# 62017TJ0292

JUDGMENT OF THE GENERAL COURT (First Chamber)

12 July 2019 (
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(State aid — Aid scheme implemented by France between 1994 and 2008 — Investment subsidies awarded by the Île-de-France Region — Decision declaring the aid scheme compatible with the internal market — Advantage — Selective nature — Article 107(1) TFEU — Obligation to state reasons — Concepts of ‘existing aid’ and ‘new aid’ — Article 108 TFEU — Article 1(b)(i) and (v) of Regulation (EU) 2015/1589)

In Case T‐292/17,

Région Île-de-France (France), represented by J.‐P. Hordies, lawyer,

Région Île-de-France

applicant,

v

European Commission, represented by L. Armati, C. Georgieva-Kecsmar and T. Maxian Rusche, acting as Agents,

European Commission

defendant,

APPLICATION under Article 263 TFEU for the annulment in part of Commission Decision (EU) 2017/1470 of 2 February 2017 on State aid schemes SA.26763 2014/C (ex 2012/NN) implemented by France in favour of bus transport undertakings in the Île-de-France Region (OJ 2017 L 209, p. 24),

THE GENERAL COURT (First Chamber),

composed of I. Pelikánová, President, V. Valančius and U. Öberg (Rapporteur), Judges,

Registrar: L. Ramette, Administrator,

having regard to the written part of the procedure and further to the hearing on 9 October 2018,

gives the following

Judgment

Judgment

I. Background

I.

Background

| 1 | The applicant, Région Île-de-France, was established as a public body with legal personality and financial autonomy by loi no 76-394, du 6 mai 1976, portant création et organisation de la Région d’Île-de-France (Law No 76-394 of 6 May 1976 establishing and organising the Île-de-France Region) (JORF of 7 May 1976, p. 2741). Under Article 6 of that law, it was made responsible, inter alia, for drawing up regional policy on traffic and the transport of passengers on its territory and for ensuring the implementation of that policy. |
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1

The applicant, Région Île-de-France, was established as a public body with legal personality and financial autonomy by loi no 76-394, du 6 mai 1976, portant création et organisation de la Région d’Île-de-France (Law No 76-394 of 6 May 1976 establishing and organising the Île-de-France Region) (JORF of 7 May 1976, p. 2741). Under Article 6 of that law, it was made responsible, inter alia, for drawing up regional policy on traffic and the transport of passengers on its territory and for ensuring the implementation of that policy.

o

| 2 | Article 17 of Law No 76-394 provided, in particular:
  ‘The Regional Council shall take decisions on matters falling within the competence of the [R]egion by resolution ...’ |
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2

Article 17 of Law No 76-394 provided, in particular:

‘The Regional Council shall take decisions on matters falling within the competence of the [R]egion by resolution ...’

| 3 | On 20 October 1994, the conseil régional d’Île-de-France (Regional Council for Île-de-France, France) adopted resolution CR 34-94 on aid for the improvement of public road transport services operated by private undertakings or undertakings under local authority control aimed at renewing a series of aid measures previously implemented for the benefit of those undertakings. It was followed by two further resolutions, namely resolutions CR 44-98 and CR 47-01 (taken together with resolution CR 34-94, ‘the disputed resolutions’), in 1998 and 2001, respectively, before the aid mechanism put in place was withdrawn in 2008. |
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3

On 20 October 1994, the conseil régional d’Île-de-France (Regional Council for Île-de-France, France) adopted resolution CR 34-94 on aid for the improvement of public road transport services operated by private undertakings or undertakings under local authority control aimed at renewing a series of aid measures previously implemented for the benefit of those undertakings. It was followed by two further resolutions, namely resolutions CR 44-98 and CR 47-01 (taken together with resolution CR 34-94, ‘the disputed resolutions’), in 1998 and 2001, respectively, before the aid mechanism put in place was withdrawn in 2008.

| 4 | Pursuant to the disputed resolutions, the applicant granted financial aid to public authorities in its territory which had signed contracts for the operation of scheduled bus services with private undertakings providing scheduled public transport services by road or which were operating such services directly under local authority control (‘the public authorities concerned’). The public authorities concerned subsequently paid the aid provided by the applicant over to those transport undertakings (‘the final beneficiaries’). |
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4

Pursuant to the disputed resolutions, the applicant granted financial aid to public authorities in its territory which had signed contracts for the operation of scheduled bus services with private undertakings providing scheduled public transport services by road or which were operating such services directly under local authority control (‘the public authorities concerned’). The public authorities concerned subsequently paid the aid provided by the applicant over to those transport undertakings (‘the final beneficiaries’).

| 5 | Under the aid scheme put in place by the disputed resolutions (‘the aid scheme at issue’), aid was granted in the form of investment subsidies (‘the disputed subsidies’) and was intended to promote the purchase of new vehicles and the installation of new equipment by the final beneficiaries, with a view to improving the supply of public transport and addressing the negative externalities associated with particularly heavy road traffic in the applicant’s territory. |
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5

Under the aid scheme put in place by the disputed resolutions (‘the aid scheme at issue’), aid was granted in the form of investment subsidies (‘the disputed subsidies’) and was intended to promote the purchase of new vehicles and the installation of new equipment by the final beneficiaries, with a view to improving the supply of public transport and addressing the negative externalities associated with particularly heavy road traffic in the applicant’s territory.

| 6 | According to the French authorities, 135 undertakings benefited from the aid scheme at issue between 1994 and 2008. Limits on how the disputed subsidies were to be used were stipulated in amendments to the operating agreements concluded between the public authorities concerned and the final beneficiaries. The amendments were countersigned by the chairman of the Regional Council for Île-de-France and set out the obligations to which the final beneficiaries were subject in return for payment of those subsidies. |
| --- | --- |

6

According to the French authorities, 135 undertakings benefited from the aid scheme at issue between 1994 and 2008. Limits on how the disputed subsidies were to be used were stipulated in amendments to the operating agreements concluded between the public authorities concerned and the final beneficiaries. The amendments were countersigned by the chairman of the Regional Council for Île-de-France and set out the obligations to which the final beneficiaries were subject in return for payment of those subsidies.

| 7 | On 17 October 2008, the European Commission received a complaint concerning the State aid schemes, which were alleged to be unlawful, consisting of support measures implemented in favour of a number of bus transport undertakings between 1994 and 2008 by the applicant in its territory, and subsequently from 2008 onwards by the syndicat des transports d’Île-de-France (Île-de-France Transport Authority, France) (STIF) in the same territory. |
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7

On 17 October 2008, the European Commission received a complaint concerning the State aid schemes, which were alleged to be unlawful, consisting of support measures implemented in favour of a number of bus transport undertakings between 1994 and 2008 by the applicant in its territory, and subsequently from 2008 onwards by the syndicat des transports d’Île-de-France (Île-de-France Transport Authority, France) (STIF) in the same territory.

| 8 | By letter of 11 March 2014, the Commission notified the French Republic of its decision to initiate the formal investigation procedure laid down in Article 108(2) TFEU. By the publication of that decision in the Official Journal of the European Union (OJ 2014 C 141, p. 38), the Commission invited interested parties to submit their comments on the measures at issue. |
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8

By letter of 11 March 2014, the Commission notified the French Republic of its decision to initiate the formal investigation procedure laid down in Article 108(2) TFEU. By the publication of that decision in the Official Journal of the European Union (OJ 2014 C 141, p. 38), the Commission invited interested parties to submit their comments on the measures at issue.

