P, EU:C:2021:663, paragraph 49).
67      In addition, it must be recalled that, as is apparent from paragraph 48 above, the case-law principles relating to decisions not to raise objections, referred to in Article 4(3) of Regulation 2015/1589, also apply to decisions finding that the measure concerned constitutes existing aid, such as that at issue in the present case. It is in the light of those principles that the body of evidence put forward by the applicants in order to determine whether it demonstrates that the Commission should have had serious doubts as to the classification of the 2015 and 2020 amendments as existing aid must be examined.
68      It is appropriate to examine, first of all, the second part of the single plea, which concerns evidence relating to the content of the contested letter.
The second part of the single plea, which concerns evidence relating to the content of the contested letter
69      The applicants submit, in essence, that there are a number of indications as to the insufficient and incomplete examination of the substantial nature of the changes made by the 2015 and 2020 amendments to the original LRT funding scheme that are such as to demonstrate that the Commission should have had doubts as to the classification of the 2015 and 2020 amendments as existing aid and that those doubts should have led that institution to initiate the formal investigation procedure. The Court considers it appropriate, in view of the close connection between the amendments made to the LRT funding scheme by the 2015 and the 2020 amendments, to examine together the evidence
relating to those two sets of amendments.
70      It is appropriate to recall, as a first step, the principles governing the assessment of changes made to existing aid and, as a second step, to examine the evidence relating to the insufficient and incomplete examination of the substantial nature of the changes made by the 2015 and 2020 amendments to the original LRT funding scheme.
–       Principles governing the assessment of changes to existing aid
71      At the outset, it should be borne in mind that Article 108 TFEU provides for different procedures according to whether the aid is existing or new. While under Article 108(3) TFEU new aid must be notified to the Commission and may not be implemented until that procedure has led to a final decision, under Article 108(1) THEU, existing aid may be lawfully implemented so long as the Commission has made no finding of incompatibility. Existing aid must therefore be regarded as lawful so long as the Commission has not found that it is incompatible with the internal market (see judgment of 26 November 2015, Comunidad Autónoma del País Vasco and Itelazpi v Commission, T‑462/13, EU:T:2015:902, paragraph 146 and the case-law cited).
72      In accordance with Article 1(b)(i) of Regulation 2015/1589, ‘existing aid’ means all aid measures which existed prior to and are still applicable after the entry into force of the FEU Treaty in the respective Member States (judgment of 4 March 2021, Commission v Fútbol Club Barcelona, C‑362/19 P, EU:C:2021:169, paragraph 131).
73      As regards aid existing prior to the entry into force of the FEU Treaty in Lithuania, it must be recalled that, in accordance with point 3(1)(a) of Annex IV to the Act concerning the conditions of accession 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 the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 797), aid measures put into effect before 10 December 1994 are to be regarded upon accession as existing aid within the meaning of Article 108(1) TFEU.
74      Under Article 1(c) of Regulation 2015/1589, alterations to existing aid are to be considered as ‘new aid’ subject to the notification requirement of Article 108(3) TFEU (judgment of 4 March 2021, Commission v Fútbol Club Barcelona, C‑362/19 P, EU:C:2021:169, paragraph 132).
75      However, it should be recalled that not every alteration
of existing aid is necessarily new aid. It is apparent from Article 4(1) of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Regulation 2015/1589 (OJ 2004 L 140, p. 1) that, ‘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 [internal] 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.’
76      Thus, in order to qualify as new aid, an alteration of existing aid must be substantial (judgment of 11 July 2014, Telefónica de España and Telefónica Móviles España v Commission, T‑151/11, EU:T:2014:631, paragraph 62).
77      In order to assess whether alterations to existing aid are substantial, it is necessary to examine whether those alterations affected the constituent elements of the original funding scheme (see, to that effect, judgment of 21 September 2022, Portugal v Commission (Madeira Free Zone), T‑95/21, EU:T:2022:567, paragraph 81 and the case-law cited).
