Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Vereniging Gelijkberechtiging Grondbezitters and Others (State aid - Aid scheme relating to the subsidised acquisition or free granting of nature land - Opinion) [2020] EUECJ C-817/18P

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Vereniging Gelijkberechtiging Grondbezitters and Others (State aid - Aid scheme relating to the subsidised acquisition or free granting of nature land - Opinion) [2020] EUECJ C-817/18P_O (02 April 2020) URL: http://www.bailii.org/eu/cases/EUECJ/2020/C81718P_O.html Cite as: ECLI:EU:C:2020:255, EU:C:2020:255, [2020] EUECJ C-817/18P_O

(Appeal — State aid — Aid scheme relating to the subsidised acquisition or free granting of nature land — Decision declaring the aid compatible with the internal market — Concept of ‘interested party’ — Serious difficulties)

1. By their appeal, Vereniging tot Behoud van Natuurmonumenten in Nederland, Stichting Het Groninger Landschap, Vereniging It Fryske Gea, Stichting Het Drentse Landschap, Stichting Landschap Overijssel, Stichting Het Geldersch Landschap, Stichting Flevo-Landschap, Stichting Het Utrechts Landschap, Stichting Landschap Noord-Holland, Stichting Het Zuid-Hollands Landschap, Stichting Het Zeeuwse Landschap, Stichting Het Noordbrabants Landschap and Stichting Het Limburgs Landschap ask the Court to set aside the judgment of the General Court of 15 October 2018, Vereniging Gelijkberechtiging Grondbezitters and Others v Commission, (2) by which that court annulled Commission Decision C(2015) 5929 final of 2 September 2015, concerning State aid SA.27301 (2015/NN) — the Netherlands in connection with the subsidised acquisition or free granting of nature land, a summary of which was published in the Official Journal of the European Union (3) (‘the decision at issue’).

2. In accordance with the Court’s request, this Opinion will be restricted to an analysis of the second part of the first ground of appeal and the first part of the second ground of appeal.

3. The second part of the first ground of appeal relates, in essence, to whether Vereniging Gelijkberechtiging Grondbezitters (‘the VGG’), Exploitatiemaatschappij De Berghaaf BV, Stichting Het Nationale Park De Hoge Veluwe, BV Landgoed Den Alerdinck II, Landgoed Ampsen BV, Pallandt van Keppel Stichting, Landgoed Kasteel Keppel BV, Baron van Lynden, Stichting het Lijndensche Fonds voor Kerk en Zending, Landgoed Welna BV, Landgoed ‘Huis te Maarn’ BV, Vicariestichting De Vijf Capellarijen / Ambachtsheerlijkheid Kloetinge, Maatschappij tot Exploitatie van het Landgoed Tongeren onder Epe BV, Landgoed Anderstein NV, Landgoed Bekspring BV, Landgoed Nijenhuis en Westerflier BV, Landgoed Caprera BV, Landgoed Schapenduinen BV, Stichting Schapenduinen and Landgoed de Noetselenberg BV, the applicants at first instance (collectively ‘VGG and Others’), could be categorised as ‘interested parties’ for the purposes of Article 1(h) of Regulation (EC) No 659/1999, (4) while the first part of the second ground of appeal seeks, in essence, to challenge the General Court’s finding that there were serious difficulties which required the Commission to initiate the formal investigation procedure.

4. Article 1(h) of Regulation No 659/1999 defines the concept of ‘interested party’ as meaning:

‘… any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations.’

‘1. The Commission shall examine the notification as soon as it is received. Without prejudice to Article 8, the Commission shall take a decision pursuant to paragraphs 2, 3 or 4.

2. Where the Commission, after a preliminary examination, finds that the notified measure does not constitute aid, it shall record that finding by way of a decision.

3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the common market of a notified measure, in so far as it falls within the scope of Article 92(1) of the Treaty, it shall decide that the measure is compatible with the common market (hereinafter referred to as a ‘decision not to raise objections’). The decision shall specify which exception under the Treaty has been applied.

4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the common market of a notified measure, it shall decide to initiate proceedings pursuant to Article [108(2) TFEU].’

6. It follows from paragraph 11 of the Communication from the Commission of 11 January 2012 entitled ‘European Union framework for State aid in the form of public service compensation’ (5) that ‘State aid … may be declared compatible with Article 106(2) [TFEU] if it is necessary for the operation of the service of general economic interest concerned and does not affect the development of trade to such an extent as to be contrary to the interests of the Union’.

7. The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.

8. Land management organisations (‘LMOs’) are non-profit-making, non-governmental associations and foundations whose statutes specify that their object is nature conservation and protection.

9. With a view to establishing an ecological structure and a ‘Natura 2000’ network for the protection of biodiversity, the Kingdom of the Netherlands granted subsidies for the acquisition of natural areas (‘the PNB scheme’) to thirteen LMOs (‘the thirteen LMOs’), which were interveners at first instance. The costs which were eligible for the subsidies under that scheme were the purchase price of the land, other acquisition costs and the costs of terminating the leases which encumbered that land.