Official Journal of the European Union

| 9 | On 30 April 2014, the French Republic submitted its comments to the Commission. All the comments submitted by the interested parties, including the applicant, were provided to the French Republic, which made no remarks on them. |
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9

On 30 April 2014, the French Republic submitted its comments to the Commission. All the comments submitted by the interested parties, including the applicant, were provided to the French Republic, which made no remarks on them.

| 10 | On 21 June 2016, the Commission received a joint note from four of the seven interested parties, the purpose of which was to clarify their position following delivery of the judgment of 6 October 2015, Commission v Andersen (C‐303/13 P, EU:C:2015:647). On 9 November 2016, the applicant supplemented its comments. |
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10

On 21 June 2016, the Commission received a joint note from four of the seven interested parties, the purpose of which was to clarify their position following delivery of the judgment of 6 October 2015, Commission v Andersen (C‐303/13 P, EU:C:2015:647). On 9 November 2016, the applicant supplemented its comments.

| 11 | On 2 February 2017, the Commission closed the formal investigation procedure laid down in Article 108(2) TFEU and adopted Decision (EU) 2017/1470 on State aid schemes SA.26763 2014/C (ex 2012/NN) implemented by France in favour of bus transport undertakings in the Île-de-France Region (OJ 2017 L 209, p. 24; ‘the contested decision’). |
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11

On 2 February 2017, the Commission closed the formal investigation procedure laid down in Article 108(2) TFEU and adopted Decision (EU) 2017/1470 on State aid schemes SA.26763 2014/C (ex 2012/NN) implemented by France in favour of bus transport undertakings in the Île-de-France Region (OJ 2017 L 209, p. 24; ‘the contested decision’).

| 12 | In the contested decision, the Commission found, inter alia, that the disputed subsidies awarded under the aid scheme at issue by the applicant between 1994 and 2008 constituted State aid within the meaning of Article 107(1) TFEU. Since trading conditions between Member States had not been affected to an extent contrary to the common interest, it found that the scheme was compatible with the internal market within the meaning of Article 107(3) TFEU. However, it concluded that in so far as the aid had not been notified and had to be categorised as ‘new aid’, the aid scheme at issue had been unlawfully implemented, in infringement of Article 108(3) TFEU. |
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12

In the contested decision, the Commission found, inter alia, that the disputed subsidies awarded under the aid scheme at issue by the applicant between 1994 and 2008 constituted State aid within the meaning of Article 107(1) TFEU. Since trading conditions between Member States had not been affected to an extent contrary to the common interest, it found that the scheme was compatible with the internal market within the meaning of Article 107(3) TFEU. However, it concluded that in so far as the aid had not been notified and had to be categorised as ‘new aid’, the aid scheme at issue had been unlawfully implemented, in infringement of Article 108(3) TFEU.

| 13 | The operative part of the contested decision reads as follows:

  ‘Article 1

  The aid scheme unlawfully implemented by [the French Republic] between 1994 and 2008 in the form of investment subsidies awarded by the Île-de-France Region by way of [resolutions] CR 34-94, CR 44-98 and CR 47-01 is compatible with the internal market.
  ...

  Article 4

  This Decision is addressed to the French Republic.’ |
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13

The operative part of the contested decision reads as follows:

‘Article 1

‘Article 1

The aid scheme unlawfully implemented by [the French Republic] between 1994 and 2008 in the form of investment subsidies awarded by the Île-de-France Region by way of [resolutions] CR 34-94, CR 44-98 and CR 47-01 is compatible with the internal market.

...

Article 4

Article 4

This Decision is addressed to the French Republic.’

II. Proceedings before the national courts

II.

Proceedings before the national courts

| 14 | In May 2004, the syndicat autonome des transporteurs de voyageurs (Independent Union of Passenger Carriers, France) (‘SATV’) requested the chairman of the Regional Council for Île-de-France to rescind the disputed resolutions. Following the refusal of that request, on 17 June 2004 SATV brought an action for annulment before the tribunal administratif de Paris (Administrative Court, Paris, France) against the decision of the chairman of the Regional Council for Île-de-France. |
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14

In May 2004, the syndicat autonome des transporteurs de voyageurs (Independent Union of Passenger Carriers, France) (‘SATV’) requested the chairman of the Regional Council for Île-de-France to rescind the disputed resolutions. Following the refusal of that request, on 17 June 2004 SATV brought an action for annulment before the tribunal administratif de Paris (Administrative Court, Paris, France) against the decision of the chairman of the Regional Council for Île-de-France.

| 15 | By judgment No 0417015 of 10 July 2008, the tribunal administratif de Paris (Administrative Court, Paris) upheld SATV’s action and ordered the applicant to submit a new resolution to the Regional Council for Île-de-France on the ground that the aid scheme at issue had not been notified to the Commission. The tribunal administratif de Paris (Administrative Court, Paris) also ordered the applicant to rescind the disputed resolutions. |
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15

By judgment No 0417015 of 10 July 2008, the tribunal administratif de Paris (Administrative Court, Paris) upheld SATV’s action and ordered the applicant to submit a new resolution to the Regional Council for Île-de-France on the ground that the aid scheme at issue had not been notified to the Commission. The tribunal administratif de Paris (Administrative Court, Paris) also ordered the applicant to rescind the disputed resolutions.

| 16 | The applicant, while challenging that decision, adopted resolution CR 80-08 of 16 October 2008 rescinding the disputed resolutions. |
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16

The applicant, while challenging that decision, adopted resolution CR 80-08 of 16 October 2008 rescinding the disputed resolutions.

| 17 | By judgment No 08PA 04753 of 12 July 2010, the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris, France) upheld judgment No 0417015 of the tribunal administratif de Paris (Administrative Court, Paris) of 10 July 2008. The applicant lodged an appeal on a point of law against that decision before the Conseil d’État (Council of State, France). By judgment No 343440 of 23 July 2012, the Conseil d’État (Council of State) dismissed that appeal and stated that the fact that the market for scheduled public passenger transport in the applicant’s territory was not open to competition had no bearing on the categorisation of the disputed subsidies as State aid, since the final beneficiaries also operated on other markets open to competition. |
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17

By judgment No 08PA 04753 of 12 July 2010, the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris, France) upheld judgment No 0417015 of the tribunal administratif de Paris (Administrative Court, Paris) of 10 July 2008. The applicant lodged an appeal on a point of law against that decision before the Conseil d’État (Council of State, France). By judgment No 343440 of 23 July 2012, the Conseil d’État (Council of State) dismissed that appeal and stated that the fact that the market for scheduled public passenger transport in the applicant’s territory was not open to competition had no bearing on the categorisation of the disputed subsidies as State aid, since the final beneficiaries also operated on other markets open to competition.

| 18 | Following the dismissal of several appeals in third party proceedings by the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) on 27 November 2015, the final beneficiaries who had lodged those appeals filed appeals on a point of law before the Conseil d’État (Council of State), which were still pending when the application was lodged. |
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18

Following the dismissal of several appeals in third party proceedings by the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) on 27 November 2015, the final beneficiaries who had lodged those appeals filed appeals on a point of law before the Conseil d’État (Council of State), which were still pending when the application was lodged.

| 19 | Following a further application filed by SATV on 27 October 2008, the tribunal administratif de Paris (Administrative Court, Paris), by judgment No 0817138 of 4 June 2013, ordered the applicant to issue enforcement orders for recovery of the disputed subsidies. On 27 November 2015, the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) dismissed the appeal brought by the Region against that decision (judgment No 13PA 03172). The applicant lodged an appeal on a point of law before the Conseil d’État (Council of State), which was still pending when the application was lodged. |
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19

Following a further application filed by SATV on 27 October 2008, the tribunal administratif de Paris (Administrative Court, Paris), by judgment No 0817138 of 4 June 2013, ordered the applicant to issue enforcement orders for recovery of the disputed subsidies. On 27 November 2015, the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) dismissed the appeal brought by the Region against that decision (judgment No 13PA 03172). The applicant lodged an appeal on a point of law before the Conseil d’État (Council of State), which was still pending when the application was lodged.

III. Procedure and forms of order sought by the parties

III.

Procedure and forms of order sought by the parties

| 20 | By application lodged at the Court Registry on 16 May 2017, the applicant brought, pursuant to Article 263 TFEU the present action seeking the annulment in part of the contested decision. |
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20

By application lodged at the Court Registry on 16 May 2017, the applicant brought, pursuant to Article 263 TFEU the present action seeking the annulment in part of the contested decision.

| 21 | The applicant claims that the Court should:





  – | declare the action admissible; |
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21

The applicant claims that the Court should:

–

declare the action admissible;

| – | annul the contested decision in so far as the Commission categorised the aid scheme at issue as a ‘State aid scheme’; |
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–

annul the contested decision in so far as the Commission categorised the aid scheme at issue as a ‘State aid scheme’;

| – | order the Commission to pay the costs. |
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–

order the Commission to pay the costs.

| 22 | The Commission contends that the Court should:





  – | primarily, declare the action inadmissible; |
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22

The Commission contends that the Court should:

–

primarily, declare the action inadmissible;

| – | in the alternative, dismiss the action; |
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–

in the alternative, dismiss the action;

| – | order the applicant to pay the costs. |
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–

order the applicant to pay the costs.

IV. Law

IV.

Law

A. Admissibility

A.

