Tightening the ropes on standing in State aid cases
Competitors of illegal State aid recipients may challenge the legality of the aid before national courts. But who is considered a competitor?
In Dutch administrative law, he who seeks the annulment of an administrative decision has no standing unless he is considered an interested party. The addressee of a decision will generally be considered an interested party as, to an extent, will residents of an area where a large building project is to be executed. A competitor of the addressee of a decision may also be considered an interested party, provided that he is, or will imminently become active on the same product market and the same geographical market as the addressee. It may also be relevant whether the competitor will suffer damages.
Interest in State aid cases
The interest requirement is now, it appears, becoming very important in State aid cases before Dutch administrative courts. As I have written earlier in this blog, many of the cases concerning State aid law before Dutch courts may not actually be aimed at undoing the distortive effects on competition caused by the granting of illegal aid. Time to tighten the ropes on standing? Well, the Administrative Jurisdiction Division of the Council of State seems to think so.
Tightening the ropes: the case of housing corporations
On January 6th, the Administrative Jurisdiction Division ruled that a large number of housing corporations had no standing regarding subsidies granted to another large number of housing corporations (www.rechtspraak.nl, LJN BZ0794). The first hurdle was that most corporations are not active on the same geographical market as they carry out their activities in different parts of the Netherlands. The other corporations, however, also failed to meet the interest requirement. They had not demonstrated that the subsidies to other housing corporations would lead to loss of revenue on their part. No access to court, then.
National procedural autonomy and effectiveness
How does this result relate to the well-known Rewe case law? The corporations, as a final argument, claimed that the Administrative Jurisdiction Division’s reading of the interest requirement would make it effectively impossible to challenge the legality of the subsidies under State aid law. This argument was rejected. The Administrative Jurisdiction division ruled that this argument could only be made in cases where the applicants actually derived rights from EU law. As the interests of the applicants were not directly affected by the subsidies concerned, the argument that they could not challenge the subsidy decisions became effectively irrelevant from a point of view of EU law. As a side note: Please do feel free to comment if you find a way out of this circle.
Tightening the ropes part 2: the case of Dutch education abroad
Just last week, on May 29th, the Administrative Jurisdiction confirmed that this development will be continued. In a case concerning subsidies to a foundation stimulating Dutch education abroad, two other undertakings providing education abroad were denied standing because they could not demonstrate that they were active on the same product market as the recipient of the subsidy.
Outlook and comments
It remains to be seen how this development will continue in practice. Let me just make one point: it seems quite odd that a person would, prior to the qualification of a potential aid measure, have to prove that he is an actual competitor of an aid recipient who suffers losses as a result of the alleged illegal State aid – when for the actual assessment of the aid measure it suffices that the contested measure threatens to distort competition.