10. In addition to their main activity of nature management, those thirteen LMOs also carried out secondary economic activities, such as land acquisition, forestry, the sale of wood and meat, leasing of hunting and fishing rights and tourism activities. Those activities generate revenue for those LMOs and constitute a source of financing for their main activity which must be used to cover management costs, in the same way as the subsidies received under the PNB scheme.

11. The PNB scheme was in force from 1993 to 2012. On 23 December 2008, the Commission received a complaint from two private non-profit-making foundations under Netherlands law, namely Stichting het Nationale Park De Hogue Veluwe and Stichting Linschoten, which manage land and carry out nature conservation activities, activities relating to the management of cultural heritage and secondary activities such as the leasing of land, agriculture, forestry and tourism. In 2009, the complainants were replaced in the administrative procedure in question by the VGG, a body whose object is to ensure equal rights for all private landowners in the context of the subsidised acquisition of land.

12. On 2 September 2015, after several exchanges and meetings between the Commission, the VGG and the Netherlands authorities, the Commission, subsequent to the preliminary examination stage, adopted the decision at issue, by which it declared the scheme for the acquisition of natural areas compatible with the internal market under Article 106(2) TFEU.

13. In the decision at issue, the Commission, in the first place, found that, although the main task of LMOs is not of an economic nature, in that it concerns nature protection, LMOs nevertheless carry out certain secondary activities of an economic nature, with the result that LMOs must, for the purposes of the competition rules, be classified as ‘undertakings’ as regards those activities.

14. In the second place, the Commission explained why it considered that the PNB scheme constituted State aid for the purposes of Article 107(1) TFEU. The Commission pointed out that the subsidies received by the thirteen LMOs for the acquisition of land conferred an initial economic advantage which was granted through State resources. Moreover, the Commission found that those LMOs could also receive a further economic advantage from the resale of the land acquired with the help of the subsidies. Furthermore, the Commission noted that the PNB scheme was selective in that only those thirteen LMOs were beneficiaries of that scheme. Lastly, it considered that the conditions identified by the Court in the judgment in Altmark Trans and Regierungspräsidium Magdeburg (6) were not fulfilled, since the compensation for the beneficiaries of the PNB scheme had not been determined in accordance with an appropriate procedure.

15. In the third place, the Commission examined the compatibility of the aid measure at issue under the rules on services of general economic interest. In particular, the Commission considered that the thirteen LMOs had been entrusted with a public service obligation of nature protection under the aid measure and that the PNB scheme fulfilled the conditions of the SGEI Framework, and accordingly that scheme had to be declared compatible with the internal market under Article 106(2) TFEU.

16. By application lodged at the Registry of the General Court on 19 February 2016, VGG and Others brought an action for the annulment of the decision at issue.

17. By document lodged at the Registry of the General Court on 17 May 2016, the thirteen LMOs sought leave to intervene in that case in support of the form of order sought by the Commission.

18. By order of 6 April 2017, the President of the Second Chamber of the General Court, after hearing the parties, granted the thirteen LMOs leave to intervene.

19. VGG and Others put forward four pleas in law in support of their action for annulment, alleging, first, infringement of their procedural rights, secondly, infringement of the principles of non-retroactivity and legal certainty, thirdly, in the alternative, an error of law and a failure to state reasons in the application of the SGEI Framework and, fourthly, infringement of Article 106(2) TFEU.

20. The Commission and the thirteen LMOs challenged VGG and Others’ status as ‘interested parties’ and the admissibility of the second and fourth pleas in law.

21. By the judgment under appeal, the General Court declared the action admissible, upheld VGG and Others’ first plea in law and, consequently, annulled the decision at issue without examining the other pleas in law.

– in the alternative, refer the case back to the General Court and reserve the costs.

24. The Netherlands Government asks the Court to set aside the judgment under appeal.

27. By their first ground of appeal, the appellants, supported in this respect by the Commission and the Netherlands Government, argue that the General Court erred in law in declaring the action brought by VGG and Others admissible, since VGG and Others cannot be regarded as ‘interested parties’ for the purposes of Article 108(2) TFEU and Article 1(h) of Regulation No 659/1999.

28. The appellants and the Commission submit that, in order for VGG and Others to be categorised as ‘interested parties’, it had to be established, first, that they were in a competitive relationship with the beneficiaries of the aid and, secondly, that the aid was likely to have a specific effect on their situation and distort that competitive relationship.

29. The appellants and the Commission argue that the General Court’s reasoning is vitiated by errors of law with respect to the assessment of the specific effect of the aid on the competitive situation of VGG and Others.

30. It is in my view necessary to make some general observations on the concept of ‘interested party’ for the purposes of Article 108(2) TFEU and Regulation No 659/1999 before examining, in the light of those observations, the General Court’s reasoning in the judgment under appeal.

