PROCEDURAL EVOLUTION OF EU STATE AID

SPECIAL EMPHASIS ON THIRD PARTIES’ RIGHTS

Word count: 3991

Jaume Barbany Arias

Dr. Mariolina Eliantonio

European Administrative Law

Maastricht University, Faculty of Law

ID: 6200970
Index
Index .............................................................................................................................................. 1
1. Introduction ............................................................................................................................... 2
2. Procedural developments throughout the successive Regulations ............................................ 2
2.1. The 1999 Procedural Regulation ........................................................................................ 3
2.1.1. (General) substantial novelties .................................................................................... 3
2.1.1.1. Notified aid........................................................................................................... 3
2.1.1.2. Unlawful aid ......................................................................................................... 4
2.1.2. Interested parties’ role ................................................................................................. 5
2.1.2.1. Interested parties’ rights before the Regulation.................................................... 5
2.1.2.2. Interested parties’ rights under the 1999 Procedural Regulation ......................... 5
2.1.3. Brief analysis of the 1999 Procedural Regulation ....................................................... 7
2.2. The 2009 Procedural Reform ............................................................................................. 7
2.2.1. Context and general remarks ....................................................................................... 7
2.2.2. Third parties in the 2009 Procedural Reform .............................................................. 8
2.3. The 2013 Regulation .......................................................................................................... 9
2.3.1. Context and reforms introduced .................................................................................. 9
2.3.1.1. Complaint procedure ............................................................................................ 9
2.3.1.2. Investigatory and sanction powers ..................................................................... 10
2.3.1.3. Participatory powers ........................................................................................... 10
2.3.2. Brief analysis of the 2013 Regulation ....................................................................... 10
3. Third parties and the Charter of Fundamental Rights of the EU ............................................. 11
4. Conclusion............................................................................................................................... 12
5. Bibliography............................................................................................................................ 14
1. Introduction

Even if concept of ‘State aid’ was introduced in the EU legal system in 1957 with the Treaty of
Rome, it was not until 1999 where its first procedural norm was enacted. Before the entry into
force of the Council Regulation (EC) No 659/1999 (hereinafter, ‘the 1999 Procedural
Regulation’), State aid procedure was exclusively governed by Article 93 of the Treaty of Rome
(hereinafter, ‘TEEC’) and its corresponding provisions in the successive Treaties1. The 1999
Procedural Regulation had as main purpose to codify and reinforce the consistent practice
developed and established by the European Commission —and clarified by the EU Courts— in
pursuit of an increase of transparency and legal certainty within the EU legal system2. Lastly, in
2013, the Council Regulation (EU) No 734/2013 (hereinafter, ‘the 2013 Regulation’)
substantially amended the 1999 Procedural Regulation with the goal of improving the
effectiveness and efficiency of State aid procedures3.

Despite the purported progress in respect of procedural effectiveness aspects, some doubts arise
when it comes to the reinforcement of rights of (some of) the ‘parties’ involved in the procedure.
Some authors criticize the fact that European institutions have been just focusing on improving
the ‘Member State-Commission’ relation throughout the State aid procedure, while leaving out
the interests of relevant third parties. With that in mind, the present paper is aimed at analysing
whether the procedural developments within the EU State aid field have really supposed a
significant improvement as far as the attainment of its declared goals and, more specifically,
whether they have duly and sufficiently borne in mind the rights of third parties.

2. Procedural developments throughout the successive Regulations

As established in the former Article 92 TEEC4, the Commission is the main institution in charge
of controlling the Member States compliance with State aid provisions, both materially and
procedurally. Article 93 TEEC conferred the necessary powers to the Commission so that it could
effectively comply with its duty and, at the same time, established the procedure that both the
Commission and the Member States had to follow when dealing with State aid matters.

