JUDGMENT OF THE COURT (First Chamber)

9 November 2017 ( *1 )

(Appeal — State aid — Article 107(1) TFEU — Public broadcasting service — Measures implemented by the Danish authorities in favour of the Danish broadcaster TV2/Danmark — Concept of ‘aid granted by a Member State or through State resources’)

In Case C‑656/15 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 7 December 2015,

European Commission , represented by B. Stromsky, T. Maxian Rusche and L. Grønfeldt, acting as Agents, with an address for service in Luxembourg,

appellant,

supported by:

EFTA Surveillance Authority , represented by C. Zatschler, M. Schneider, Í. Isberg and C. Perrin, acting as Agents,

intervener in the appeal,

the other parties to the proceedings being:

TV2/Danmark A/S , established in Odense (Denmark), represented by O. Koktvedgaard, advokat,

applicant at first instance,

Kingdom of Denmark , represented by C. Thorning, acting as Agent, and by R. Holdgaard, advokat,

Viasat Broadcasting UK Ltd , established in West Drayton (United Kingdom), represented by M. Honoré and S. Kalsmose-Hjelmborg, advokater,

interveners at first instance,

THE COURT (First Chamber),

composed of R. Silva de Lapuerta (Rapporteur), President of the Chamber, C.G. Fernlund, A. Arabadjiev, S. Rodin and E. Regan, Judges,

Advocate General: M. Wathelet,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after hearing the Opinion of the Advocate General at the sitting on 30 May 2017,

gives the following

Judgment

1By its appeal, the European Commission asks the Court partly to set aside the judgment of the General Court of the European Union of 24 September 2015, TV2/Danmark v Commission ( T‑674/11 , EU:T:2015:684 ) (‘the judgment under appeal’), whereby the General Court, first, annulled Commission Decision 2011/839/EU of 20 April 2011 on the measures implemented by Denmark (C 2/03) for TV2/Danmark ( OJ 2011 L 340, p. 1 ; ‘the contested decision’), in that the Commission had held that the advertising revenue for 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid, and, second, dismissed, for the remainder, the action brought by TV2/Danmark A/S seeking the partial annulment of that decision.

Background to the dispute

2TV2/Danmark is a Danish broadcasting company which was created in 1986. Initially created in the form of an autonomous State undertaking, it was converted, for accounting and tax purposes as of 1 January 2003, into a public limited company. TV2/Danmark is the second public television station in Denmark, the first being Danmarks Radio.

3The mission of TV2/Danmark is to produce and broadcast national and regional television programmes. Broadcasting may be by means of radio equipment, satellite or cable systems. The public-service obligations of TV2/Danmark are determined by the Minister for Culture.

4Apart from the public broadcasters, commercial broadcasters also operate on the nationwide television market in Denmark. These include, first, Viasat Broadcasting UK Ltd (‘Viasat’) and, second, the group created from the companies SBS TV A/S and SBS Danish Television Ltd (‘SBS’).

5TV2/Danmark was initially set up with the help of an interest-bearing State loan and its activities were, like those of Danmarks Radio, 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 Danmarks Radio, TV2/Danmark would also be able to benefit from, in particular, advertising revenue.

6Following a complaint lodged on 5 April 2000 by SBS Broadcasting SA/Tv Danmark, the system for funding TV2/Danmark was examined by the Commission in its Decision 2006/217/EC of 19 May 2004 on measures implemented by Denmark for TV2/Danmark ( OJ 2006 L 85, p. 1 , corrigendum in OJ 2006 L 368, p. 112 ; ‘the TV2 I decision’). That decision covered the period from 1995 to 2002 and concerned the following measures: license fee resources, transfers granted from funds used to finance TV2/Danmark (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/Danmark at the time of its formation, the State guarantee for operating loans and favourable terms for payment of fees by TV2/Danmark for the use of nationwide transmission frequencies (taken as a whole, ‘the measures concerned’). Last, the Commission’s investigation also concerned the authorisation given to TV2/Danmark 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.