31. I would recall that, in the context of the review procedure provided for in Article 108 TFEU, a distinction must be made between two stages: (1) the preliminary examination stage established in Article 108(3) TFEU, which allows the Commission to form a prima facie opinion on the conformity of the aid in question, and (2) the formal investigation procedure laid down in Article 108(2) TFEU, which allows the Commission to be fully informed of the facts of the case. It is only in connection with the formal investigation procedure that the FEU Treaty imposes an obligation on the Commission to give the parties concerned notice to submit their comments. (7)

32. When the formal investigation procedure is not initiated, interested parties, who could have submitted comments during that second stage, are deprived of that possibility. In order to remedy this, they are entitled to challenge the Commission’s decision not to initiate the formal investigation procedure before the EU judicature. (8) Thus, an action for annulment of a decision based on Article 108(3) TFEU brought by an interested party for the purposes of Article 108(2) TFEU is admissible where he seeks to safeguard the procedural rights available to him under the latter provision. (9)

33. In the present case, it is common ground that the formal investigation procedure was not initiated by the Commission and that VGG and Others relied before the General Court on an infringement of their procedural rights. Consequently, as the General Court rightly pointed out, (10) the admissibility of the action depends, in essence, on whether VGG and Others have established that they are interested parties for the purposes of Article 108(2) TFEU and Article 1(h) of Regulation No 659/1999.

34. That second provision defines an ‘interested party’ as ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations.’ That provision essentially reproduces the consistent definition of the concept of ‘interested party’ provided by the Court in its case-law. (11)

35. In other words, that term covers an ‘indeterminate group of persons’, (12) and accordingly it is settled case-law that that provision ‘does not rule out the possibility that an undertaking which is not a direct competitor of the beneficiary of the aid … can be categorised as an interested party, provided that that undertaking demonstrates that its interests could be adversely affected by the grant of the aid’. (13)

36. In other words, the status of ‘interested party’ depends essentially on whether the interests of the entity claiming that status could be affected by the granting of the aid measure. It is therefore necessary to determine how it may be established that the interests of an undertaking could be affected by the granting of aid so as to confer the status of ‘interested party’ on that undertaking.

37. In my view, it is clear both from the wording of Regulation No 659/1999 and from the case-law of the Court of Justice and the General Court that two situations must be distinguished, that is to say, first, the situation of undertakings competing with the beneficiary of the aid and, secondly, the situation of entities which are not competitors of the beneficiary.

38. As regards, in the first place, an undertaking competing with the beneficiaries of the measure, it is clear from the Court’s case-law that such an undertaking is ‘without doubt an interested party’. (14)

39. In its settled case-law, the General Court also confers the status of ‘interested party’ on an undertaking which is in a competitive relationship with the beneficiary of the aid for that reason alone. (15)

40. In other words, for an undertaking, the mere fact that it is a competitor of the beneficiary of the aid is sufficient for it to establish that its interests will be affected by the granting of the aid and thus for it to be categorised as an ‘interested party’. In that situation, an undertaking claiming to have the status of ‘interested party’ on the ground that it is a competitor of the beneficiary of the aid need only be able to demonstrate that it is in a competitive relationship with that beneficiary. As the General Court points out in its case-law, ‘any undertaking invoking the existence of an actual or potential competitive relationship [with the beneficiary of the measure] may be regarded as having the status of interested party’. (16)

41. As regards, in the second place, an entity which is not a competitor of the beneficiary of the aid, that entity may be regarded as having the status of ‘interested party’ provided that it can be shown that its interests could be affected by the granting of the aid. To that end, it is for that entity to establish, in accordance with the case-law, that the measure is likely to have a specific effect on its situation. (17)

42. The Court has, in particular, accepted that a trade union could be regarded as an interested party provided that, by establishing that the aid is likely to have a real effect on its situation or that of the workers it represents, it shows that its interests or those of its members might be affected by the granting of aid. (18)

43. In other words, in order to be categorised as ‘interested parties’, entities must establish that their interests will be affected by the granting of the aid. In order to do so, undertakings competing with the beneficiary of the aid need only demonstrate the existence of a competitive relationship with the beneficiary. By contrast, undertakings which are not in such a competitive relationship must, for their part, establish that the aid is likely to have a specific effect on their situation.

44. In that regard, I must point out that such a distinction is inconsistent with a minority line of the General Court’s case-law, of which the judgment under appeal forms part.

(b) The General Court’s reasoning in the judgment under appeal and the line of case-law of which it forms part

45. According to that case-law, an entity must, ‘in order to be categorised as an interested party, on the one hand, establish that it is in a competitive relationship with the beneficiary of the aid and, on the other hand, prove that the aid is likely to have a specific effect on its situation and will distort the competitive relationship in question’. (19) In other words, an undertaking competing with the beneficiaries of the aid is required to prove both the existence of a competitive relationship and the specific effect of the aid on its situation.

