Case T‑151/11

Telefónica de España, SA

and

Telefónica Móviles España, SA

v

European Commission

‛State aid — Public service broadcasting — Aid planned by Spain for RTVE — Alteration of the funding scheme — Replacement of advertising revenues by new taxes on television and telecommunications operators — Decision declaring the aid compatible with the internal market — Procedural rights — New aid — Alteration of the existing aid scheme — Fiscal measure constituting the method by which the aid measure is financed — Tax necessarily hypothecated to the aid — Direct impact of the revenue from the tax on the amount of the aid — Proportionality — Obligation to state reasons’

Summary — Judgment of the General Court (Third Chamber), 11 July 2014

Acts of the institutions — Statement of reasons — Obligation — Scope — Commission decision on State aid — Contradiction in the statement of reasons — Lawfulness — Conditions — Addressee knowing the real reasons for the decision and existence of legal support for its operative part

State aid — Existing aid and new aid — Measure amending an existing aid scheme — Modification not affecting the substance of the scheme, being severable from it — Only those elements of the scheme affected in their substance by the modification classified as new aid

See the text of the decision. (see paras 34, 35)

In the formal investigation procedure as to whether a State measure constitutes State aid, laid down by Article 108(2) TFEU, there is nothing to prevent interested third parties from making observations not only on the doubts which the Commission has itself alluded to in its decision to initiate the formal investigation procedure, but also on other aspects of the measure under investigation. Nor is there anything to prevent the Commission, following doubts raised in the observations of an interested third party, from conducting a more detailed examination, gathering additional information and, if appropriate, altering its position. Indeed, it is clear from Article 4(4) and Article 6(1) of Regulation No 659/1999 that any decision to initiate the formal investigation procedure includes a preliminary examination which enables the Commission to formulate an initial view on whether the measures under examination are in the nature of aid, within the meaning of Article 107(1) TFEU, and whether they are compatible with the internal market. Such a decision is thus of a merely preparatory nature. The necessarily provisional nature of the assessments in a decision to initiate the formal investigation procedure is confirmed by Article 7 of Regulation No 659/1999, which provides that the Commission may decide in the final decision that the notified measure does not constitute aid, that the notified aid is compatible with the internal market, that the notified aid may be considered compatible with the internal market if certain obligations are complied with or that the notified aid is incompatible with the internal market. Such third parties may thus submit observations and the Commission may take those observations into account during the formal investigation procedure. (see paras 45-47)

See the text of the decision. (see paras 61-65, 70)

See the text of the decision. (see paras 86, 88, 90, 190)

In order for a tax to be regarded as forming an integral part of an aid measure, there must necessarily be a binding provision of national law which hypothecates the tax to the financing of the aid. In the absence of such a provision, a tax cannot be regarded as being allocated to an aid measure and does not, therefore, constitute one of its conditions. The mere fact that such a provision exists is not in itself sufficient to establish that a tax does in fact form an integral part of an aid measure. If such a provision of national law does exist, it is also necessary to examine whether the revenue from the tax has a direct impact on the amount of the aid. For a tax to be capable of being regarded as forming an integral part of an aid measure, it is thus not sufficient that its product be necessarily allocated to the financing of the aid. Nor is it sufficient to demonstrate that the levy collected on the basis of the fiscal measure is allocated to the beneficiary of the aid. (see paras 102-104)

See the text of the decision. (see para. 134)

In order for State aid, within the meaning of Article 107 TFEU, to be declared compatible with the internal market on the basis of Article 106(2) TFEU, the following conditions must be met: first, the operator in question must be entrusted with a service of general economic interest by an act of a public authority that clearly defines the general economic interest service obligations in question and, secondly, the operator must not receive excessive compensation, nor must the State funding affect competition disproportionately on the external market. (see para. 152)

According to Protocol No 29 on the system of public broadcasting in the Member States, annexed to the EU and FEU Treaties, public broadcasting in the Member States is directly related to the democratic, social and cultural needs of each society and to the need to preserve media pluralism. It is also clear from that protocol that the provisions of the FEU Treaty are without prejudice to the competence of the Member States to provide for the funding of public service broadcasting in so far as such funding is granted to broadcasting organisations for the fulfilment of the public service remit as conferred, defined and organised by each Member State and in so far as such funding does not affect trading conditions and competition in the Union to an extent which would be contrary to the common interest, account being taken of the performance of that public service mandate. Accordingly, the Member States enjoy a broad discretion in determining the compensation to be paid for the provision of a public broadcasting service. The extent of the Commission’s review of the proportionality of such compensation is therefore limited. Since the Commission’s assessment addresses complex economic facts, the scope of the General Court’s review of a Commission decision is even more limited than that of the Commission’s assessment of the measure of the Member State in question and is restricted to ascertaining whether the compensation provided for is necessary to enable the service of general economic interest in question to be performed in economically acceptable conditions or whether, on the contrary, the measure in question is manifestly inappropriate, given the objective pursued. (see paras 158-161, 173)