Opinion of Advocate General Tanchev delivered on 29 July 2019.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2019:647
• Celex Number: 62018CC0385
• Court: Court of Justice (European Union)
• Date: 29 July 2019

Provisional text

OPINION OF ADVOCATE GENERAL

TANCHEV

delivered on 29 July 2019(1)

Case C‑385/18

Arriva Italia Srl,

Ferrotramviaria SpA,

Consorzio Trasporti Aziende Pugliesi (CO.TRA.P)

v

Ministero delle Infrastrutture e dei Trasporti,

joined parties:

Ferrovie dello Stato Italiane SpA,

Ferrovie del Sud Est e Servizi Automobilistici Srl,

Autorità Garante della Concorrenza e del Mercato

(Request for a preliminary ruling from the Consiglio di Stato (Council of State, Italy))

(State aid — Aid granted to the operator of local railway infrastructure in financial difficulties — Notion of State aid — Time at which the aid is considered to be granted — Private investor test — Beneficiary of the advantage — Distortion of competition)

Table of contents

I. Italian law

A. The Stability Law for 2016

B. Decree No 9/2016

C. Decree No 264/2016

D. The instrument of transfer

E. Decree-Law No 50/2017

II. The facts, the main proceedings and the questions referred for a preliminary ruling

III. Analysis

A. The allocation of EUR 70 million

1. An intervention by the State or through State resources

2. Effect on trade between Member States

3. Selective advantage conferred on the recipient

4. Distortion of competition, or threat thereof

B. The transfer to FSI of the MIT’s shareholding in FSE

1. An intervention by the State or through State resources

2. Effect on trade between Member States

3. Selective advantage conferred on the recipient

(a) Was an advantage conferred on FSI?

(b) Was an advantage conferred on FSE?

4. Distortion of competition, or threat thereof

IV. Conclusion

1. The dispute in the present case arose from measures taken in 2016 by the Italian State, whereby a large, non-repayable subsidy was granted to the State-owned operator of local railway infrastructure and provider of local passenger transport services, on account of its serious financial situation. Moreover, the State’s entire shareholding in that operator was transferred, for no consideration, to the State-owned operator of the national railway infrastructure, subject to an undertaking by the latter to restore the financial viability of the transferred company. The legality of those measures was challenged by other providers of local passenger transport services that had expressed, in vain, an interest in the transfer. The Consiglio di Stato (Council of State, Italy) asks the Court whether those measures constitute State aid.

2. This case presents the Court with the opportunity to provide guidance on the notions of advantage and distortion of competition for the purpose of classifying State intervention as State aid. One question which must be answered by the Court is whether an advantage was conferred on the acquirer although it undertook to restore the viability of the local operator, and whether the beneficiary of the transfer is the acquirer (if the viability of the transferred company can be restored and it becomes profitable again) or the transferred company (which benefits from the acquirer’s undertaking to restore its viability). Another question before the Court is whether the circumstance that the beneficiary (or beneficiaries) of aid operates on markets that are subject to legal monopolies — and, therefore, not open to competition — precludes a finding that the aid is liable to distort competition.

I. Italian law

A. The Stability Law for 2016

3. In Article 1(867) of the Stability Law for 2016, (2) the Italian State provided that Ferrovie del Sud Est e Servizi Automobilistici Srl (‘FSE’) was to be put into administration on account of its ‘serious financial situation’. This was to be implemented by decree of the Ministro delle Infrastrutture e dei Trasporti (Minister for Infrastructure and Transport, Italy) (‘the MIT’).

4. The second and fifth sentences of Article 1(867) of the Stability Law for 2016 called upon the Special Commissioner, respectively, to ‘prepare a business plan for restructuring’ focused on reducing operating costs, and to submit proposals to the MIT for ‘the transfer or disposal [of FSE] according to criteria and procedures defined by decree’ of the MIT. Moreover, the sixth and last sentence of Article 1(867) of the Stability Law for 2016 provides that ‘pending the implementation of the aforementioned restructuring plan, for the purpose of ensuring the continued operation of [FSE], the expenditure of [EUR 70 million] is authorised for 2016’.

B. Decree No 9/2016

5. Article 6 of Decree No 9/2016 (3) provided that FSE was to be put into administration and established that the EUR 70 million allocated under the Stability Law for 2016 were intended as an increase in FSE’s capital, which could be used even without prior authorisation by the public shareholder ‘in order to ensure the continuity and regularity of the public service provided [by FSE] by taking all necessary measures to ensure business continuity and to restore the economic and financial balance of [FSE]’.

