AG Jääskinen revisits PreussenElektra and minimises implications of Doux Elevages (C-262/12)
As a continuation of the Judgment of the Court of Justice of the EU of 30 May 2013 in case C-677/11 Doux Élevages and Coopérative agricole UKL-AREE, where the CJEU (re)analysed the concept of 'State aid' and stressed that aid cannot
exist if the economic advantage under analysis is not funded by 'State
resources' and there is no 'imputability to the State' (commented here); in his Opinion of 11 July 2013 in case C-262/12 Vent De Colère and Others, Advocate General Jääskinen has assessed a French scheme of support to electric distribution companies and revisited the well-known PreussenElektra criteria.
In his analysis, AG Jääskinen uses the two main criteria of 'imputability' and existence of 'State resources' in order to determine whether some contributions paid by final customers of electricity--which are then used to compensate for the costs of the mandatory purchase of wind energy by electricity distributors at above the market prices--amount to State aid.
Very briefly, under the controverted scheme, producers of wind energy benefit from an obligation of mandatory purchase of their electricity by energy distributors at prices above the market. Distribution companies can then claim full compensation for those additional costs (which are classed as costs derived from public service obligations) from CDC (Caisse des Dépôts group, which is a "public group serving general interest and economic development"). CDC's compensation is ultimately financed by the final consumers of electricity, who pay that compensation as part of their electricity bill.
According to AG Jääskinen, the scheme constitutes State aid because there is both State imputability and the measure is financed by State resources. As to the first element, the AG considers that the fact the contribution to be paid by consumers is directly determined in a law implies that the adoption of such a measure is imputable to the public powers of the French State (para 32 of hi Opinion).
It is interesting to stress that the AG distinguishes this case from the very recent Doux Elevages Judgment by stressing that the intervention of the State in this case was not of a 'merely instrumental' nature, but that the French State took full ownership of the compensation scheme for producers of wind electricity (para 40).
As to the more controversial issue of the consumer contributions amounting to the existence of 'State resources', the AG stresses that 'the fact that these resources constantly remain under public control and, therefore, are available to the competent national authorities, suffices to qualify them as State funds to finance the measure, which then falls within the scope of Article 107(1) TFEU' (para 34, own translation from Spanish). AG Jääskinen confirms this positive finding in view of the control that the French State exercises over CDC, the status of CDC as the organism that intervenes in the transmission of the funds between consumers and distributors of energy, and the nature of the controverted funds.
In my view, it is worth noting that AG Jääskinen advocates for a rather streamlined test of 'origin/absorption' of private funds once they are managed by a public entity by clearly submitting that he does 'not agree with the general statement that the public nature of an organism does not entail that the resources available to it are to be regarded as State funds' (para 46, own translation from Spanish). I think that this is an appropriate approach that would overcome a formalistic assessment of the avenues that financial support follows and, in the end, would broaden the definition of State aid under a more functional approach.
Also, and once more, AG Jääskinen distinguishes this case from the Doux Elevages Judgment by stressing the fact that all consumers are indiscriminately affected by the compensation scheme (regardless of their use of wind energy or not) and, consequently, the scheme is of a (quasi)fiscal nature (at least, this is my understading of his considerations in paras 50-54 of his Opinion). I think that this should also be welcome, as such an approach would contribute to limit the possibilities for States to effectively create (disguised) aid schemes by means of (pseudo)fiscal interventions.
In general, in my opinion, AG Jääskinen's Opinion in Vent de Colere should be welcome, not least because of his clear and well-thought proposals to distinguish (and restrict) the implications of the Doux Elevages Judgment.
Let's hope that the CJEU follows him and also adopts a clear position towards limiting the potentially far-fetched implications of Doux Elevages.
CJEU protects right to challenge public procurement decisions by non-compliant tenderers (C-100/12)
In its Judgment of 4 July 2013 in case C-100/12 Fastweb, the Court of Justice of the European Union (CJEU) has strengthened the effectiveness of the public procurement remedies system by protecting the right to challenge (illegal) award decisions by tenderers that do not comply with all the (technical) requirements imposed by the tender documentation themselves.
In the case at hand, a disappointed tenderer challenged the award decision on the basis that none of the two awardees in a framework agreement complied with the technical specifications set by the contracting authority. The awardees of the contract intervened in the procedure and raised a counterclaim stating that the challenger did not comply with the technical specifications (either). Under Italian law, the counterclaim had to be analysed first and, if successful, would bar the challenge on the basis of a lack of locus standi of the disappointed tenderer (who could not have been awarded the contract anyway and, consequently, would be prevented from challenging the outcome of the procedure).
The CJEU found such an interpretation of the rules on active standing contrary to the EU public procurement remedies directives (as amended by dir 2007/66), inasmuch as 'the aim of [those directives] is to ensure that
decisions made by contracting authorities in breach of European Union
law can be effectively reviewed' (C-100/12 at para 25). Following a functional approach that deserves praise, the CJEU found that:
a counterclaim filed by the successful tenderer cannot bring about the dismissal of an action for review brought by a tenderer where the validity of the bid submitted by each of the operators is challenged in the course of the same proceedings and on identical grounds. In such a situation, each competitor can claim a legitimate interest in the exclusion of the bid submitted by the other, which may lead to a finding that the contracting authority is unable to select a lawful bid (C-100/12 at para 33).
