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

08.12.2023 | PR Publications

Payout can be risky

In the current issue of Personalwirtschaft from 30.11.2023, there is a guest article by Stefan Middendorf and Gracjan Modrzyk. Some companies are once again…

07.12.2023 | PR Publications

Institutional Money – It’s all in the mix

Institutional Money 04/2023 discusses the opportunities offered by the Neighborhood Fund. The fund is ideal for real estate investors, as it is not limited to

01.12.2023 | PR Publications

WiWo: Best of Legal Awards – Philipp Glock Leader of the Year

On Thursday evening, WirtschaftsWoche honored outstanding projects and minds from consulting firms and law firms in Düsseldorf and celebrated the second Best of Professional Night…

29.11.2023 | KPMG Law Insights

Energy transition also opens up business opportunities

The energy industry’s complex, capital-intensive transformation process offers investors and banks a great deal of potential By Lars Christian Mahler and Marc Goldberg for Börsen-Zeitung,…

29.11.2023 | KPMG Law Insights

Guest article in ZURe – AI and the legal department of tomorrow

The current issue of ZURe (p. 48 ff.) contains a guest article by KPMG Partner Sina Steidel-Küster (Regional Director Southwest, Head of Stuttgart office) and…

29.11.2023 | KPMG Law Insights, KPMG Law Insights

Key Facts about the new draft of the “Data Act

On February 23, 2022, the EU Commission presented the new draft of the so-called Data Act, the “Regulation on harmonized rules for fair access to…

21.11.2023 |

Guest article in ZURe on the implementation of CSRD reporting in SMEs

The current issue of ZURe (p. 34 ff.) contains a guest article by Lena Plato (Director Legal & Compliance, FLABEG Automotive Group GmbH), KPMG Law…

20.11.2023 | Press releases

Statement by KPMG Law experts in Handelsblatt on the topic of sustainability cooperation in antitrust law

In the Handelsblatt, KPMG Law expert Jonas Brueckner is quoted in detail on the subject of cooperation in terms of sustainability. Until this summer, there…

15.11.2023 |

Legal 500 – Country Comparative Guide Germany

Gerrit Rixen and Jonas Brueckner provide an overview of the relevant legal regulations in the area of Competition & Litigation in a practical guide on…

14.11.2023 | Press releases

Tax and Law at a glance – New issue of the digital magazine “Talk

“Talk” stands for Tax and Law Compass, because that’s what the digital magazine wants to be: a navigation aid to the legal and tax aspects…

Contact

Mathias Oberndörfer

Geschäftsführer
Mitglied des Vorstands Service Tax - KPMG AG Wirt­schafts­prüfungs­gesell­schaft

Theodor-Heuss-Straße 5
70174 Stuttgart

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

© 2023 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