Despite Article 94 TEEC allowed the Council to “make any appropriate regulations for the
application of Articles 92 and 93”5, no procedural legal code was approved until 1999. Such

1
Jonathan Faull, Ali Nikpay, Deirdre Taylor, ‘The EU Law of Competition (3rd Edition)’ – Tim Maxian
Rusche, Claire Micheau, Henri Piffaut, Koen Van de Casteele; Part IV State Aid, (17) State Aid, (D) State
Aid Procedure.
2
Recital 2 of the Council Regulation (EC) No 659/1999.
3
Recital 1 of the Council Regulation (EU) No 734/2013.
4
And in its successive corresponding provisions.
5
Provided that the Commission submitted a proposal and the Parliament was previously consulted.
situation was ideal to the Commission, since its (discretionary) powers were only bound by the
non-detailed treaty-based provisions and EU Courts case law6. However, due to the pressure the
Commission received from Member States7 and despite its initial resistance to the requests to
draft legislation8, it presented in 1998 a proposal which one year later would materialize into the
first Procedural Regulation: the Council Regulation (EC) No 659/1999.

2.1. The 1999 Procedural Regulation

As it has been introduced, the 1999 Procedural Regulation tried to codify the consistent practice
carried out by the Commission and clarified by the EU Courts for the purposes of providing
(more) legal certainty. However, predictability was not the only goal: the Procedural Regulation
also empowered the Commission with the objective of enhancing a more effective and efficient
enforcement of the rules, especially in respect of unlawful aid and its recovery.

2.1.1. (General) substantial novelties

2.1.1.1. Notified aid

One of the differences between the pre-1999 notified aid procedure and the 1999 Procedural
Regulation is the scope of the notification obligation. Before, the Commission considered that
any measure which could potentially be considered as ‘State aid’ had to be notified by the
concerned Member State; however, the wording of the Article 2 PR 1999 explicitly limited the
notification requirement to plans to grant new ‘aid’, being the latter defined as “any measure
fulfilling all the criteria established in Article 87(1) of the Treaty”, that is, ‘illegal State aid’9.

As regards the preliminary examination, the 1999 Procedural Regulation codified almost
completely the previous Commission’s practice, without changing any detail, except for Article
5(3). Such provision sets out that if a Member State did not reply to the Commission to a request
for further information, after the due reminder, the notification would be considered to be
withdrawn10. Nevertheless, an interesting exception to this assumption is the possibility for the
concerned Member State “to inform the Commission that it considers the notification to be
complete because the additional information requested is not available or has already been
provided”11, as long as it is produced prior to the expiry of the “reminder period”.

6
Nikolaos Zahariadis, ‘Discretion by the Rules: European State Aid Policy and the 1999 Procedural
Regulation’ (2008), p 3.
7
Ibid.
8
Cini Michelle and Lee McGowan, ‘Competition Policy in the European Union’, 1998, p 157.
9
Adinda Sinnaeve and Piet Jan Slot, ‘The new Regulation on State aid procedures’ (1999), p 11.
10
Ibid, p 15.
11
Article 5(3) of the Council Regulation (EC) No 659/1999.
In relation to the formal investigation procedure, no major changes were done, but just
systematizing the prerogatives the Commission already enjoyed. However, a relevant limitation
to the Commission’s prior discretionary powers was introduced through Article 7(3): the 18
months’ time limit for adopting a decision12 —that is, for the completion of the formal
investigation period—. Once expired the referred time limit, “the Member State concerned may
request the Commission to take a decision within two months”13. Despite the above, it seems that
the non-compliance by the Commission of the referred two months does not have any legal
consequences as regards, for instance, the lapse of the standstill obligation —that is, the
obligation by which any Member State can implement an aid once made the notification—,
operating as an implicit authorization.

2.1.1.2. Unlawful aid

Unlawful aid procedure in the 1999 Procedural Regulation did not substantially change from that
regularly followed by the Commission, adding just a few powers to the Commission in the
recovery of unlawful aids.

In its proposal, the Commission wanted to avoid the suspensive effect of remedies under national
law in order to overcome “the long delays in the implementation of decisions”, which hampered
—and still do it— effective compliance with recovery decisions14. Despite this provision was not
finally introduced formally in the text of the 1999 Procedural Regulation15, a similar but more
hidden arrangement was inserted through Article 14(3), which stated that recovery shall be
effected in accordance with the concerned national procedures, “provided that they allow the
immediate and effective execution of the Commission's decision”.

