Judgment_paragraph 2 · Viasat Broadcasting UK Ltd v European Commission (C-660/15 P)

2The General Court set out the background to the dispute in paragraphs 1 to 17 of the judgment under appeal in the following terms:1. The subject-matter of this action is a claim for annulment, in part, of [the contested decision] in that it finds that [the measures implemented by Denmark for TV2/Danmark], although amounting to State aid, are nevertheless compatible with the internal market, within the meaning of Article 106(2) TFEU. The action has been brought by [Viasat], which is a commercial broadcasting company active on the Danish market and a direct competitor of the Danish broadcasting company TV2/Danmark A/S (“TV2 A/S”).2. TV2 A/S was created in order to replace, for accounting and tax purposes as of 1 January 2003, the autonomous State undertaking [TV2], established in 1986, by the Lov No 335 om ændring af lov om radio-og fjernsynsvirksomhed ... [(Law No 335 amending the Law on Broadcasting Services) of 4 June 1986]. TV2 A/S is, as was its predecessor TV2, the second public television station in Denmark, the first being Danmarks Radio (“DR”).3. TV2 A/S, like, previously, TV2, has a public-service mission to produce and broadcast national and regional television programmes. These may be broadcast by means of radio equipment, in particular, satellite or cable systems. Rules governing the public-service obligations of TV2 A/S and TV2 are laid down by the Danish Minister for Culture.4. Apart from the public broadcasters, commercial television broadcasters operate on the nationwide television broadcasting market in Denmark. These include, first, [Viasat] and, second, the group created from the companies SBS TV A/S and SBS Danish Television Ltd (“SBS”).5. TV2 was set up with the help of an interest-bearing State loan and its activities were, like those of DR, to be funded with the help of revenue from the licence fee paid by all Danish television viewers. The Danish legislature decided, however, that, unlike DR, TV2 would also be able to benefit from, in particular, advertising revenue.6. Following a complaint lodged on 5 April 2000 by SBS Broadcasting AS/TvDanmark, another commercial broadcaster on the Danish market, the system for funding TV2 was examined by the Commission of the European Communities in its Decision 2004/217/EC of 19 May 2004 on measures implemented by Denmark for [TV2] (OJ 2006 L 85, p. 1, corrigendum in OJ 2006 L 368, p. 1; “the TV2 I decision”). That decision covered the period from 1995 to 2002 and concerned the following measures: licensing fees, transfers granted from funds used to finance TV2 (TV2 and Radiofonden Funds), sums granted on an ad hoc basis, exemption from corporation tax, exemption from interest and servicing charges on loans granted to TV2 at the time of its formation, the State guarantee for operating loans and favourable terms for payment of fees for nationwide transmission frequencies (taken as a whole, “the measures concerned”). Lastly, the Commission’s investigation also concerned the authorisation given to TV2 to broadcast on local networks and the obligation for all owners of communal aerial installations to relay TV2’s public-service programmes through those installations.7. After examining the measures concerned, the Commission concluded that they constituted State aid within the meaning of Article 87(1) EC (now Article 107(1) TFEU). That conclusion was based on the finding that TV2’s funding system, which sought to compensate it for the cost of providing its public services, failed to meet the second and fourth of the four conditions laid down by the Court of Justice in its judgment of 24 July 2003 in Altmark Trans and Regierungspräsidium Magdeburg [(C‑280/00, EU:C:2003:415) (“the Altmark conditions”)].8. In addition, the Commission decided that the aid granted between 1995 and 2002 by the Kingdom of Denmark to TV2, in the form of licence fees and the other measures described in the TV2 I decision, was compatible with the internal market under Article 86(2) EC (now Article 106(2) TFEU), with the exception of an amount of 628.2 million Danish Kroner (DKK) which it classified as overcompensation (recital 163 to and Article 1 of the TV2 I decision). It accordingly ordered the Kingdom of Denmark to recover that sum, together with interest, from TV2 A/S (Article 2 of the TV2 I decision), which had in the meantime replaced TV2 (see paragraph 2 above).9. Given that the recovery of aid referred to in Article 2 of the TV2 I decision rendered TV2 A/S insolvent, the Kingdom of Denmark notified the Commission, by letter of 23 July 2004, of a planned recapitalisation of that company. That plan provided, so far as State-funded measures were concerned, for a capital injection of DKK 440 million, on the one hand, and the conversion into capital of a State loan of DKK 394 million, on the other. By its Decision C(2004) 3632 final of 6 October 2004, in State Aid Case No N 313/2004 relating to the recapitalisation of [TV2 A/S] (OJ 2005 C 172, p. 3; “the recapitalisation decision”), the Commission concluded that the two measures planned for TV2 A/S were “necessary to rebuild the capital which TV2 [A/S] need[ed], following its conversion into a limited company, to fulfil its public-service mission” (recital 53 of the recapitalisation decision). Consequently, the