46. However, I consider that such a solution cannot be maintained. Since that solution imposes, for recognition of the status of ‘interested party’, requirements additional to that of having the status of competitor of the beneficiary, it first of all runs counter to the wording of Regulation No 659/1999, which expressly refers to a competitor of the beneficiary as an interested party, and to the case-law of the Court, according to which a competitor of the beneficiary is without doubt an interested party.

47. That solution is next at odds with a plethora of case-law of the General Court, according to which proof of the status of competitor is on its own sufficient to categorise the undertaking relying on it as an ‘interested party’, (20) without it being necessary also to demonstrate the existence of a likelihood that the aid will have a specific effect on the situation of the competing undertaking and distort the established competitive relationship.

48. Finally, I believe that such a solution may lead to some confusion with the case-law on the admissibility of a competitor’s action where the latter seeks to challenge not only an infringement of its procedural rights, as in this case, but also the merits of a decision assessing the compatibility of the aid with the internal market. (21)

49. According to that case-law, an undertaking contesting the merits of a Commission decision not to initiate the formal investigation procedure cannot rely solely on its status as a ‘competitor’ of the beneficiary undertaking, but must also establish that its market position is substantially affected by the aid in question. (22) The solution proposed by the case-law of the General Court leads, to a certain extent, to an alignment of the conditions of admissibility, whether the undertaking is contesting an infringement of its procedural rights based on the Commission’s refusal to initiate the formal investigation procedure or the merits of a decision appraising the compatibility of the aid, contrary to the settled case-law of the Court of Justice.

50. In both situations, the competing undertaking could not merely demonstrate the existence of a competitive relationship, but would also have to establish that its situation is specifically affected by the aid measure in that the competitive relationship is distorted by that measure. (23) The distinction between the conditions of admissibility based on the subject matter of the action would then be largely eliminated.

51. Accordingly, contrary to what the General Court held in paragraph 54 of the judgment under appeal and to what the appellants maintain, VGG and Others, in order to establish that they have the status of ‘interested party’, cannot, in my view, be required to prove both that there exists a competitive relationship with the thirteen LMOs benefiting from the aid scheme at issue and that the measure has a specific effect on the situation of VGG and Others and will distort that competitive relationship. I am therefore of the opinion that the General Court’s examination of the specific effect of the aid on the situation of VGG and Others constitutes a ground included only for the sake of completeness.

52. Since, in paragraphs 61 to 64 of the judgment under appeal, the General Court established that VGG and Others were in a competitive relationship with the thirteen LMOs, the General Court rightly categorised VGG and Others as ‘interested parties’, in accordance with the case-law of the Court of Justice recalled in points 37 to 39 of this Opinion and with the provisions of Regulation No 659/1999.

53. By holding that VGG and Others had to be regarded as undertakings competing with those LMOs, the General Court could reasonably categorise VGG and Others as ‘interested parties’.

54. Thus, even if, as the appellants and the Commission submit, it is true the General Court erred in law in its assessment of the specific effect of the measure on the situation of VGG and Others, such an error cannot, in any event, lead to the setting aside of the judgment under appeal since the General Court’s assessment is well founded on other legal grounds. (24)

55. In those circumstances, I am of the view that the second part of the first ground of appeal is ineffective and, therefore, cannot be upheld.

(c) Subsidiary considerations on the General Court’s assessment of the likelihood of the measure having a specific effect on the situation of VGG and Others

56. That said, I note that the finding of the existence of a competitive relationship between VGG and Others and the thirteen LMOs benefiting from the scheme at issue is disputed by the appellants, the Commission and the Netherlands Government in the context of the first part of the first ground of appeal. For the sake of completeness, I must therefore examine whether the General Court erred in law in holding that the aid measure was likely to have a specific effect on the situation of VGG and Others.

57. If the first part of the first ground of appeal is upheld, VGG and Others could be categorised as ‘interested parties’ only if it was correctly held that the measure in question was likely to have a specific effect on their situation. More specifically, if VGG and Others were wrongly categorised as competitors of the thirteen LMOs, it remains necessary to ensure that the interests of VGG and Others were not, in any event, affected by the granting of the aid, in that the aid was likely to have a specific effect on their situation.

58. The appellants, supported by the Netherlands Government and the Commission, argue, first, that the criterion identified by the General Court for establishing the specific effect of the aid on the situation of VGG and Others is erroneous in law. Secondly, those parties maintain that the General Court could not confine itself to finding that the aid had an influence on the situation of VGG and Others, since the latter were required to establish the specific effects of the aid on their situation. The General Court’s reasoning is thus vitiated by an error of law.

59. As regards the criterion identified by the General Court for establishing the existence of a likelihood that the aid might have a specific effect on the situation of VGG and Others, the General Court noted, in paragraph 68 of the judgment under appeal, that ‘when State aid strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected by that aid’. However, as the appellants and the Commission rightly point out, the case-law relied on by the General Court relates to the effect on trade between Member States for the purposes of Article 107(1) TFEU. (25) That criterion, which makes it possible to establish whether trade between Member States is affected by the aid measure, appears to me to be manifestly irrelevant in determining whether that measure is likely to have an effect on the situation of VGG and Others. That reasoning, which is characterised by some confusion in the reading of the case-law, therefore appears to me to be vitiated by an error of law.

