NAVIGATING NATIONAL IDENTITY AND EUROPEAN INTEGRATION: THE EVOLUTION OF SPANISH COMPETITION LAW IN THE EU LEGAL ORDER (2020-‍2024)^[1]

1. The CNMC is not a “Court” under article 267 TFEU (ANESCO)[Up]

On September 16 2020, the Court of Justice declared inadmissible a request for a preliminary ruling submitted by the CNMC in the Anesco case^[5]. (See also ‍Hornkohl, 2020). The Court of Justice found that the CNMC did not qualify as a “court or tribunal” within the meaning of Article 267 TFEU because it did not fulfil the criteria laid down by the case law^[6]. In particular, the Court of Justice found that the CNMC was “not called upon to give judgment in proceedings intended to lead to a decision of a judicial nature”^[7].

The Court of Justice concluded that the proceedings before the CNMC and its decisions were of an administrative nature instead because:

This interpretation was confirmed by Article 29(4) of the Law establishing the CNMC^[13], which provides that a decision of its Board puts an end to the expressly-named “administrative” proceedings^[14]. As a result, the proceedings before the CNMC “are on the periphery of the national court system” and the CNMC’s decisions are of an administrative nature, not judicial^[15].

This finding contrasts with the 1992 ruling in Dirección General de Defensa de la Competencia v Asociación Española de Banca Privada and Others, where the Court of Justice did admit the request for a preliminary ruling from the CNMC^[16]. The different outcome is explained by the evolution of the Spanish institutional framework. Back then, the Spanish Competition Authority encompassed a competition court separate from the investigative body, whereas today the investigation and decision-making functions are separated, but handled under the same administrative roof (i. e., within the CNMC).

2. The Court of Justice declares that the Spanish State liability regime for breaches of EU law is incompatible with the Principle of Effectiveness (Commission v Spain)[Up]

In June 2022, the Grand Chamber of the Court of Justice ruled that the Spanish state liability regime for breaches of EU law is incompatible with the general principle of effectiveness^[17]. The judgment followed a series of complaints lodged by private individuals in 2016, which prompted the Commission to launch an infringement procedure against Spain under Article 258 TFEU in 2017. The pre-litigation phase ran until 2019, without Spain remedying the infringement or providing a satisfactory defense. The Commission thus brought the matter before the Court of Justice in 2020.

The Court examined the compatibility of the Spanish state liability regime for breaches of EU law, set out in Articles 32 and 34 of the Law on the Regime Governing the Public Sector^[18] and Article 67 of the on the Common Administrative Procedure^[19], with the general principles of effectiveness and equivalence. In essence, the Court found that four criteria required by the Spanish state liability regime were incompatible with the principle of effectiveness, namely that:

On the other hand, the Court found that the Spanish state liability regime, insofar as it required claimants to demonstrate a “sufficiently serious breach” in damages actions against the state for breaches of EU law, but not in damages actions for breaches of the Spanish constitution, was not incompatible with the principle of equivalence (See further ‍Iglesias, 2020).

The judgment follows another landmark ruling of the Grand Chamber, which declared that the Spanish state liability regime for breaches of EU law, as developed by the case law of the Spanish Supreme Court, was incompatible with the general principle of equivalence. In Transportes Urbanos, the Court took issue with the requirement that the claimant exhaust all domestic remedies in damages actions against the Spanish legislator for breaches of EU law, but not in damages actions for breaches of the Spanish constitution^[22]. (See further ‍Doménech-Pascual, 2021).

3. The Spanish Constitutional Court confirms that article 101 TFEU is a rule of public order (Cabify and Auro)[Up]

In a judgment rendered on December 2 2024, the Spanish Constitutional Court clarified that provisions of EU law declared as rules of public order by the Court of Justice in Ecoswiss ^[23] and its progeny—such as Article 101 TFEU—have the same consideration under the Spanish legal system, and that the misapplication of these rules in arbitration proceedings can constitute a ground for the annulment of the award^[24]. (See ‍Constitutional Court of Spain, 2016).

