European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

The State granting the aid must, without delay and in accordance with the procedures under its national law allowing the immediate and effective execution of the Commission's decision (Regulation No 2015/1589, art. 16), abolish the unlawful aid entirely  or, at least, officially inform the Commission of the measures of abolishment adopted . For that purpose, it must use all the legal means available under its own legal system .

The Commission decision is general and abstract in nature. As the recovery of improperly granted aid must be carried out in accordance with the rules and procedures laid down by national law, the Commission is  not obliged to specify the rules by which the calculation of the rate of tax on profits had to be carried out by the Member State concerned, since that calculation falls to the authorities of that Member State . The Member State must implement it without ascertaining in each individual case whether the conditions for the application of Article 107(1) TFEU are satisfied . However, if, when implementing a decision to recover unlawful aid, a Member State becomes aware of consequences not envisaged by the Commission, it must, in application of the rule imposing on the Member States and the institutions of the Union mutual duties of loyal cooperation, submit to the Commission appropriate amendments to the decision at issue . In application of that principle, the Commission is required to take into consideration the arguments put to it by the Member State concerned specifically on the existence of absolute impossibility of recovery. The principle of sincere cooperation does not however require the Commission to attach an order for recovery to every decision declaring aid to be unlawful and incompatible with the internal market .

Where the circumstances or reasons connected to internal procedures prevent the Member State registering the debt relating to recovery of the aid in question in the schedule of liabilities within the period prescribed, that Member State may request an extension of the period specified, but if it does not do so, the relevant date remains the date specified in the recovery decision . The State concerned is however free to choose the means of fulfilling its obligation to recover the unlawful aid, provided that the measures chosen comply with EU law and are suitable to re-establish the normal conditions of competition . While it can give up recovering aid by way of a cash payment, the State must however bring evidence that the alternative measures chosen are suitable for achieving the result required by the recovery decision . Thus, it has the possibility to attach the assets of the recipient , to settle them or to register a repayment obligation in the recipient's insolvency . In all events, it must ensure that funds corresponding to the aid that has been reimbursed are not made available, even provisionally, to the aid recipient . The State must further verify the individual situation of each undertaking concerned by the recovery , but that circumstance cannot justify the non-implementation of a recovery decision . The fact that national courts had on a number of occasions ordered stays of enforcement of payment notices does not justify a Member State's failure to recover the aid within the prescribed period, insofar as Member States are required to take all the measures necessary for the immediate and effective recovery of  State aid which has been declared unlawful well before the term of that period .

The State concerned must comply with the recovery decision under penalty of being sued in accordance with Article 108(2) TFEU, which allows the Commission to directly refer the matter to the Court of Justice without resorting to the pre-litigation phase of an action for a declaration of failure to fulfill Treaty obligations (Regulation No 2015/1589, Article 28). The decision requiring the recovery of illegal aid is in effect presumed to be lawful and, despite the existence of the action for annulment, remains binding in all respects on the addressee State . 

A Member State may, nevertheless, plead that it is absolutely impossible for it to implement the decision where it encounters unforeseen and unforeseeable difficulties to implement the recovery. The fact that implementation is impossible is strictly interpreted. According to the Court of Justice, the recovery of unlawful aid can only be considered objectively and absolutely  impossible if the Commission finds, following a detailed examination, that two cumulative conditions are satisfied, namely that the difficulties relied on by the Member State concerned are real and that there are no alternative methods of recovery. The Commission cannot therefore merely limit itself to deducing the absolute impossibility of recovering the unlawful aid in question solely from the fact that it was not possible to obtain the necessary information for recovery of the aid from the Italian land registry and tax databases, while omitting to consider the possible existence of alternative methods allowing recovery, if only in part, of the aid . Generally, irrespective of the degree of complexity and level of difficulty of repayment, the impossible implementation is never recognized where there is no attempt to recover . The Member State can neither plead the unlawfulness of the Commission decision to refuse to carry out recovery of an unlawful aid unless the decision contains particularly serious and manifest defects such that it could be deemed non-existent . It should not assert political difficulties  or a risk of social conflict , national provisions  or procedures , a lack of clarity of the operative part of the recovery decision  or no exact amount , an obligation difficult to implement   or administrative and practical difficulties caused by the large number of beneficiaries, as well as the lack of national rules adapted to the magnitude of the recovery . A Member State cannot argue that the recovery decision is non-existent on the grounds that it did not identify the beneficiaries more precisely on the basis of a specific sector or by objective characteristics other than the obligation to carry out a BSE (bovine spongiform encephalopath) test, where the decision nevertheless made it possible to determine the beneficiaries of the unlawful aid without limiting those beneficiaries to farmers alone, nor may it plead that, as it could not identify the beneficiaries precisely it would not be possible to establish whether the de minimis thresholds are exceeded in relation to each of the beneficiaries, insofar as, in order to determine the beneficiaries of State aid, it is necessary to identify the undertakings which actually enjoyed the benefit of it, but not to calculate the amount of the aid to be recovered by dividing the overall amount of the aid in equal shares between the economic sectors designated by the decision at issue . The State cannot claim the existence under domestic law of a rule providing that measures granting unlawful aid are null and void in order to escape its recovery obligation where a benefit has actually been granted  , raise the question of whether the benefit complies with domestic law or whether, on the contrary, it constitutes a case of tax avoidance or evasion  or invoke the complexity of the recovery procedure and political, legal and practical issues . 

