- Being a competitor of the aid recipient is not enough.
- The competitor must show that it is directly and individually affected by the aid.
- Or, the competitor must show that it is directly affected by the Commission decision and that the decision leaves no discretion to the Member State concerned on how to comply with it.
Introduction
This article reviews two cases: A judgment of the Court of Justice of the EU and an Order of the General Court. Both of them addressed the question who has legal standing to challenge a Commission decision. In both cases, the EU courts held that being a competitor of the aid recipient is not enough.
Case I: C-126/24 P, Uno Organización Empresarial de Logística y Transporte v Commission
Uno asked the Court of Justice of the EU to set aside the 2023 judgment of the General Court in case T-514/20, Uno v Commission, by which the General Court dismissed its action for annulment of Commission decision SA.50872 concerning the compensation provided by Spain to Correos for its universal postal service obligation in the period 2011-2020.
Uno is an association of Spanish private postal operators providing services falling both within the scope of the universal postal service and outside that service. Correos is the incumbent postal operator in Spain entrusted with the universal service obligation [USO].
In 2014, Uno lodged a complaint with the European Commission, alleging the illegality of state aid granted by Spain to Correos for its USO.
In 2018, the Commission, by decision 2019/115 [concerning SA.37977] found that Spain had granted excessive compensation to Correos in the period 2004-2010. The Commission considered that that overcompensation and exemptions from property tax and from tax on economic activities constituted aid incompatible with the internal market. It ordered Spain to recover approximately EUR 167 million.
Then, in July 2018, the Spanish authorities informed, ex post, the Commission of compensation granted to Correos for the discharge of the USO for the years 2011-2020. The total public service compensation [PSC] for that period was EUR 1280 million out of which EUR 1219 million had already been granted to Correos before the notification.
In May 2020, the Commission decided in decision SA.50872, without initiating the formal investigation procedure, that the PSC for the years 2011-2020 was state aid compatible with the internal market even though it had been granted unlawfully [i.e. without a prior notification to and approval by the Commission].
Did Uno, as an association, have legal standing?
Article 263 TFEU provides that anyone to whom a decision of an EU institution is addressed has standing to challenge that decision before EU courts. However, a person who is not the addressee of a decision must first prove that it is individually and directly concerned by that decision. In this case, Uno was an association of postal undertakings, rather than a provider of postal services itself.
The CJEU began its analysis by recalling that the case-law accepts the admissibility of an action brought by an association when that association represents the interests of undertakings which are entitled to bring proceedings (paragraph 35 of the judgment).
The CJEU went on to explain that undertakings other than the addressee of a decision can claim to be individually concerned only if the decision affects them by reason of certain attributes which are particular to them or by reason of circumstances which differentiate them from all other persons and distinguishes them individually in the same way as the addressee (para 37).
With regard to state aid, where, without initiating the formal investigation procedure, the Commission finds that aid is compatible with the internal market, any interested party can seek the annulment of that decision in order to safeguard its procedural rights. The CJEU has stated that such interested parties are persons, undertakings or associations whose interests may be affected by the granting of aid, and, in particular, undertakings competing with the beneficiaries of the aid and trade organisations (para 38).
On the other hand, if, as in the present case, a person calls into question the merits of a Commission decision, the mere fact that it may be regarded as an interested party within the meaning of Article 108(2) TFEU is not sufficient to confer to it legal standing. It must demonstrate that it is individually concerned. That is the case where that person’s position on the relevant market is substantially affected by the aid in question (para 39).
A competitive relationship between that person and the aid recipient is not enough. Nor, is the possibility that the aid may affect conditions on the relevant market. The position of that person on the market must be substantially affected by the aid. Moreover, the alleged harm must be caused by the aid, not other events (paras 40 & 41).
Then the CJEU observed that in the present case, it was not apparent that the aid actually affected substantially and adversely the competitive position of the members of Uno, in particular in the form of a fall in their revenue or a fall in their market shares (para 43).
The CJEU agreed with the General Court that, although members of Uno were active on the market for universal postal services there was no prima facie evidence that they had suffered a significant drop in turnover, or financial losses or a reduction in their market share. The CJEU also noted that a description of the evolution of Correos’s market share and of its activities did not prove that the aid had led to substantial damage to those Uno members (para 45).
Uno counterargued that it was also was individually concerned because the state aid in question affected its own interests as an association of postal undertakings.
The CJEU’s response was that that argument was not sufficient to confer standing to a trade association calling into question the merits of a Commission decision where it was not established that the market position of its members had been substantially affected by the aid in question (para 69).
The CJEU dismissed all the other pleas of Uno, and, therefore, it rejected the appeal in its entirety.
Case II: Order T-261/25, LM v Commission
LM, a German operator of games of chance, initiated action against Commission decision 2025/317 concerning the special tax treatment of public casinos in Germany.
As mentioned in the review of the previous case, under the fourth paragraph of Article 263 TFEU, any natural or legal person may institute proceedings against an act addressed to that person or which is of direct and individual concern to it, and against a regulatory act which is of direct concern to them and does not entail implementing measures (paragraph 31 of the Order].
Since in this case, the sole addressee of that decision was Germany and not LM, the action could be considered admissible, only if, first, the decision was of direct and individual concern to LM or, second, the decision was of direct concern to the applicant and the decision constituted a regulatory act.
The condition that a natural or legal person must be directly concerned requires that two criteria be met cumulatively: the contested measure directly affects the legal situation of the individual and leaves no discretion to the addressee as to what to do or how to comply (para 34).
As already explained, a competitive relationship between the competitor and the aid recipient is not sufficient to establish that the competitor is directly concerned (para 36). It is necessary that the contested act directly affects the competitor’s legal situation by placing it at a significant competitive disadvantage (para 37).
The General Court noted that LM was not active on the same geographic market as that of casino operators that benefitted from the state measure that was the subject of the Commission’s decision. LM was operating in North-Rhein Westfalen while the aid measure concerned the tax treatment of casinos in Hamburg.
Since one of the two cumulative criteria for the condition of direct concern was lacking, the General Court held that the applicant could not be regarded as being directly affected by the Commission decision (para 47).
However, the General Court examined, nonetheless, the second criterion according to which it was necessary for the decision not to leave any discretion to the addressee – i.e. Germany.
In this regard, the General Court explained that, where an act of an EU institution is addressed to a Member State, if the action which the Member State must take in order to implement that act is automatic or the consequences of the act are unequivocal, then it is of direct concern to any person affected by that action. If, on the other hand, the act leaves to the Member State the possibility of deciding how to act or not acting or does not compel it to act in a particular way, it is the action or inaction of the Member State which is of direct concern to the person affected, and not to the act itself (para 49).
Next, the General Court concluded that LM was wrong to claim that the measures adopted by Germany, in compliance with the Commission’s decision, were an automatic consequence of that decision. The decision left Germany a margin of discretion because it required Germany only to repeal aid schemes incompatible with the internal market, without any obligation to adopt any new tax schemes (para 50).
Consequently, the General Court declared as inadmissible the action for annulment of Commission decision 2025/317.
[1] The full text of the judgment, in languages other than English, can be accessed at:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62024CJ0126
[2] The full text of the Order, in languages other than English, can be accessed at:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62025TO0261