The case concerned Cabify and Auro, two companies active in the provision of transportation services. In February 2017, Auro agreed to provide its services exclusively through Cabify’s digital platform. Following a contractual dispute —regarding in particular the exclusivity clause— the parties submitted the matter to arbitration. In December 2020, the Court of Arbitration of Madrid ruled in favor of Auro, finding that the exclusivity clause constituted a restriction of competition by object and was therefore null and void. Cabify subsequently filed an action for annulment of the award before the Madrid Court of Appeal. The court upheld the claim, holding that the arbitral award assessed the dispute solely under the Spanish Competition Act, without applying Article 101 TFEU, a rule of public order^[25].

On February 11 2022, Auro filed a recurso de amparo before the Spanish Constitutional Court, alleging that the Madrid Court of Appeal had violated its rights of defense by exceeding its jurisdiction in annulling the arbitral award. In its judgment, the Spanish Constitutional Court confirmed the principle that Article 101 TFEU constitutes a rule of public order under Spanish law, like any other EU law provision recognized as such by the Court of Justice. As a result, its misapplication may constitute one of the exceptional grounds for setting aside an award, in accordance with Article 41(1)(f) of the Spanish Arbitration Act^[26].

However, the Spanish Constitutional Court also found that the arbitral tribunal had, in fact, considered the applicability of Article 101 TFEU and had assessed whether the agreement could benefit from the exemption provided under Art. 101(3) TFEU. Accordingly, the Spanish Constitutional Court concluded that the Madrid Court of Appeal had exceeded its jurisdiction in setting aside the award. As a result, it annulled the judgment of the Madrid Court of Appeal and ordered the issuance of a new award in compliance with Auro’s fundamental rights.

However, on March 24 2025, the Madrid Court of Appeal suspended the proceedings and referred a preliminary question to the Court of Justice, essentially asking whether the findings of the Spanish Constitutional Court are compatible with the principles of primacy, effectiveness, and unity of EU law^[27].

1. The CNMC assessed for the first time vertical restrictions on online sales (Adidas)[Up]

The CNMC terminated proceedings with commitments in February 2020, establishing important precedents for vertical restrictions in digital markets^[28]. The case established three key legal principles: (i) contractual clauses limiting sales to an authorized “point of sale” may constitute online sales prohibitions even without express regulation; (ii) restrictions on online advertising through search engines equivalent to online sales prohibitions constitute hardcore restrictions; and (iii) pre-authorization requirements for online sales or brand use in domain names constitute hardcore restrictions when defined abstractly, particularly without reasonable response timeframes. Such conduct is now classified as hardcore restrictions under Article 4(e) of the 2022 Vertical Block Exemption Regulation.

2. The CNMC closed a complaint against Amazon, Booking.com, and Tripadvisor over false reviews (opiniones falsas plataformas)[Up]

The CNMC closed its complaint against Amazon, Booking.com, and TripAdvisor in November 2023, finding insufficient evidence of Article 3 Spanish Competition Act violations^[29]. The authority determined that false reviews were published by third parties, not attributable to platforms, and that all platforms had implemented reasonable measures to counteract false reviews. The case demonstrates the increasing interconnectedness between competition and consumer protection issues.

3. The CNMC fines apple and Amazon for restricting competition on Amazon’s website in Spain (Amazon/Apple Brandgating)[Up]

On July 12 2023, the CNMC fined Apple and Amazon in the region of EUR 194 million for including certain clauses in the contracts governing Amazon’s conditions as an Apple reseller, which effected the sale of Apple products on Amazon’s website in Spain^[30]. In particular, the distribution agreement restricted competition from third-party resellers of Apple products as well as from sellers from competing products. Apple was fined EUR 164 million, making it the second highest fine ever imposed by the CNMC on a single company. The combined fine ranks as the CNMC’s third-largest overall, following the EUR 413 million fine on Booking.com in 2024 and the EUR 203.6 million fine on several construction companies in 2022 (see point 4 in this Section, and Section IV, point 1.2 below).