Lastly, the fact that the beneficiary undertaking has stopped trading or is insolvent  is no ground for pleading that it is absolutely impossible to implement the decision. The Commission imposes on the Member States to register their claims under their national bankruptcy proceedings . The approval of any acquisition plan is to be subject to the prior recovery of aid . In case of liquidation, the authorities of the Member State must determine whether the purchase is carried out under market conditions.

Case 52/83 Commission v France [1983] ECR 3707, LawLex200500005380JBJ; Case 5/86 Commission v Belgium [1987] ECR 1773, LawLex200500005381JBJ; Case C-411/12 Commission v Italy, Judgment of 12 December 2013, not available in English.

Case 63/87 Commission v Greece [1988] ECR 2875, LawLex200500004468JBJ.

Case C-499/99 Commission v Spain [2002] ECR I-6031, LawLex200500004859JBJ.

See however Case C-331/09 Commission v Poland, LawLex201200000041JBJ, which considers that a State does not fulfill its obligation to recover where it registers in the schedule of liabilities the debt relating to unlawful aid whereas the recipient undertaking was not bankrupt when the time-period for recover set by the Commission expired; C-454/09 Commission v Italy, not available in English, which penalizes for failure to act the Member State which, two months and ten days after the date of expiry of the mandatory time-limit, registers in the liabilities the debt relating to the recovery of unlawful aid from which the bankrupt undertaking has benefited.

Case C-210/09 Scott and Kimberly Clark, LawLex201000000656JBJ.

Case C-71/09 P Comitato “Venezia vuole vivere” and others v Commission,LawLex201200000059JBJ.

Case C-37/14 Commission v France, Judgment of 12 February 2015, not available in English.

Case C-547/11 Commission v Italy, Judgment of 5 June 2014, LawLex202000002106JBJ.

Case C-63/14 Commission v France, Judgment of 9 June 2015, LawLex201500000899JBJ.

Cases C-622/16 P, C-623/16 P, C-624/16 P Scuola Elementare Maria Montessori, Judgment of 6 November 2018, LawLex201800001664JBJ.

Case C-378/98 Commission v Belgium [2001] ECR I-5107, LawLex200500004890JBJ; Case C-310/99 Italy v Commission [2002] ECR I-2289, LawLex200500004848JBJ; Case C-214/07 Commission v France [2008], LawLex200900000255JBJ: difficulties in identifying the recipients, in calculating the amount of the aid to be recovered, and in the choice and implementation of recovery procedures.

Case C-404/97 Commission v Portugal [2000] ECR I-4897, LawLex200500004963JBJ.

Commission decision No 2000/536/EC of 2 June 1999, Aid granted by Italy to Seleco SpA, LawLex200400002593JBJ, in particular acting against a subsidiary of the beneficiary company in liquidation which, before the end of the investigation procedure, transferred fraudulently its most profitable assets.

Case 94/87 Commission v Germany [1989] ECR 175, LawLex200500005386JBJ; Case C-378/98 Commission v Belgium [2001] ECR I-5107, LawLex200500004890JBJ; Case C-263/12 Commission v Greece, Judgment of 17 October 2013, not available in English.

Case C-265/95 Commission v France [1997] ECR I-6959, LawLex200900001333JBJ; Case C-280/95 Commission v Italy [1998] ECR I-259, LawLex200500005085JBJ: in this case a risk of a resurgence of an earlier conflict in the road haulage sector which would derive from the recovery of a tax credit; Case C-404/97 Commission v Portugal [2000] ECR I-4897, LawLex200500004963JBJ; Case C-310/99 Italy v Commission [2002] ECR I-2289, LawLex200500004848JBJ.

Case C-5/89 Commission v Germany [1990] ECR I-3437, LawLex200500004640JBJ: like a national legislation according to which the period for revocation of an unlawful administrative measure granting a benefit is time-barred; Case C-24/95 Land Rheinland-Pfalz v Alcan Deutschland [1997] ECR I-1591, LawLex200500005094JBJ: exclusion by national law of recovery where the gain no longer exists and in the absence of bad faith on the part of the recipient of the aid.

Case C-404/00 Commission v Spain [2003] ECR I-6695, LawLex200500004600JBJ: for an example, the need to wait for the report of the Conseil d'Etat to determine the most appropriate procedure; Case C-232/05 Commission v France [2006] ECR I-10071, LawLex200700001467JBJ: for the suspensory effect of actions brought against the demands for payment issued for the recovery of an aid; Case C-507/08 Commission v Slovak Republic, Judgment of 22 December 2010, LawLex201000001511JBJ; Case C-302/09 Commission v italy, Judgment of 6 October 2011, a measure taken by a national court to stay, either the national instrument enacted in execution of a Commission decision requiring the Member State to recover  unlawful aid, or the procedure necessary to ensure the effective implementation of said decision may only constitute an absolute impossibility to implement if it is justified by arguments to establish the invalidity of the decision at issue.