Admissibility

| 23 | The Commission, without raising a plea of inadmissibility by means of a separate document under Article 130(1) of the Rules of Procedure of the General Court, contends that the action is inadmissible due to the applicant having no standing to bring proceedings and it having no legal interest in bringing proceedings. |
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23

The Commission, without raising a plea of inadmissibility by means of a separate document under Article 130(1) of the Rules of Procedure of the General Court, contends that the action is inadmissible due to the applicant having no standing to bring proceedings and it having no legal interest in bringing proceedings.

| 24 | The applicant submits that, although it is not the addressee of the contested decision, the action is admissible inasmuch as it has both standing to bring proceedings and a legal interest in bringing proceedings against the contested decision. |
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24

The applicant submits that, although it is not the addressee of the contested decision, the action is admissible inasmuch as it has both standing to bring proceedings and a legal interest in bringing proceedings against the contested decision.

| 25 | In that respect, it must be noted that the Courts of the European Union are entitled to assess, according to the circumstances of each case, whether the proper administration of justice justifies the dismissal of the action on the merits without first ruling on its admissibility (judgments of 26 February 2002, Council v Boehringer, C‐23/00 P, EU:C:2002:118, paragraphs 51 and 52, and of 14 September 2015, Brouillard v Court of Justice, T‐420/13, not published, EU:T:2015:633, paragraph 18). |
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25

In that respect, it must be noted that the Courts of the European Union are entitled to assess, according to the circumstances of each case, whether the proper administration of justice justifies the dismissal of the action on the merits without first ruling on its admissibility (judgments of 26 February 2002, Council v Boehringer, C‐23/00 P, EU:C:2002:118, paragraphs 51 and 52, and of 14 September 2015, Brouillard v Court of Justice, T‐420/13, not published, EU:T:2015:633, paragraph 18).

| 26 | In the circumstances of the present case, the Court considers that, in the interests of procedural economy, the substance of the action should be examined at the outset, without first ruling on its admissibility. |
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26

In the circumstances of the present case, the Court considers that, in the interests of procedural economy, the substance of the action should be examined at the outset, without first ruling on its admissibility.

B. Substance

B.

Substance

| 27 | In support of its action, the applicant essentially raises two pleas in law. The first plea alleges infringement of Article 1(b)(i) and (v) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 TFEU (OJ 2015 L 249, p. 9), in so far as the Commission erred in taking the view in the contested decision that the aid granted between 1994 and 2008 under the aid scheme at issue was new aid which, in the absence of notification, had been implemented unlawfully. The second plea alleges infringement of the obligation to state reasons inasmuch as, in its assessment of the categorisation of the disputed subsidies as State aid within the meaning of Article 107(1) TFEU, the Commission failed to provide an adequate statement of reasons explaining why those subsidies were selective and conferred an undue economic advantage on the final beneficiaries. |
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27

In support of its action, the applicant essentially raises two pleas in law. The first plea alleges infringement of Article 1(b)(i) and (v) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 TFEU (OJ 2015 L 249, p. 9), in so far as the Commission erred in taking the view in the contested decision that the aid granted between 1994 and 2008 under the aid scheme at issue was new aid which, in the absence of notification, had been implemented unlawfully. The second plea alleges infringement of the obligation to state reasons inasmuch as, in its assessment of the categorisation of the disputed subsidies as State aid within the meaning of Article 107(1) TFEU, the Commission failed to provide an adequate statement of reasons explaining why those subsidies were selective and conferred an undue economic advantage on the final beneficiaries.

| 28 | In its heads of claim, the applicant expressly requests the Court to annul the contested decision in so far as the Commission found that the disputed subsidies constituted a State aid scheme. |
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28

In its heads of claim, the applicant expressly requests the Court to annul the contested decision in so far as the Commission found that the disputed subsidies constituted a State aid scheme.

| 29 | However, it cannot be presumed from the headings of the pleas raised in support of the present action that those pleas seek to question the categorisation of the disputed subsidies as State aid. |
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29

However, it cannot be presumed from the headings of the pleas raised in support of the present action that those pleas seek to question the categorisation of the disputed subsidies as State aid.

| 30 | It is apparent from the headings of the pleas raised that they are intended solely, in the case of the second plea, to establish that the contested decision is vitiated by an inadequate statement of reasons as regards the categorisation of the disputed subsidies as State aid, and, in the case of the first plea, to challenge the Commission’s assessment in that decision of whether the aid scheme at issue was new. |
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30

It is apparent from the headings of the pleas raised that they are intended solely, in the case of the second plea, to establish that the contested decision is vitiated by an inadequate statement of reasons as regards the categorisation of the disputed subsidies as State aid, and, in the case of the first plea, to challenge the Commission’s assessment in that decision of whether the aid scheme at issue was new.

| 31 | However, it is clear from the application that, although the second plea is framed as alleging infringement only of the obligation to state reasons, in reality, the applicant also takes issue with the Commission’s finding that the criteria of selectivity and advantage were met in this case. By that plea, it therefore seeks both to establish an infringement of the obligation to state reasons and to challenge the substantive legality of the contested decision, on the ground that the disputed subsidies did not constitute State aid within the meaning of Article 107(1) TFEU. |
| --- | --- |

31

However, it is clear from the application that, although the second plea is framed as alleging infringement only of the obligation to state reasons, in reality, the applicant also takes issue with the Commission’s finding that the criteria of selectivity and advantage were met in this case. By that plea, it therefore seeks both to establish an infringement of the obligation to state reasons and to challenge the substantive legality of the contested decision, on the ground that the disputed subsidies did not constitute State aid within the meaning of Article 107(1) TFEU.

| 32 | Moreover, it is apparent from the arguments put forward by the applicant in its written pleadings and those it expanded at the hearing that the application for annulment of the contested decision does not seek solely to question the categorisation of the disputed subsidies as State aid, but also to dispute the aid scheme at issue was new. In those circumstances, it must be held that the first plea, alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589, is effective in support of that application. |
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32

Moreover, it is apparent from the arguments put forward by the applicant in its written pleadings and those it expanded at the hearing that the application for annulment of the contested decision does not seek solely to question the categorisation of the disputed subsidies as State aid, but also to dispute the aid scheme at issue was new. In those circumstances, it must be held that the first plea, alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589, is effective in support of that application.

| 33 | In the light of those considerations, the Court finds that the pleas relied in support the applicant’s head of claim seeking the annulment in part of the contested decision on the ground that there was no State aid, within the meaning of Article 107(1) TFEU, and that the aid scheme at issue was incorrectly categorised as a new aid scheme. |
| --- | --- |

33

In the light of those considerations, the Court finds that the pleas relied in support the applicant’s head of claim seeking the annulment in part of the contested decision on the ground that there was no State aid, within the meaning of Article 107(1) TFEU, and that the aid scheme at issue was incorrectly categorised as a new aid scheme.

| 34 | In addition, it should be recalled that a claim that there is no, or only an inadequate, statement of reasons is intended to establish an infringement of essential procedural requirements and, therefore, should be examined separately, as such, from the question whether the grounds for the contested decision are accurate, the latter being a matter for the Court to review when it examines the substance of that decision (see, to that effect, judgments of 2 April 1998, Commission v Sytraval and Brink’s France, C‐367/95 P, EU:C:1998:154, paragraph 67, and of 15 December 2005, Italy v Commission, C‐66/02, EU:C:2005:768, paragraph 26). |
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34

In addition, it should be recalled that a claim that there is no, or only an inadequate, statement of reasons is intended to establish an infringement of essential procedural requirements and, therefore, should be examined separately, as such, from the question whether the grounds for the contested decision are accurate, the latter being a matter for the Court to review when it examines the substance of that decision (see, to that effect, judgments of 2 April 1998, Commission v Sytraval and Brink’s France, C‐367/95 P, EU:C:1998:154, paragraph 67, and of 15 December 2005, Italy v Commission, C‐66/02, EU:C:2005:768, paragraph 26).

| 35 | It follows that the second plea, in so far as it seeks, in particular, to establish an infringement of the obligation to state reasons and an error of assessment by the Commission as regards the categorisation of the disputed subsidies as State aid, must be examined before the first plea, which is concerned solely with the substantive legality of the contested decision. |
| --- | --- |

35

It follows that the second plea, in so far as it seeks, in particular, to establish an infringement of the obligation to state reasons and an error of assessment by the Commission as regards the categorisation of the disputed subsidies as State aid, must be examined before the first plea, which is concerned solely with the substantive legality of the contested decision.

1.
   
  Second plea in law alleging infringement of the obligation to state reasons and error of assessment in the categorisation of the disputed subsidies in the light of Article 107(1) TFEU

1.

