In a judgment last month by the EU’s General Court in Case T-525/20, ITD and Danske Fragtmænd v Commission (PostNord Logistics), it annulled a Commission Decision which had found no state aid had been provided to PostNord Logistics by PostNord.
PostNord, established in 2009, is a company that is owned by Denmark (40%) and Sweden (60%), which constitutes a merger of the postal operators of Denmark (Post Danmark) and Sweden (Posten). PostNord, as part of its group, also owns PostNord Logistics, which provides road haulage services in Denmark. In 2017 and 2018, PostNord Logistics received capital injections from its parent company, PostNord, given the loss-making nature of PostNord Logistics.
ITD, Brancheorganisation for den danske vejgodstransport is a trade association of companies incorporated under Danish law that are active on the national and international markets for road haulage and logistics services. Danske Fragtmænd is a commercial competitor of PostNord Logistics.
ITD and Danske Fragtmænd is of the view that, through PostNord Logistics’ capital injection from PostNord, PostNord Logistics would benefit from cross-subsidisation of its activities, which would allow it to use, free of charge, several of its infrastructures financed by the public compensation PostNord received for providing the universal postal service in Denmark.
In May 2020, the Commission decided in SA.52489 (2018/FC) and SA.52658 (2018/FC) that the capital injection to PostNord Logistics did not entail an advantage; no cross-subsidisation had been established, and therefore, the actions did not constitute state aid.
ITD challenged the Commission’s decisions on the basis that it failed to initiate the formal investigation procedure provided for in Article 108(2) TFEU, despite the issues raised, namely, the capital injection, on the one hand, and the cross-subsidisation, on the other.
In a long judgment, the General Court established that the Commission, prior to making a decision, had failured to take into account the links between PostNord Logistics and the restructuring of PostNord’s business in Denmark, which has demonstrated the incomplete and insufficient nature of its examination of the immutability, to Denmark and Sweden, of the capital injection.
Therefore, the Commission’s decisions, which had established there was no state aid after the preliminary examination stage was annulled.
In the case, Jørgen Jensen Distribution and Specialforeningen for Logistik og Distribution (SLD) had intervened in favour of ITD and Danske Fragtmænd, whereas on the other side, Denmark, Sweden, PostNord Logistics, and PostNord had intervened in favour of the Commission.
The Commission has two months to decided if it will appeal the judgment of the General Court to the Court of Justice.
The judgment of the General Court in Case T-525/20, ITD and Danske Fragtmænd v Commission (PostNord Logistics) can be read in full here.