60. Nevertheless, I do not believe that such an error of law in identifying the relevant criterion for establishing the existence of a likelihood of a specific effect on the situation of VGG and Others affected the outcome of the General Court’s assessment of that condition. It follows from the case-law of the Court of Justice that an error of law committed by the General Court does not invalidate the judgment under appeal if the operative part of that judgment is well founded on other legal grounds, (26) which appears to me to be the case as regards the judgment under appeal.

61. On the one hand, and contrary to what the appellants and the Commission maintain, it is clear from the case-law that, in order to prove that an applicant’s interests could be affected by aid, it is necessary to show not that there has been an actual change in the applicant’s situation, but only that there is likely to be a specific effect. (27) I therefore do not believe that the General Court erred in law in holding, in paragraph 73 of the judgment under appeal, that ‘the applicants have to show … not evidence that their competitive position has been significantly affected, but merely the influence’ of the aid on their situation.

62. On the other hand, it is common ground that an aid measure may affect the situation of an operator ‘in [different] ways …, in particular by causing the loss of an opportunity to make a profit or a less favourable development than would have been the case without such aid’. (28)

63. In paragraph 71 of the judgment under appeal, the General Court noted that VGG and Others had to ‘invest in natural areas in order to carry out economic activities similar’ to those carried out by the thirteen LMOs, placing VGG and Others at a disadvantage compared to those LMOs, which were able to acquire land on more favourable terms as a result of the measure at issue. The General Court also referred, in paragraph 69 of the judgment under appeal, to VGG and Others’ undisputed line of argument that ‘[their] inability to expand their land holdings on the same terms as [the] beneficiaries led to a less favourable development of their activities than would have been the case without such an aid measure’.

64. In those circumstances, the General Court cannot be criticised on the grounds that it erred in law by holding, in essence, that the measure at issue was likely to have a specific effect on the situation of VGG and Others and for ruling that they must therefore be categorised as ‘interested parties’.

65. Accordingly, I am of the view that the second part of the first ground of appeal is ineffective or, in any event, unfounded and cannot be upheld.

66. By their second ground of appeal, the appellants, supported in this respect by the Commission and the Netherlands Government, argue that the General Court wrongly accepted that there were serious difficulties in assessing the compatibility of the aid measure at issue with the market, necessitating initiation of the formal investigation procedure under Article 108(2) TFEU.

67. By the first part of the second ground of appeal, the appellants maintain, first, that the General Court could not, without committing errors of law, hold that the finding that there exists a ‘wider’ and ‘atypical’ service of general economic interest (SGEI) entrusted to the LMOs revealed that there were serious difficulties, secondly, that the General Court’s reasoning is also inadequate and, thirdly, that, in finding that classification of the SGEI as ‘wider’ or ‘atypical’ was evidence of the existence of serious difficulties, the General Court, in any event, relied on the existence of a contradiction in the decision at issue which had not been invoked by the appellants.

1. The General Court’s alleged finding of a contradiction in the decision at issue

68. From the outset, I am of the view that it is not possible to accept the argument that the General Court ruled ultra petita in finding that the Commission’s reasoning in the decision at issue contained a contradiction which VGG and Others had not relied on.

69. It is true that, in paragraphs 117 to 120 of the judgment under appeal, the General Court referred to the existence of a contradiction, in the decision at issue, between the Commission’s conclusions relating to the classification of the LMOs as ‘undertakings’ and its conclusions relating to the definition of the SGEI at issue, which covers both the main activity of nature protection and the secondary activities of the LMOs. No such contradiction was relied on by the parties at first instance.

70. Nevertheless, the fact remains that, on the one hand, in so doing, the General Court merely set out the arguments of the various parties relating to that contradiction, on which they were questioned in the context of the measures of organisation of procedure.

71. On the other hand, although, in paragraph 126 of the judgment under appeal, the General Court referred to the Commission’s reasoning relating to the economic nature of the LMOs’ secondary activities, it nonetheless made no reference to any contradiction — not relied on by the parties — between that reasoning and the reasons governing the definition of the SGEI in the decision at issue.

72. The solution arrived at by the General Court, according to which classification of the activities of the LMOs as a ‘wider’ or ‘atypical’ SGEI may constitute evidence of the existence of serious difficulties, is therefore not based on the existence of a contradiction in the Commission’s decision. (29)

73. Thus, even if the General Court, at the stage of the parties’ arguments, set out an argument which had not been relied on by VGG and Others, this had no effect on the solution reached.

2. The General Court’s reasoning relating to the existence of serious difficulties with regard to the definition of the SGEI

74. The appellants, supported in this respect by the Commission, argue that the General Court erred in law in holding that the Commission’s definition of the SGEI as an ‘atypical’ SGEI was evidence of serious difficulties.

