Thanks to all of you who turned out for the very successful inaugural lecture for UKSALA on Monday this week, and many thanks to BLP for hosting the event. Judge Forwood’s lecture was delivered to a packed auditorium at BLP, and contained many insights into some hotly-debated issues of Commission and Court procedure, as well as comparisons with the more established antitrust procedures.
For those of you who have not seen it already, the MLex report on the event is reproduced below, with permission from MLex.
EC should re-assess companies’ rights in subsidy probes, says EU judge
5 Mar 13 | 13:44 GMT
Author: Ana Rita Rego
Companies should be more closely involved in EU regulatory investigations into government subsidies that could affect them, a leading EU judge has said. As the rules stand, companies that receive aid, or those that contest alleged illegal grants to rivals, have limited rights to be involved in the proceedings. Meanwhile companies may have “serious arguments” to bring under fundamental rights laws.
London – Companies should be more closely involved in EU regulatory investigations into government subsidies that could affect them, a leading EU judge has said.
Over the years, companies have gained more protection and leeway to defend themselves in antitrust probes, but the same is not true for “state-aid” investigations.
Speaking in London yesterday evening*, judge Nicholas Forwood suggested the time was ripe to bring procedural rules in state-aid proceedings up to par.
“The situation is different from the structural rights established in relation to competition cases. What we don’t have is an equivalent development in relation to state-aid law,” the General Court judge said.
The commission is modernizing state-aid enforcement rules, to streamline procedures and focus resources on major cases. It also intends to extend the scope of its information-gathering powers to include requests to market players.
“It would be better, if these issues were addressed by granting an increased role for interested parties, other than states” in proceedings, Forwood noted. EU capitals would have to approve such changes.
“It seems to me, this may have been left out of the commission’s [modernization] program.”
As the rules stand, companies that receive aid, or those that complain to the commission about illegal grants given to rivals, have limited rights to be involved in the proceedings. Much of the investigation is conducted solely between officials and EU capitals.
During preliminary investigations, “there is no express provision of any procedural rights for the recipient of the aid to be notified. There is no formal provision for them to be involved,” Forwood explained.
Case-law suggests companies should be allowed “appropriate involvement in the procedure” but that’s as far as it goes. For example, there is no right to access communications between member states and the commission, the EU judge noted.
And once a formal investigation is launched, companies or complainants may comment, but they still have no access to the file. This can make it difficult for them to assess the contours of the aid scheme under scrutiny.
– More litigation likely –
The commission’s plan to extend the scope of its information-gathering powers may also generate new litigation, judge Forwood warned.
EU Governments have also expressed concerns about these plans (see previous coverage here).
“It may give rise for more clearly-founded arguments on whether state-aid procedures involving third parties responding to notices without a clear idea of what others have presented is still compatible with the current ideas on procedural rights,” Forwood said.
European rules governing fundamental rights may be evoked more often in the future to argue that procedural rights should be improved, Forwood suggested.
“Whether [the EU charter] will be applied by the court in recognition of a deeper and more complex right to be heard may be a matter for argument. My view is that there are serious arguments which could be presented to the court.”
*UKSALA – Judicial Control of State Aid in the EU – 4 March 2013
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