According to the CNMC, Apple and Amazon agreed to restrict the number of re-sellers of Apple products on Amazon’s website in Spain by allowing only a limited number of distributors pre-selected by Apple to sell these products (a practice known as the use of brand-gating clauses). The CNMC found that up to 90% of re-sellers that had previously used the Amazon website for the retail sale of Apple products were excluded from the main e-commerce platform in Spain. In addition, Apple and Amazon agreed to limit the visibility of competing products by restricting the advertising space on Amazon’s website in Spain (so-called advertising clauses). While Amazon’s standard search function typically displays results from competing brands, the CNMC found that Apple and Amazon had agreed that, when a user searched for “Apple”, only Apple products would be shown on the results page. Finally, Apple and Amazon agreed to restrict Amazon’s ability to conduct marketing campaigns targeting customers who had purchased Apple products on its website in Spain with promotions for competing brands, unless prior consent was obtained from Apple (“marketing limitation clauses”).

The Decision was appealed before the Spanish National Court (“Audiencia Nacional”), which temporarily suspended the payment of the fine for both Apple^[31] and Amazon^[32], pending final judgment.

4. The CNMC fined Booking.com for abusing its dominant position[Up]

The CNMC imposed a record EUR 413 million fine on Booking.com in July 2024 for abusing its dominant position in online hotel booking intermediation services. This represents the highest fine ever imposed by the CNMC on a single company^[33] (see also ‍CNMC, 2024a).

The authority found two types of abuse since January 2019. The exploitative abuse involved narrow parity clauses preventing Spanish hotels from offering better prices on their own websites while reserving Booking.com’s right to compete on price, subjecting hotels to Dutch law and courts, and providing insufficient information about premium programs. The exclusionary abuse centered on ranking manipulation, where Booking.com prominently ranked hotels performing well on its platform, restricting competitors’ market expansion.

The Decision imposed behavioral remedies and is currently under appeal to the Spanish National Court. The case raises alignment questions with the Digital Markets Act, as Booking.com is now designated as a gatekeeper and prevented from requiring parity conditions under Article 5(3) DMA. This creates potential jurisdictional complexity since the Commission has exclusive competence to interpret DMA provisions whilst the CNMC assessed the same conduct. On March 7, as part of the appeals proceedings, the National Court adopted an interim measure suspending the fine (‍El Mundo, 2025).

5. The CNMC probed Apple for possible anti-competitive conduct in the distribution of apps on its devices[Up]

On July 24 2024, the CNMC initiated infringement proceedings against Apple for a potential abuse of its dominant position in the market for distribution of applications for its devices (See ‍CNMC, 2024b). According to the press release, Apple may have imposed unfair commercial conditions on developers distributing their applications through the App Store to users of Apple products. Although the press release does not detail the commercial conditions under investigation, previous investigations by the Commission suggest that they may relate to the imposition of anti-steering provisions on its app developers. For context, on March 4 2024, the Commission fined Apple over EUR 1.8 billion for imposing such provisions to music streaming app developers, preventing them from informing users of Apple products about alternative and cheaper music subscription services that were available outside the music app (see ‍European Commission, 2024c)^[34]. Apple was also investigated under the DMA for similar conduct. In particular, on March 25 2024, the Commission launched a non-compliance investigation under Article 5(4) DMA—which requires gatekeepers to allow app developers to communicate consumers offers outside the gatekeepers’ app stores, free of charge—and has since found Apple in breach of that provision and imposed a fine (see ‍European Commission, 2025a)^[35].

1. Bid-rigging[Up]

The CNMC has remained focused on investigating bid-rigging practices, leading to some of the largest infringement decisions over the five-year period. During this time, the authority has developed its BRAVA (Bid Rigging Algorithm for Vigilance in Antitrust) platform, which utilizes algorithmic screening of public tenders (for further information, see CNMC, ‍2024c). This platform is now in its early stages of implementation, aiming to enhance the CNMC’s ability to detect and prevent anti-competitive behavior in public procurement.

2. Anti-competitive agreements[Up]

During the 2020-‍2024 period, there were relatively few major developments with regard to anti-competitive agreements. Notably, 2020 saw a significant development, with the Supreme Court upholding a 2016 CNMC Decision in the diaper cartel case, clarifying important aspects of the scope of antitrust liability (see point 2.1 below). This was in addition to Decisions involving digital markets, as covered in Section III above.