7After examining the measures concerned, the Commission concluded that they constituted State aid within the meaning of Article 107(1) TFEU, on the ground that the funding system for TV2/Danmark, which sought to offset the cost of that undertaking’s public service provision, 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, Altmark Trans and Regierungspräsidium Magdeburg ( C‑280/00 , EU:C:2003:415 ; as regards those conditions, ‘the Altmark conditions’).

9The TV2 I decision was the subject of four actions for annulment brought, on the one hand, by TV2/Danmark (Case T‑309/04) and the Kingdom of Denmark (Case T‑317/04) and, on the other, by the competitors of TV2/Danmark, Viasat (Case T‑329/04) and SBS (Case T‑336/04).

10By 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 ), the General Court annulled that decision. In its judgment, the General Court held that the Commission had rightly concluded that the public-service mission of TV2/Danmark was consistent with the definition of broadcasting services of general economic interest. The General Court also found, however, several instances of illegality that vitiated the TV2 I decision.

11First, in examining the question whether the measures covered by the TV2 I decision involved State resources, the General Court held that the Commission had failed to state in its decision the reasons why it took advertising revenue for 1995 and 1996 into consideration, de facto, in order to decide whether or not State resources were involved. Second, the General Court held 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 specific legal and economic considerations which governed how the amount of the licence fee income payable to TV2/Danmark was set. The TV2 I decision was consequently vitiated by a failure to state sufficient reasons on that point. Third, the General Court held that the Commission’s findings on the compatibility of the aid under Article 106(2) TFEU, in particular on whether or not there had been overcompensation, were also vitiated by a failure to state reasons. According to the General Court, that failure to state sufficient reasons was attributable to the failure to undertake a serious examination of the specific legal and economic conditions which governed the setting of the amount of the licence fee income payable to TV2/Danmark during the period under investigation.

12Following the annulment of the TV2 I decision, the Commission re-examined the measures concerned. At that time, it consulted the Kingdom of Denmark and TV2/Danmark and, furthermore, received observations from third parties.

13On the conclusion of that examination, the Commission adopted the contested decision.

14That decision concerns the measures implemented for TV2/Danmark between 1995 and 2002. However, in its examination, the Commission also took into account the recapitalisation measures taken in 2004 following the TV2 I decision.

15In 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. First, it considered that the advertising revenue for 1995 and 1996 constituted State resources and, second, in determining the existence of a selective advantage, the Commission concluded that the measures concerned did not meet the second and fourth Altmark conditions. However, whereas in the TV2 I decision the Commission had concluded that the sum of DKK 628.2 million (approximately EUR 85 million) was overcompensation incompatible with Article 106(2) TFEU, in the contested decision it took the view that that sum was for TV2/Danmark an appropriate capital buffer. In the operative part of that decision, the Commission stated the following:

‘Article 1

The measures implemented by Denmark in favour of TV2/Danmark 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].’

The procedure before the General Court and the judgment under appeal

16By an application lodged at the Registry of the General Court on 30 December 2011, TV2/Danmark brought an action seeking the partial annulment of the contested decision.

17TV2/Danmark claimed that the General Court should annul the contested decision, in so far as the Commission had found that the measures concerned constituted State aid, within the meaning of Article 107(1) TFEU.

18In the alternative, TV2/Danmark claimed that the General Court should annul the contested decision, in so far as the Commission had considered that:

–

the measures concerned constituted new aid;

–

the licence fee resources which, from 1997 to 2002, were transferred to TV2/Danmark, then passed on to TV2/Danmark’s regional stations, constituted State aid granted to TV2/Danmark;

–

the advertising revenues which, in 1995 and 1996 and at the time of the winding-up of the TV2 Fund in 1997, were transferred from that fund to TV2/Danmark constituted State aid granted to TV2/Danmark.

19By the judgment under appeal, the General Court annulled the contested decision, in so far as the Commission had held that the advertising revenue for 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid, and dismissed the action for the remainder.

Procedure before the Court and forms of order sought

20By document lodged at the Registry of the Court on 12 February 2016, the EFTA Surveillance Authority, on the basis of the third paragraph of Article 40 of the Statute of the Court of Justice of the European Union, sought leave to intervene, in this case, in support of the forms of order sought by the Commission. By a decision of 11 March 2016, the President of the Court granted such leave.

