General Court annuls Commission’s decision on Lithuania’s public service broadcaster scheme for failure to open the formal investigation procedure
The General Court (GC) rendered its judgment in Interneto žiniasklaidos asociacija and Others v Commission (T-72/22), concerning an action for annulment of a Commission’s letter concerning State aid granted to Lithuania’s public service broadcaster LRT – LT.
Three Lithuanian media outlets lodged a complaint to the Commission, arguing that amendments made in 2015 and 2020 to the funding model of public broadcaster LRT constituted unlawful State aid, as they had not been notified under Article 108(3) of the TFEU. The changes introduced a fixed State funding mechanism and removed commercial advertising revenue. Upon review, the Commission determined in a letter that LRT’s funding constituted ‘existing aid’, both prior to and after Lithuania’s EU accession, and that the amendments were not significant enough to be considered new aid.
In their action for annulment, the applicants argued that the Commission should have had serious doubts about whether the amendments constituted new, rather than existing aid, especially due to significant changes in the source and amount of funding.
First, the GC clarified that the letter had to be classified as a decision adopted under Article 4 of Regulation 2015/1589, in so far as the Commission classified the 2015 and 2020 amendments as existing aid. The letter consequently constitutes a challengeable act.
Next, the GC found that the Commission had not adequately assessed whether eliminating advertising revenue (effectively shifting from dual to single funding) and increasing public support changed essential aspects of the original aid scheme. The GC held that such changes could have substantially altered the nature of the aid, requiring a formal investigation under Article 108(2) TFEU.
Furthermore, the GC concluded that the Commission failed to examine key evidence that was either available or could have been obtained during the preliminary investigation phase. Therefore, the GC annulled the decision.
For more information, see the GC’s judgment.