3. Exploitative abuses[Up]

The CNMC has experienced a rise in cases involving exploitative abuses, with several landmark decisions made during the 2020-‍2024 period. This shift underscores the authority’s increased attention on tackling practices that exploit consumers, such as unfair pricing and other forms of abusive conduct, across different industries. This aligns with the Commission’s own practice, which has been particularly active in addressing exploitative abuses in recent years, as evidenced by its recent Decisions in the Apple ^[49] and Meta ^[50] cases.

4. Exclusionary abuses[Up]

Exclusionary abuses have received less attention from the CNMC in the past five years compared to exploitative practices. However, 2022 saw two significant Decisions addressing discriminatory practices. In Enel Green Power España (see point 4.1 below), the CNMC found that Enel, acting as a “Single Node Interlocutor”, abused its position by prioritizing its own access requests to the power network over competitors, distorting capacity allocation. Similarly, in Real Sociedad Canina de España (“RSCE”), the CNMC sanctioned the RSCE for using discriminatory fees, restricting judges, and enforcing exclusivity agreements to undermine rival canine associations. These national enforcement actions reflect broader EU trends, such as the European Super League case (see point 4.2 below), where the Court of Justice ruled against opaque and discriminatory access rules imposed by dominant market players acting as both regulators and participants.

1. Merger statistics[Up]

The pandemic-induced downturn in mergers and acquisitions in 2020 was followed by a surge in transactions in Spain, leading to record levels of transactions in 2021 and 2022. However, inflation and rising interest rates contributed to a decline in mergers and acquisitions throughout 2023. Despite this slowdown, a recovery began to take shape toward the end of 2024, suggesting a potential rebound in the market and a renewed flow of transactions in Spain, as seen in Figure 2 below.

Figure 2.

Number of Merger Control Decisions from the CNMC (2020-‍2024)

Source: Data sourced from the CNMC (see CNMC Memorias 2020-‍2023)^[65].

The highest number of merger decisions was recorded in 2021, with a total of 102, while 2020 saw the lowest number at just 60. In 2022, 2023, and 2024, the CNMC issued 95, 69, and 80 merger decisions, respectively.

The majority of these decisions were unconditional approvals, with the percentage consistently remaining well above 90%. Notably, 2022 saw a large number of clearances but no Phase 2 decisions, while 2024 experienced the smallest percentage of unconditional clearances, dropping to 90%.

In recent years, Spanish merger control has witnessed intensified activity, driven by a new wave of consolidation in the banking sector, increased involvement in EU-level referrals, and robust enforcement of procedural rules. The CNMC has reviewed major domestic mergers, such as Caixabank/Bankia and BBVA/Sabadell (see point 2 below), while also participating in Article 22 EUMR referrals, such as in Qualcomm/Autotalks (see point 3 below). In parallel, the authority has reinforced its oversight through infringement proceedings concerning gun-jumping, non-compliance with commitments, and, for the first time, misleading information in merger filings. These developments reflect a broader shift toward stricter scrutiny and more assertive merger enforcement in Spain.

2. Consolidation in the banking sector[Up]

The Spanish banking sector has undergone a new wave of consolidation, building upon the previous wave that occurred in the aftermath of the financial crisis, during which the number of players in the sector was drastically reduced. At the European level, authorities have consistently advocated for further consolidation within the sector (‍Reuters, 2024). This push is intended to enhance the global competitiveness of European banks and to reinforce the functioning of the common market, ensuring that the sector remains competitive and resilient in the face of international challenges.

One of the most relevant mergers in 2021 was the acquisition of Bankia by Caixabank, two major players in the Spanish banking sector. The transaction, involving the country’s third- and fourth-largest banks, respectively, created the single largest entity in Spain by domestic assets, ahead of BBVA and Santander. Santander, however, remains the leading Spanish bank in terms of global assets. The transaction forms part of a decade-long consolidation process in the sector, which has led to the near-complete disappearance of savings banks through successive mergers, acquisitions, and restructuring operations, ultimately reinforcing the position of the four largest commercial banks. For instance, prior to its acquisition by Caixabank, Bankia had itself been created through the merger of seven savings banks in 2010. In 2017, it further expanded by acquiring a rival that had also been formed in 2010 through the merger of four savings banks.

