The implications of today’s Judgment in Cases C-20/15 and C-21/15 P (World Duty Free, Santander and Santusa)
This morning the ECJ annulled the General Court’s Judgments which in turn had quashed the Commission’ decisions in the Spanish financial goodwill cases. As some readers may know, my firm represents the parties that prevailed in first instance.
We had commented on this case before (most recently here) and Pablo’s statistical analysis predicted the outcome (actually, some of the comments in my last post could also be read in conjunction with today’s news).
We are getting a pretty significant number of calls and emails asking about the implications of this Judgment, so here go my personal main comments in this regard:
–The implications for the specific cases considered in the Judgment are actually limited. The cases now go back to the General Court, which (as acknowledged in para. 123 of today’s Judgment) had only examined the first part of only one of the four pleas presented to it. It is therefore pretty evident that the Judgment has in no way”fully upheld the two Commission decisions” as
surprisingly claimed in the Commission’s Press release. The game is still on.
–The implications for the Apple cases and other cases concerning tax rulings are not evident, and most likely non-existent. Whereas establishing links can be good for headlines and the Commission may have had an interest in linking these cases to raise the stakes before the ECJ, the cases share little more than a wide interpretation of the notion of selectivity.
-The implications for State aid aw and tax law, and for institutional equilibrium between the Commission and Member States are simply huge:
The Judgment creates the concept of “behavioural selectivity” and thus places us in a brave new world.
From now onwards any tax measure conditioned on a behaviour (e.g an investment; i.e most tax measures) will automatically be considered as meeting the first of the three step test. In practice, this means that the European Commission becomes a tax co-legislator (some Member States did note that at the hearing and so did AG Kokott in the parallel Finanzlamt case), a role which it may nevertheless not want to assume (or at least not always, or not regarding every Member State).
Pablo is putting pressure on me to write an article on selectivity during the holidays, so perhaps we’ll develop our thoughts there.
-For law firms specialized in State aid, this means tons of new work…
–For the general interest, well, the news are perhaps not so great.