21By its appeal, the Commission claims that the Court should:

–

set aside the judgment under appeal to the extent that it annuls the contested decision in so far as the Commission held that the advertising revenue for 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid;

–

reject as to its substance the third head of claim submitted in the alternative by TV2/Danmark at first instance; and

–

order TV2/Danmark to pay the costs.

22TV2/Danmark contends that the Court should:

–

dismiss the appeal, and

–

order the Commission to pay the costs.

23The EFTA Surveillance Authority claims that the Court should:

–

set aside the judgment under appeal in so far as it annuls the contested decision on the ground that that decision held that the advertising revenue for 1995 and 1996 constituted State aid, and

–

reject as to its substance the third head of claim submitted in the alternative by TV2/Danmark at first instance.

24Viasat claims that the Court should:

–

set aside the judgment under appeal in so far it annuls the contested decision finding that the advertising revenue for 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid;

–

reject as to its substance the third head of claim submitted in the alternative by TV2/Danmark in the procedure before the General Court; and

–

order TV2/Danmark to pay the costs.

25The Kingdom of Denmark claims that the Court should dismiss the appeal.

The appeal

Arguments of the parties

26In support of its appeal, the Commission relies on a single ground of appeal, whereby it submits, in essence, that the General Court, in holding that the Commission had wrongly classified as ‘State aid’ the advertising revenue for the years 1995 and 1996 transferred from TV2 Reklame A/S to TV2/Danmark, through the TV2 Fund, misinterpreted the concept of ‘State resources’, within the meaning of Article 107(1) TFEU.

27In that regard, the Commission submits that, since TV2 Reklame was a public undertaking whose entire share capital was owned by the Danish State, that company was wholly under the control and at the disposal of the Danish State, and consequently the resources of that company had to be regarded as constituting State resources, within the meaning of that provision.

28In particular, the Commission argues that the source of the resources concerned is of no relevance for the purposes of such a classification and that the initially private nature of those resources cannot prevent them being characterised as State resources.

29The General Court, however, according to the Commission, erred in law in holding, in paragraphs 208, 211 and 212 of the judgment under appeal, that resources obtained from third parties, such as public undertakings, were to be regarded as State resources only if those resources had been voluntarily placed at the disposal of the State by their owners, or abandoned by those owners and managed by the State.

30The Commission also considers that there is no need to investigate whether the State exercises control over the resources concerned, since the control exercised by the State over a public undertaking implies that it exercises control over the resources of that undertaking.

31Accordingly, the Commission considers that, in paragraphs 212, 214 and 215 of the judgment under appeal, the General Court erred in law in giving an overly restrictive interpretation of the concept of ‘control’ in its assessment of whether the Danish State exercised, through the TV2 Fund, control over the resources transferred from TV2 Reklame to TV2/Danmark.

32In that context, the Commission submits that the decisive factor is not whether the Danish authorities, in this case the Minister for Culture, did in fact have those resources at their disposal and decide how to use them, but the fact that that possibility was open to them. Accordingly, the fact that, for the years 1995 and 1996, the Minister for Culture decided to transfer the entire profits of TV2 Reklame to the TV2 Fund is of no relevance for the purposes of the question of whether those resources were controlled by the State, when it was open to the Minister for Culture to decide that those resources would be used for a purpose other than such a transfer.

33Moreover, according to the Commission, the General Court, in paragraphs 209 and 213 of the judgment under appeal, misinterpreted the judgment of 13 March 2001, PreussenElektra ( C‑379/98 , EU:C:2001:160 ), and drew an inappropriate parallel between that judgment and the present case.

34The EFTA Surveillance Authority and Viasat concur with the Commission that the General Court erred in law in holding that the advertising revenue concerned did not constitute ‘State resources’, within the meaning of Article 107(1) TFEU, and, consequently, did not constitute State aid, within the meaning of that provision.

35TV2/Danmark and the Kingdom of Denmark dispute the Commission’s arguments.