The transaction was notified in November 2020 and was cleared in Phase I in late March 2021, following the CNMC’s approval of commitments offered by the parties, which focused primarily on addressing local-level post-acquisition concerns^[66]. In particular, the parties committed to (i) restricting the closure of branches in underserviced municipalities; (ii) maintaining their terms and conditions in areas where they held high market shares; and (iii) granting customers access to the acquirer’s closest ATMs where Bankia’s ATMs had shut down. Additional commitments included (iv) transparency in Caixabank’s communications with Bankia’s clients; (v) maintaining terms and conditions for vulnerable clients; and (vi) undertaking statutorily-mandated divestitures in stocks.

Though less noteworthy, in late June 2021, the CNMC cleared another merger in the banking sector between Unicaja and Liberbank, which resulted in the fifth-largest domestic bank in Spain^[67]. As with Caixabank/Bankia, the CNMC cleared the merger in Phase I, also with commitments addressing potential local-level post-transactional concerns along the lines of points (ii) and (iv) above.

On May 31 2024, BBVA notified the CNMC of its intention to acquire Banco Sabadell^[68]. BBVA, Spain’s second largest lender, had launched earlier in the year a takeover bid for Banco Sabadell, the country’s fourth largest lender and a significant source of financing for SMEs. Both BBVA and Banco Sabadell have been categorized as Significant Institutions and therefore fall under the direct supervision of the European Central Bank.

After a considerable delay, on November 12, the CNMC announced the launch of a Phase II investigation into the transaction. The delay was caused by Banco Sabadell’s belated responses to several requests for information from the authority. In its Decision, the CNMC identified competition concerns in three areas: (i) retail banking (concerns that the transaction could result in less favorable terms and conditions for consumers and SMEs, and that BBVA would likely close branches post-merger, particularly in rural areas); (ii) payment services (concerns that after acquiring Sabadell’s sizable payment services business BBVA would raise commissions, particularly on SMEs); and (iii) cash machines (concerns that Sabadell’s customers would see the number of cash machines they can access reduced, due to a curtailment of existing agreements with other banks after the transaction).

In order to alleviate the CNMC’s concerns, BBVA offered several commitments. Regarding retail banking, BBVA committed to maintain Sabadell’s contractual terms in geographic areas where the transaction would result in a duopoly or a monopoly. In addition, BBVA proposed further commitments aimed at supporting SMEs and consumers deemed financially vulnerable. Moreover, BBVA committed not to close any branches in rural or impoverished areas, and not to close any offices servicing SMEs. With respect to payment services and cash machines, BBVA offered to divest any excess participation in companies managing payment systems and guaranteed that all of Sabadell’s existing agreements with other banks will remain in force for 18 months, thereby ensuring continued access to cash machines for existing Sabadell’s customers. However, the CNMC considered these commitments insufficient^[69], alleging that the commitments did not fully address the concerns raised by the transaction. As a result, the CNMC decided to open a Phase II investigation. In May 2025, the CNMC finally issued a conditional clearance decision, accepting a package of commitments that went beyond those initially proposed by BBVA (‍CNMC, 2025c). These include obligations to keep bank branches open in remote areas, maintain existing credit lines for SMEs, and preserve current contractual terms related to payment systems and ATMs. The duration of these commitments varies, with specific measures required to remain in force for either 18 months or three years, depending on their nature.

The Spanish Government, which holds ultimate authority to clear the transaction under the Spanish Competition Act^[70], took an unprecedented step by launching a public consultation to gather feedback on the transaction’s potential impact on public interest objectives (‍La Moncloa, 2025b)^[71]. Following this consultation, the government approved the deal but imposed strict and arguably draconian conditions on BBVA (‍Ministerio de Economía, Comercio y Empresa, 2025), hampering the viability of the transaction. This move drew criticism from the Commission, which has since initiated infringement proceedings against Spain (‍Aguado, 2025).