75. First, they maintain that the General Court confused the question whether the LMOs’ activities are economic activities and the question whether those activities form part of the SGEI entrusted to the LMOs. Secondly, the General Court applied a manifestly erroneous criterion to determine whether the secondary activities form part of the SGEI. Thirdly, the General Court wrongly concluded that the Commission did not have sufficient evidence to find that the LMOs’ secondary activities formed part of a wider or atypical SGEI. In so doing, the General Court failed to have regard to the discretion of the Member States in the definition of SGEIs. Finally, the appellants and the Commission state that the reasoning of the General Court is incomprehensible and therefore claim, in essence, a failure to state adequate reasons.

76. It is apparent from paragraph 127 of the judgment under appeal that the General Court concluded that there were serious difficulties with regard to the definition of the SGEI in the decision at issue, on the ground that the ‘examination carried out by the Commission during the preliminary examination procedure was insufficient or incomplete’, which, according to the case-law, constitutes evidence of serious difficulties. (30)

77. The General Court pointed out that, although Member States have a wide discretion as to the definition of an SGEI mission, that discretion is nonetheless not unlimited. According to the case-law, ‘in order to be classified as an SGEI, the service in question must be of a general economic interest exhibiting special characteristics by comparison with the general economic interest of other economic activities’. (31)

78. The General Court found, in paragraph 126 of the judgment under appeal, first, that the Commission had considered that, although the secondary activities of the LMOs arose from the main activity of nature protection, those secondary activities were not made necessary by that main activity and, secondly, that the Commission had not examined whether the secondary activities of the LMOs were of general interest.

79. The General Court stated in paragraph 128 of the judgment under appeal that ‘although the revenue which the secondary activities generated is intended to cover part of the costs of the main activity of nature conservation and is closely linked to the task of general interest of that main activity, the evidence in the Commission’s possession did not enable it, on that basis alone, to conclude … that [they] were of general economic interest’.

80. In paragraph 129, the General Court added that although an undertaking to which an SGEI is entrusted could carry out other economic activities linked to the task of general interest entrusted to it, this did not automatically mean that those activities formed part of the SGEI.

81. In those circumstances, the General Court concluded that the Commission’s examination was incomplete and constituted evidence of the existence of serious difficulties.

82. The General Court held, in paragraph 128 of the judgment under appeal, that that conclusion was supported by the fact that the evidence available to the Commission similarly did not allow it to ‘conclude that the secondary activities were necessary for the operation of the SGEI for the purposes of paragraph 11 of the [SGEI] Framework, which the Commission applied in the contested decision’.

83. In that regard, I note that the General Court has indeed rightly pointed out that the incomplete or inadequate nature of the examination relating to the definition of the SGEI could be evidence of the existence of serious difficulties. I nevertheless believe that the General Court’s reasoning in reaching that conclusion is vitiated by several inconsistencies.

84. As regards, in the first place, the General Court’s finding that the Commission could not, on the basis of the evidence available to it, conclude that the secondary activities of the LMOs were necessary for the operation of the SGEI for the purposes of paragraph 11 of the SGEI Framework, with the result that the inclusion of the secondary activities in the SGEI was not required and raised serious difficulties, my view — like that of the appellants and the Commission — is that the General Court misinterpreted the SGEI Framework.

85. Indeed, paragraph 11 of the SGEI Framework simply provides that ‘State aid … may be declared compatible with Article 106(2) [TFEU] if it is necessary for the operation’ (32) of the SGEI. It is therefore not the secondary activities which must be necessary for the operation of the SGEI, but the aid measure whose compatibility is being examined.

86. Accordingly, the General Court establishes a manifestly erroneous criterion, criticising the Commission for not having demonstrated the necessity of the secondary activities for the operation of the SGEI, even though paragraph 11 of the SGEI Framework does not impose that requirement on the Commission. Accordingly, the Commission cannot be criticised for not having correctly applied that paragraph for that reason alone.

87. In those circumstances, the General Court could not, without committing an error of law, rely on that element to conclude that the Commission’s examination was incomplete and that there were therefore serious difficulties in the definition of the SGEI.

88. However, since the finding of the incompleteness of the Commission’s examination of the definition of the SGEI is not based solely on the alleged error in the application of the SGEI Framework, such an error of law does not, in itself, provide a sufficient basis for upholding the present part of the second ground of appeal. An error of law committed by the General Court does not invalidate the judgment under appeal if the operative part of that judgment is well founded on other legal grounds. (33) Given that the General Court, for the purpose of concluding that the Commission’s examination was incomplete, also relied on the fact that the Commission had not established that the secondary activities of the LMOs were of general interest, I must therefore examine the General Court’s reasoning on that point.

89. Accordingly, as regards, in the second place, the finding that the Commission has not established that the secondary activities are of general interest, with the result that the Commission’s examination is also incomplete on that point, I think that such a finding is vitiated by a failure to state adequate reasons.

