European Commission v Fútbol Club Barcelona.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:169
• Docket Number: C-362/19
• Date: 04 March 2021
• Celex Number: 62019CJ0362
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Fifth Chamber)

4 March 2021 (*)

(Appeal – State aid – Aid granted to certain professional football clubs – Article 107(1) TFEU – Concept of ‘advantage’ – Aid scheme – Regulation (EU) 2015/1589 – Article 1(d) – Reduced tax rate – Non-profit entities – Less advantageous tax deduction – Effect – Cross-appeal – Articles 169 and 178 of the Rules of Procedure of the Court of Justice)

In Case C‑362/19 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 6 May 2019,

European Commission, represented by P. Němečková and by B. Stromsky and G. Luengo, acting as Agents,

appellant,

the other parties to the proceedings being:

Fútbol Club Barcelona, established in Barcelona (Spain), represented by R. Vallina Hoset, J. Roca Sagarra, J. del Saz Cordero, A. Sellés Marco and R. Salas Lúcia, abogados,

applicant at first instance,

Kingdom of Spain, represented by S. Centeno Huerta and M.J. Ruiz Sánchez, and by A. Rubio González, acting as Agents,

intervener at first instance,

THE COURT (Fifth Chamber),

composed of E. Regan (Rapporteur), President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Fifth Chamber, M. Ilešič, C. Lycourgos and I. Jarukaitis, Judges,

Advocate General: G. Pitruzzella,

Registrar: L. Carrasco Marco, Administrator,

having regard to the written procedure and further to the hearing on 24 June 2020,

after hearing the Opinion of the Advocate General at the sitting on 15 October 2020,

gives the following

Judgment

1 By its appeal, the European Commission requests the Court of Justice to set aside the judgment of the General Court of the European Union of 26 February 2019, Fútbol Club Barcelona v Commission (T‑865/16; ‘the judgment under appeal’, EU:T:2019:113), by which the General Court annulled Commission Decision (EU) 2016/2391 of 4 July 2016 on the State aid SA.29769 (2013/C) (ex 2013/NN) implemented by Spain for certain football clubs (OJ 2016 L 357, p. 1; ‘the decision at issue’).

EU law

2 Article 1 of Council Regulation (EC) No 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9), entitled ‘Definitions’, provides:

‘For the purposes of this Regulation, the following definitions shall apply:

…

(b) “existing aid” means:

(i) … all aid which existed prior to the entry into force of the TFEU in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the TFEU in the respective Member States;

…

(c) “new aid” means all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

(d) “aid scheme” means any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount;

(e) “individual aid” means aid that is not awarded on the basis of an aid scheme and notifiable awards of aid on the basis of an aid scheme;

…’

3 Articles 21 to 23 of that regulation are contained in Chapter VI thereof, which is devoted to the procedure regarding existing aid schemes.

4 Article 4 of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Regulation 2015/1589 (OJ 2004 L 140, p. 1), as amended by Commission Regulation (EU) 2015/2282 of 27 November 2015 (OJ 2015 L 325, p. 1), entitled ‘Simplified notification procedure for certain alterations to existing aid’, provides in the first sentence of paragraph 1 thereof, that, for the purposes of Article 1(c) of Regulation 2015/1589, ‘an alteration to existing aid shall mean any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the [internal] market’.

Background to the dispute and the decision at issue

5 The background to the dispute, as set out in paragraphs 1 to 6 of the judgment under appeal, is as follows:

‘1 Article 19(1) of Ley 10/1990 del Deporte (Law 10/1990 on sport) of 15 October 1990 (BOE No 249 of 17 October 1990, p. 30397) (‘Law 10/1990’) obliged all Spanish professional sports clubs to convert into public limited sports companies (‘SLCs’). The purpose of the law was to encourage more responsible management of clubs through a change in legal form.

2 However, the seventh additional provision of Law 10/1990 provided an exception for professional sports clubs that had achieved a positive financial balance during the financial years preceding adoption of the law. … Fútbol Club Barcelona, and three other professional footballs clubs fell within the exception under Law 10/1990. Those four entities therefore had the option, which they chose to take, of continuing to operate in the form of sports clubs.

3 Unlike SLCs, sports clubs are non-profit legal persons which enjoy, in that capacity, a special rate of income tax. Until 2016, that rate remained below the rate applicable to SLCs.

4 By letter of 18 December 2013, the … Commission notified the Kingdom of Spain of its decision to initiate the procedure laid down in Article 108(2) TFEU with regard to the potentially preferential tax treatment of four professional football clubs, including the applicant, when compared with SLCs.

…

6 By [the decision at issue], the Commission found that, by Law 10/1990, the Kingdom of Spain had unlawfully implemented aid in the form of a preferential corporate tax rate for the applicant, Club Atlético Osasuna, Athletic Club Bilbao and Real Madrid Club de Fútbol, in breach of Article 108(3) TFEU (Article 1 of the [decision at issue]). The Commission also found that the scheme was incompatible with the internal market and therefore ordered the Kingdom of Spain to discontinue it (Article 4(4)) and to recover from the beneficiaries the difference between the corporate tax actually paid and the corporate tax they would have been required to pay had they been SLCs, as of the tax year 2000 (Article 4 (1)), subject, in particular, to the possibility that the aid in question constituted de minimis aid (Article 2). Lastly, the [decision at issue] instructs its addressee to comply with the requirements set out in the operative part immediately and effectively with regard to recovery of the aid granted (Article 5(1)) and within 4 months following the date of notification with regard to implementation of the decision overall (Article 5(2)).’

The procedure before the General Court and the judgment under appeal

6 By application lodged at the Court Registry on 7 December 2016, Fútbol Club Barcelona (‘FCB’) brought an action for annulment of the decision at issue.

7 By decision of 25 April 2017, the President of the Fourth Chamber of the General Court granted the Kingdom of Spain leave to intervene in support of the form of order sought by FCB.

8 FCB put forward five pleas in support of its action. The first plea in law alleged infringement of Article 49 TFEU, read in conjunction with Articles 107 and 108 TFEU, and of Article 16 of the Charter of Fundamental Rights of the European Union, in that the decision at issue had failed to take account of the fact that the measure at issue infringed the freedom of establishment. The second plea alleged infringement of Article 107(1) TFEU, in that the Commission had committed an error of assessment as to the existence of an advantage, and of the principle of sound administration in the examination of the existence of that advantage. The third plea alleged infringement of the principles of the protection of legitimate expectations and of legal certainty. The fourth plea alleged infringement of Article 107(1) TFEU, in that the Commission had not taken into account the fact that the measure at issue was justified by the internal logic of the tax system. Lastly, the fifth plea alleged infringement of Article 108 TFEU, in that the Commission had ordered the recovery of existing aid and had failed to comply with the procedure laid down for that type of aid.

9 By the judgment under appeal, the General Court, after having rejected, in paragraphs 25 to 37 thereof, the first plea, upheld the second plea.

10 In that regard, the General Court held, as is apparent, inter alia, from paragraphs 59 and 67 of that judgment, that the Commission had failed to discharge, to the requisite legal standard, the burden of proving that the national measure at issue, which resulted from the combination of the specific tax regime applicable to non-profit entities and the derogating rule, introduced by the seventh additional provision of Law 10/1990, allowing professional football clubs meeting the condition of having achieved a positive financial balance before the adoption of that law, not to have to convert themselves into SLCs in order to continue to operate as a non-profit entity (‘the measure at issue’), provided an advantage to its beneficiaries, given the existence of a less favourable deduction rate for reinvestment of extraordinary profits for those entities than that applicable to SLCs.

11 Consequently, the General Court, without having examined the three other pleas put forward by FCB, annulled the decision at issue.

Forms of order sought by the parties

12 By its appeal, the Commission claims that the Court should:

– set aside the judgment under appeal;

– refer the case back to the General Court, and

– reserve the costs.

13 FCB and the Kingdom of Spain contend that the appeal should be dismissed and that the Commission should be ordered to pay the costs.

The appeal

14 In support of its appeal, the Commission raises a single ground, divided into two parts, alleging infringement by the General Court, in...