3. The CNMC triggered commission review of Qualcomm/Autotalks under article 22 EUMR[Up]

The CNMC, alongside the Belgian, French, Italian, Dutch, Polish, and Swedish competition authorities initially requested the Commission to review Qualcomm’s acquisition of Autotalks under Article 22 of the EU Merger Regulation (“EUMR”) (‍CNMC, 2023). Another eight competition authorities joined the request and the Commission accepted the referral on August 17 2023^[72]. The transaction concerned Qualcomm, a US multinational operating in the development and sale of semiconductors and software and Autotalks, a company specializing in automotive semiconductors.

In response to increasing opposition from competition authorities, including the Commission, Qualcomm decided to abandon the transaction. This marked the second instance in which the Commission accepted a below-threshold referral after the Illumina/Grail referral^[73], a mechanism that has since come under scrutiny following the Court of Justice’s judgment on the matter^[74]. It remains to be seen whether the Commission will continue to utilize this approach, especially in light of NVIDIA’s recent legal challenge (‍Yun Chee, 2025), after the Italian competition authority referred its below-threshold acquisition of Israeli start-up Run:AI—a transaction that was ultimately cleared unconditionally by the Commission^[75].

4. Infringement proceedings in mergers[Up]

The CNMC was also very active in the enforcement of merger control, sending a clear signal that the disregard of those rules will face great penalties. The CNMC not only investigated and sanctioned typical merger control infringements, such as failures to notify transactions that meet the national thresholds (see point 4.1 below) or non-compliance with accepted commitments (see point 4.2 below), but went one step further and also targeted companies that provided misleading information in the context of merger proceedings (see point 4.3 below). This increased enforcement reveals a clear commitment from the CNMC to protect the merger control system in Spain.

1. The Court of Justice defined the concept of “selectivity” in the Spanish Goodwill saga[Up]

In October 2021, the Court of Justice handed down the last judgment of the so-called “Spanish Goodwill saga”, clarifying the concept of “selectivity” in State aid. The ruling put an end to the main part of a decade-long litigation, including eight cases on appeal^[103].

In late 2001, Spain introduced a provision in its corporate tax law^[104] providing that in the event an undertaking taxable in Spain acquires a shareholding greater than 5% in a “foreign company” and retains it for at least one year, the resulting goodwill may be deducted via amortization from the taxable base. However, that deduction did not apply to acquisitions of shares in Spanish companies. The Commission found that this difference amounted to illegal and incompatible State aid because it conferred an unjustified advantage to Spanish companies in the context of competitive takeover bids. The Commission thus ordered the recovery of the aid in its Decisions of 2009 and 2011^[105].

In 2014, the General Court annulled the Commission Decisions, finding that the Commission had failed to establish the selective nature of the tax measure^[106]. In particular, the General Court highlighted the general nature of the measure, which did not target a particular “category of undertakings” and was potentially available to all^[107]. In 2016, the Grand Chamber of the Court of Justice quashed the General Court’s ruling, relying on a broader interpretation of the concept of selectivity^[108], and referred the case back to the General Court, which, in November 2018, upheld Decisions^[109]. On appeal, in October 2021, the Grand Chamber of the Court of Justice confirmed the latter, putting an end to the protracted dispute, and thus “crystallised” the broad interpretation of selectivity set out in its previous ruling^[110].

Through these rulings, the Court of Justice clarified that in order to determine whether an aid measure is selective, it is irrelevant that the measure grants an advantage to a limited group of undertakings with specific features^[111]. In sum, “[a]ll that matters […] is [whether] the measure [has] the effect of placing the recipient undertakings in a position that is more favourable than that of other undertakings […] in a comparable factual and legal situation”^[112]. Therefore, a “general” derogation from the reference framework may still be selective if it favors some undertakings vis-à-vis others. In other words, selectivity is not an “absolute” concept based on the general or limited scope of an aid measure but a “relative” one based on the differential effect created.