In this way, that innovative constraint could at the end trigger the same effects that had entailed
the proposed Commission’s provision. And indeed, it did so: in 2006, the First Chamber of the
Court of Justice confirmed that “national legislation which provides for the suspensive effect of
actions brought against a recovery order of the national authorities cannot be considered to allow
the “immediate and effective” execution of the decision”16. Furthermore, during the Council
negotiations, a new provision was introduced, which reinforced the obligation of Member States

12
Even if they were aware of the Commission’s lack of resources, Sinnaeve and Slot criticised the absence
of short deadlines, arguing that it is not logical nor efficient having to wait almost two years for
implementing an aid project.
13
Adinda Sinnaeve and Piet Jan Slot, supra p 20.
14
Adinda Sinnaeve and Piet Jan Slot, supra p 28.
15
According to Sinnaeve and Slot, Article 89 did not provide “sufficient legal basis”, since it was considered
as a “harmonization provision”.
16
Adinda Sinnaeve, ‘State aid procedures: Developments since the entry into force of the Procedural
Regulation’ (2007), p 37, in which it makes reference to “Case C-232/05, Commission v. France, [2006]
ECR I 10071, paras. 51–53 and Case T- 423/05 R, Olympiaki Aeroporia Ypiresies AE v. Commission,
Order of 29 Jan. 2007, nyr, para 70”.
to “take all necessary steps which are available in their respective legal systems, including
provisional measures, without prejudice to Community law” in order to obtain immediate
reimbursement17.

2.1.2. Interested parties’ role

2.1.2.1. Interested parties’ rights before the Regulation

As stated supra, the pre-1999 State aid regime was only based on the primary legislation,
developed by the Commission and clarified and interpreted by the European Courts.
Consequently, third parties18 to the State aid procedures had to rely on Article 88(2) TEC (ex
Article 93(2) TEEC) —which obliges the Commission to give “notice to the parties concerned to
submit their comments” within the formal investigation procedure— and on case law in order to
protect their interests.

Regarding case law, Cook and Matra cases established a precedent confirming that a decision
declaring that a measure is compatible with the internal market can be challenged by interested
parties19. However, in a later judgment in Sytraval case, the Court of Justice considered that,
unlike the decision itself, the letter addressed to the complainant informing of the decision of the
Commission that the measure does not constitute State aid cannot be challenged. Furthermore,
Sytraval and British Airway judgments clarified that “interested parties have only the right to be
involved in the administrative procedure during formal investigation phase to the extent
appropriate in the light of the circumstances of the case and they do not enjoy the right to a
hearing”, and none during the preliminary examination stage20.

Such viewpoint coincides with that of the Commission when interpreting the Treaties’ State aid
provisions. According to them, “State aid procedures are a bilateral dialogue between the
Commission and the Member State concerned, where third parties are involved only
incidentally”21 by collecting all the necessary information during the formal investigation phase.
Even if the Council did substantially agree with that opinion, it preferred to formally include the
rights of third parties in the referred Regulation, being finally codified in Chapter VI22.

2.1.2.2. Interested parties’ rights under the 1999 Procedural Regulation

17
Adinda Sinnaeve and Piet Jan Slot, supra p 28-29.
18
The use of the concept “third parties” and “interested parties” are equivalent.
19
Anduena Gjevori, ‘Modernisation of EU State aid procedures: are the rights of third parties more
protected?’ (2015), p 47.
20
Ibid, p 48.
21
Ibid, p 46.
22
Adinda Sinnaeve and Piet Jan Slot, p 31.
The rights of interested parties23 are contained in Article 20 and are the following:

(1) Right to submit comments within the formal investigation phase —which is directly
based on Article 88(2) TEC—.
(2) (a) Right to inform the Commission of any alleged unlawful aid and misuse of aid and;
(b) right to be informed and/or to receive a copy of the decision.
(3) Right to access to decisions.

Most of the referred rights had already been being previously applied, so the Regulation just
embodied them24. Nevertheless, Article 20(2) seemed to introduce an improvement for
competitors’ rights. Before the 1999 Procedural Regulation was enacted, the Commission had
certain discretion in starting (or not) a preliminary examination of alleged unlawful aid25 and in
the form to react to complaints. However, the 1999 Procedural Regulation, together with the
subsequent case law, effectively supported that apparent reinforcement of rights to complainants.

