Search
Contact
01.08.2016 | KPMG Law Insights

ECJ ruling on the consequences of a formal EU state aid investigation for member states

Dear Readers,

Just in time for Christmas or the turn of the year, the EU Commission has issued its new de minimis regulation. However, not to everyone’s delight: those of you who had an increase in the aid ceiling for de minimis aid on your wish list are now likely to be disappointed. Some things are changing, but the unpopular ceiling remains.

There are also exciting reports from the area of subsidies and public procurement law as well as from the ECJ. The latter has put the national courts in their place and made it unequivocally clear that, despite an investigation still underway in the same matter before the EU Commission, they must take all necessary measures to draw the consequences from any breach of the obligation to suspend implementation of this measure.

We wish you a Merry Christmas and a Happy New Year 2014!

Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer Dr. Anke Empting

Lawyer Attorney

If the EU Commission has opened a formal investigation into an EU state aid measure that is being implemented and has not been notified, a national court must issue orders to remedy a possible state aid infringement while the Commission proceedings are still ongoing. This applies when the national court is dealing with a competitor’s application for an injunction against this measure and for the recovery of payments already made.

In a legal dispute between an airline and the operator of an airport before the German civil courts, the European Court of Justice ruled on November 21, 2013, following a corresponding referral by the Higher Regional Court of Koblenz, that the courts of the Member States cannot simply suspend proceedings under EU state aid law until the European Commission has ruled on the aid in parallel proceedings.

Possible suspension of the aid measure

On the contrary, according to the ECJ’s legal opinion, national courts are obliged to take “all necessary measures to draw the consequences from a possible breach of the obligation to suspend the implementation of this measure” despite an ongoing investigation before the EU Commission in the same matter.

In concrete terms, this means: The national court which has been seized by a competitor of the potential aid recipient with the application for injunctive relief and/or recovery and damages must decide in the individual case that the parties to the aid measure must suspend the implementation of the measure at issue. Accordingly, for example, aid in the form of state grants must be provisionally discontinued and state guarantees may not be issued.

Recovery of aid granted in individual cases

In serious cases of (potential) damage to competition, the national court would even have to order the recovery of state funds already disbursed. In addition, the national courts are also required to issue interim measures if necessary. On the one hand, to safeguard the interests of the parties involved in the state aid measure and, on the other hand, to ensure the practical effectiveness of the opening of the formal state aid investigation procedure by the EU Commission.

In case of doubt as to the classification of the measure at issue as state aid, the national court may ask the EU Commission for further explanations. The same applies if the national court has doubts about the validity or interpretation of the decision to open the formal investigation procedure by the EU Commission. In such cases, the national court must refer the relevant question to the Court of Justice for a preliminary ruling.

Consequences for the aid practice

For the practice of EU state aid law, the new case law of the ECJ means a further tightening of EU state aid control: In the event of improper implementation of state aid, there is now a threat that the national courts will order suspension and recovery measures at the same time as formal investigation proceedings before the EU Commission. Until now, the latter had regularly waited for the outcome of the Commission’s investigation in state aid proceedings. Now they are required to already during the commission procedure – if necessary. to order drastic – measures. The parties involved in an improper granting of aid must therefore be prepared to be confronted with the corresponding consequences at a much earlier stage.

Explore #more

25.04.2025 | KPMG Law Insights

Coalition agreement: The plans for supply chain law, EUDR and GTC law

In the coalition agreement, the CDU/CSU and SPD agreed: “We will also abolish the National Supply Chain Due Diligence Act (LkSG).” At first glance,…

17.04.2025 | KPMG Law Insights

What the coalition agreement means for the financial sector

The coalition agreement between the CDU/CSU and SPD also has an impact on the financial sector. Here is an overview. Increasing the energy supply The…

17.04.2025 | KPMG Law Insights

AWG amendment provides for tougher penalties for sanction violations

Due to the ongoing Russian war of aggression against Ukraine, the EU wants to make it easier to prosecute violations of EU sanctions. The corresponding…

16.04.2025 | KPMG Law Insights

What the new digitization plans in the coalition agreement mean

The coalition agreement shows how the future government wants to shape Germany’s digital future. What do the plans mean for companies in concrete terms? Here…

14.04.2025 | KPMG Law Insights

How the new coalition wants to accelerate investment in infrastructure

The coalition agreement between the CDU/CSU and SPD marks a fundamental new beginning in German infrastructure policy. In view of a considerable investment backlog, the…

14.04.2025 | KPMG Law Insights

Coalition agreement 2025 and NKWS: Booster for environmental and planning law?

In the current coalition agreement, environmental and planning law is mentioned at various points throughout the coalition agreement, highlighting its great importance. However, the…

11.04.2025 | KPMG Law Insights

What’s next for foreign trade? The plans in the 2025 coalition agreement

Foreign trade and foreign trade have become particularly explosive in view of the new US tariffs. The CDU/CSU and SPD have agreed on the following…

11.04.2025 | KPMG Law Insights

Coalition agreement 2025: What the plans mean for the economy

The CDU/CSU and SPD have agreed on a coalition agreement. The central theme is the renewal of the promise of the social market economy. The…

10.04.2025 | KPMG Law Insights

Coalition agreement 2025: Housing construction on the move

In the coalition agreement, the CDU/CSU and SPD have agreed comprehensive reform plans in the area of housing construction. The aim is to speed…

10.04.2025 | KPMG Law Insights

Energy in the 2025 coalition agreement: what the future government is planning

In the coalition agreement, the CDU/CSU and SPD commit to the German and European climate targets and Germany’s climate neutrality by 2045. To this…

Contact

Mathias Oberndörfer

Geschäftsführer
Bereichsvorstand Öffentlicher Sektor KPMG AG Wirtschaftsprüfungsgesellschaft

Theodor-Heuss-Straße 5
70174 Stuttgart

Tel.: +49 711 781923410
moberndoerfer@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll