Judgment of the General Court Second Chamber, Extended Composition, 21 December 2022, E. Breuninger v Commission, T-525/21

• Date: 21 December 2022
• Year: 2022

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Judgment of the General Court (Second Chamber, Extended Composition), 21 December

2022, E. Breuninger v Commission, T-525/21

Action for annulment – State aid – Framework system to establish a federal compensation scheme in

Germany for losses caused by lockdown decisions – Decision not to raise any objections – Aid to make

good the damage caused by natural disasters or other exceptional occurrences – No interest in bringing

proceedings – Inadmissibility

On 21 May 2021, the Federal Republic of Germany notified the European Commission of an aid

scheme in the form of temporary economic support for companies whose activities had been

suspended as a result of the measures taken by the Federal Government and the Länder to deal with

the pandemic in Germany in the context of the COVID-19 crisis (‘the federal compensation scheme’).

Under this federal compensation scheme, federal, regional and local administrative authorities may,

under certain conditions, provide direct subsidies to companies that suffered losses between

16 March 2020 and 31 December 2021 as a result of decisions to enter into lockdown.

By decision of 28 May 2021,

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the Commission declared that scheme compatible with the internal

market pursuant to Article 107(2)(b) TFEU. Under that provision, aid to make good the damage caused

by natural disasters or exceptional occurrences is compatible with the internal market.

The German undertaking E. Breuninger GmbH & Co, which is active, inter alia, in the retail sector,

brought an action for annulment of the Commission’s decision. However, the action is dismissed as

inadmissible by the Second Chamber (Extended Composition) of the General Court, which raises of its

own motion that undertaking’s failure to establish the requisite interest in bringing proceedings

before the Court.

Findings of the Court

Since the conditions governing the admissibility of an action relate to the absolute bar to proceeding

with an action, which it must determine of its own motion, the Court points out that an action for

annulment brought by a natural or legal person is admissible only in so far as that person has an

interest in the annulment of the contested measure. Such an interest presupposes that the

annulment of the measure in question is capable, in itself, of having legal consequences and that the

action may thus, if successful, procure an advantage for the party who brought it.

As regards the question whether the applicant has an interest in bringing proceedings for the

annulment of the contested decision, the Court notes that the applicant’s action is based on the

incorrect premiss that it was not eligible for the federal compensation scheme on account of the

condition, laid down in Article 2(2) of that scheme, that undertakings pursuing mixed activities, some

of which are not at all affected by the lockdown, may benefit from the federal compensation scheme

only if the prohibited activities represent at least 80% of their turnover. Since the online trading

activities pursued by the applicant were considered to be related to its retail activities, all the activities

were required to be affected, within the meaning of that provision, by the lockdown decisions ordered

during the COVID-19 pandemic.

On the other hand, it became apparent from the discussions in the course of the judicial proceedings

that the fact that it was impossible for the applicant to obtain financial assistance under the federal

aid programme was in fact due to the application by the German authorities of an eligibility

requirement not notified to the Commission, requiring that at least 30% of the applicant’s total

turnover had been affected by the lockdown decisions.

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Commission Decision C(2021) 3999 final of 28 May 2021 on State aid SA.62784 (2021/N) – Germany COVID-19 – Federal Damage

Compensation Scheme (OJ 2021 C 223, p. 25; ‘the contested decision’).