Commission decided that any element of State aid that might be connected with the planned recapitalisation of TV2 A/S was compatible with the internal market under Article 86(2) EC (recital 55 to the recapitalisation decision).10. The TV2 I decision was the subject of four actions for annulment brought, on the one hand, by TV2 A/S (Case T‑309/04) and the Kingdom of Denmark (Case T‑317/04) and, on the other, by the competitors of TV2 A/S, namely [Viasat] (Case T‑329/04) and SBS (Case T‑336/04).11. By judgment of 22 October 2008 in TV2/Danmark and Others v Commission [(T‑309/04, T‑317/04, T‑329/04 and T‑336/04, EU:T:2008:457)], the Court annulled the TV2 I decision. [In paragraph 124 of that judgment], the Court held that the Commission had rightly concluded that TV2’s public-service mission was consistent with the definition of broadcasting services of general economic interest ... It also found, however, several instances of illegality vitiating the TV2 I decision, which led, in short, to the annulment of that decision.12. Thus, first, examining the question whether the measures concerned by the TV2 I decision involved State resources, the Court held that the Commission had failed to state in its decision the reasons for which it took advertising revenue from 1995 and 1996 into consideration, de facto, as State resources [(judgment of 22 October 2008, TV2/Danmark and Others v Commission, T‑309/04, T‑317/04, T‑329/04 and T‑336/04, EU:T:2008:457, paragraphs 160 to 167)]. Second, the Court found that the Commission’s examination as to whether the second and fourth Altmark conditions had been met was not supported by serious analysis of the legal and economic considerations which governed the setting of the amount of the licence fee income payable to TV2. The TV2 I decision was, in consequence, vitiated by failure to state reasons on that point [(judgment of 22 October 2008, TV2/Danmark and Others v Commission, T‑309/04, T‑317/04, T‑329/04 and T‑336/04, EU:T:2008:457, paragraphs 224 to 233)]. Third, the Court held that the Commission’s conclusions on the examination of the compatibility of the aid in the light of Article 86(2) EC, in particular on whether or not there had been overcompensation, were also vitiated by a failure to state reasons. According to the Court, that inadequacy of the reasons stated was attributable to the failure to undertake a serious examination of the actual legal and economic conditions which governed the setting of the amount of the licence fee income payable to TV2 during the period under investigation [(judgment of 22 October 2008, TV2/Danmark and Others v Commission, T‑309/04, T‑317/04, T‑329/04 and T‑336/04, EU:T:2008:457, paragraphs 192, 197 to 203).13. The recapitalisation decision was the subject of two actions for annulment, brought by SBS and by [Viasat]. By two orders delivered on 24 September 2009, the Court ruled that, in the light of the annulment of the TV2 I decision and the close link between the obligation to recover the aid resulting from that decision and the measures which are the subject of the recapitalisation decision, it was no longer necessary to rule on those cases [(orders of 24 September 2009, SBS TV and SBS Danish Television v Commission, T‑12/05, not published, EU:T:2009:357, and [of 24 September 2009,] Viasat Broadcasting UK v Commission, T‑16/05, not published, EU:T:2009:358)].14. Following the annulment of the TV2 I decision, the Commission re-examined the measures concerned. On that occasion, it consulted the Kingdom of Denmark and TV2 A/S and, furthermore, received observations from the third parties.15. The Commission presented the result of its re-examination of the measures concerned in the contested decision, which is the subject of the present action and of another action brought by TV2 A/S [(TV2/Danmark v Commission, T‑674/11, EU:T:2015:684)], in which the Court has delivered its judgment today.16. The contested decision concerns the measures granted to TV2 between 1995 and 2002. However, in its analysis the Commission also took into account the recapitalisation measures taken in 2004 following the TV2 I decision.17. In the contested decision, the Commission maintained its position as regards the classification of the measures concerned as State aid within the meaning of Article 107(1) TFEU in favour of TV2 (recital 153 of the contested decision). First, it considered that the advertising revenue for 1995 and 1996 constituted State resources (recital 90 to the contested decision) and, second, in determining the existence of a selective advantage, it concluded that the measures concerned did not meet the second and fourth Altmark conditions (recital 153 to the contested decision). However, whereas in the TV2 I decision it had concluded that the sum of DKK 628.2 million was overcompensation incompatible with Article 86(2) EC, in the contested decision the Commission took the view that that sum was a capital buffer appropriate for TV2 A/S (recital 233 to the contested decision). In the operative part of the contested decision, it therefore declared as follows:“Article 1The measures implemented by Denmark in favour of [TV2] between 1995 and 2002 in the form of the licence fee resources and other measures discussed in this Decision are compatible with the internal market within the meaning of Article 106(2) [TFEU].”’