90. The General Court confined itself to pointing out that the evidence available to the Commission was not sufficient to reach the conclusion that those secondary activities were of general interest, even though the General Court accepted, in paragraphs 128 and 129 of the judgment under appeal, that the Commission had adduced evidence establishing a definite link between the LMOs’ nature protection activity and secondary activities, which thus contribute to performance of the task of general interest identified. The General Court thus failed to substantiate in any way the reasons why such evidence, although clearly relevant, was not sufficient.

91. Moreover, nor does the General Court’s reasoning explain what evidence would have demonstrated to the requisite legal standard that the secondary activities of the LMOs were in the general interest, in particular since the existence of a close link between those activities and the general interest pursued cannot, in the General Court’s view, establish that those activities were in the general interest.

92. In that regard, I would recall that the obligation to state the reasons on which a judgment is based arises under Article 36 of the Statute of the Court of Justice of the European Union, which applies to the General Court by virtue of the first paragraph of Article 53 of the Statute, and Article 81 of the Rules of Procedure of the General Court. It has consistently been held that the statement of the reasons on which a judgment of the General Court is based must clearly and unequivocally disclose that court’s reasoning in such a way as to enable the persons concerned to ascertain the reasons for the decision taken and the Court of Justice to exercise its power of review. (34)

93. The General Court merely stated that the evidence available to the Commission was not sufficient to reach the conclusion that the Commission had not established that the secondary activities were of general interest, without, however, showing why that evidence was insufficient or specifying which evidence was insufficient. In those circumstances, it must be found that the General Court’s reasoning lacks clarity and, in my view, does not allow the interested parties to ascertain the reasons for the decision adopted, with the result that it is vitiated, to my mind, by a failure to state adequate reasons.

94. Accordingly, the reasoning of the General Court relating to the incompleteness of the Commission’s examination of the definition of the SGEI is vitiated first by an error of law and secondly by a failure to state adequate reasons.

95. Therefore, I am of the view that the first part of the second ground of appeal must be upheld.

96. In the light of the foregoing considerations, I consider that the second part of the first ground of appeal must be dismissed as ineffective and that the first part of the second ground of appeal must be upheld, without prejudice to the issue of the merits of the other parts of the grounds of appeal.

2 Judgment of 15 October 2018 (T‑79/16, not published, ‘the judgment under appeal’, EU:T:2018:680).

4 Council Regulation of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1).

7 See, inter alia, judgments of 19 May 1993, Cook v Commission, (C‑198/91, EU:C:1993:197, paragraph 22); of 15 June 1993, Matra v Commission (C‑225/91, EU:C:1993:239, paragraph 16), and of 17 September 2015, Mory and Others v Commission (C‑33/14 P, EU:C:2015:609, paragraph 94).

8 Judgment of 17 July 2008, Athinaïki Techniki v Commission (C‑521/06 P, EU:C:2008:422, paragraph 53).

9 Judgments of 17 July 2008, Athinaïki Techniki v Commission (C‑521/06 P, EU:C:2008:422, paragraph 36), and of 18 November 2010, NDSHT v Commission (C‑322/09 P, EU:C:2010:701, paragraph 56).

11 See, inter alia, judgments of 14 November 1984, Intermills v Commission (323/82, EU:C:1984:345, paragraph 16); of 2 April 1998, Commission v Sytraval and Brink’s France (C‑367/95 P, EU:C:1998:154, paragraph 41), and of 27 October 2011, Austria v Scheucher-Fleisch and Others (C‑47/10 P, EU:C:2011:698, paragraph 132).

12 See, inter alia, judgments of 14 November 1984, Intermills v Commission (323/82, EU:C:1984:345, paragraph 16); of 24 May 2011, Commission v Kronoply and Kronotex (C‑83/09 P, EU:C:2011:341, paragraph 63), and of 27 October 2011, Austria v Scheucher-Fleisch and Others (C‑47/10 P, EU:C:2011:698, paragraph 132).

13 Judgments of 24 May 2011, Commission v Kronoply and Kronotex (C‑83/09 P, EU:C:2011:341, paragraph 64), and of 27 October 2011, Austria v Scheucher-Fleisch and Others (C‑47/10 P, EU:C:2011:698, paragraph 132).

14 Judgment of 18 November 2010, NDSHT v Commission (C‑322/09 P, EU:C:2010:701, paragraph 59, and the case-law cited). Emphasis added.

15 See, inter alia, judgments of 1 December 2004, Kronofrance v Commission (T‑27/02, EU:T:2004:348, paragraph 44); of 28 March 2012, Ryanair v Commission (T‑123/09, EU:T:2012:164, paragraph 73); of 12 June 2014, Sarc v Commission (T‑488/11, not published, EU:T:2014:497, paragraph 41); of 5 November 2014, Vtesse Networks v Commission (T‑362/10, EU:T:2014:928, paragraph 47), and of 19 June 2019, NeXovation v Commission (T‑353/15, EU:T:2019:434, paragraph 69), as well as the order of 26 March 2014, Adorisio and Others v Commission (T‑321/13, not published, EU:T:2014:175, paragraph 41).

