Judgment — ECLI:EU:T:2006:385
Date: 2006-12-12
Language of the case: Spanish
Court formation: Second Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Statement of reasons;Applications by natural or legal persons;Rights of the defence and procedural guarantees;Use of State resources;Commission decision following a preliminary review or proceeding to the formal investigation procedure;Preliminary review
Procedure: Action for annulment - unfounded;Application for measures of inquiry - unfounded
Origin: Spain

summary of all the important information which the complainants had submitted throughout the administrative procedure. Consequently, the need for the Commission to conduct a diligent investigation of that information does not justify the period of time taken of more than nine months. 127 Second, in relation to the procedural steps taken by the Commission, it should be pointed out that, besides the meetings and telephone conversations with the complainants’ representatives, the Commission made only one request for information from the Kingdom of Spain, in December 2000. The Kingdom of Spain responded to the invitation in February 2001 by way of summary observations based exclusively on the interpretation of the applicable Spanish legislation. Consequently, the steps taken by the Commission do not justify the duration of the investigation either. 128 Third, there is nothing to suggest that the present case is so complex as to require an initial investigation of more than two years. In so far as its conclusion that there was no direct or indirect transfer of public resources is based essentially on the examination of the applicable Spanish legislation, it does not appear that the Commission was required to enquire extensively into the facts or to take other measures requiring a significant amount of time. Similarly, the relatively short length of the letter containing the initial position and of the contested decision seem to rebut the argument that the present case may be categorised as particularly complex. 129 It follows that, by carrying out an initial examination of the complaint for almost 28 months, the Commission did not adopt the contested decision within a reasonable period and, consequently, failed to comply with its duty to conduct a diligent examination. 130 However, although the need to conduct administrative procedures within a reasonable period is a general principle of Community law, applicable in the context of an investigation procedure of State aid, and compliance with which is enforced by the Community judicature, the mere adoption of a decision after the expiry of such a period is not in itself sufficient to render unlawful a decision taken by the Commission at the conclusion of an initial examination conducted under Article 88(3) EC (see, to that effect, the order of the President of the Court of First Instance in Case T‑378/02 R Technische Glaswerke Ilmenau v Commission [2003] ECR II‑2921, paragraph 65, and the case‑law cited). 131 In that context, the applicants put forward two allegedly exceptional circumstances. First, they point out that the application of the TP 1 throughout the duration of the examination caused harm to both themselves and their members. Second, the excessive period of the initial examination conducted by the Commission indicates that the Commission was faced with serious difficulties, justifying the initiation of the formal investigation procedure in accordance with Article 88(2) EC. 132 The argument concerning the harm suffered by the applicants and their members is not relevant in the context of the present case, which concerns exclusively the annulment of the contested decision and, therefore, only the review of its legality. The relevance of the Commission’s exceeding a reasonable period in the context of any duty it had to initiate a formal investigation procedure will be assessed in the context of the relevant complaint, examined below. The failure to initiate the formal investigation procedure 133 As pointed out in paragraph 44 above, in the context of Article 88 EC, the preliminary stage of the procedure for reviewing aid under Article 88(3) EC, which is intended merely to allow the Commission to form a prima facie opinion on whether the measure concerned amounts to State aid and on the partial or complete conformity of the aid in question with the common market, must be distinguished from the formal investigation stage envisaged by Article 88(2) EC. It is only under the latter provision, which is designed to enable the Commission to be fully informed about all the facts of the case, that the EC Treaty imposes an obligation on the Commission to give the parties concerned notice to submit their comments. 134 It is apparent from Article 4(4) of Regulation No 659/1999 and the case-law that the Commission is required to open the procedure provided for in Article 88(2) EC if an initial examination does not enable it to overcome all the difficulties raised by the question whether the State measure under scrutiny constitutes aid for the purposes of Article 87(1) EC, unless, in the course of that initial examination, the Commission is able to satisfy itself that the measure at issue would in any event be compatible with the common market, even if it were aid (Case T‑11/95 BP Chemicals v Commission [1998] ECR II‑3235, paragraph 166). 135 The fact that the time spent considerably exceeds the time usually required for a preliminary examination under Article 88(3) EC may, with other factors, justify the conclusion that the Commission encountered serious difficulties of assessment necessitating initiation of the procedure under Article 88(2) EC (SIC v Commission, paragraph 102). 136 As pointed out in paragraphs 121 to 129 above, the time spent considerably exceeded the time usually required for a preliminary examination under Article 88(3) EC. It must be observed however that, other than the fact that the Commission exceeded the reasonable period, no other factors have been established in the present case. 137 As regards the doubts which the Commission had as to whether the measure at issue constitutes aid, it appears, first, that the argument that the Commission maintained throughout the investigation that the TP 1 constituted aid is unfounded inasmuch as it is contradicted by facts in the case and by the chronology of the administrative procedure submitted by the applicants in their application. 138 Second, although it is true that the Commission stated, in the letter of 8 February 2002 containing its initial position, that ‘the provisions of the TP 1 could be regarded as measures having equivalent effect to State aid’, it is also true that it followed that sentence up by pointing out that ‘they are not [however] financed by State resources and, consequently, are not subject to the … prohibition [laid down in Article 87(1) EC]’. Thus, the position expressed in the letter of 8 February 2002 corresponds to that expressed in the contested decision, the validity of which was examined in the context of the first and second pleas. Consequently, the wording of the letter of 8 February 2002 does not enable it to be established that the Commission was faced with serious difficulties during the initial examination. 