C. Decree No 264/2016

6. Decree No 264/2016 (4) provided that the entire shareholding held by the MIT in the capital of FSE was to be transferred to Ferrovie dello Stato Italiane SpA (‘FSI’), a company wholly owned by the Ministero dell’Economia e delle Finanze (Ministry of Economic Affairs and Finance, Italy) (‘the MEF’).

7. The acquirer was selected on the basis of the criteria listed in Article 1(1) of Decree No 264/2016, namely: (a) ‘the efficiency of public shareholdings in the context of a reorganisation within a single economic entity held by the same owner (State body)’; (b) ‘the possession, by the acquirer, of industrial capacity and assets sufficient to ensure the continuity of employment and service and to provide a guarantee for creditors …’; and (c) ‘the restructuring of the company, account being taken of the negative net equity of [FSE]’.

8. In view of those criteria, Article 2(2) of Decree No 264/2016 stated that the transfer to FSI would be ‘for no consideration’.

D. The instrument of transfer

9. By instrument of 28 November 2016 certified by a notary (‘the instrument of transfer’), the MIT transferred to FSI its entire shareholding in the capital of FSE.

10. By memorandum of the same day (‘the ministerial memorandum’), the MIT established that the conditions laid down in Article 1(1) of Decree No 264/2016 were met. In particular, according to that memorandum, FSI had undertaken to remedy the situation of asset imbalance in FSE. Still according to the ministerial memorandum, the Autorità Garante della Concorrenza e del Mercato (Competition and Market Authority, Italy) (‘the AGCM’) had decided not to initiate the investigation procedure provided for by Article 16(4) of Law No 287/1990 (5) in connection with the transfer.

11. Furthermore, the ministerial memorandum states that the allocation of EUR 70 million provided for by Article 1(867) of the Stability Law for 2016 ‘must be used — subject to an exclusive restriction on utilisation — to cover the financial requirements of [FSE]’s rail infrastructure, in accordance with EU legislation’.

E. Decree-Law No 50/2017

12. Following the transfer, Article 47(7) of Decree-Law No 50/2017 (6) replaced the last sentence in Article 1(867) of the Stability Law for 2016 with the following wording: ‘Without prejudice to the obligations laid down in this paragraph, the expenditure of EUR 70 million shall be authorised for 2016. The corresponding resources shall be transferred to the capital of [FSE], to be used, in accordance with [EU] rules in this matter and in relation to the plan for the restructuring of the company, only to cover the liabilities, where applicable pre-existing, and financial requirements of the infrastructure sector. The acts, measures and operations already implemented under [Decree No 264/2016] shall be unaffected.’

II. The facts, the main proceedings and the questions referred for a preliminary ruling

13. FSE, an undertaking at the time fully owned by the MIT, operates a railway infrastructure owned by the Regione Puglia (the Apulia region, Italy) and provides public rail passenger transport services and related road transport services in an area of Apulia (in Salento).

14. On account of its serious financial situation, FSE was put into administration by the Italian State, pursuant to Article 1(867) of the Stability Law for 2016 and Decree No 9/2016. The Italian State also authorised the allocation of EUR 70 million to guarantee the continued operation of the services operated by FSE pending the implementation of the restructuring plan.

15. On 4 August 2016, Decree No 264/2016 provided that the entire shareholding held by the MIT in the capital of FSE was to be transferred to FSI, an undertaking wholly owned by the MEF and the holding company of a group that (through Rete Ferroviaria SpA, a subsidiary of FSI) operates the national railway infrastructure and (through Trenitalia SpA [‘Trenitalia’], a wholly owned subsidiary of FSI) provides transport services for passengers and goods, by rail and by road. The transfer was for no consideration. It was subject to the undertaking, by FSI, to remedy the situation of asset imbalance of FSE. No competitive tender was held for the selection of the acquirer of FSE.

16. On 12 October 2016, pursuant to Articles 20 and 21 of Law No 287/1990, the AGCM notified the Italian Government of the planned transfer of the MIT’s shareholding in FSE and the allocation of EUR 70 million because, in its view, that operation could constitute State aid. (7)

17. Arriva Italia Srl (‘Arriva Italia’), Ferrotramviaria SpA (‘Ferrotramviaria’) and Consorzio Trasporti Aziende Pugliesi (CO.TRA.P) (‘Consorzio Trasporti Aziende Pugliesi’), all of which operate in the sector of public rail and road transport, had expressed an interest in acquiring FSE. On 24 October 2016, those companies brought an action for annulment of Decree No 264/2016 before the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy). They...