16 Judgment of 19 June 2019, NeXovation v Commission (T‑353/15, EU:T:2019:434, paragraph 69).

17 See, inter alia, judgments of 24 May 2011, Commission v Kronoply and Kronotex (C‑83/09 P, EU:C:2011:341, paragraph 65), and of 27 October 2011, Austria v Scheucher-Fleisch and Others (C‑47/10 P, EU:C:2011:698, paragraph 132).

18 Judgment of 9 July 2009, 3F v Commission (C‑319/07 P, EU:C:2009:435, paragraph 33).

19 Judgment of 12 May 2016, Hamr — Sport v Commission (T‑693/14, not published, EU:T:2016:292, paragraph 42); judgment under appeal (paragraph 54), and order of 28 September 2018, Motex v Commission (T‑713/17, not published, EU:T:2018:631, paragraph 26). Emphasis added.

20 See, inter alia, judgments of 1 December 2004, Kronofrance v Commission (T‑27/02, EU:T:2004:348, paragraph 44); of 28 March 2012, Ryanair v Commission (T‑123/09, EU:T:2012:164, paragraph 73); of 12 June 2014, Sarc v Commission (T‑488/11, not published, EU:T:2014:497, paragraph 41); of 5 November 2014, Vtesse Networks v Commission (T‑362/10, EU:T:2014:928, paragraph 47), and of 19 June 2019, NeXovation v Commission (T‑353/15, EU:T:2019:434, paragraph 69), as well as the order of 26 March 2014, Adorisio and Others v Commission (T‑321/13, not published, EU:T:2014:175, paragraph 41).

21 See, for a useful summary of the various conditions of admissibility according to the subject matter of the action, judgment of 13 December 2005, Commission v Aktionsgemeinschaft Recht und Eigentum (C‑78/03 P, EU:C:2005:761, paragraphs 31 to 37), or, more recently, of 6 May 2019, Scor v Commission (T‑135/17, not published, EU:T:2019:287, paragraphs 37 to 45).

22 See, inter alia, judgment of 22 November 2007, Spain v Lenzing (C‑525/04 P, EU:C:2007:698, paragraph 33).

23 Such a risk is apparent, moreover, from a reading of the written submissions of the appellants and the Commission. They submit that the General Court erred in law in holding that VGG and Others had to prove not that their competitive position was substantially affected, but only that the aid influenced that position. The appellants argue, in particular, that VGG and Others should have produced an economic analysis demonstrating a specific effect on their competitive position.

24 See judgments of 2 April 1998, Commission v Sytraval and Brink’s France (C‑367/95 P, EU:C:1998:154, paragraph 47), and of 29 March 2011, ThyssenKrupp Nirosta v Commission (C‑352/09 P, EU:C:2011:191, paragraph 136).

25 The General Court cites, in paragraph 68 of the judgment under appeal, the judgment of 17 September 1980, Philip Morris Holland v Commission (730/79, EU:C:1980:209, paragraph 11).

26 See judgments of 2 April 1998, Commission v Sytraval and Brink’s France (C‑367/95 P, EU:C:1998:154, paragraph 47), and of 29 March 2011, ThyssenKrupp Nirosta v Commission (C‑352/09 P, EU:C:2011:191, paragraph 136).

27 See, inter alia, judgments of 24 May 2011, Commission v Kronoply and Kronotex (C‑83/09 P, EU:C:2011:341, paragraph 65), and of 27 October 2011, Austria v Scheucher-Fleisch and Others (C‑47/10 P, EU:C:2011:698, paragraph 132). Emphasis added.

28 Judgment of 22 December 2008, British Aggregates v Commission (C‑487/06 P, EU:C:2008:757, paragraph 53).

29 The Commission itself acknowledges, in its pleadings, that the General Court did not find that there was any contradiction in the decision at issue.

30 See, inter alia, judgment of 17 March 2015, Pollmeier Massivholz v Commission (T‑89/09, EU:T:2015:153, paragraph 50 and the case-law cited).

31 Judgments of 10 December 1991, Merci convenzionali porto di Genova (C‑179/90, EU:C:1991:464, paragraph 27), and of 17 July 1997, GT-Link (C‑242/95, EU:C:1997:376, paragraph 53).

33 See judgments of 2 April 1998, Commission v Sytraval and Brink’s France (C‑367/95 P, EU:C:1998:154, paragraph 47), and of 29 March 2011, ThyssenKrupp Nirosta v Commission (C‑352/09 P, EU:C:2011:191, paragraph 136).

34 Judgment of 19 December 2012, Mitteldeutsche Flughafen and Flughafen Leipzig-Halle v Commission (C-288/11 P, EU:C:2012:821, paragraph 83 and case-law cited).

Court of Justice of the European Communities (including Court of First Instance Decisions)