139 Third, as regards the alleged changes of position of the Commission, the fact that that institution expresses doubts, on the basis of the information at its disposal, as to whether a State measure constitutes State aid, and no longer expresses such doubts after receiving supplementary information from the complainants, does not lead to the conclusion that the Commission encountered serious difficulties. Although it has no discretion in relation to the decision to initiate the formal investigation procedure, where it finds that such difficulties exist, the Commission nevertheless enjoys a certain margin of discretion in identifying and evaluating the circumstances of the case in order to determine whether or not they present serious difficulties. In accordance with the objective of Article 88(3) EC and its duty of sound administration, the Commission may, amongst other things, engage in talks with the complainants in an endeavour to overcome, during the preliminary procedure, any difficulties encountered (see, to that effect, Case T‑73/98 Prayon‑Rupel v Commission [2001] ECR II‑867, paragraph 45). That power presupposes that the Commission may bring its position in line with the results of the talks it engaged in, without that alignment having to be interpreted, a priori, as establishing the existence of serious difficulties. 140 Fourth and finally, although the applicants accuse the Commission of not having referred explicitly, before adoption of the contested decision, to Article 14 of the LRSV, they have not established the relevance of that fact in the context of the examination of whether serious difficulties exist or not. In so far as the Commission is not under an obligation to conduct an exchange of views and arguments with the complainants (Commission v Sytraval and Brink’s France, paragraphs 58 and 59), it is not required to indicate to them the legal basis on which it intends to base its decision. Consequently, the mere absence of such an indication does not imply that the Commission encountered difficulties. 141 In addition, in the letter of 8 February 2002, the Commission states that ‘the information at the Commission’s disposal shows that there is no legal obligation requiring payment of … compensation by the [hypermarket owner seeking to alter the conditions of use of the land on which that hypermarket is situated]’. That wording implies that the Commission relied on an examination of the relevant Spanish legislation, of which the LRSV represents an essential part. It thus appears that, even if the Commission did not expressly point out to the applicants that its analysis was based on the LRSV, it nevertheless took that text into account even before adopting the contested decision. 142 In the light of the above, it must be found that, even if the duration of the administrative procedure considerably exceeded the time usually required for a preliminary examination under Article 88(3) EC, it has not been established to the requisite legal standard that the Commission was faced with serious difficulties justifying the initiation of the formal investigation procedure under Article 88(2) EC. Other errors in the examination carried out by the Commission 143 Finally, in so far as they claim that the Commission acted unmethodically, expressed differing views without justification and did not respond to the documents submitted by the complainants concerning the questions raising doubts, the applicants merely made summary claims which were not substantiated by more detailed information or any evidence. Those claims must therefore be rejected as unfounded. 144 Since none of the complaints put forward in the context of the fourth plea can be upheld, that plea must be rejected. 5. The request to produce evidence 145 The applicants request the Commission to produce its administrative file, including the response from the Kingdom of Spain to the Commission’s request for information and the claims made by the Kingdom of Spain or third parties at a later stage. 146 In that regard, it should be pointed out that the Commission attached to its defence the response from the Kingdom of Spain to the request for information. In so far as the Court was able to examine all of the applicants’ pleas on the basis of the information available in the file, there is no need to request the Commission to produce additional information. The applicants’ request to produce evidence must therefore be rejected. 147 It follows from all of the foregoing that the application must be dismissed in its entirety. Costs 148 Article 87(3) of the Rules of Procedure provides that, where the circumstances are exceptional, the Court of First Instance may order that costs be shared or that the parties bear their own costs. In the present case, it must be found that, although the applicants have failed on their head of claim seeking annulment of the contested decision, the examination conducted by the Court has nevertheless revealed that the Commission infringed its obligation to conduct a diligent examination of the complaints which were submitted to it. Accordingly, it is appropriate to order the applicants to bear three quarters of their own costs, three quarters of those incurred by the Commission and all of the costs incurred by ANGED. The Commission is to bear one quarter of its own costs and a quarter of those incurred by the applicants. 149 Under the first subparagraph of Article 87(4) of the Rules of Procedure, the Member States which intervened in the proceedings are to bear their own costs. Therefore, the Kingdom of Spain is to bear its own costs. On those grounds, THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition) hereby: 1. Dismisses the action; 2. Orders the applicants to bear three quarters of their own costs, three quarters of those incurred by the Commission and all of the costs incurred by the Asociación Nacional de Grandes Empresas de Distribución; 3. Orders the Commission to bear a quarter of its own costs and a quarter of those incurred by the applicants; 4. Orders the Kingdom of Spain to bear its own costs. Pirrung Meij Forwood Pelikánová Papasavvas Delivered in open court in Luxembourg on 12 December 2006. E. Coulon J. Pirrung Registrar President Table of contents Background to the dispute 1. Spanish legislation 2. Decree-Law and the TP 1 3. Procedure before the Commission 4. Contested decision Procedure and forms of order sought by the parties Admissibility 1. The admissibility of certain annexes to the applicants’ observations of 14 October 2005 2. Admissibility of the action Arguments of the parties Findings of the Court Substance 1. The first plea, alleging a manifestly incorrect assessment of the Spanish legislation The first part, alleging a manifestly incorrect assessment of the obligation to transfer benefits Arguments of the parties Findings of the Court – The existence of legislation laying down an obligation to transfer benefits – The existence of an administrative practice authorising the State to require the transfer of benefits The second part, alleging a manifest error of assessment of the change in the intended use of the land Arguments of the parties Findings of the Court 2. The second plea, alleging misinterpretation and misapplication of the constituent elements of the concept of State aid Arguments of the parties Findings of the Court 3. The third plea, alleging infringement of the duty to state reasons 4. The fourth plea, alleging infringement of the principle of sound administration, of Article 88(2) EC and of Article 4(4) of Regulation No 659/1999 Arguments of the parties Findings of the Court The duration of the investigation The failure to initiate the formal investigation procedure Other errors in the examination carried out by the Commission 5. The request to produce evidence Costs * Language of the case: Spanish.