78      As is apparent from the case-law, the constituent elements of the original funding scheme include, inter alia, the nature of the advantage, the class of beneficiaries, the activities of the beneficiaries, the objective of the financial support, the public service task assigned to the beneficiaries and the source and amount of that support (see, to that effect, judgments of 9 August 1994, Namur-Les assurances du crédit,
C‑44/93, EU:C:1994:311, paragraph 29; of 13 December 2018, Rittinger and Others, C‑492/17, EU:C:2018:1019, paragraphs 59 to 63; and of 14 April 2021, Verband Deutscher Alten- und Behindertenhilfe and CarePool Hannover v Commission, T‑69/18, EU:T:2021:189, paragraph 191 and the case-law cited).
79      These elements are also referred to in paragraph 31 of the Broadcasting Communication, which states that ‘in its decision-making practice the Commission has generally examined: (a) whether the original financing regime for public service broadcasters is existing aid … (b) whether subsequent modifications affect the actual substance of the original measure (i.e. the nature of the advantage or the source of financing, the purpose of the aid, the beneficiaries or the scope of activities of the beneficiaries) or whether these modifications are rather of a purely formal or administrative nature; and (c) in case subsequent modifications are substantial, whether they are severable from the original measure, in which case they can be assessed separately, or whether they are not severable from the original measure so that the original measure is as a whole transformed into a new aid.’
80      Furthermore, as regards pre-accession existing aid within the meaning of Article 1(b)(i) of Regulation 2015/1589, the substantive nature of the alteration must be assessed on the basis of the content of the aid, by reference to the provisions providing for it (see, to that effect, judgments of 9 August 1994, Namur-Les assurances du crédit, C‑44/93, EU:C:1994:311, paragraphs 28 to 31, and of 16 December 2010, Netherlands and NOS v Commission, T‑231/06 and T‑237/06, EU:T:2010:525, paragraph 180).
–       Evidence relating to the insufficient and incomplete examination of the substantial nature of the changes made by the 2015 and 2020 amendments to the original LRT funding scheme
81      The applicants claim, in essence, that the Commission should have harboured serious doubts as to the substantial nature of the changes made by the 2015 and 2020 amendments to the LRT funding scheme. To that end, they maintain that those amendments substantially altered, inter alia, the principles used to calculate the compensation paid to LRT, by eliminating revenue from commercial advertising as a source of funding for LRT, by removing the rule that commercial revenue reduces the compensation paid from the State budget, and by introducing a ‘safe haven’. In essence, according to the applicants, the Commission should have encountered serious difficulties with the question whether the change in the source and level of funding granted to LRT was substantial.
82      In particular, first, the applicants point out that, as a result of the elimination of advertising revenue by the 2015 amendments, LRT’s dual-funding model, based on both commercial revenue and public funding, became a single-funding model, based on public funding. In that regard, the applicants do not dispute that, following the 2015 and 2020 amendments, LRT may continue to collect revenue from commercial activities. They point out, however, that the importance of that revenue in the total LRT funding has become insignificant.
83      Secondly, the applicants claim that the 2015 amendments called into question the principle of net cost compensation and the absence of overcompensation and, in particular, removed the principle that commercial revenue received by LRT would reduce the compensation paid to it from the State budget. In essence, they submit that the 2015 amendments introduced a new funding model for LRT, characterised by a sharp increase in the State compensation allocated to LRT. According to the applicants, the funding allocated to LRT in the State budget rose from EUR 14 679 000 in 2014 to EUR 29 964 000 in 2015, namely a 104% increase. Moreover, the amount actually received by LRT from the State budget rose from EUR 15 158 000 in 2014 to EUR 22 726 000 in 2015, namely a 49.9% increase. They claim that that increase far exceeds the 20% threshold laid down in Article 4(1) of Regulation No 794/2004.
84      Thirdly, the applicants submit that, following the 2020 amendments, the ‘safe haven’ of EUR 29 900 000, introduced by the 2015 amendments, was increased to approximately EUR 41 000 000, which represents a 37.12% increase. According to the applicants, since there is no link between the net costs of providing the service and the compensation paid to LRT, the ‘safe haven’ increase, introduced by the 2020 amendments, could lead to LRT being over-compensated in a manner incompatible with the Broadcasting Communication.