According to Article 20(2), the Commission can either (i) “inform the complainant that on the
basis of the information in its possession there are insufficient grounds for taking a view on the
case, or (ii) it can examine the measure as any other State aid case and send a copy of its decision
to the complainant”. Although it could seem that the first option provides the Commission some
broad discretion, it is in fact limited by Articles 10(1) and 13(1), which oblige it to start an
examination if the information provided —in this case, by the complainant— reveals the existence
of possible unlawful aid26. The Deutsche Bahn case set out that in all cases where a complainant
provides such information, a (‘formal’) State aid decision must be issued and therefore, it may be
challenged through an action for annulment, even if the form by which the Commission takes the
decision is not suitable to its content27. Thus, the first option of Article 20(2) by which the
Commission shall just inform (through a ‘communication’) the complainant —and therefore, not
being challengeable— is only appropriate for cases with unclear factual background28.

In line with the Deutsch Bahn case, the CJEU declared in Athinaïki Techniki the “right to set in
motion the preliminary examination stage” by third parties, which indeed also implies that the

23
Interested party “shall mean 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”.
24
Adinda Sinnaeve and Piet Jan Slot, supra p 31.
25
Implicitly supported by case law in “Case T-95/96, Gestevisión Telecinco SA v. Commission, [1998],
para 53”, as quoted in ‘State aid procedures: developments since the entry into force of the Procedural
Regulation’, p 62-63.
26
Adinda Sinnaeve and Piet Jan Slot, supra p 32-33.
27
Meaning that the Commission issues a true decision in the form of a communication.
28
Adinda Sinnaeve, p 65.
Commission have to conclude its assessment by a formal decision. Furthermore, it also considered
that the Commission could not withdraw its decision to escape a review of its legality29.

2.1.3. Brief analysis of the 1999 Procedural Regulation

Certainly, it may be concluded that the 1999 Procedural Regulation contributed to an amelioration
of the State aid procedure in general terms, since the then-declared goals were effectively
achieved, namely legal certainty30. Furthermore, since it really supposed a codification of the
previous practice, there was a continuity of the prior case law, not taking place disruptive
interpretations to the original purposes of the Regulation nor of the Commission expectations. As
regards the latter, it supposed an effective enhancement of its powers, especially in the
enforceability of its decisions through national courts. Finally, it is also worth to note that the
Procedural Regulation managed the equilibrium between detailed provisions and general
principles, which helped to cover and control not only currently envisaged situations but also
future and unforeseen issues which could arise31.

However, the same cannot be said about third parties’ role and rights. Although it was something
expected —since no special mention or focus was made in the Commission’s proposals nor during
the negotiations of the Regulation—, the Regulation only codified the rights derived from the
Treaty provisions and the EU Courts just strictly followed it and gave some further basic ‘rights’,
confirming the status quo: interested parties are only mere “information sources”32.

2.2. The 2009 Procedural Reform

2.2.1. Context and general remarks

In 2005, the Commission launched the so-called State Aid Action Plan (hereinafter, ‘SAAP’) in
order to reform State aid policies and procedures. Although there were some expectations for an
amendment of the 1999 Procedural Regulation, the developments finally consisted of a “soft law”
reform in 2009 in which different procedural areas were modified for the purposes of enhancing
effectiveness (of the Commission and CJEU decisions) and efficiency (among the different actors
involved)33. Thus, among the reforms introduced, there were (i) the Enforcement Notice, (ii) the
Notice on the Simplified Procedure and (iii) the Code of Best Practice.

29
François-Charles Laprévote, ‘A Missed Opportunity? State aid Modernization and Effective Third Parties
Rights in State aid Proceedings’ (2014), EStAL 3, p 433.
30
Ibid, p 68.
31
Ibid.
32
Ibid, p 69.
33
Fabio Filpo, ‘The Commission 2009 Procedural Reform from a Private Party Perspective: Two Steps
Forward, One Step Back?’ (2010), Eur. St. Aid L.Q, p 323.
Regarding the first one, the Enforcement Notice replaced the 1995 Cooperation Notice in order
to better clarify the role of national courts in the enforcement of both the Article 108(3) TFEU
and in the implementation of negative Commission decisions ordering recovery34. In relation with
the Simplified Procedure, it gave the Commission a faster way to adopt decisions in simpler
cases35. Finally, as regards the Code of Best Practice, it intended “to provide guidance on the day-
to-day conduct of State aid procedures” of the Commission with the objective of ensuring greater
transparency, predictability and efficiency of State aid procedures36.

