In a judgment of 13 February 2014, the European Court of justice (CJEU) confirmed that, when the European Commission (Commission) does not specify, in its decision ordering the recovery of unlawful state aid, the identity of the beneficiaries of the aid or their amount, the judge has a certain degree of freedom in calculating the amount of the aid to be recovered. While the judge is indeed required to take into account subsequent interpretative letters sent by the Commission pursuant to its duty of sincere cooperation, such letters are not formally binding on the judge.
In order to promote the television digital switchover in Italy, the Finance Acts for 2004 and 2005 adopted by the Italian State provided public subsidies respectively of €150 and €70 for each user who purchased or rented a device receiving digital terrestrial television (DTT) signals.
Considering that this measure resulted indirectly in benefitting DTT broadcasters, the Commission adopted a decision in January 2007 (Decision) declaring the aid scheme unlawful and incompatible with the common market and ordered the Italian State to recover the aid (Aid) with interest. In its Decision, the Commission did not indicate the amount of Aid but, given the complexity of the required calculation, only provided criteria for the quantification thereof.
Through various exchanges of correspondence spread out over nearly a year and a half following the Decision, the Commission gave its opinion on methodologies proposed by the Italian authorities for calculating the amount of Aid including that paid to Mediaset, the principal media company in Italy. On that basis, Mediaset was ordered by the Italian authorities to repay a total of nearly €6 million.
After paying such amount, Mediaset appealed the decision to the Rome Civil Court (Court) seeking the annulment of the injunction and the reduction of the amount to be recovered, in particular on the ground of an alleged misapplication of the quantification criteria of enunciated in the Decision. To resolve the dispute, the Court referred a number of questions to the CJEU for a preliminary ruling concerning, amongst other things, a determination of whether the national court is bound by statements of the Commission made subsequent to the decision concerning the precise amount to be recovered from a specified beneficiary.
With respect to this specific point, the CJEU answered that, while Commission decisions are binding on the national court, this is not the case for opinions expressed by the Commission in the course of implementing such decisions. However, under the principle of sincere cooperation, the national court must still take them into account in the course of its appreciation of the issues when dealing with the case.
Consequently, when the Commission indicates neither the identity of the beneficiaries of the aid nor the amount to be recovered, the national court has a margin of discretion in the implementation of its duty to order recovery of unlawful aid. In particular, the national judge is entitled to conclude that the amount to be recovered from the beneficiaries of aid is equal to zero when the calculation method leads to such a result. This certain degree of freedom is also manifested when the judge decides not to order the recovery of the aid in question in exceptional circumstances making it impossible to obtain such recovery.
In essence, the margin of discretion of the national court in the absence of a decision setting forth exhaustively the method of implement the required recovery also creates an interesting opportunity for companies to present arguments likely to reduce the amount they actually have to repay. The national court, due to its proximity to the situation, will be able to assess specific local features of a case, while at the same time ensuring application of EU law.