Second plea in law alleging infringement of the obligation to state reasons and error of assessment in the categorisation of the disputed subsidies in the light of Article 107(1) TFEU

(a)
   
  Infringement of the obligation to state reasons

(a)

Infringement of the obligation to state reasons

| 36 | In the first place, the applicant submits that the contested decision is vitiated by an inadequate statement of reasons, in so far as the Commission simply pointed out in that decision that the aid scheme at issue made a de facto selection from among the economic operators in the scheduled public transport by road sector and placed that economic sector at an advantage over other sectors. The issue of the selectivity of the aid was the subject of only three recitals in the contested decision (namely recitals 222 to 224). |
| --- | --- |

36

In the first place, the applicant submits that the contested decision is vitiated by an inadequate statement of reasons, in so far as the Commission simply pointed out in that decision that the aid scheme at issue made a de facto selection from among the economic operators in the scheduled public transport by road sector and placed that economic sector at an advantage over other sectors. The issue of the selectivity of the aid was the subject of only three recitals in the contested decision (namely recitals 222 to 224).

| 37 | In the second place, the applicant argues that the inadequate statement of reasons for the contested decision stems from the fact that the Commission did not demonstrate how the final beneficiaries had specific scope for manoeuvre following the award of the disputed subsidies under the aid scheme at issue. It contends, among other things, that the Commission failed to examine how those subsidies enabled the final beneficiaries to mitigate the impact of the costs liable to be borne by them and therefore conferred an economic advantage on them. |
| --- | --- |

37

In the second place, the applicant argues that the inadequate statement of reasons for the contested decision stems from the fact that the Commission did not demonstrate how the final beneficiaries had specific scope for manoeuvre following the award of the disputed subsidies under the aid scheme at issue. It contends, among other things, that the Commission failed to examine how those subsidies enabled the final beneficiaries to mitigate the impact of the costs liable to be borne by them and therefore conferred an economic advantage on them.

| 38 | The Commission disputes the applicant’s arguments. In particular, it maintains that the contested decision contains detailed explanations concerning both the existence of an economic advantage and the selective nature of that advantage. The Commission states that, in so far as the disputed resolutions did not define any of the key parameters for write-off of the advantage received, its finding that there was an undue economic advantage in favour of the final beneficiaries achieved the requisite legal standard. |
| --- | --- |

38

The Commission disputes the applicant’s arguments. In particular, it maintains that the contested decision contains detailed explanations concerning both the existence of an economic advantage and the selective nature of that advantage. The Commission states that, in so far as the disputed resolutions did not define any of the key parameters for write-off of the advantage received, its finding that there was an undue economic advantage in favour of the final beneficiaries achieved the requisite legal standard.

| 39 | It should be noted that, under the second paragraph of Article 296 TFEU, legal acts are to state the reasons on which they are based. Moreover, according to Article 41(2) of the Charter of Fundamental Rights of the European Union, the right to good administration includes the obligation of the administration to give reasons for its decisions. |
| --- | --- |

39

It should be noted that, under the second paragraph of Article 296 TFEU, legal acts are to state the reasons on which they are based. Moreover, according to Article 41(2) of the Charter of Fundamental Rights of the European Union, the right to good administration includes the obligation of the administration to give reasons for its decisions.

| 40 | The Court has consistently held that the scope of the obligation to state reasons depends on the nature of the measure at issue and on the context in which it was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure, in such a way as to enable the EU judicature to carry out its review and to enable the persons concerned to ascertain the reasons for the measure so that they can defend their rights and ascertain whether or not the measure is well founded (judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 278). |
| --- | --- |

40

The Court has consistently held that the scope of the obligation to state reasons depends on the nature of the measure at issue and on the context in which it was adopted. The statement of reasons must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure, in such a way as to enable the EU judicature to carry out its review and to enable the persons concerned to ascertain the reasons for the measure so that they can defend their rights and ascertain whether or not the measure is well founded (judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 278).

| 41 | It is not necessary for the statement of reasons to specify all the relevant matters of fact or of law, since the question whether the statement of reasons for a measure satisfies the requirements of the second paragraph of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 279). |
| --- | --- |

41

It is not necessary for the statement of reasons to specify all the relevant matters of fact or of law, since the question whether the statement of reasons for a measure satisfies the requirements of the second paragraph of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 279).

| 42 | However, although the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned, it must set out the facts and the legal considerations having decisive importance in the context of the decision (see, to that effect, judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 280). |
| --- | --- |

42

However, although the Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned, it must set out the facts and the legal considerations having decisive importance in the context of the decision (see, to that effect, judgment of 6 March 2003, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, T‐228/99 and T‐233/99, EU:T:2003:57, paragraph 280).

| 43 | With regard to the categorisation of a measure as aid, the obligation to state reasons requires that the reasons which led the Commission to consider that the measure concerned falls within the scope of Article 107(1) TFEU should be stated (judgment of 13 June 2000, EPAC v Commission, T‐204/97 and T‐270/97, EU:T:2000:148, paragraph 36). |
| --- | --- |

43

With regard to the categorisation of a measure as aid, the obligation to state reasons requires that the reasons which led the Commission to consider that the measure concerned falls within the scope of Article 107(1) TFEU should be stated (judgment of 13 June 2000, EPAC v Commission, T‐204/97 and T‐270/97, EU:T:2000:148, paragraph 36).

| 44 | First, it must be pointed out that before finding that there was an economic advantage for the purposes of Article 107(1) TFEU, the Commission replied to the arguments of the French authorities and the interested parties, which it noted in recital 198 of the contested decision and which sought to establish that the aid had been granted by the applicant in exchange for the discharge of public service obligations and was not capable of conferring such an advantage on the final beneficiaries, in accordance with the conditions laid down in the judgment of 24 July 2003, Altmark Trans and RegierungspräsidiumMagdeburg (C‐280/00, EU:C:2003:415, paragraphs 87 to 94). |
| --- | --- |

44

First, it must be pointed out that before finding that there was an economic advantage for the purposes of Article 107(1) TFEU, the Commission replied to the arguments of the French authorities and the interested parties, which it noted in recital 198 of the contested decision and which sought to establish that the aid had been granted by the applicant in exchange for the discharge of public service obligations and was not capable of conferring such an advantage on the final beneficiaries, in accordance with the conditions laid down in the judgment of 24 July 2003, Altmark Trans and RegierungspräsidiumMagdeburg (C‐280/00, EU:C:2003:415, paragraphs 87 to 94).

| 45 | In particular, in recitals 201 to 207 of the contested decision, the Commission set out the reasons why, in its view, the disputed subsidies were not intended to compensate for the public service obligations, but were grafted on to the contractual mechanism already in place between the undertakings providing scheduled public transport services in the applicant’s territory and the public authorities concerned in order to stimulate investment. It stated that the fact that the advantage conferred by the subsidies could be corrected by the possible write-off of the sums paid by those authorities to the final beneficiaries, in order to compensate for their public service obligations, was not relevant to such an analysis. |
| --- | --- |

45

In particular, in recitals 201 to 207 of the contested decision, the Commission set out the reasons why, in its view, the disputed subsidies were not intended to compensate for the public service obligations, but were grafted on to the contractual mechanism already in place between the undertakings providing scheduled public transport services in the applicant’s territory and the public authorities concerned in order to stimulate investment. It stated that the fact that the advantage conferred by the subsidies could be corrected by the possible write-off of the sums paid by those authorities to the final beneficiaries, in order to compensate for their public service obligations, was not relevant to such an analysis.

| 46 | In the light of the detailed assessment which the Commission carried out in the contested decision as to whether the disputed subsidies conferred an advantage on the final beneficiaries, it cannot be criticised for having failed, in the present case, to provide an adequate statement of reasons for the purposes of establishing that that criterion was satisfied. |
| --- | --- |

46

In the light of the detailed assessment which the Commission carried out in the contested decision as to whether the disputed subsidies conferred an advantage on the final beneficiaries, it cannot be criticised for having failed, in the present case, to provide an adequate statement of reasons for the purposes of establishing that that criterion was satisfied.

| 47 | Second, as regards the criterion relating to the selectivity of the disputed subsidies and the reasons provided in relation to that criterion in the contested decision, it must be borne in mind that, according to settled case-law, it is for the Commission to prove that the measure at issue creates differences between undertakings which, with regard to the objective of that measure, are in a comparable factual and legal situation (see, to that effect, judgment of 8 September 2011, Commission v Netherlands, C‐279/08 P, EU:C:2011:551, paragraph 62 and the case-law cited). |
| --- | --- |