2.2.2. Third parties in the 2009 Procedural Reform

As it may be noticed, no substantial consideration was made in respect of interested parties.

However, it is also true that this “reform pack” contained some ‘tools’ or ‘motivations’ which
could be used in favour of third parties’ interests.

Firstly, the Enforcement Notice partially wants to enhance the role of competitors before national
tribunals and with that in mind, the Commission insists them to play an important role in State
aid enforcement through private actions for damages37. Secondly, the Notice on the Simplified
Procedure conceded some (limited) rights to third parties by giving them the possibility to revert
to the standard procedure if they express “substantiated competition concerns”38. Finally,
regarding the Code of Best Practice, it paradoxically seemed to reduce the already limited rights
of interested parties. On the one hand, while “institutionalising” the pre-notification contacts, a
further step in the procedure was added, giving the Commission “more time and less
responsibility” —and therefore, more discretion39— to take a position, while not being possible
to challenge the derived informal preliminary assessments40. On the other hand, Section 7 of the
Code indicated that the Commission “endeavoured” to adopt a decision within twelve months of
the complaint’s receipt, which received much criticism since such a time frame could be in breach
of some of the articles of the Regulation requiring to examine information “without delay”41.
Furthermore, the Commission added an important discretionary power which is consisted of
rejecting a complaint for lack of Community or Union interest (the so-called ‘prioritisation’)42.
Apart from the previous remarks, no other “relevant” issues appear in the referred Code, since the

34
Fabio Filpo, p 324.
35
Ibid, p 325.
36
Ibid.
37
Ibid, p 328.
38
Ibid.
39
The fact of discussing the merits of the case before the formal examination phase indeed deprived
interested parties of exercising their (few) rights within the procedure.
40
Ibid, p 329.
41
Ibid.
42
Anduena Gjevori, ‘Modernisation of EU State aid procedures: are the rights of third parties more
protected?’ (2015).
Commission merely committed itself to better comply with the rules already set out in the
Procedural Regulation.

In conclusion, it seems that some attempts to reinforce third parties’ role were timidly made at
the national level —through the Enforcement Notice—, but not really at the EU level —as it may
be seen with the Code of Best Practice—43. This apparent intention of the Commission to get rid
of its responsibilities and obligations by adding discretion to the procedure may enhance the so-
desired effectiveness of State aid procedures, but it does it at the expense of third parties’ rights.

2.3. The 2013 Regulation

2.3.1. Context and reforms introduced

The Commission, in its several attempts to improve the State aid procedure, announced its
intention to modernize State aid control through the Communication on EU State aid
modernization of 8 May 2012 (also called ‘SAM’). In this context, the Regulation 734/2013 was
subsequently adopted, making some important amendments to the 1999 Procedural Regulation.

2.3.1.1. Complaint procedure

Two possible and compatible explanations for the amendment of the complaint procedure are
raised: (i) the need for the Commission of coping with the increasing number of complaints44 and
(ii) the opportunity to avoid the outcome envisaged by EU Courts45 regarding the handling of
complaints and more broadly, interested parties’ rights46. Foremost, and even if the 2013
Regulation introduces for the first time the term ‘complaint’, the derived regime does not strictly
follow the (then-)recent case law which limited Commission’s discretion47.

Firstly, the 2013 Regulation introduces an admissibility test of the complaint, in which it has to
prove that he is an interested party. Secondly, the complaint shall be submitted in a specific form
and contain mandatory information —otherwise, those submissions would be treated as ‘market
information’—. Finally, the amended Article 20(2) enables the Commission to consider