85      The Commission, supported by the interveners, disputes the applicants’ arguments, contending in particular that the budget increases are not relevant for the purpose of assessing whether changes made to pre-accession existing aid are substantial, since there is no ‘original budget’ within the meaning of Article 4(1) of Regulation No 794/2004 for that category of existing aid.
86      The Commission also points out that, in so far as the 2015 amendments did not change the fact that LRT’s funding is based on the net cost principle, the amount of aid received by LRT does not depend on the potential amounts that could be allocated to the broadcaster under the 2015 amendments, but is limited to the net costs of its public service mission. The actual funding is determined by the real needs of those broadcasters, irrespective of the mix of commercial revenue and public support included to cover those needs. In that context, the reference to the budget increase on pages 4 to 5 of the contested letter may be considered to be superabundant, having been made only for the sake of completeness. Thus, according to the Commission, the argument that the budget increase relating to the measure exceeded the 20% threshold set out in Article 4(1) of Regulation No 794/2004 cannot result in the annulment of the Commission’s finding of existing aid in the contested letter.
87      In any event, the Commission maintains that, even if the budget increase were relevant for the purpose of assessing whether the 2015 amendments constituted alterations to existing aid, on the basis of the figures in Table 2 in the applicants’ observations of 1 July 2021, that budget increase from 2014 to 2015 is not 49.9% as the applicants suggest, but only 12.74%, that is to say below
20%, as indicated on pages 4 and 5 of the contested letter.
88      In the rejoinder, the Commission states that the applicants seem to contradict themselves in that, in the application, they rely on the 20% budget increase threshold while, in the reply, they argue that that threshold is irrelevant in the present case, as it applies only to State aid schemes, and not to ad hoc aid under consideration in the present case.
89      In that regard, it should be noted that, as is apparent from page 4 of the contested letter, LRT’s dual-funding scheme, consisting of State compensation and revenue from advertising activities, was replaced, as a result of the 2015 amendments, by a single-funding scheme, advertising now being prohibited and LRT being funded mainly by State compensation and by certain limited revenue from commercial activities.
90      However, the Commission does not appear to have considered, in the contested letter, the consequences,
on LRT’s sources of funding, of eliminating advertising revenue.
91      The Commission did not consider whether the elimination of advertising as a source of funding for LRT was likely to reduce the net benefit from commercial revenue by the same amount, through automatic and proportionate increase of the net cost of the public service activity and therefore the public contribution paid to LRT. In addition, it failed to examine whether removing revenue from commercial advertising could have the consequence that LRT would henceforth be funded, exclusively or almost exclusively, from public funds, and whether that increase in public funding would not constitute an alteration of one of the constituent elements of the original LRT funding scheme and would therefore be classified as new aid.
92      Furthermore, in the contested letter, the Commission did not carry out a sufficiently comprehensive examination making it possible to identify precisely the characteristics of the LRT funding scheme prior to 10 December 1994 and determine whether the amount of that funding, as a constituent element of the original LRT funding scheme, had been substantially altered after the introduction of the 2015 and 2020 amendments.
93      In particular, as regards the 2015 amendments, on page 4 of the contested letter, the Commission stated that, according to the information provided by Table 2, ‘Factual budget of LRT’, set out in the applicants’ observations of 1 July 2021, LRT’s total actual budget had increased from EUR 22 234 000 in 2014 to EUR 25 067 000 in 2015. According to the Commission, that ‘seems to indicate that the overall budget of LRT, for which the State assures the financing, did not change drastically following the change in 2015’.
94      It is apparent from that passage of the contested letter that, in order to determine whether the 2015 amendments should be classified as substantial alterations to existing aid and, consequently, as new aid, the Commission compared LRT’s actual total budget for 2014 with that for 2015. In addition, it merely stated, on page 4 of the contested letter, that it ‘seemed’ from the information provided by the applicants that LRT’s total budget had not been substantially altered following the 2015 amendments.
