Not a long time ago, the CJEU ruled on a couple of cases about the general state aid regime of social housing companies in the Netherlands. They both referred to the compatibility of the terms under which Dutch state support is available to social housing companies (also known under the abbreviation wocos).
As a concise introduction to the facts at hand, the Netherlands had in place, on one hand, an existing state aid scheme (aid measure E 2/2005) and, on the other hand, a new state aid scheme (aid measure N 642/2009) was notified for ‘clearance’ in 2009. It is also important to note that the Commission, in adhering to its general responsibility to monitor the continuous compatibility of existing state aid systems with EU law, expressed later on its concerns about the non compatibility of the existing aid with the common market. The Dutch authorities, aiming at the revision of the existing state aid in order to ensure its consistency with the EU rules on State aid, proposed commitments for amendments of the existing state aid regime. The Commission issued a decision whereby regarded the proposed commitments as satisfactory and the newly notified state aid scheme as compatible with State aid rules. Thus, it made a finding that both the existing state aid regime and the new state aid scheme did not raise any anti-competitive concerns pursuant to EU State aid rules and, so concluding, approved them. However, certain wocos were disgruntled with the resulting amendments on the state aid system because, on the basis of the new terms for ensuring state support for their activities, they were required at large to operate in less favourable conditions than the previous state aid scheme imposed. Therefore, they initiated proceedings for two actions of annulment before the General Court. The General Court issued two orders whereby declared both annulment actions as inadmissible in their entirety. The grounds of the Court consisted in the lack of individual concern and legal interest in bringing proceedings against the contested Commission’s decision. The same applicants challenged the above orders before the CJEU by submitting two appeals. With respect to their ability to annul the contested Commission’s decision insofar it related to the amended existing state aid scheme (E 2/2005), the Court accepted that the appellants-wocos were indeed individually concerned, overturning the holding of the General Court.
In particular, the CJEU made some important points in order to decide the cases.
Insofar as it concerns aid measure E 2/2005, it dissociated their status as potential beneficiaries of the aid from the eventuality of being individually concerned or not. In particular, the Court stressed that the appelants-wocos were not affected the way potential beneficiaries of the scheme at hand do or the way undertakings are concerned only as a result of the fact that they belong to the sector in question. Rather, they were individually concerned in light of their special legal situation compared to the respective one of any other undertakings. It also underscored that the wocos at issue were members of a "closed circle" of undertakings at the moment the Commission decision was issued, a fact which individually distinguishes them in relation to that decision. Secondly, it confirmed the finding of the General Court that the appellants-wocos did not have any legal interest in bringing proceedings against the contested Commission’s decision, in so far as it relates to the new aid measure N 642/2009. It further stated that the appellants-wocos, did not have any acquired rights with regard to the aid envisaged (N 642/2009), since they were only potential beneficiaries of the latter support scheme. As a result, they were neither individually distinguished to an adequate degree so as to be equated with the legal situation of the original addressee of the Commission decision nor had any procedural rights of them infringed on the grounds that they were not able to enjoy the status of an interested party. In addition to all the foregoing, the Court made another crucial intervention regarding the comprehensiveness of the General Court’s method on checking the admissibility of annulment actions. The intervention relates to the possibility of having EU acts annulled by persons other than their genuine addressees. Article 263 paragraph 4 consists of two possible sets of conditions in determining the admissibility of actions of third parties against EU acts, as outlined in its second and third limb respectively. The first one exacts the applicant to be both individually and directly concerned by the act and the second one, added with the Lisbon Treaty amending the EC Treaty, refers to the admissibility of legal actions turning against regulatory acts which do not entail implementing measures and are only of direct concern to the applicant In particular, it found that the General Court limited itself in taking into consideration only the traditional, and more burdensome, test of whether the wocos at issue were both individually and directly concerned in order to decide on the admissibility of their actions, which was an inchoate application of article 263 para. 4 TFEU. According to the CJEU, the General Court should have also examined the admissibility of the annulment applications under the new, less stringent, conditions set out in the third limb of the fourth paragraph of Article 263 TFEU. Eventually, it concluded that the above omission on behalf of the General Court was of no consequence, since the actions for annulment would have been dismissed in any case, even under admissibility criterion put forth in the third limb.
Lessons to be learnt for the conditions governing admissibility of annulment actions
The contribution of the present case, towards uniform decisions on admissibility of annulment actions in the future can be boiled down in the following points:
With regard to the most conventional upshots of the present decision, the Court reiterated once more the milestone admissibility criterion of the Plaumann case which necessitates the applicant to be individually and directly affected by the act whose validity is contested before the courts. Another point which should be stressed is the striking error of the General Court in its attempt to determine the admissibility of the action. The CJEU made it clear that the admissibility of all annulment actions should always be assessed in an exhaustive manner under all conditions available in article 263 paragraph 4 TFEU.
Departing from the most obvious conclusions, the judgment at hand offers valuable guidance as to the different treatment of the status of potential beneficiary of the aid depending on various circumstances. According to settled case law, an undertaking cannot, in principle, contest a Commission decision prohibiting an aid scheme if it is concerned by that decision solely by virtue of belonging to the sector in question and being a potential beneficiary of the scheme. Therefore, by and large, the standing of any person who intends to challenge a Commission decision –including a decision on the compatibility of a certain state aid scheme with EU rules- requires the applicant to be an actual beneficiary of the said state aid scheme. This requirement is only relaxed in cases where the Commission determines the compatibility of a State aid measure on the basis of Article 88(3) EC without initiating the formal investigation procedure referred to in Article 88(2) EC. In that category of cases, the applicant has just to prove that it is a concerned party for the purposes of Article 88(2) and plead infringement of its procedural rights stemming from not initiating the formal investigation procedure of the latter provision, in the context of which the Commission seeks to be fully informed of all the facts of the case and is obliged to give the parties concerned notice to submit their comments.