43
Fabio Filpo, p 330.
44
Hanns Peter Nehl, ‘2013 Reform of EU State Aid Procedures: How to Exacerbate the Imbalance between
Efficiency and Individual Protection’ (2014), Eur. St. Aid L.Q. 235, p 237.
45
As it has been mentioned supra, the Deutsche Bahn and Athinaiki Techniki cases invalidated some
behaviours of the Commission when dealing with third parties. Now, the new Regulation enters into
conflict, at least, with the latter.
46
Edoardo Gambaro and Francesco Mazzocchi, ‘Private parties and State aid procedures: a critical analysis
of the changes brought by Regulation 734/2013’ (2016), Common Market Law Review 53, p 397.
47
Hanns Peter Nehl, ‘2013 Reform of EU State Aid Procedures: How to Exacerbate the Imbalance between
Efficiency and Individual Protection’ (2014), Eur. St. Aid L.Q. 235, p 240.
complaints withdrawn if the complainant does not provide the required information or due
collaboration. These requirements could have been result of a reaction to the Ryanair case48.

2.3.1.2. Investigatory and sanction powers

First of all, the 2013 Regulation grants the Commission, although only in limited cases49, to
directly request information from undertakings and associations of undertakings during the formal
investigation phase. Then, the Regulation also allows the Commission to carry out ‘sector
inquiries’ across various Member States when it has reasonable suspicion that State aid measures
materially distorting competition are being given in several member States within a particular
sector50.

Moreover, it also enables the Commission to impose fines and periodic penalty payments to
undertakings for undue supply of information —or even being correct, for a belated response—
subject to several specific safeguards granted to the interested parties.

2.3.1.3. Participatory powers

On the basis of Articles 107 and 108 TFEU, the new Regulation allows, on the one hand, (i) the
Member States’ courts “to ask the Commission to transmit to them information in its possession
or its opinion on questions concerning the application of State aid rules” and, on the other hand,
(ii) the Commission to submit on its own initiative written observations to Member States’ courts
and also oral observations with their permission. Thus, the Regulation enables the Commission
to participate in national court State aid proceedings as an amicus curiae.

2.3.2. Brief analysis of the 2013 Regulation

Through the afore-described reform, the Commission ensures both a true control of the
preliminary examination phase —through the new form of handling of complaints, which indeed
constrain interested parties’ rights—, a strong power to deeply investigate State aid cases —
through the new inquiry market tools— and an effective monitoring and surveillance of Member
States’ courts compliance with its decisions —through its new permission to become a “third

48
In the Ryanair judgment, the Courts found that the transmission of information by third parties regarding
allegedly unlawful aid was “not subject to any formal requirements, such as using the standard form made
available to interested parties” by the Commission. Thus, a letter informing the Commission must therefore
be considered to oblige the Commission to examine it and adopt a decision further to a preliminary
examination.
49
“It can only be addressed after the opening of the formal investigation with respect to “technical complex
cases” and in the event of investigation procedures which have been identified by the Commission as being
ineffective to date”, always with the permission of the Member State concerned, in ‘Private parties and
State aid procedures: a critical analysis of the changes brought by Regulation 734/2013’.
50
Edoardo Gambaro and Francesco Mazzocchi, p 389.
party” in procedures before national courts—, then improving the so-desired efficiency in the
State aid procedure.

Nevertheless, the 2013 Regulation keeps on stifling third parties. With the referred reform, not
only interested parties’ rights are not reinforced, but in addition, their procedural obligations are
broadened. Therefore, the disequilibrium between third parties’ rights and duties is even greater
than before. They are now obliged to provide more information in more circumstances and in a
more accurate form, but their procedural safeguards against the increasing intrusive Commission
powers keep involutional. Furthermore, the legislator exacerbates the previous existing
asymmetry by frontally colliding with the CJEU case law strengthening interested parties’ rights,
constituting therefore a step back on the matter.

3. Third parties and the Charter of Fundamental Rights of the EU

The Charter of Fundamental Rights of the European Union (hereinafter, ‘the Charter’) was
drafted in 2000, but it did finally enter into force in 2009, together with the Treaty of Lisbon.
Thus, since 1 December 2009, the provisions contained within the Charter became fully
applicable, so the European Union had to act and legislate in accordance with them. Many authors
consider that both the current 2015 Procedural Regulation51 and the Commission’s practice in
State aid procedures contravene the Charter and, more specifically, the right to a good
administration (Article 41) and the right to an effective remedy and to a fair trial (Article 47)52.

