European justice confirms the legality of the RTVE financing system

The Court of Justice of the European Union gives its approval to the RTVE financing regime introduced with the Corporation's Financing Law of 2009 that suppressed advertising on TVE.

The First Chamber of the Court of Justice of the European Union handed down a ruling on the Spanish Radiotelevision financing system on the 10th, rejecting in its entirety DTS's appeal and Telefónica's appeal, following the line of argument raised by the Commission, the Government and RTVE and thus ending the dispute initiated in 2010 by DTS and, later, Telefónica, against the authorization granted by the European Commission to the regime. of RTVE financing provided for in Law 8/2009, without said regime having been affected by any of the appeals filed either before the General Court, or subsequently, before the CJEU.

The ruling, in its analysis, alters the order of the three reasons for the appeal invoked by DTS and the reason for joining the appeal by Telefónica de España and Telefónica Móviles España, rejecting them.

In relation to the first of the reasons examined, referring to the possible distortion of the facts in relation to the interpretation of national law (something that must be limited to the fact that it can be clearly deduced from the documentation in the Courts without the possibility of providing new evidence), the Court of Justice concludes that the General Court considered that the aid allocated to RTVE does not depend on the amount of the tax levies to which DTS is subject, but on the net costs of the public service and, therefore, there is no distortion in the interpretation of national law (paragraphs 46 to 49).

Regarding the reason relating to the alleged infringement of article 107.1 TFEU due to incorrect interpretation of the concept of State aid, DTS structures it in two parts, the first stating that the relationship between the tax on pay television operators and the aid granted to RTVE is not comparable to that between a tax of general scope and an exemption from it, and a second in which it affirms that the tax on pay television operators is an asymmetric tax that constitutes aid. in the sense of the ruling handed down in the Laboratoires Boiron litigation.

Regarding the first part of the reason, the Court of Justice concludes that it is ineffective, since the Grounds of the Appealed Judgment are not articulated on this relationship between the tax of general scope and the exemption, but rather due to the lack of relevance of the Laboratorios Boiron ruling to examine the aid in question.

Therefore, the ruling of the Court of Justice analyzes the second part of this reason, which focused a large part of the litigation, in relation to whether the questioned tax is similar to the tax that was considered state aid in Boiron Laboratories.

Aid regime

In this sense, the Court of Justice starts from the fact that the method of financing aid may determine that the entire aid scheme is incompatible with the common market, provided that the destination of the tax is obligatorily linked to the aid in accordance with the relevant national legislation, in the sense that the collection of the tax is necessarily used to finance the aid and directly affects the amount of the aid and, consequently, the assessment of the compatibility of this aid with the common market.

The Court of Justice declared that, in the case of asymmetrical subjection to a tax, that is, when only one of the two categories of operators in a competitive situation is subject to the tax, the operators who owe the tax can invoke the illegality of the tax (when the aid measure is the tax itself, since the latter and the aid constitute the two inseparable elements of a single and the same tax measure).

The Court of Justice considers that the appealed judgment did not err in law in estimating that the tax or fee that DTS (and therefore any other operator) has to pay is not a tax comparable to the asymmetric tax, since the tax measures (rates) and the aid in favor of the RTVE Corporation are not two inseparable elements of a single and the same measure, since the possible inapplicability of the tax measures in question due to their possible incompatibility with Union Law It does not have the direct consequence of questioning the aid, since the State is obliged to complete the difference between the economic income available to RTVE and its total costs for the fulfillment of its public service obligations, of which the fact that the amount of the aid is not determined solely by the amount of the fees but by the net costs of the public service constitutes an additional element.

Although the ruling also considers that the obligation to pay DTS is an additional competitive disadvantage, it also states that this 'is not sufficient to consider that the tax forms an integral part of the aid.'

As for the third plea, relating to an alleged infringement of Article 106(2) TFEU, the Judgment considers it ineffective, given that DTS does not in any way allege that this part of the judgment under appeal is vitiated by errors of law, while immediately highlighting that its appeal does not concern the examination of the compatibility of the aid granted to RTVE with Article 106(2) TFEU.

Finally, the ruling analyzes the arguments supported by the response and the accession to the appeal of the Telefónica companies. As for the reason for answering the cassation, this is inadmissible because it is not procedurally possible, given that it cannot have as its object the annulment of the judgment appealed for for reasons different and autonomous from those invoked in the appeal, since such reasons can only be invoked in the framework of an accession to the cassation. As for the reason for adhesion, this is also rejected, since the appealed ruling correctly found that Telefónica in its intervention did not adhere to the object of the litigation raised by DTS and, therefore, modified the scope of what it could procedurally as an intervening party.