In addition, the Court of Justice established that the definition of an aid measure by reference to specific “behavioral” characteristics, such as acquisitions of shareholdings, may also make it selective (see further ‍Kyriazis, 2021).

2. The General Court upheld the principle of legitimate expectations, giving another twist to the Spanish Goodwill saga[Up]

In 2014, the Commission adopted another Decision where it assessed a new interpretation of the tax scheme by the Spanish authorities in the form of a binding opinion, and concluded that this interpretation extended the possibility of deducting financial goodwill to indirect acquisitions of shareholdings in non-resident companies, which amounted to new aid, and thus declared it illegal and incompatible^[113].

Spain and multiple companies challenged the Commission’s 2014 Decision. The General Court stayed these cases pending the outcome of the first litigation proceedings mentioned above, which concluded in 2021.

On September 27 2023, the General Court annulled the 2014 Decision, finding in essence that the indirect acquisitions of shareholdings were already covered by the 2009 and 2011 Decisions^[114], and therefore, in adopting the 2014 Decision, the Commission had withdrawn two valid Decisions that conferred a legitimate expectation on Spain to implement the tax scheme (even if declared incompatible), and on private operators not to have to repay part of the illegal aid^[115]. Accordingly, the General Court annulled the 2014 Decision in its entirety^[116].

3. The Court of Justice concluded a decade-long litigation over the “Spanish Tax Lease System” (Lico Leasing)[Up]

In 2011, following complaints, the Commission opened a formal investigation against a Spanish Tax Lease System (“STLS”), which essentially enabled shipping companies to purchase ships built by Spanish shipyards at a 20-‍30% rebate^[117]. In 2013, the Commission concluded that three out of the five tax measures conforming the STLS amounted to State aid under Article 107(1) TFEU and declared them illegal and partially incompatible, thus ordering Spain to recover the advantages^[118]. The Commission found that the SLTS granted an advantage to economic interest groupings (“EIGs”) and their investors, which then partly transferred the advantage to shipping companies that purchased a new ship.

Spain, Lico Leasing SA and Pequeños y Medianos Astilleros Sociedad de Reconversión (“PYMAR”) lodged actions for annulment against the 2013 Decision. In the first ruling of the Lico Leasing saga in 2015, the General Court upheld the applicants’ arguments that the Commission had erred in concluding that the aid was selective^[119].

The Commission appealed to the Court of Justice, which set aside the General Court’s ruling in 2018, finding, in particular, that the General Court had erred in applying the concept of selectivity, and referred the cases back to the General Court to rule on the matter and the remaining pleas^[120].

In 2020, the General Court dismissed the actions for annulment lodged by Spain, Lico Leasing and PYMAR^[121]. Specifically, the General Court found that (i) the STLS was selective insofar it granted broad discretionary powers to the Spanish tax authorities when applying the tax scheme^[122], and (ii) the Commission did not err in ordering the recovery of the tax advantages from the EIGs and their investors alone, even if the tax advantages had been partly transferred to the shipping companies^[123]. In addition, the General Court dismissed the applicants’ arguments that the Commission had failed to state reasons, infringed the principles of equal treatment, legitimate expectations, and legal certainty in ordering the recovery of the aid.