95      The documents before the Court show that, when the contested letter was adopted, the Commission had at its disposal figures provided by the applicants which should have led it to enquire whether the amount of State compensation paid to LRT had been substantially altered after the 2015 amendments. It is apparent from the information provided in Table 2, ‘Factual budget of LRT’, set out in the applicants’ observations of 1 July 2021, that the compensation actually paid by the State to LRT (second column of that table) increased from EUR 15 158 000 in 2014 to EUR 22 726 000 in 2015, representing a 49.9% increase, whereas the increases in previous years were less significant. As regards the share corresponding to commercial revenue (third column of that table), it went from EUR 7 076 000 in 2014 to EUR 2 341 000 in 2015. However, no answer appears to have been given to those issues in the contested letter.
96      As regards the 2020 amendments, on page 6 of the contested letter, the Commission merely states that they are of a technical nature that does not affect the essential character of the original measure, since they introduced a modification in the formula for calculating LRT’s funding and changed the minimum level of State contribution. In the Commission’s view, those changes cannot be regarded as changes affecting the essential character of the original measure.
97      The documents before the Court show that, when the contested letter was adopted, the Commission had information at its disposal which should have led it to enquire whether the amount of State compensation paid to LRT had been substantially altered after the 2020 amendments. It is apparent from the applicants’ observations of 1 July 2021 that, following the 2020 amendments, the ‘safe haven’ of EUR 29 900 000, introduced by the 2015 amendments, was increased to approximately EUR 41 000 000, which, according to the applicants, represents a 37.12% increase. However, this does not appear to have been addressed in the contested letter.
98      In the light of the foregoing, it must be held that the Commission failed to examine properly, for the purposes of the case-law cited in paragraphs 62 and 63 above, whether the amount of State compensation allocated to LRT was substantially altered following the entry into force of the 2015 and 2020 amendments.
99      In those circumstances, the applicants are right to claim that the Commission carried out an insufficient and incomplete examination of the classification of the 2015 and 2020 amendments as existing aid during the preliminary examination procedure, which constitutes an indication of the existence of serious difficulties in the assessment of the measure at issue within the meaning of the case-law cited in paragraph 60 above.
100    In the light of the foregoing considerations, it must be concluded that the applicants have demonstrated, on the basis of evidence which was or could have been available to the Commission at the time the contested letter was adopted, that that institution should have encountered serious difficulties with the classification of the 2015 and 2020 amendments as existing aid, and, in particular, the question whether the 2015 amendments had altered the source of LRT’s funding and the question whether the 2015 and 2020 amendments had altered the amount of public funding paid to LRT. Those doubts should have led the Commission to initiate the formal investigation procedure.
101    It follows from the foregoing that the second part of the single plea, which concerns evidence relating to the content of the contested letter, must be upheld and the contested letter must be annulled, without it being necessary to rule either on the other arguments put forward by the applicants in the context of the second part or on the first part of the single plea in law.
Costs
102    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 bear its own costs and to pay those incurred by the applicants, in accordance with the form of order sought by the applicants.
103    Furthermore, under Article 138(3) of the Rules of Procedure, the Court may order an intervener other than those referred to in paragraphs 1 and 2 of that article to bear its own costs. In the present case, LRT and EBU are to bear their own costs.
On those grounds,
THE GENERAL COURT (Ninth Chamber)
hereby:
1.      Annuls the letter from the European Commission bearing the reference COMP.C.4/KK/ASz/ao D(2021)7942463 of 25 November 2021 on State Aid SA.57787 (2020/FC) – Lithuania – State aid to public service broadcaster LRT - LT;
2.      Orders the Commission to bear its own costs and to pay those incurred by Interneto žiniasklaidos asociacija, All Media Lithuania UAB and All Media Radijas UAB;
3.      Orders Lietuvos nacionalinis radijas ir televizija VšĮ and European Broadcasting Union (EBU) to bear their own costs.
Truchot
Kanninen
Perišin
Delivered in open court in Luxembourg on 21 May 2025.
V. Di Bucci
S. Papasavvas
Registrar
President
*      Language of the case: English.