47

Second, as regards the criterion relating to the selectivity of the disputed subsidies and the reasons provided in relation to that criterion in the contested decision, it must be borne in mind that, according to settled case-law, it is for the Commission to prove that the measure at issue creates differences between undertakings which, with regard to the objective of that measure, are in a comparable factual and legal situation (see, to that effect, judgment of 8 September 2011, Commission v Netherlands, C‐279/08 P, EU:C:2011:551, paragraph 62 and the case-law cited).

| 48 | In recitals 222 and 223 of the contested decision, the Commission stated that the disputed subsidies concerned only private undertakings providing public transport services with which the public authorities concerned had concluded an operating agreement, so that those subsidies concerned only the scheduled road public transport sector in the applicant’s territory. It also found that a selection from among the undertakings in that sector was made prior to the award of subsidies, in order to determine which of them would be responsible for performing the public service obligations in the applicant’s territory. |
| --- | --- |

48

In recitals 222 and 223 of the contested decision, the Commission stated that the disputed subsidies concerned only private undertakings providing public transport services with which the public authorities concerned had concluded an operating agreement, so that those subsidies concerned only the scheduled road public transport sector in the applicant’s territory. It also found that a selection from among the undertakings in that sector was made prior to the award of subsidies, in order to determine which of them would be responsible for performing the public service obligations in the applicant’s territory.

| 49 | The Commission therefore found, in recital 224 of the contested decision, that the selective nature of the aid scheme at issue could be observed both at the level of the sector concerned and within that sector, between undertakings which had received the disputed subsidies and those which had been excluded from the scheme. |
| --- | --- |

49

The Commission therefore found, in recital 224 of the contested decision, that the selective nature of the aid scheme at issue could be observed both at the level of the sector concerned and within that sector, between undertakings which had received the disputed subsidies and those which had been excluded from the scheme.

| 50 | It follows that the Commission provided explanations which were sufficiently detailed to enable the applicant to ascertain the reasons for its view that the disputed subsidies created a difference, within the meaning of the case-law referred to in paragraph 47 above, between the final beneficiaries and undertakings which, with regard to the objective of the disputed resolutions, were in a comparable factual and legal situation to those beneficiaries. |
| --- | --- |

50

It follows that the Commission provided explanations which were sufficiently detailed to enable the applicant to ascertain the reasons for its view that the disputed subsidies created a difference, within the meaning of the case-law referred to in paragraph 47 above, between the final beneficiaries and undertakings which, with regard to the objective of the disputed resolutions, were in a comparable factual and legal situation to those beneficiaries.

| 51 | In those circumstances, the applicant cannot complain that the Commission infringed the obligation to state reasons in its assessments of the selective nature of the aid scheme at issue and of the undue economic advantage granted to the final beneficiaries. |
| --- | --- |

51

In those circumstances, the applicant cannot complain that the Commission infringed the obligation to state reasons in its assessments of the selective nature of the aid scheme at issue and of the undue economic advantage granted to the final beneficiaries.

(b)
   
  Error of assessment in the categorisation of the disputed subsidies as State aid, in the light of Article 107(1) TFEU and, in particular, of the criteria relating to economic advantage and selectivity

(b)

Error of assessment in the categorisation of the disputed subsidies as State aid, in the light of Article 107(1) TFEU and, in particular, of the criteria relating to economic advantage and selectivity

(1) Substance of the assessment of economic advantage

(1)

Substance of the assessment of economic advantage

| 52 | According to the applicant, the Commission erred in taking the view in the contested decision that the criterion relating to economic advantage, provided for in Article 107(1) TFEU, was satisfied. In particular, the Commission allegedly failed to specify the specific costs which were liable to be borne by the final beneficiaries and how the disputed subsidies enabled those costs to be reduced and, consequently, conferred an economic advantage on them. |
| --- | --- |

52

According to the applicant, the Commission erred in taking the view in the contested decision that the criterion relating to economic advantage, provided for in Article 107(1) TFEU, was satisfied. In particular, the Commission allegedly failed to specify the specific costs which were liable to be borne by the final beneficiaries and how the disputed subsidies enabled those costs to be reduced and, consequently, conferred an economic advantage on them.

| 53 | The Commission disputes the applicant’s arguments. It contends that the disputed resolutions did not define the key parameters for the possible write-off of the economic advantage received by the final beneficiaries. The Commission maintains it was therefore fully entitled to find — in the light of the considerations set out in recital 209 of the contested decision, namely, in particular, the fact that there was nothing to suggest, upon reading the disputed resolutions, that the disputed subsidies had been properly written-off — that aid granted under the aid scheme at issue conferred an undue economic advantage on the final beneficiaries. |
| --- | --- |

53

The Commission disputes the applicant’s arguments. It contends that the disputed resolutions did not define the key parameters for the possible write-off of the economic advantage received by the final beneficiaries. The Commission maintains it was therefore fully entitled to find — in the light of the considerations set out in recital 209 of the contested decision, namely, in particular, the fact that there was nothing to suggest, upon reading the disputed resolutions, that the disputed subsidies had been properly written-off — that aid granted under the aid scheme at issue conferred an undue economic advantage on the final beneficiaries.

| 54 | It should be noted at the outset that, in recital 207 of the contested decision, the Commission stated that since the disputed subsidies were intended to cover part of the investment costs normally borne by undertakings on the scheduled public transport market, the applicant had, by awarding those subsidies, freed up margins for manoeuvre for the final beneficiaries, who were therefore able to use their own resources for other purposes. |
| --- | --- |

54

It should be noted at the outset that, in recital 207 of the contested decision, the Commission stated that since the disputed subsidies were intended to cover part of the investment costs normally borne by undertakings on the scheduled public transport market, the applicant had, by awarding those subsidies, freed up margins for manoeuvre for the final beneficiaries, who were therefore able to use their own resources for other purposes.

| 55 | The analysis set out in recital 207 of the contested decision is sufficient to reject the applicant’s argument that the Commission failed to explain how the disputed subsidies enabled the costs borne by the final beneficiaries to be reduced. |
| --- | --- |

55

The analysis set out in recital 207 of the contested decision is sufficient to reject the applicant’s argument that the Commission failed to explain how the disputed subsidies enabled the costs borne by the final beneficiaries to be reduced.

| 56 | Since the applicant has not put forward any other arguments or evidence challenging the Commission’s assessment in the contested decision of the criterion of economic advantage, provided for in Article 107(1) TFEU, and, moreover, given that the applicant merely asserted that that assessment was incorrect, there is no reason to question the substance of the assessment set out in the contested decision concerning the existence of an economic advantage. |
| --- | --- |

56

Since the applicant has not put forward any other arguments or evidence challenging the Commission’s assessment in the contested decision of the criterion of economic advantage, provided for in Article 107(1) TFEU, and, moreover, given that the applicant merely asserted that that assessment was incorrect, there is no reason to question the substance of the assessment set out in the contested decision concerning the existence of an economic advantage.

(2) Substance of the assessment of selectivity

(2)

Substance of the assessment of selectivity

| 57 | The applicant denies that the disputed subsidies are selective. It claims that it did not have any discretion as to the award of those subsidies. According to the applicant, all operators active on the scheduled passenger transport market were eligible for those subsidies simply by presenting a dossier, provided that they had concluded an operating agreement with one of the public authorities concerned. Of the 150 scheduled public transport operators carrying on business in its territory, more than 130 operators thus benefited from aid granted under the aid scheme at issue. |
| --- | --- |

57

The applicant denies that the disputed subsidies are selective. It claims that it did not have any discretion as to the award of those subsidies. According to the applicant, all operators active on the scheduled passenger transport market were eligible for those subsidies simply by presenting a dossier, provided that they had concluded an operating agreement with one of the public authorities concerned. Of the 150 scheduled public transport operators carrying on business in its territory, more than 130 operators thus benefited from aid granted under the aid scheme at issue.

| 58 | The Commission disputes the applicant’s arguments. Specifically, it contends — as the applicant itself acknowledged — that some undertakings carrying on business in the market for scheduled public passenger transport in Île-de-France were excluded from the group of final beneficiaries. The fact that a large number of undertakings were entitled to the disputed subsidies is not sufficient to call into question their selective nature. |
| --- | --- |

58

The Commission disputes the applicant’s arguments. Specifically, it contends — as the applicant itself acknowledged — that some undertakings carrying on business in the market for scheduled public passenger transport in Île-de-France were excluded from the group of final beneficiaries. The fact that a large number of undertakings were entitled to the disputed subsidies is not sufficient to call into question their selective nature.

