Ombudsman rejects complaint of maladministration in relation to third party rights in Commission investigations

Some of the readers of this blog will be aware of John Temple Lang’s complaint to the Ombudsman, and related article (“The Charter and the EU State Aid Procedure” in de Vries, Bernitz and Weatherill, The EU Charter of Fundamental Rights as a Binding Instrument), in which he argues that the Commission’s practice of refusing to provide aid beneficiaries and other interested parties with access to its State aid file was in breach of Articles 41 and 47 of the Charter of Fundamental Rights of the EU.

In a recent decision (see full text of decision here), the Ombudsman has rejected that complaint. She found that the fact that beneficiaries and other interested parties do not have access to the State aid file reflects their limited role in a State aid investigation, and the fact that the investigation is instigated against a Member State rather than against the aid beneficiary.

In particular, the Ombudsman comments that:

  • If the EU legislature had wanted to confer a right of access on interested parties, it would have done so explicitly.
  • The scope and nature of the procedural rights of interested parties in State aid procedures has been the subject of a number of consistent rulings by the EU Courts, in cases where the parties raised exactly the same arguments as raised by the complainant in this procedure.
  • The notions of fairness and impartiality do not imply that interested parties should be treated in the same way as the Member State against which the investigation is directed.
  • As regards the rights of aid beneficiaries, they “have no right, as such, to receive aid”. For that reason “it is the interests of the Member State concerned that are at stake once the formal investigation procedure is initiated by the Commission, not those of the beneficiary or of any other interested party. The fact that the interests of the Member State concerned and those of the beneficiary or any other interested party may or may not always coincide in the context of a State aid procedure has no relevance as regards the issue of whether or not access to the file should be given.”
  • As regards the rights of complainants, a competitor of the beneficiary of an aid that has been declared incompatible by the Commission can claim damages from the Member State concerned for breach of the State aid rules. The complainant did not provide concrete examples to support the view that the lack of access to the file undermines competitors’ rights to an effective remedy and a fair trial when seeking damages.

This ruling is certainly not surprising, and it is consistent with the orthodox position adopted by the European Courts. But (in the opinion of this blogger) it seems a missed opportunity. It is trite to say that an aid beneficiary has no right as such to receive aid. The reality is, however, that once an investigation is opened into alleged unlawful aid, the party directly at risk is, in the first instance, the recipient of that aid. As such, while in many cases the Member State in question will defend the aid, and may continue to do so in annulment proceedings in the European Court, in financial terms the interests of the State and the beneficiary are diametrically opposed.

The aid beneficiary cannot, therefore, necessarily rely on the Member State to defend its interests during the Commission’s investigation. Indeed, in the recent European Court appeals concerning the Irish air travel tax, Ireland intervened on the side of the Commission rather than supporting the appellants Aer Lingus and Ryanair (Cases T-473/12 and T-500/12, pending appeal in Cases C-164-165/15 P).

As for the position of competitor complainants, the much-vaunted right to claim damages from an unlawfully-bountiful Member State remains, for the present, a tree that has yet to bear edible fruit. Competitors that place their hopes in such a claim are likely to go very hungry. The only really effective remedy is a negative decision by the Commission, with the hope that this will translate itself into a brake on the payment of new aid and/or the recovery of historic unlawful aid. For the Ombudsman to rely on domestic damages actions by injured competitors thus largely misses the point.

Temple Lang’s complaint raised some very important issues of State aid procedure. They have not yet been resolved, and they will no doubt will continue to be debated despite this decision.

 

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