Consequently, the CJEU has determined that the counterclaim concerning the locus standi of a tenderer that should have been excluded (or whose tender should have been rejected) cannot preempt the analysis of the legality of the award decision adopted by the contracting authority.
By (implicitly) adopting such a broad interpretation of the concept of 'any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement' [art 1(3) dir 2007/66], the CJEU has increased the chances of attaining effective and substantive review of the award decisions adopted by contracting authorities, regardless of the specific procedural rules within each of the EU Member States (as mandated by the principle of effectiveness of EU law) and seems to point clearly towards a principle or criterion of 'favor revisionis', so that review bodies and courts tend to assess the material conditions of award decisions, despite the presence of apparent procedural difficulties to carry out such an assessment.
In my opinion, this is a favourable development of EU public procurement law and one that is conducive to ensuring an absence (or correction at review stage) of distortions of competition. As argued elsewhere [A Sanchez Graells, Public Procurement and the EU Competition Rules (Oxford, Hart, 2011) pp. 353-355], my view is coincidental with the approach adopted by the CJEU in that
the best reading of the standing requirements imposed by Directive 2007/66 is that Member States have to adopt a broad approach to the setting of detailed rules regulating active standing to access bid protests and review procedures, and that they have to do so attending both to the criterion of participation in the tender, and to the criterion of the effects actually or potentially generated by the alleged infringement—so that bid protest and review procedures are open to any party that has taken part in the tender or that can otherwise prove that it has been harmed or risks being harmed as a result of the alleged infringement, regardless of its actual participation (or lack of it) in the specific tender that gave rise to it.
AG (dangerously) stresses possibility to indirectly challenge State Aid decisions via Art 267 TFEU
In his Opinion of 27 June 2013 in case C-284/12 Deutsche Lufthansa, Advocate General Mengozzi stressed that (provisional) Decisions of the European Commission in State Aid cases are open to (indirect) challenges via a reference for a preliminary ruling on their validity under Article 267 of the Treaty on the Functioning of the European Union.
In the case at hand, the complainant before the Commission seeked interim measures against the beneficiary of a measure that the Commission qualified as State aid in its decision to open a formal investigation. The domestic court competent in the matter remained unconvinced by the Commission's preliminary assessment and seeked ways not to adopt interim measures on the basis of such an assessment. It referred the following question to the CJEU:
Does the uncontested decision of the Commission to initiate the formal investigation procedure under Article 108 paragraph 3, second sentence, result in the national court seised of a procedure which aims to recover payments already made and the prohibition of future payments being bound by the legal assessment expressed by the Commission in that decision on the state aid character of the measure in question?
In paragraph 42 of his Opinion, AG Mengozzi indicates that:
under the combined effect of Article 108 paragraph 3, last sentence, and the qualification as a new aid of the controverted measure [in the provisional decision of the Commission], the opening of the formal investigation procedure generates the obligation of the Member State concerned to suspend its execution from the date of adoption of the decision to open the investigation and until a final decision is reached, regardless of the objective nature of the controverted measure [...]. National courts will therefore be obliged to take all necessary measures to ensure compliance with this requirement and to eliminate the consequences of any breach thereof, regardless of any previous assessment of the measure under Article 107, paragraph 1. In case national courts harbour doubts about whether the requirements to qualify the measure as aid are met in the given case, which justify the initiation of the formal investigation procedure, national courts may refer a question of validity under Article 267 TFEU, first paragraph, letter b) (Opinion in C-284/12 at para 42, own translation from Spanish).
This comes to stress the (procedural) difficulties derived from the joint competence of domestic courts and the Commission to interpret and apply the notion of aid under Article 107(1) TFEU--as stressed in paragraph 10 of the Commission Notice on the enforcement of State Aid law by national courts, which also metions the possibility for a preliminary reference in paragraph 90, but (impliedly) in a context where no concurrent Commission investigation is in place--and can create significant complications by way of parallel procedures (before the Commission, the national courts and the CJEU) in one and the same case. Such duplication of procedures can only result in a waste of resources and, most likely, in legal uncertainty and potentially contradictory outcomes.
In my view, leaving the door open for a reference for a preliminary ruling (of validity) against a provisional assessment of the European Commission is excessively deferential towards domestic courts and can have significant undesirable effects. This is not satisfactory and would justify the adoption of a more streamlined procedural system whereby national courts would have to suspend their powers of interpretation of the concept of aid and limit their role to the adoption of effective interim measures when the Commission is still completing its investigation on a given measure.
In my view, this could be easily achieved by simply applying Article 4(3) of the Treaty on European Union, since the need for sincere cooperation in this type of matters seems out of the question. It will be interesting to see how far the CJEU is willing to go in the balance between the sphere of jurisdiction/competence of domestic courts and ensuring a mangeable procedural system in State aid law.