| 59 | It must be pointed out, as the applicant itself conceded in its written pleadings, that the award of the disputed subsidies depended on an operating agreement being concluded between the final beneficiaries and the public authorities concerned. |
| --- | --- |

59

It must be pointed out, as the applicant itself conceded in its written pleadings, that the award of the disputed subsidies depended on an operating agreement being concluded between the final beneficiaries and the public authorities concerned.

| 60 | It follows that undertakings from other Member States or other French regions were not eligible to receive the disputed subsidies and that only undertakings active on the scheduled passenger transport market which carried on business in the applicant’s territory were able to use the equipment subsidised by the aid granted under the aid scheme at issue. In particular, only those undertakings were able to use the equipment thus subsidised in other parts of the European Union and France, where they might find themselves competing against public transport operators which had not received the same aid. |
| --- | --- |

60

It follows that undertakings from other Member States or other French regions were not eligible to receive the disputed subsidies and that only undertakings active on the scheduled passenger transport market which carried on business in the applicant’s territory were able to use the equipment subsidised by the aid granted under the aid scheme at issue. In particular, only those undertakings were able to use the equipment thus subsidised in other parts of the European Union and France, where they might find themselves competing against public transport operators which had not received the same aid.

| 61 | Therefore, contrary to the applicant’s assertions, even though a large number of undertakings providing scheduled public transport services by road in its territory were eligible for the disputed subsidies, the aid scheme at issue led to differences such as to favour ‘certain undertakings or the production of certain goods’ over others which, with regard to the objective of that scheme, were in a comparable factual and legal situation. |
| --- | --- |

61

Therefore, contrary to the applicant’s assertions, even though a large number of undertakings providing scheduled public transport services by road in its territory were eligible for the disputed subsidies, the aid scheme at issue led to differences such as to favour ‘certain undertakings or the production of certain goods’ over others which, with regard to the objective of that scheme, were in a comparable factual and legal situation.

| 62 | In those circumstances, it must be held that the arguments put forward by the applicant do not call in question the Commission’s assessment of the selectivity of the disputed subsidies set out in the contested decision. |
| --- | --- |

62

In those circumstances, it must be held that the arguments put forward by the applicant do not call in question the Commission’s assessment of the selectivity of the disputed subsidies set out in the contested decision.

| 63 | In the light of all the foregoing, the Court rejects the applicant’s arguments relating to the Commission’s assessment in the contested decision of the selectivity of the aid scheme at issue and, therefore, dismisses the second plea in its entirety. |
| --- | --- |

63

In the light of all the foregoing, the Court rejects the applicant’s arguments relating to the Commission’s assessment in the contested decision of the selectivity of the aid scheme at issue and, therefore, dismisses the second plea in its entirety.

2.
   
  The first plea in law alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589 in so far as the aid scheme at issue was incorrectly categorised as a new aid scheme

2.

The first plea in law alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589 in so far as the aid scheme at issue was incorrectly categorised as a new aid scheme

| 64 | The applicant asserts that the aid scheme at issue is an existing aid scheme, under Article 1(b)(i) of Regulation 2015/1589, because the possibility for the public authorities concerned to award subsidies to undertakings providing public passenger transport services by road was introduced by Article 19 of décret no 49‐1473, du 14 novembre 1949, relatif à la coordination et à l’harmonisation des transports ferroviaires et routiers (Decree No 49-1473 of 14 November 1949 on the coordination and harmonisation of rail and road transport) (JORF of 15 November 1949, p. 11104; ‘the 1949 Decree’), before the entry into force of the Treaty establishing the European Economic Community (now the TFEU) in France on 1 January 1958. |
| --- | --- |

64

The applicant asserts that the aid scheme at issue is an existing aid scheme, under Article 1(b)(i) of Regulation 2015/1589, because the possibility for the public authorities concerned to award subsidies to undertakings providing public passenger transport services by road was introduced by Article 19 of décret no 49‐1473, du 14 novembre 1949, relatif à la coordination et à l’harmonisation des transports ferroviaires et routiers (Decree No 49-1473 of 14 November 1949 on the coordination and harmonisation of rail and road transport) (JORF of 15 November 1949, p. 11104; ‘the 1949 Decree’), before the entry into force of the Treaty establishing the European Economic Community (now the TFEU) in France on 1 January 1958.

o

| 65 | The applicant also submits that, since the contested decision contains no specific finding as to the date on which the aid scheme at issue was introduced, the Commission could not rule out the possibility that that scheme was introduced in a market initially closed to competition and is therefore an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589. |
| --- | --- |

65

The applicant also submits that, since the contested decision contains no specific finding as to the date on which the aid scheme at issue was introduced, the Commission could not rule out the possibility that that scheme was introduced in a market initially closed to competition and is therefore an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589.

| 66 | As regards the applicant’s argument that the aid scheme at issue was implemented by the provisions of the 1949 Decree, the Commission notes that it found, in recital 236 of the contested decision, that those provisions did not define any of the key parameters of that scheme — namely its duration, budget, beneficiaries, the type of assets eligible for the subsidy and the subsidy rate, among others — and that they did not establish any entitlement to receive subsidies. |
| --- | --- |

66

As regards the applicant’s argument that the aid scheme at issue was implemented by the provisions of the 1949 Decree, the Commission notes that it found, in recital 236 of the contested decision, that those provisions did not define any of the key parameters of that scheme — namely its duration, budget, beneficiaries, the type of assets eligible for the subsidy and the subsidy rate, among others — and that they did not establish any entitlement to receive subsidies.

| 67 | Moreover, as for the applicant’s argument concerning the date from which the disputed subsidies were likely to affect competition in the internal market, the Commission contends that, as the tribunal administratif de Paris (Administrative Court, Paris) held in judgment No 0417015 of 10 July 2008, the final beneficiaries operated both on the scheduled passenger transport market and on the occasional passenger transport market. The occasional passenger transport market was already liberalised in 1979. Accordingly, the aid scheme at issue was likely to affect competition between Member States on that market from the moment it was introduced, irrespective of its date of introduction, as long as that date fell between 1979 and 2008. |
| --- | --- |

67

Moreover, as for the applicant’s argument concerning the date from which the disputed subsidies were likely to affect competition in the internal market, the Commission contends that, as the tribunal administratif de Paris (Administrative Court, Paris) held in judgment No 0417015 of 10 July 2008, the final beneficiaries operated both on the scheduled passenger transport market and on the occasional passenger transport market. The occasional passenger transport market was already liberalised in 1979. Accordingly, the aid scheme at issue was likely to affect competition between Member States on that market from the moment it was introduced, irrespective of its date of introduction, as long as that date fell between 1979 and 2008.

| 68 | In the first place, it is necessary to ascertain whether, as the applicant claims, the aid scheme at issue was introduced by the 1949 Decree prior to the entry into force of the Treaty establishing the European Economic Community in France and, therefore, was an existing aid scheme under Article 1 (b)(i) of Regulation 2015/1589. |
| --- | --- |

68

In the first place, it is necessary to ascertain whether, as the applicant claims, the aid scheme at issue was introduced by the 1949 Decree prior to the entry into force of the Treaty establishing the European Economic Community in France and, therefore, was an existing aid scheme under Article 1 (b)(i) of Regulation 2015/1589.

| 69 | The 1949 Decree provided, in particular as follows:

  ‘Article 2

  The following passenger transport services shall be subject to coordination and harmonisation measures under the provisions of Article 7 of the Law of 5 July 1949:
  ...
  2. The public passenger transport services by road listed below ...
  Scheduled services, including seasonal and periodic services ...;
  Occasional services, that is to say, services which, although provided on request, meet the public’s general needs and are renewed at given times each year ...

  Article 19

  A local authority may subsidise a road service by signing a contract with an undertaking laying down the obligations imposed on the latter over and above those to which it is subject under its operating rules.
  The fares established in accordance with this contract shall comply with all the rules contained in the preceding articles.’ |
| --- | --- |

69

The 1949 Decree provided, in particular as follows:

‘Article 2

‘Article 2

The following passenger transport services shall be subject to coordination and harmonisation measures under the provisions of Article 7 of the Law of 5 July 1949:

...

2. The public passenger transport services by road listed below ...

Scheduled services, including seasonal and periodic services ...;

Occasional services, that is to say, services which, although provided on request, meet the public’s general needs and are renewed at given times each year ...

Article 19

Article 19

A local authority may subsidise a road service by signing a contract with an undertaking laying down the obligations imposed on the latter over and above those to which it is subject under its operating rules.

