Judgment of the General Court of the EU on the notion of existing aid in the broadcasting sector

In a judgment held on 21 May 2025, the General Court of the EU reaffirmed the importance of procedural safeguards in State aid investigations, particularly in the context of public service broadcasting. 

The judgment concerns legal and financial modifications affecting the initial public measure for Lithuanian national public broadcaster LRT that constituted initially existing aid.

Context

LRT is the public service broadcaster owned by the Lithuanian State. It is funded by allocations from the State budget as well as income from commercial activities, publishing, advertising and other sources, including donations from public organisations and individuals in accordance with the Law on the Lithuanian National Radio and Television adopted in 1996. This Law was amended in 2015 and again in 2020.

In 2020, Interneto žiniasklaidos asociacija, a trade association representing the interests of companies operating in the online media sector, and All Media Lithuania and All Media Radijas, both private operators in the media sector, including television and radio broadcasting activities, lodged a complaint before the European Commission stating that the changes made to the LRT funding scheme by the 2015 and the 2020 amendments were sufficiently substantial to trigger the notification requirement under Article 108(3) TFEU.

In its letter addressed to the complainants in 25 November 2021, the Commission considered that the LRT funding constituted existing aid as it was put into effect before, and is still applicable after, the entry into force of the TFEU in Lithuania. Furthermore, the amendments of 2015 and 2020 could be not considered as substantial alterations to existing aid, since they did not affect the central elements of the original LRT funding scheme. Therefore, they could not constitute new aid, subject to Commission approval under Article 108(3) TFEU.

Such letters to complainants are not published but may be challenged before the General Court of the EU on the same grounds as formal decisions adopted by the Commission in matters of State aid.

General Court’s ruling: formal procedure cannot be bypassed in case of doubts

The complainants lodged an annulment action against the Commission’s letter before the General Court of the EU.

The private broadcasters contended that the modifications to LRT’s funding mechanism and mandate since the accession of Lithuania to the EU warranted a State aid notification and a full assessment of its compatibility. They argued the Commission had failed to initiate a formal procedure despite receiving a detailed complaint, thereby violating their procedural rights under Article 108(2) TFEU.

The General Court ruled that the Commission had committed a manifest error of assessment and had breached the procedural rights of the complainants.

According to the Court, the changes to LRT’s legal framework and financing since 2004 were potentially significant enough to raise “serious doubts” about whether the aid continued to qualify as existing aid. Indeed, the Commission should have verified whether or not the amount of public compensation granted by the Lithuanian State was modified substantially following the modifications to the existing aid. According to the complainants, this amount was increased by 37.12% following the first amendment of 2015. The Commission had not addressed this element in its letter closing down its preliminary investigation.

The Court emphasised that the threshold for opening a formal investigation is not certainty of illegality but the mere existence of such serious doubts.

The Commission’s failure to examine all the relevant legal and factual changes surrounding LRT’s funding was seen as a critical oversight. In bypassing the formal investigation stage, the Commission denied the complainants an opportunity to fully participate in the decision-making process, thereby infringing its procedural rights.

Implications for State aid rules

This judgment reaffirms the procedural protections available to third parties in State aid cases, particularly competitors of aid recipients. It sets a clear limit on the Commission’s ability to dismiss complaints without a thorough and reasoned analysis. Furthermore, it places the burden on the Commission to fully assess whether changes to an aid scheme could trigger a reclassification from existing to new aid and to sufficiently motivate its letter announcing to complainants the closure of its preliminary investigations.

The judgment may lead to more frequent formal investigations in cases involving complex or evolving legal frameworks, such as those governing public service broadcasters. It sends a signal that even long-standing funding schemes may require fresh scrutiny if substantially altered.

Next step

Following the General Court’s annulment of the Commission’s decision, the Commission will most probably open the formal investigation procedure to address those critics. All interested parties, including the complainants as well as the beneficiary of the public compensation, will have the opportunity to submit their observations on the measures under investigation.

This judgment does not mean the LRT funding is illegal. The Commission will assess all the factual and legal elements of the case and may maintain its initial position in a formal decision. In the event that the modifications in question did indeed entail new aid, the Commission may still declare the public compensation compatible with the common market in accordance with the applicable State aid communication.