36They contend, inter alia, that the Danish State’s control over the advertising revenue paid to TV2/Danmark through the TV2 Fund in the years 1995 and 1996 was theoretical, since the possibility of having that revenue at its disposal was subject to the condition that the funding requirements of TV2/Danmark had first been met, and since, in reality, that revenue was transferred in its entirety to TV2/Danmark.

37TV2/Danmark and the Kingdom of Denmark consider that the Commission’s reasoning is based on a misinterpretation of Danish law.

38Further, TV2/Danmark and the Kingdom of Denmark consider that the General Court did not err in law in making a connection between the circumstances at issue in the present case and the situation that gave rise to the judgment of 13 March 2001, PreussenElektra ( C‑379/98 , EU:C:2001:160 ).

39Last, the Kingdom of Denmark considers that the distinction made by the General Court between the advertising revenue transferred from TV2 Reklame to TV2/Danmark through the TV2 Fund and the radio and television licence fee resources transferred from the TV2 Fund to TV2/Danmark is justified by the fact that the source of the former consisted of payments made by private advertisers to TV2 Reklame, whereas the latter consists of the proceeds of a tax levied by the State in order to ensure the funding of the Danish public broadcasting service.

Findings of the Court

40In accordance with the Court’s settled case-law, a classification as ‘aid’, within the meaning of Article 107(1) TFEU, requires that all the conditions set out in that provision are fulfilled (see judgment of 17 July 2008, Essent Netwerk Noord and Others, C‑206/06 , EU:C:2008:413 , paragraph 63 and the case-law cited).

41That provision sets out four conditions. First, there must be intervention by the State or through State resources. Second, that intervention must be liable to affect trade between Member States. Third, it must confer an advantage on the recipient. Fourth, it must distort or threaten to distort competition (see judgments of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00 , EU:C:2003:415 , paragraph 75 ; of 17 July 2008, Essent Netwerk Noord and Others, C‑206/06 , EU:C:2008:413 , paragraph 64 ; and of 19 December 2013, Association Vent De Colère! and Others, C‑262/12 , EU:C:2013:851 , paragraph 15 ).

42In this case, only the first of those conditions is at issue.

54It follows that the General Court erred in law in holding, in paragraph 220 of the judgment under appeal, that the revenue for the years 1995 and 1996, derived from the sale, by TV2 Reklame, of advertising space on TV2/Danmark, and transferred to TV2/Danmark through the TV2 Fund, did not constitute State resources and that, therefore, the Commission had wrongly classified that revenue as ‘State aid’.

55As stated above in paragraph 48 of the present judgment, and contrary to what is stated in paragraph 211 of the judgment under appeal, the fact that the source of that revenue, which came from advertisers, was private is of no significance in that regard and is irrelevant to the question whether that revenue was controlled by the Danish authorities.

56Moreover, the General Court was wrong to hold, in paragraphs 208 and 212 of the judgment under appeal, that resources originating with third parties that are managed by public undertakings can constitute State resources only when they are voluntarily placed at the disposal of the State by their owners or abandoned by their owners and when the State has assumed the management of those resources.

57Contrary to what is stated by the General Court, there is no basis for such a consideration in the Court’s case-law.

58The same is true of the arguments, in paragraphs 214, 215 and 217 of the judgment under appeal, that only the part of that revenue which, by a decision of the Minister for Culture, was not transferred to TV2/Danmark was capable of constituting a State resource and that the fact that there was no obligation to transfer that revenue each year from the TV2 Fund to TV2/Danmark could not permit a different finding.

60Last, the situation at issue in the present case is not comparable to the situation in the case that gave rise to the judgment of 13 March 2001, PreussenElektra ( C‑379/98 , EU:C:2001:160 ), in which the Court held that the obligation imposed on private electricity supply undertakings to purchase electricity produced from renewable energy sources at fixed minimum prices did not involve any direct or indirect transfer of State resources to undertakings which produced that type of electricity (see judgments of 13 March 2001, PreussenElektra, C‑379/98 , EU:C:2001:160 , paragraph 59 ; of 17 July 2008, Essent Netwerk Noord and Others, C‑206/06 , EU:C:2008:413 , paragraph 74 ; and of 19 December 2013, Association Vent De Colère! and Others, C‑262/12 , EU:C:2013:851 , paragraph 34 ).