The fares established in accordance with this contract shall comply with all the rules contained in the preceding articles.’

| 70 | As regards whether the disputed subsidies have their origins in the 1949 Decree, it must be stated, first, that the procedure for awarding subsidies laid down in the 1949 Decree differed from the conditions for granting aid under resolution CR 34‐94. As the Commission correctly rightly points out, under resolution CR 34‐94, the disputed subsidies were awarded by the applicant to public authorities before being paid over to the final beneficiaries. No such pay-over mechanism existed under the 1949 Decree. |
| --- | --- |

70

As regards whether the disputed subsidies have their origins in the 1949 Decree, it must be stated, first, that the procedure for awarding subsidies laid down in the 1949 Decree differed from the conditions for granting aid under resolution CR 34‐94. As the Commission correctly rightly points out, under resolution CR 34‐94, the disputed subsidies were awarded by the applicant to public authorities before being paid over to the final beneficiaries. No such pay-over mechanism existed under the 1949 Decree.

| 71 | Secondly, it is apparent from judgment No 343440 of 23 July 2012 of the Conseil d’État (Council of State) that the subsidies awarded under resolution CR 34‐94 were intended solely to facilitate the purchase of equipment by public transport undertakings in Île-de-France; the aid scheme at issue had neither the object nor effect of imposing fare obligations on the final beneficiaries in return. The same cannot be said of Article 19 of the 1949 Decree, which, whilst making general provision enabling French local authorities to conclude subsidy agreements with those same undertakings, sought to control the fares charged. Article 11 of that decree therefore provided that ‘in respect of services covered by a contract with a local authority, fares [were to] be set ... in accordance with the contract concluded between the undertaking and the authority that pa[id] the subsidy’. |
| --- | --- |

71

Secondly, it is apparent from judgment No 343440 of 23 July 2012 of the Conseil d’État (Council of State) that the subsidies awarded under resolution CR 34‐94 were intended solely to facilitate the purchase of equipment by public transport undertakings in Île-de-France; the aid scheme at issue had neither the object nor effect of imposing fare obligations on the final beneficiaries in return. The same cannot be said of Article 19 of the 1949 Decree, which, whilst making general provision enabling French local authorities to conclude subsidy agreements with those same undertakings, sought to control the fares charged. Article 11 of that decree therefore provided that ‘in respect of services covered by a contract with a local authority, fares [were to] be set ... in accordance with the contract concluded between the undertaking and the authority that pa[id] the subsidy’.

| 72 | Thirdly, the disputed resolutions contained no reference to the 1949 Decree. They mentioned only the code général des collectivités territoriales (General code on local authorities), loi no 82-1153, du 30 décembre 1982, d’orientation des transports intérieurs (Law No 82-1153 of 30 December 1982 laying down guidelines for domestic transport) (JORF of 31 December 1982, p. 4004) and several earlier resolutions and decrees adopted in accordance with national law, which did not include the 1949 Decree. |
| --- | --- |

72

Thirdly, the disputed resolutions contained no reference to the 1949 Decree. They mentioned only the code général des collectivités territoriales (General code on local authorities), loi no 82-1153, du 30 décembre 1982, d’orientation des transports intérieurs (Law No 82-1153 of 30 December 1982 laying down guidelines for domestic transport) (JORF of 31 December 1982, p. 4004) and several earlier resolutions and decrees adopted in accordance with national law, which did not include the 1949 Decree.

o

| 73 | Fourthly, the disputed resolutions formed part of a specific legislative framework concerning the organisation of transport in Île-de-France, which was defined, for the first time, in ordonnance no 59-151, du 7 janvier 1959, relative à l’organisation des transports de voyageurs dans la région parisienne (Order No 59-151 of 7 January 1959 on the organisation of passenger transport in the Paris area) (JORF of 10 January 1959, p. 696), almost 10 years after the adoption of the 1949 Decree. |
| --- | --- |

73

Fourthly, the disputed resolutions formed part of a specific legislative framework concerning the organisation of transport in Île-de-France, which was defined, for the first time, in ordonnance no 59-151, du 7 janvier 1959, relative à l’organisation des transports de voyageurs dans la région parisienne (Order No 59-151 of 7 January 1959 on the organisation of passenger transport in the Paris area) (JORF of 10 January 1959, p. 696), almost 10 years after the adoption of the 1949 Decree.

o

| 74 | It follows from all those considerations that the 1949 Decree was not the legal basis for the aid scheme at issue. |
| --- | --- |

74

It follows from all those considerations that the 1949 Decree was not the legal basis for the aid scheme at issue.

| 75 | In those circumstances, it must be held that the applicant has not adduced sufficient evidence before the Court to prove that the aid scheme at issue must be categorised as an existing aid scheme under Article 1(b)(i) of Regulation 2015/1589. |
| --- | --- |

75

In those circumstances, it must be held that the applicant has not adduced sufficient evidence before the Court to prove that the aid scheme at issue must be categorised as an existing aid scheme under Article 1(b)(i) of Regulation 2015/1589.

| 76 | In the second place, as regards whether the aid scheme at issue must be categorised as an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589, it should be noted that, according to the case-law, the concept of ‘evolution of the internal market’ set out in that provision can be understood as referring to a change in the economic and legal framework of the sector concerned by the measure in question. Such a change may, in particular, be the result of the liberalisation of a market initially closed to competition (see, by analogy, judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‐443/08 and T‐455/08, EU:T:2011:117, paragraph 188). |
| --- | --- |

76

In the second place, as regards whether the aid scheme at issue must be categorised as an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589, it should be noted that, according to the case-law, the concept of ‘evolution of the internal market’ set out in that provision can be understood as referring to a change in the economic and legal framework of the sector concerned by the measure in question. Such a change may, in particular, be the result of the liberalisation of a market initially closed to competition (see, by analogy, judgment of 24 March 2011, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‐443/08 and T‐455/08, EU:T:2011:117, paragraph 188).

| 77 | It follows that a system of aid established in a market that was initially closed to competition must, when that market is liberalised, be regarded as an existing aid system (judgment of 15 June 2000, Alzetta and Others v Commission, T‐298/97, T‐312/97, T‐313/97, T‐315/97, T‐600/97 to T‐607/97, T‐1/98, T‐3/98 to T‐6/98 and T‐23/98, EU:T:2000:151, paragraph 143). |
| --- | --- |

77

It follows that a system of aid established in a market that was initially closed to competition must, when that market is liberalised, be regarded as an existing aid system (judgment of 15 June 2000, Alzetta and Others v Commission, T‐298/97, T‐312/97, T‐313/97, T‐315/97, T‐600/97 to T‐607/97, T‐1/98, T‐3/98 to T‐6/98 and T‐23/98, EU:T:2000:151, paragraph 143).

| 78 | However, in accordance with Article 1(b)(v) of Regulation 2015/1589, the date on which an activity is liberalised by EU law must be taken into consideration for the sole purpose of ensuring that, after that date, a measure which did not constitute aid before that liberalisation should not be classified as existing aid (see, by analogy, judgment of 16 January 2018, EDF v Commission, T‐747/15, EU:T:2018:6, paragraph 369). |
| --- | --- |

78

However, in accordance with Article 1(b)(v) of Regulation 2015/1589, the date on which an activity is liberalised by EU law must be taken into consideration for the sole purpose of ensuring that, after that date, a measure which did not constitute aid before that liberalisation should not be classified as existing aid (see, by analogy, judgment of 16 January 2018, EDF v Commission, T‐747/15, EU:T:2018:6, paragraph 369).

| 79 | In the present case, it is apparent from the contested decision, particularly recitals 18(a), 19, 183 and 186 thereof, that the Commission found that the aid scheme at issue had been introduced in 1994 and withdrawn in 2008, with the result that aid granted under earlier resolutions must be considered to constitute a separate aid scheme from that implemented by resolution CR 34-94 et seq. |
| --- | --- |

79

In the present case, it is apparent from the contested decision, particularly recitals 18(a), 19, 183 and 186 thereof, that the Commission found that the aid scheme at issue had been introduced in 1994 and withdrawn in 2008, with the result that aid granted under earlier resolutions must be considered to constitute a separate aid scheme from that implemented by resolution CR 34-94 et seq.

