The General Court of the European Union rejected the action brought by German companies Breuninger and Falke against the European Commission’s decision of November 2020, amended in February 2021, to authorise German public aid to German companies that suffered heavy losses due to the Covid-19 pandemic, in a judgment delivered on Wednesday 21 December (Judgments T-260&306/21).
The companies Breuninger and Falke seek the annulment of the Commission’s amended decision declaring the German aid scheme, which allowed, until the end of 2021, to grant public aid of up to €10 million per company that suffered a loss of turnover of at least 30% over the reference period compared to 2019 (see EUROPE 12646/14), to be compatible with the internal market and the temporary framework on State aid at EU level in the context of the pandemic.
The applicants contest the appropriateness, necessity and proportionality of the criterion for eligibility for the German scheme, arguing that the losses incurred in the areas of activity affected by Covid-19 should have been taken into account without taking into account the situation of the company concerned as a whole.
The General Court rejects the claims made. In its view, the proposed alternative eligibility criterion would have had greater budgetary implications for Germany and is not an ‘equally appropriate’ measure.
Furthermore, the European Court considers that the contested eligibility criterion does not give rise to restrictive effects on competition that are disproportionate to the objective of the German scheme to ensure the viability of the companies affected by Covid-19.
Secondly, the General Court rejects the argument of the two German companies that procedural rights were violated because the Commission validated the German scheme without opening a formal investigation procedure.
See the General Court’s judgment (in French): https://aeur.eu/f/4r7
On the same day, the General Court also ruled that the action brought by Breuninger against the Commission’s decision of May 2021 declaring compatible with EU law another temporary economic support scheme in favour of companies whose activities had been closed down as a result of the health measures taken by the German Federal State to deal with the pandemic was inadmissible (Case T-525/21).
Breuninger mistakenly considered that it was excluded from the scheme, so the German company has no interest in having the Commission’s decision overturned.
See the judgment (in French): https://aeur.eu/f/4r8 (Original version in French by Mathieu Bion)