As stated supra, the only substantial rights of an interested party in the State aid procedure are
limited to (i) submit comments on the decision of the Commission of starting the formal
investigation phase and to (ii) know the Commission final decision. Thus, no effective rights are
given throughout the preliminary examination phase and only a few in the formal investigation
procedure53. A common fundamental principle of procedural law in all legal systems is that if a
proceeding decides on the rights and obligations of a person, this person is and shall be a party54.

51
It is a kind of ‘consolidated version’ of the amendments made to the 1999 Procedural Regulation, so no
novelties were introduced.
52
“Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to
an effective remedy before a tribunal in compliance with the conditions laid down in this Article. Everyone
is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal
previously established by law”.
53
Indeed, only at the beginning of the phase (comments) and at the end (notification of the decision).
54
Luboš Tichy & Petra Joanna Pipková, ‘State Aid and Fundamental Human Rights: State Aid Procedure
and Procedural Fairness – A Contribution to the Right to Participate Debate’ (2014), p 9.
Therefore, both the aid beneficiary55 and, more indirectly and dubious, competitors56 should be
recognised with the corresponding rights57.

The right to a good administration entails the right to have one’s case treated impartially and
fairly. As a result, the Commission is obliged to provide certain guarantees to the parties
concerned, among which we may find the principle of equality of arms58, the right to be heard59
or the right to a justification of a decision. Thus, and even if interested parties may submit
comments, this possibility is limited to the beginning of the formal investigation phase, therefore
not having any opportunity neither to analyse the final and developed arguments and evidence
provided by the Commission nor to refute them and submitting their own evidence at a later stage.
Even in the case that the PR could not be considered as violating Article 41, it should be
undeniable that the Commission’s practice is infringing such fundamental right, since the
Regulation is not prohibiting from giving the referred possibilities to interested parties and the
Commission has the duty to comply with the Charter60.

Consequently, Article 47 is neither respected. Since interested parties have no access to the
Commission files —not even after the decision has been adopted—, their possibilities to properly
prepare their arguments and evidence are unfairly and unjustifiedly reduced. Furthermore, as it
has been mentioned, they are not in possession of sufficient procedural guarantees throughout the
State aid procedure. Given the previous, it can be concluded that the right to an effective remedy
and to a fair trial is not respected neither by the Procedural Regulation nor the Commission’s
administrative practice.

4. Conclusion

Effectiveness and efficiency are two concepts which have been guiding the several procedural
reforms undertaken by EU legislators. With that in mind, as stated throughout the paper, the
evolution of the State aid procedure has been clearly based on enhancing, on the one hand, the
relationship between the Commission and the Member States and, on the other hand, the
Commission’s unilateral powers over market operators and national judicial authorities. Even if

55
Whose given right may be withdrawn and may have negative consequences on its legal and economic
sphere. It is the beneficiary who will eventually assume the liability for an unlawful state aid.
56
The decision of the Commission may cause them a detriment in their economic sphere.
57
At least, full rights should be recognised to competitors, whose legal sphere may be more potentially
affected than competitors’ one.
58
In this context, it entails —together with the right to be heard— the possibility of the concerned parties
to have access to the case files and the evidences provided by the Commission in its formal investigation.
59
Having the possibility to provide both arguments and evidence and consequently, having the Commission
to take them into consideration when deciding on the issue.
60
John Temple Lang, ‘The Charter and EU State aid procedure’ (2014).
the referred goals have been object of certain improvement, they are still far away from being
ideally accomplished.

Furthermore, third parties’ rights have been increasingly diluting, while their obligations have
been experimenting the contrary. It is not only a matter of fairness and legality that interested
parties —particularly, the aid beneficiary— should have their procedural rights in accordance
with their procedural duties, but also of effectiveness. Since no incentives are given to interested
parties in order to truly collaborate with the Commission, they do not usually do so. For instance,
if they had access to the Commission’s file, it would facilitate claims for compensation against
States that have paid illegal aid61.

In conclusion, EU legislators should re-consider the several requests from the academic and
private community to reinforce interested parties’ rights and amend the Procedural Regulation to
increase their limited participation in the whole procedure, especially by granting the right to
access the case files and to submit comments and evidence in later stages within the formal
investigation procedure.

61
John Temple Lang, p 15-16.
5. Bibliography

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