Valencia wins fight against EU state aid decision, another blow for EU

By Foo Yun Chee

BRUSSELS (Reuters) - Spanish soccer club Valencia on Thursday won its fight against an EU state aid decision as Europe's top court said competition regulators had failed to prove their case in yet another blow to EU antitrust chief Margrethe Vestager's tax crackdown.

The European Commission had said in its 2016 decision that guarantees provided by the regional government of Valencia between 2009 and 2010 to foundations linked to Valencia and two other soccer clubs, to cover bank loans taken out in order to participate in capital increases for the clubs, were illegal state aid.

The case was part of Vestager's campaign against tax deals and other aid schemes such as state guarantees granted by EU governments giving some companies an unfair advantage.

Valencia subsequently challenged the EU decision at the General Court, Europe's second highest, which quashed the finding in 2020, prompting the EU competition enforcer to appeal to the Court of Justice of the European Union (CJEU).

The Luxembourg-based CJEU dismissed the Commission's appeal.

"The General Court did not impose an excessive burden of proof on the Commission and merely found that the Commission had not fulfilled the requirements which it had imposed on itself by adopting the Guarantee Notice," judges said.

"The Commission had not substantiated its finding or availed itself of its power to make a specific request to the Spanish authorities or the interested parties during the administrative procedure to obtain the production of relevant evidence for the purposes of the assessment to be carried out," they said.

Vestager suffered a major setback earlier this week when the CJEU backed Fiat Chrysler in its fight against an EU order to pay 30 million euros ($30 million) in back taxes to Luxembourg.

The case is C-211/20 P | Commission v Valencia Club de Fútbol.

($1 = 1.0027 euros)

(Reporting by Foo Yun Chee; Editing by Alison Williams and Richard Chang)