| 80 | It must be noted that loi no 93‐122, du 29 janvier 1993, relative à la prévention de la corruption et à la transparence de la vie économique et des procédures publiques (Law No 93‐122 of 29 January 1993 on the prevention of corruption and transparency in economic affairs and public procedures) (JORF of 30 January 1993, p. 1588), which liberalised the scheduled passenger transport market across the whole of France, with the exception of the applicant’s territory, was adopted in 1993, that is, before the date on which resolution CR 34-94 came into force, and that the latter date coincides, according to the Commission’s analysis in the contested decision, with the date on which the aid scheme at issue was introduced. |
| --- | --- |

80

It must be noted that loi no 93‐122, du 29 janvier 1993, relative à la prévention de la corruption et à la transparence de la vie économique et des procédures publiques (Law No 93‐122 of 29 January 1993 on the prevention of corruption and transparency in economic affairs and public procedures) (JORF of 30 January 1993, p. 1588), which liberalised the scheduled passenger transport market across the whole of France, with the exception of the applicant’s territory, was adopted in 1993, that is, before the date on which resolution CR 34-94 came into force, and that the latter date coincides, according to the Commission’s analysis in the contested decision, with the date on which the aid scheme at issue was introduced.

o

| 81 | In the light of the foregoing, the Commission was fully entitled to find, in the contested decision, that the final beneficiaries could, from 1994 onwards, use the equipment financed by the disputed subsidies on other scheduled public passenger transport markets open to competition and, consequently, that those subsidies were likely, from that date, to affect competition and trade between Member States. |
| --- | --- |

81

In the light of the foregoing, the Commission was fully entitled to find, in the contested decision, that the final beneficiaries could, from 1994 onwards, use the equipment financed by the disputed subsidies on other scheduled public passenger transport markets open to competition and, consequently, that those subsidies were likely, from that date, to affect competition and trade between Member States.

| 82 | It must be pointed out that the Commission’s finding that all the criteria laid down in Article 107(1) TFEU were satisfied for that period is consistent with the analysis set out in the decisions of the national courts, namely, in particular, judgment No 0417015 of 10 July 2008 of the tribunal administratif de Paris (Administrative Court, Paris) and judgment No 08PA 04753 of 12 July 2010 of the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris), cited, inter alia, in recital 226 of the contested decision. |
| --- | --- |

82

It must be pointed out that the Commission’s finding that all the criteria laid down in Article 107(1) TFEU were satisfied for that period is consistent with the analysis set out in the decisions of the national courts, namely, in particular, judgment No 0417015 of 10 July 2008 of the tribunal administratif de Paris (Administrative Court, Paris) and judgment No 08PA 04753 of 12 July 2010 of the cour administrative d’appel de Paris (Administrative Court of Appeal, Paris), cited, inter alia, in recital 226 of the contested decision.

| 83 | Furthermore, even if, as the applicant claims, the Commission erred in finding that the aid scheme at issue was not introduced until 1994, that error alone would not be sufficient to invalidate the conclusion that it must be considered to be a new aid scheme. It is apparent from recitals 226 and 237 of the contested decision that, even if it were to be accepted that the aid scheme at issue should be regarded as having been introduced in 1979 or, at the latest, 1994, when the scheduled passenger transport market was still closed to competition, the final beneficiaries were likely to use the equipment subsidised by the applicant in connection with occasional transport activities open to competition. |
| --- | --- |

83

Furthermore, even if, as the applicant claims, the Commission erred in finding that the aid scheme at issue was not introduced until 1994, that error alone would not be sufficient to invalidate the conclusion that it must be considered to be a new aid scheme. It is apparent from recitals 226 and 237 of the contested decision that, even if it were to be accepted that the aid scheme at issue should be regarded as having been introduced in 1979 or, at the latest, 1994, when the scheduled passenger transport market was still closed to competition, the final beneficiaries were likely to use the equipment subsidised by the applicant in connection with occasional transport activities open to competition.

| 84 | In the present case, the applicant has adduced no evidence to prove that the occasional transport market was not the subject of trade between Member States during the period prior to the introduction of the aid scheme at issue or at the time of its introduction. It simply asserted at the hearing, that that market was marginal in comparison with the market for scheduled public passenger transport. |
| --- | --- |

84

In the present case, the applicant has adduced no evidence to prove that the occasional transport market was not the subject of trade between Member States during the period prior to the introduction of the aid scheme at issue or at the time of its introduction. It simply asserted at the hearing, that that market was marginal in comparison with the market for scheduled public passenger transport.

| 85 | The cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) had already correctly drawn attention to the relevance of the occasional passenger transport market in judgment No 15PA 00385 of 27 November 2015. The Commission therefore, on the basis of the decisions of the national courts, found that the aid scheme at issue had to be regarded as having affected trade between Member States and competition since its introduction and ruled out categorising it as an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589. |
| --- | --- |

85

The cour administrative d’appel de Paris (Administrative Court of Appeal, Paris) had already correctly drawn attention to the relevance of the occasional passenger transport market in judgment No 15PA 00385 of 27 November 2015. The Commission therefore, on the basis of the decisions of the national courts, found that the aid scheme at issue had to be regarded as having affected trade between Member States and competition since its introduction and ruled out categorising it as an existing aid scheme under Article 1(b)(v) of Regulation 2015/1589.

| 86 | Having regard to all the foregoing, it must be held that the Commission did not infringe Article 1(b)(i) and (v) of Regulation 2015/1589. |
| --- | --- |

86

Having regard to all the foregoing, it must be held that the Commission did not infringe Article 1(b)(i) and (v) of Regulation 2015/1589.

| 87 | Accordingly, the first plea in law must be rejected, as must the action in its entirety. |
| --- | --- |

87

Accordingly, the first plea in law must be rejected, as must the action in its entirety.

Costs

Costs

| 88 | Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. |
| --- | --- |

88

Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

| 89 | In this case, since the applicant has been unsuccessful, it must be ordered to bear its own costs and, in addition, to pay those incurred by the Commission, in accordance with the form of order sought by the Commission. |
| --- | --- |

89

In this case, since the applicant has been unsuccessful, it must be ordered to bear its own costs and, in addition, to pay those incurred by the Commission, in accordance with the form of order sought by the Commission.

| | On those grounds,
  THE GENERAL COURT (First Chamber)
  hereby: |
| --- | --- |

On those grounds,

THE GENERAL COURT (First Chamber)

hereby:

| | 1. | Dismisses the action; |
| --- | --- | --- |

1.

1.

Dismisses the action;

Dismisses the action;

| | 2. | Orders Région Île-de-France to bear its own costs and to pay those incurred by the European Commission. |
| --- | --- | --- |

2.

2.

Orders Région Île-de-France to bear its own costs and to pay those incurred by the European Commission.

Orders Région Île-de-France to bear its own costs and to pay those incurred by the European Commission.

| | Pelikánová


  Valančius


  Öberg


  Delivered in open court in Luxembourg on 12 July 2019.
  [Signatures] |
| --- | --- |

Pelikánová

Valančius

Öberg

Delivered in open court in Luxembourg on 12 July 2019.

[Signatures]

Table of contents

| | I. Background |
| --- | --- |
| | II. Proceedings before the national courts |
| | III. Procedure and forms of order sought by the parties |
| | IV. Law |
| | A. Admissibility |
| | B. Substance |
| | 1. Second plea in law alleging infringement of the obligation to state reasons and error of assessment in the categorisation of the disputed subsidies in the light of Article 107(1) TFEU |
| | (a) Infringement of the obligation to state reasons |
| | (b) Error of assessment in the categorisation of the disputed subsidies as State aid, in the light of Article 107(1) TFEU and, in particular, of the criteria relating to economic advantage and selectivity |
| | (1) Substance of the assessment of economic advantage |
| | (2) Substance of the assessment of selectivity |
| | 2. The first plea in law alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589 in so far as the aid scheme at issue was incorrectly categorised as a new aid scheme |
| | Costs |

I. Background

II. Proceedings before the national courts

III. Procedure and forms of order sought by the parties

IV. Law

A. Admissibility

B. Substance

1. Second plea in law alleging infringement of the obligation to state reasons and error of assessment in the categorisation of the disputed subsidies in the light of Article 107(1) TFEU

(a) Infringement of the obligation to state reasons

(b) Error of assessment in the categorisation of the disputed subsidies as State aid, in the light of Article 107(1) TFEU and, in particular, of the criteria relating to economic advantage and selectivity

(1) Substance of the assessment of economic advantage

(2) Substance of the assessment of selectivity

2. The first plea in law alleging infringement of Article 1(b)(i) and (v) of Regulation 2015/1589 in so far as the aid scheme at issue was incorrectly categorised as a new aid scheme

Costs

---

(
  *1
  )	Language of the case: French.

*1