News

European Commission confirms Spanish state aid grant was unlawful

07.07.2021

In Decision SA.28599 on 10 June 2021, the European Commission (the "Commission") confirmed that grants made to terrestrial platform operators between 2005 and 2008 to digitise and expand a TV network in remote parts of Spain had breached EU rules on state aid. Spain was therefore ordered to ensure the recovery of these unlawful grants from their recipients.

The Commission had already reached this verdict in 2013 after a formal investigation based on a complaint from a competing satellite network operator. However in 2017, the EU Court of Justice overturned this initial decision on the grounds that there was insufficient evidence of grant selectiveness.  The Commission therefore undertook an additional investigation, which has now confirmed that the grants were indeed selective and amounted to impermissible state aid.

The selectiveness (and thus, the inadmissibility of the state aid) was found to lie precisely in the fact that Spain had made these grants to terrestrial platform operators exclusively, and not to the operators of alternative competing technologies (although satellite technology was legally and factually equivalent and could also be used to facilitate the switch from analogue to digital TV and to run and maintain a digital TV network). In other words, the measures taken infringed the technological neutrality rule by treating digital terrestrial television as the only technology for the subsidised digital transition and by giving its operators an impermissible selective advantage over other competitors.

Given this confirmation from the Commission, it is now up to Spain to use the method stated in the Commission's decision to determine which companies will have to reimburse the unlawful state aid and to what extent. The European Union does not impose fines or penalties on state aid recipients; however, it requires the elimination of the distortion of competition caused by the unlawful state aid and the restoration of equality between competitors, and thus, the immediate repayment of the unlawful state aid to the provider.

JUDr. Bc. Kristýna Zakouřilová

T +420 270 006 111
kristyna.zakourilova@achourpartners.com

Kristýna Zakouřilová specialises in civil and commercial law. Kristýna provides legal advice in the areas of contracts, real estate and litigation. She was a member of a legal advisory team that worked on major international and national trials and arbitration proceedings. She has also participated in significant transactions involving the acquisition of local companies