European state aid: EU Court rejects the action to stop formal investigation procedure as inadmissible

Football has become a multi-billion Euro industry in the single market. It is therefore not surprising that the European Commission has intensified the state aid control in this sector. In 2011 the Commission has launched state aid investigations into the funding of Dutch football clubs which was later on followed by similar investigations in other Member States, taking under scrutiny public financing of many football clubs including Real Madrid, Valencia and Barcelona. Decisions in these cases are expected to be adopted in the course of 2015.

In March 2013 the Commission reached a preliminary conclusion in the Dutch state aid procedure that public funding by the municipalities to five football clubs is prone to constitute an illegal state aid and has therefore opened a formal investigation procedure. One of the five municipalities, the Dutch city of Nijmegen, was being investigated for the 2010 2.2 million Euros repurchase of Nijmegen Eendracht Combinatie (NEC)‘s right to acquire a multifunctional sport complex, a measure it did not notify to the Commission. The city of Niijmegen challenged the Commission’s decision in front of the European Court (case T-251/13).

The Commission requested the dismissal of the action as inadmissible because the contested decision was of preliminary and preparatory nature did not require Member State to suspend the application of the measure as the alleged aid had already been fully granted. The General Court did not agree with the applicant’s reasoning that no distinction should be drawn regardless of the actual status of the implementation of the measure as the contested decision to open a formal investigation was seen as having unconditional binding effects on national courts’ duty to adopt all the necessary measures with a view to drawing the appropriate conclusions from an infringement of the obligation to suspend the implementation of that measure. Following the Commission’s reasoning, the General Court held that such decision does not produce effects which are immediate, certain and sufficiently binding and is therefore not challengeable. The present case dealt with an unnotified new aid measure which concerned a fully executed repurchase. According to the General Court, the formal opening of an investigation does not entail independent legal effects in the present scenario as national courts are under no absolute, unconditional obligation to follow the Commission’s provisional assessment. The Court dismissed the action as inadmissible because the contested decision could not hamper the applicants interests.

On the question of admissibility the Court clearly takes into account the status of the aid in terms of the execution. Contrary to the circumstances in Deutsche Lufthansa and Flughafen Lübeck where the Commission’s decision had unconditional binding effects because the public funding was still in process, fully disbursed aid can only be defended in front of the Commission.