“What’s in a Commission Decision?” and other lessons for national courts

In a decision of 13 February 2014, the Court of Justice of the European Union (“CJEU”) added a little gloss to an otherwise well-trodden path in relation to the binding aspects of a Commission Decision. For instance, it is well established that assessments made in recitals to a decision “are not in themselves capable of forming the subject of an application for annulment” unless they are “the necessary support for its operative part” (see Case T-138/89 Nederlandse Bankiersvereniging and Nederlandse Vereniging van Banken v Commission [1992] ECR II-2181 at [31]). What of statements of position by the Commission subsequent to its Decision, e.g. in order to facilitate its enforcement at national level?

Case C-69/13 Mediaset SpA v Ministero dello Sviluppo economico, concerned a state aid which had been granted by the Italian Republic to Mediaset (the main commercial broadcaster in terrestrial television). In essence, the scheme consisted of a State subsidy granted to consumers for purchasing or leasing a digital decoder. Following complaints by Centro Europa 7 srl and Sky Italia srl that this amounted to a selective advantage in favour of the terrestrial and cable pay-TV operators, the European Commission investigated, and by its Decision 2007/374/EC, declared the scheme a state aid incompatible with the common market (Article 1). It ordered Italy to “take all necessary measures to recover from the recipients the aid” (Article 2(1)), “in accordance with the procedures of national law provided that they allow the immediate and effective execution of this Decision” (Article 2(2)). That should have been that.

However, given the scheme’s complexity, the Commission did not quantify the aid to be recovered and simply offered some “guidelines” on how this could be achieved at recitals 196 to 205 of the Decision. It also “invite[d] Italy to submit to the Commission for consideration any problem that it may meet in implementing this Decision” (Recital (207)). Cue a number of exchanges between the Italian authorities and the Commission in which the latter set out its position on the approach to be taken. This process eventually led to a number being found and recovered from, among others, Mediaset. Mediaset unsuccessfully brought an action for annulment of the Decision (which ended up as Case C-403/10 P Mediaset v Commission [2011] ECR I-117) and it then challenged the domestic Order recovering the aid in national proceedings.

In those proceedings, the Tribunale civile di Roma was faced with an expert report which suggested that there was no evidence that the aid in question had actually influenced the sales of decoders during the period examined – the quantum would thus be nil. As such, it referred two questions to the CJEU: (1) whether subsequent statements of position by the Commission after it had reached a Decision were binding on a national court and (2) whether a national court could find a quantum of nil when national authorities had been ordered to recover aid by the Commission.

The CJEU responded in brief form. As to the second question, the Court simply restated the principle that national procedural law governs recovery of state aid so long as it satisfies the requirements of effectiveness and equivalence (at [34]) but otherwise, “without calling into question the validity of the Commission’s decision or the obligation to repay the aid declared unlawful and incompatible with the internal market, the national court may fix an amount of aid equal to zero” (at [37]). As to the first question, the Court was clear that “the statements of position made by the Commission in the context of the execution of Decision 2007/374 cannot be regarded as being binding on the national court” (at [28]). Nonetheless, its analysis did not stop there.

Noting that the “application of the European Union competition rules is based on an obligation of cooperation in good faith between the national courts, on the one hand, and the Commission and the European Union Courts, on the other” (at [29]) and that a national court entertaining doubts or encountering difficulties can “contact the Commission for assistance” (at [30]), it concluded (at [31]) that:

“to the extent that those statements of position, as well as the Commission opinions which may be sought by the national court […] are intended to facilitate the accomplishment of the task of the national authorities in the immediate and effective execution of the recovery decision and, having regard to the principle of cooperation in good faith, the national court must take them into account as a factor in the assessment of the dispute before it and must state reasons having regard to all the documents in the file submitted to it” (emphasis added)

Thus, the Court saw Mediaset as a chance to trace another feature of the uncharted and sometimes nebulous terrain of the principle of sincere cooperation of Member States under Article 4(3) TEU (as to which see my post on the Ryanair saga here). This is particularly relevant in the post-Pfleiderer era when national legal systems are struggling with how to deal with follow-on damages claims while respecting the Commission’s procedures.

The CJEU’s approach in Mediaset invites the Commission and national courts to become more active discussants when seeking to simultaneously (or sequentially) enforce competition law. Indeed, despite a Notice to that effect which is almost a decade old, it is only a fairly recent trend for Commission involvement in national competition law proceedings (see, e.g. National Grid Electricity Transmission Plc v ABB Ltd [2012] EWHC 869 (Ch), where Nicholas Khan intervened in writing on behalf of the Commission).

The CJEU has also pointed national courts to additional material which they “must take [] into account” when deciphering the meaning and effect of Commission Decisions – subsequent communications which contain “statements of position”. This could have far-reaching consequences, where – for instance – the Commission provides further detail about the territorial scope of anti-competitive conduct which it has found to be proven, or clarifies the position of non-addressees. One would imagine that the latter situation would lead to caution as was the case when the General Court of the European Union held the Commission to standards of “professional secrecy” so that it cannot make findings or allude to an undertaking’s culpability in the non-operative parts of a Decision (see T-474/04 Pergan Hilfsstoffe für industrielle Prozesse v Commission [2007] ECR II-4225 at [73] and [80]).

The duty of co-operation nevertheless seems to require national courts to conduct thorough and extensive exercises in order to see through the crystal ball into the consequences of Commission Decisions. In Mediaset the Court failed to take the opportunity to explain to national courts in any further detail what “taking into account” might mean, or to circumscribe the scope of Commission Decisions so that such an exercise might be targeted and clear. Further uncertainty remains with only the general guidance of Article 4(3) TEU….a penny for the soothsayer?

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