European Union – General Court dismisses actions by retail companies against German aid to undertakings suffering from loss of revenues during pandemic

In cases T-260/21 and T-306/21, the General Court ruled that the European Commission’s approval of German aid to businesses that suffered a loss of at least 30% of their turnover due to the COVID-19 pandemic did not violate the principles of proportionality or equal treatment under the Union’s state aid rules. The Court rejected claims by two retail companies – Breuninger and Falke – that the Commission had infringed upon these principles in its approval of the aid scheme. The Court also found that the Commission had not exceeded its discretion in applying the Temporary Framework for State aid measures to support the economy during the COVID-19 outbreak, as outlined in Article 107(3)(b) of the Treaty on the Functioning of the European Union. The Court further stated that the Commission had adequately justified its decision and that the aid scheme was appropriate, necessary, and proportionate in achieving its legitimate objective of mitigating the effects of the COVID-19 pandemic on the economy.

In case T-525/21, the General Court ruled that the action brought by Breuninger – the same retail company – against the European Commission's approval of other aid provided by Germany to compensate for losses suffered as a result of lockdown measures during the COVID-19 pandemic was inadmissible. The Court found that Breuninger did not have a sufficient interest in having the Commission's decision annulled, as it had incorrectly assumed that it was excluded from the aid scheme and therefore did not stand to gain any advantage from the annulment of the measure. The Court also noted that the addition of an eligibility requirement by the German authorities, which was not mentioned in the aid scheme, was irrelevant to the proceedings concerning the legality of the Commission’s decision.