Case C-404/97 Commission v Portugal [2000] ECR I-4897, LawLex200500004963JBJ; Case C-277/00 Germany v Commission [2004] ECR I-3925, LawLex200600000038JBJ.

Case C-441/06 Commission v France [2007] ECR I-8887, LawLex200800000238JBJ; Case C-419/06 Commission v Greece [2008].

Case C-183/91 Commission v Greece [1993] ECR I-3131, LawLex200500004645JBJ; Case C-280/95 Commission v Italy [1998] ECR I-259, LawLex200500005085JBJ: administrative difficulties to recover a tax credit; Case C-310/99 Italy v Commission [2002] ECR I-2289, LawLex200500004848JBJ: regarding the wide reach of aid schemes across the fabric of national production industry; Case C-415/03 Commission v Greece [2005] ECR I-3875, LawLex200500009583JBJ: transfer of assets of the beneficiary of an unlawful aid to a third party.

Case C-11/20 Commission v Greece, Judgment of 12 May 2021, not available in English.

Case C-591/01 Commission v Belgium, Judgment of 13 September 2017, LawLex201700001408JBJ.

Case T-452/08 DHL Aviation and DHL Hub Leipzig v Commission, LawLex201000001307JBJ.

Case T-308-00 RENV Salzgitter AG, Judgment of 22 January 2013, LawLex201300001256JBJ. The Commission cannot be reproached for accepting that a part of the compensation at issue is de minimis aid without determining precisely how much, as it is entitled to limit itself to finding that there is an obligation to repay the aid and leave it to the national authorities to calculate the exact amount: see Case T-52/12 Greece v Commission, Judgment of 16 July 2014, LawLex201300001256JBJ.

Case C-303/09 Commission v Italy, not available in English.

Case T-131/21 Região Autónoma da Madeira v Commission, not available in English.

Case C-404/97 Commission v Portugal [2000] ECR I-4897, LawLex200500004963JBJ; Case C-499/99 Commission v Spain [2002] ECR I-6031, LawLex200500004859JBJ; Case C-75/97 Belgium v Commission [1999] ECR I-3671, LawLex200500005080JBJ; Case C-42/93 Spain v Commission [1994] ECR I-4175, LawLex200500005057JBJ; Case C-349/93 Commission v Italy [1995] ECR I-343, LawLex200500005137JBJ; Case T-198/01 Technische Glaswerke Illmenau v Commission [2002] ECR II-2153, LawLex200500008218JBJ; Case T-318/00 Freistaat Thüringen v Commission [2005] ECR II-4179, LawLex200600001243JBJ.  Case C-280/05 Commission v Italy, Judgment of 6 December 2007,LawLex202000002009JBJ. 

Commission Notice No 2007/C 272/05 of 27 November 2007, at pt 65. See also Case C-613/11 Commission v Italy, Judgment of 21 March 2013, which specifies that the Member State must, according to the case, cause the liquidation of the undertaking, register its claim in the liabilities of the undertaking and take all necessary measures to ensure the aid is recovered.

Commission Notice No 2007/C 272/05 of 27 November 2007, at pt 67.

Case T-254/00 Hotel Cipriani v Commission [2008] ECR II-3269, LawLex200900000254JBJ. The obligation to directly implement the decision ordering recover does not prevent the Member State from adopting a law to obtain recovery: Case C-354/10 Commission v Greece, Judgement of 1 March 2012, LawLex200900000254JBJ.

Case C-344-12 Commission v Italy, Judgment of 17 October 2013, LawLex202000002173JBJ.

Case C-363/16 Commission v Greece, Judgment of 17 January 2018, LawLex201800000106JBJ.

Those measures must not be less favorable than those which originate in domestic law (principle of equivalence) or render impossible or excessively difficult the exercise of rights conferred by the Community legal order (principle of effectiveness): Case C-24/95 Land Rheinland-Pfalz v Alcan Deutschland [1997] ECR I-1591, LawLex200500005094JBJ; Case C-404/97 Commission v Portugal [2000] ECR I-4897, LawLex200500004963JBJ; Case C-209/00 Commission v Germany [2002] ECR I-11695, LawLex200500004844JBJ; Case C-404/00 Commission v Spain [2003] ECR I-6695, LawLex200500004600JBJ; Case C-392/04 i-21 Germany [2006] ECR I-8559, LawLex200900000652JBJ; Case C-368/04 Transalpine Ölleitung in Österreich [2006] ECR I-9957, LawLex200700001470JBJ.

Case C-209/00 Commission v Germany [2002] ECR I-11695, LawLex200500004844JBJ; Case C-328/99 Italy and SIM 2 Multimedia v Commission [2003] ECR I-4035, LawLex200500004597JBJ.

444. Member State obligation to implement