61The latter case related to private undertakings that had not been appointed by the State to administer a State resource, but were bound by an obligation to purchase by means of their own financial resources (see judgments of 17 July 2008, Essent Netwerk Noord and Others, C‑206/06 , EU:C:2008:413 , paragraph 74 ; of 19 December 2013, Association Vent De Colère! and Others, C‑262/12 , EU:C:2013:851 , paragraph 35 ; and order of 22 October 2014, Elcogás, C‑275/13 , not published, EU:C:2014:2314 , paragraph 32 ).

62Further, in that case, the funds at issue could not be regarded as a State resource, since they were at no time under public control (see judgment of 19 December 2013, Association Vent De Colère! and Others, C‑262/12 , EU:C:2013:851 , paragraph 36 , and order of 22 October 2014, Elcogás, C‑275/13 , not published, EU:C:2014:2314 , paragraph 32 ).

64Consequently, the General Court erred in law in holding, in paragraph 213 of the judgment under appeal, that the situation at issue in the present case was comparable to the situation in the case that gave rise to the judgment of 13 March 2001, PreussenElektra ( C‑379/98 , EU:C:2001:160 ).

65That being the case, the single ground of appeal relied on by the Commission in support of its appeal must be upheld and the judgment under appeal must be set aside, to the extent that it annulled the contested decision in so far as the Commission had held that the advertising revenue for 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid.

The action before the General Court

66In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the appeal is well founded, the Court of Justice is to quash the decision of the General Court. The Court may then itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment.

67In this case, the Court considers that it should give final judgment on the action brought by TV2/Danmark seeking the annulment of the contested decision.

68In that regard, suffice it to state that, for the reasons stated in paragraphs 43 to 64 of the present judgment, the fourth plea in law relied on by TV2/Danmark in support of the third head of claim, in the alternative, must be rejected.

69Accordingly, the action brought by TV2/Danmark must be dismissed.

Costs

70Under Article 184(2) of the Court’s Rules of Procedure, where an appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs.

71Under Article 138(1) of those rules, applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party’s pleadings.

72Since the Commission and Viasat have applied for costs to be awarded against TV2/Danmark, and as the latter has been unsuccessful in all its submissions, TV2/Danmark must be ordered to pay, in addition to its own costs, all the costs incurred by the Commission and by Viasat both at first instance and on appeal.

73Article 140(1) of the Rules of Procedure, which is also applicable to appeal proceedings by virtue of Article 184(1) thereof, provides that the Member States and institutions which intervene in the proceedings are to bear their own costs.

74The Kingdom of Denmark, as an intervener at first instance, must bear its own costs.

75According to Article 140(2) of those rules, also applicable to appeal proceedings by virtue of Article 184(1) thereof, the EFTA Surveillance Authority is to bear its own costs when it intervenes in proceedings.

76Consequently, as an intervener in this appeal, the EFTA Surveillance Authority must bear its own costs.

On those grounds, the Court (First Chamber) hereby:

1.Sets aside the judgment of the General Court of the European Union of 24 September 2015, TV2/Danmark v Commission ( T‑674/11 , EU:T:2015:684 ), to the extent that it annulled Commission Decision 2011/839/EU of 20 April 2011 on the measures implemented by Denmark (C 2/03) for TV2/Danmark in that the European Commission held that the advertising revenue for the years 1995 and 1996 paid to TV2/Danmark through the TV2 Fund constituted State aid;

2.Dismisses the action brought by TV2/Danmark A/S seeking the annulment of Decision 2011/839;

3.Orders TV2/Danmark A/S to bear its own costs and to pay all the costs incurred by the European Commission and Viasat Broadcasting UK Ltd both at first instance and in relation to this appeal;

4.Orders the Kingdom of Denmark and the EFTA Surveillance Authority to bear their own costs.

[Signatures]

( *1 ) Language of the case: Danish.