Spain, Lico Leasing, PYMAR, and 29 other entities that had intervened in the first appeal before the Court of Justice, appealed again to the Court of Justice against the judgment rendered by the General Court once the case was referred back to it. On February 2 2023, the Court of Justice dismissed all grounds of appeal except one (failure to state reasons on the identification of the beneficiaries of the STLS for recovery), and gave final ruling on the cases, annulling the Decision in part^[124]. Regarding the assessment of selectivity, the Court of Justice recalled that discretionary aid measures confer a selective advantage^[125]. Accordingly, the three-step methodology (i. e., reference framework/difference of treatment/justification) to assess whether a tax measure of general nature confers a selective advantage is not applicable to the STLS^[126]. The relevant national law—as interpreted by the Court and not having been contested in time by the applicants^[127]—afforded significant discretion to the tax authorities when applying the STSL and, therefore, granted a selective advantage^[128]. The Court also rejected that the General Court had to examine whether the exercise of discretion by the Spanish tax authorities actually granted a selective advantage^[129]. Regarding the definition of the beneficiaries in the recovery order, the Court of Justice found that the General Court had provided insufficient reasons to reject the appellants’ challenge that the STLS transferred the advantage from the EIGs and their investors to the shipping companies^[130]. In particular, the General Court merely indicated that the 2013 Decision had identified the EIGs and their investors as the beneficiaries of the aid and that this finding was not disputed; the Court of Justice, however, found that such a challenge was necessarily implicit in the applicants’ arguments^[131]. Accordingly, the Court of Justice set aside the judgment of the General Court and gave final ruling on this point, finding that it was apparent from the 2013 Decision, and the rationale of the STLS, that the latter intended to transfer part of the advantage also to the shipping companies and not just the EIGs and their investors^[132].

4. The Court of Justice defined the Commission’s obligation to reason the selectivity of an aid measure during the preliminary investigation phase (EDP España and Naturgy v Commission)[Up]

In 2007, Spain established a “remuneration for capacity” scheme aimed to promote investment in the production of electricity, which included an “environmental incentive” for coal-fired power stations to install new sulfur oxide filters to reduce emissions. In 2015, the Commission launched an investigation into the capacity mechanism market in multiple Member States. In 2017, the Commission initiated a formal investigation into the Spanish environmental incentive scheme^[133].

In 2018, Naturgy Energy Group (“Naturgy”), an undertaking involved in the generation of electricity through coal-fired power stations, among others, which benefited from the Spanish incentive scheme, challenged the Commission’s decision to open a formal investigation^[134]. EDP España, another beneficiary of the Spanish incentive scheme, intervened in support of Naturgy. Naturgy argued, inter alia, that the Commission had infringed its duty to state reasons concerning the selectivity of the Spanish environmental incentive scheme. The General Court dismissed Naturgy’s action recalling that the decision to open the formal procedure may be limited to summarizing the relevant issues, including a preliminary assessment of the qualification of the measure as State aid, and explaining the doubts as to its compatibility with the internal market^[135]. In particular, the General Court concluded that the Commission had sufficiently reasoned why the Spanish incentive scheme favored certain coal-fired power plants over others or over power plants generating electricity from other technologies^[136]. The General Court noted that “if the arguments of the applicant and the interveners were to be accepted, […] this would result in the blurring of the boundary between the decision to open the formal examination procedure and the decision to close that procedure”^[137].

Both Naturgy and EDP España appealed the judgment of the General Court^[138]. The appellants argued that the standard to state reasons is the same for the Commission regardless of whether the decision adopted opens or closes the formal investigation procedure, relying on Comunidad Autónoma de Galicia and Retegal v Commission ^[139], and that the General Court had erred in discarding this precedent as irrelevant. The appellants argued further that the Commission has the obligation to assess the selectivity of the measure by analyzing the comparability of the beneficiaries with other entities pursuant to Commission v Hansestadt Lübeck ^[140]. The Court of Justice found that, even if, in a decision opening a formal investigation procedure, the Commission undertakes a preliminary assessment of the relevant measure, the Commission has to determine whether the aid measure constitutes State aid^[141]. As the qualification of the measure as State aid deploys legal effects, including the suspension of the measure and the duty for national courts to draw the appropriate conclusions in case of infringement of the said standstill obligation, the Commission is required to disclose its reasoning “in a clear and unequivocal fashion”^[142]. The Court of Justice also found that, contrary to the General Court’s findings, (i) the precedent Comunidad Autónoma de Galicia and Retegal v Commission was relevant, even if it concerned the duty to state reasons for the Commission in a decision closing a formal investigation procedure; and (ii) the Commission was obliged to undertake the comparability analysis pursuant to Commission v Hansestadt Lübeck ^[143]. However, none of the above was clear from the General Court judgment and the Commission 2017 decision^[144]. Accordingly, the Court of Justice set aside the judgment of the General Court and annulled the Commission 2017 decision to open the formal investigation procedure^[145].