Concerning the case under examination, the Court was called to appraise the nature of a potential beneficiary of a state aid under two different contexts.
On one hand, it declared that the standing (more precisely, the individual concern) of the wocos to apply for the annulment of an existing state aid scheme (aid measure E 2/2005), after the latter’s amendment on the basis of articles 17 through 19 of the Procedural Regulation, was not invalidated by their alleged status as potential beneficiaries of the amended scheme. The Court recognized the applicants-wocos as individually concerned by that measure inasmuch as they form part of a limited class of traders and the decision alters rights acquired by the wocos prior to its adoption. Thus, one can conclude, in general, that the fact that an existing state aid scheme undergoes modifications, in order to entertain Commission’s reservations regarding its compatibility with EU rules, respects the segregation between the actual beneficiaries of the pre-amended state aid scheme and the potential beneficiaries of the altered aid regime who lack, in principle, the requisite individual concern to annul its new revised version. The CJEU explicitly held that those beneficiaries are conferred individual concern provided that, first, they belong to a close circle of operators whose number and identity were precisely determined at the time when the contested decision was adopted and secondly, they have their previous situation significantly affected by the new conditions for the grant of the aid, meaning that the amendments made by the contested decision alter rights acquired by the beneficiary prior to its adoption.
Otherwise, the Court rejected that the applicants-wocos had legal interest in bringing annulment proceedings against the notified state aid scheme (aid measure N 642/2009). The Court’s argument was that the wocos had not secured for themselves a consolidated right for receiving the aid envisaged by the new aid scheme. On the contrary, they were only potential beneficiaries of the new aid which rendered their entitlement for the new aid uncertain and conditional. Hence, they were not in a position to claim that their previous situation or the terms of exercising their market activities were shaken, thereby qualifying themselves as individually concerned applicants. In fact, the Court denied to confer upon the applicants even the status of a concerned party whose procedural rights following from article 108(2) TFEU had been infringed by reason of deciding the compatibility of the state aid scheme at hand only on the basis of the preliminary examination of article 108(3) TFEU which is intended merely to allow the Commission to form a prima facie opinion on conformity of the aid in question. In connection to that, the Court held that where the subject of annulment is a Commission decision not to raise objections, on the basis of the infringement of its procedural rights, it is for that applicant to show that, during the preliminary phase of examination of the measure notified, the Commission should have had doubts as to the compatibility of that measure with the common market.
As a final corollary, it could be said that the status of a person as a potential beneficiary of an aid does not preconceive in an ex ante fashion its ability to contest a decision declaring it compatible with the internal market. The way EU courts deal with the admissibility of annulment actions of potential beneficiaries of an aid scheme can be divided into sub-instances depending on the factual context of any case and whether the particular circumstances framing the dispute are able to sustain the individual and direct concern of the applicant. What is worth noting after studying the present decision is that an amended existing state aid scheme is not on par with the varied case of putting into effect a new scheme after its notification to and approval by the Commission, as far as admissibility issues is concerned. In the first instance, a person who submits an annulment action against the amended aid scheme can claim to be individually concerned because his status as potential beneficiary is backed by his prerogatives acquired by virtue of his previous capacity as an actual beneficiary of the pre-amended aid scheme. The Court appears to acknowledge a sequence between the two different versions of the same aid scheme. The beneficiary’s right to operate within some given market conditions can be protected on condition that a set of requirements which can distinguish it individually are met. Rather, in the event of approving a new state aid scheme, the capacity of the applicant as a potential beneficiary is the only one available, with the effect that the evidentiary burden of proving individual and direct concern is so onerous that the admissibility of a related annulment action is virtually preempted in the negative.
 C-132/12 P - Stichting Woonpunt and Others v Commission, not yet published & C-133/12 P - Stichting Woonlinie and Others v Commission, not yet published.
 For an all inclusive analysis of the notion of social housing see Thomas Biermeyer, From the Spirits that I Called - the Conflict between Domestic Norms and Internal Market Law in Dutch Social Housing Policy (April 11, 2011). Maastricht Faculty of Law Working Paper No. 2011-5 and cited bibliography.
 Article 21 et seq. of the Council Regulation (EC) No 659/1999, 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ L 83, 27 March 1999, p.1) (known as the Procedural Regulation).
 The Commission pointed out that the Netherlands authorities had to amend the public service mission entrusted to wocos, in such a way that social housing would be earmarked for a clearly defined target group of underprivileged individuals or socially disadvantaged groups. In particular, the Commission stated that all commercial activities of wocos had to be carried out in accordance with market conditions and should not benefit from State aid.
 Under the amended scheme the latitude relating to the choice of tenants eligible for housing managed by wocos is reduced and the guarantee funds for loans benefitting them cease to exist.
 Procedural Regulation, op.cit., article 24 on addressee of State aid decisions.
 C-25/62 - Plaumann v Commission of the EEC,  199.
 C-274/12 P - Telefónica v Commission, not yet published, para.49 & C-15/98 & C-105/99 Italy & Sardegna Lines v Commission  ECR I‑8855, para.33.
 T-193/06 - TF1 v Commission,  ECR II-4967, para.69,70.
 Council Regulation (EC) No 659/1999, 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ L 83, 27 March 1999, p.1).
 Paragraph 79 of the judgment at hand & C‑125/06 P - Commission v Infront WM  ECR I‑1451, para.71,72.