Distortion of competition through staff changes must be examined – Court of Justice of the European Union (EuGH) quashes General Court (EuG) judgment on satellite procurement

By judgment of 12 June 2025 the Court of Justice of the European Union (EuGH) in Case C-415/23 P has set a significant public procurement law milestone.

Competitive dialogue and protection against unlawful competitive advantages

At the centre was a multi-billion euro procurement procedure for the acquisition of Galileo transition satellites by the European Commission in the context of a competitive dialogue. The bidder OHB System AG accused a competing company – Airbus Defence and Space (ADS) – of unlawfully exploiting strategically confidential information by engaging a former OHB executive.

Initially, the General Court of the European Union (EuG) rejected these objections (Judgment of 26.04.2023 – T-54/21). However, the EuGH made clear: the General Court had erred in law in assuming that the mere absence of a formal ground for exclusion under the Financial Regulation is sufficient to allow an offer to be admitted. Rather, objective indications of a possible distortion of competition are sufficient to trigger an obligation to conduct an in-depth examination.

The judgment has substantial practical significance for public contracting authorities, high-tech bidders and all procedures involving strategically sensitive information.

What it was about: High technology, staff changes and the accusation of offer falsification

OHB System AG applied for the award in the context of a competitive dialogue conducted by the ESA on behalf of the European Commission for the procurement of Galileo transition satellites. During the course of the multi-year procedure, a senior employee of OHB moved to ADS, a direct competitor in the procedure.

This employee had been responsible at OHB for strategically decisive aspects such as pricing, offer structure and technical direction. At ADS, he assumed a leadership role in the bidding phase. OHB suspected that ADS had gained access to commercially sensitive information through this staff change and that there was thus an unlawful advantage.

Despite corresponding indications, the Commission saw no reason for further investigations. The awards were made to ADS and Thales Alenia Space Italia (TASI). OHB filed an appeal after the General Court (EuG) dismissed its action.

Procedure type: The competitive dialogue in overview

The procedure was conducted as a competitive dialogue pursuant to Art. 29 of Directive 2014/24/EU. This procedure type is suitable for particularly complex procurement projects where the public contracting authority already knows the requirement but does not know how to meet it best from a technical or economic perspective.

The dialogue was conducted in three phases:

1. Requests to participate: Selection of three bidders (OHB, ADS, TASI).
2. Dialogue and bidding phase: Development of solution proposals in several iterations.
3. Best and Final Offer (BAFO): Evaluation according to the award criterion of the most economically advantageous offer (35% price, 65% quality).

The evaluation resulted in the ranking: TASI (1), ADS (2), OHB (3).

Legal assessment by the Court of Justice of the European Union (EuGH)

1. Central statement: EuGH quashes the General Court (EuG) judgment

The EuGH corrects the General Court (EuG) in essential respects: the decision reached there is erroneous in law because it the obligations of the Commission to uphold the principle of equal treatment (Art. 160 Financial Regulation, Art. 18 Directive 2014/24/EU) interpreted too narrowly.

2. Duty to examine where there are indications of unfair advantages

The EuGH emphasises: Not only final and binding court decisions or formal administrative decisions trigger examination obligations. Already objective indications which raise doubts about the independence of an offer obligate the contracting authority to conduct an examination.

Exemplary indications: access to internal strategies, pricing, know-how; personnel overlaps; unusual price.

3. Objection: General Court (EuG) examined only Art. 136 Financial Regulation – too narrow

The General Court (EuG) had based its examination solely on the formal grounds for exclusion, in particular Art. 136 Financial Regulation (e.g. final and binding establishment of serious professional misconduct). The EuGH counters: a breach of the principle of equal treatment can also be justified independently thereof to exclude an offer (cf. EuGH, C-531/16 – Specializuotas transportas, and C-697/17 – Telecom Italia).

4. Indications suffice – full proof not required

The Court of Justice of the European Union (EuGH) makes expressly clear that a bidderneed not provide full proofbut only needs to submit consistent and objective indications. It is then the task of the public contracting authority to examine this suspicion – also by putting questions to the affected bidder.

5. Referral back to the General Court (EuG)

The Court of Justice of the European Union (EuGH) sets aside the judgment andrefers the matter back for re-examination. The Court must now in particular clarify whether the specific indications from OHB (for example from forensic IT investigations) constituted a sufficient basis for an obligation on the Commission to carry out an exclusion review.

Significance for practice: compliance, documentation and timely objection are decisive

For public contracting authorities:

• Obligation to actively investigatewhere there are indications of distortion of competition
• Documentation of suspicions and examination steps is essential
• Exclusion must not be viewed only from a formal legal perspective – the principle of equal treatment extends further

For bidding enterprises:

• Timely, substantiated objectionswhere there is suspicion of unfair procedural advantages
• Compliance measureswhen sensitive employees depart (e.g. non-compete periods, IT logs, exit interviews)
• Risk analysis when recruiting employees with access to competitive information

For all participants in competitive dialogue procedures:

• Transparent communication about procedural changes
• File-based safeguarding of every critical personnel decision
• Cooperation with specialist law firms in public procurement law in case of doubts or disputes

Conclusion: Court of Justice of the European Union (EuGH) strengthens equal treatment in public procurement and affirms investigation obligations

The Court of Justice of the European Union (EuGH) reaffirms with this judgment the central importance of the principle of equal treatment in public procurement procedures. Public contracting authorities may not hide behind formal thresholds or the absence of court findings. Rather, they are obligedto actively examine where there are signs of impermissible advantages– even on the basis of mere indications.

For bidders, this means:Protection against unfair competition is enforceable, provided it is well documented, raised in a timely manner and properly substantiated.

Would you like to have your tender offerssafeguarded under public procurement lawor to challenge a defective award procedure?
As a specialist law firm inpublic commercial lawthe experts fromAVANTCORE Rechtsanwältein Stuttgart advise you on legally secure participation in EU-wide procedures – including complex procedures such as competitive dialogue.