Judgment — ECLI:EU:C:2003:252
Date: 2003-05-08
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition
Concepts: Use of State resources;Private investor test;Implementation of the Commission decision and recovery
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Italy

Summary of the Judgment 
1. State aid — Definition — Aid front State resources — Aid granted by a private-law 
company owned essentially by a public authority — Resources of the undertaking 
constantly remaining under public control — Included 
(Art. 87(1) EC) 
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SUMMARY — JOINED CASES C-328/99 AND C-399/00 
2. State aid — Definition — Financial assistance granted by a Member State to a public 
or private undertaking — Assessment on the basis of the private investor criterion — 
Account to be taken of the context in which aid was granted 
(Art. 87(1) EC) 
3. State aid — Definition — Private investor test put into practice — Commission's 
power of assessment — judicial review •—· Limits 
(Art. 87(1) EC) 
4. State aid — Recovery of unlawful aid — Obligation resulting from unlawfulness — 
Subject-matter — Restoration of the previous legal situation 
(Art. 88(2) EC) 
5. State aid —· Recovery of unlawful aid — Procedures for recovery — Conduct of a 
private creditor — Obligation to use all the legal means available, including 
liquidation of the beneficiary 
(Art. 88(2) EC) 
6. State aid — Recovery of unlawful aid — Determination of the debtor where assets 
are transferred to a subsidiary •— Economic continuity test 
(Art. 88(2) EC) 
1. The financial resources of a private-law 
company owned essentially by a public 
authority, and which acts under the 
control of that authority, may be cat­
egorised as State resources within the 
meaning of Article 87(1) if they con­
stantly remain under public control 
and therefore available to the compet­
ent national authorities. 
(see para. 33) 
2. The notion of State aid within the 
meaning of Article 87 EC can 
encompass not only positive benefits 
such as, inter alia, subsidies, loans or 
direct investment in the capital of 
enterprises, but also interventions 
which in various forms mitigate the 
charges which are normally included in 
the budget of an undertaking and 
which therefore, without being sub­
sidies in the strict sense of the word, are 
of the same character and have the 
same effect. 
Pursuant to the principle that the 
public and private sectors are to be 
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ITALY AND SIM 2 MULTIMEDIA v COMMISSION 
t reated equally, however , capital 
placed directly or indirectly at the 
disposal of an undertaking by the State 
in circumstances which correspond to 
normal market conditions cannot be 
regarded as State aid. 
Thus, in order to determine whether 
investment by the public authorities in 
the capital of an undertaking, in what­
ever form, may constitute State aid, it is 
necessary to determine whether, in 
similar circumstances, a private inves­
tor of a dimension comparable to that 
of the bodies managing the public 
sector could have been prevailed upon 
to make capital contributions of the 
same size, having regard in particular 
to the information available and fore­
seeable developments at the date of 
those contributions. 
(see paras 35-38) 
3. Judicial review of an act necessitating a 
complex economic appraisal, in which 
the Commission puts into practice the 
private investor test in order to ascer­
tain whether investment by the public 
authorities in the capital of an under­
taking constitutes State aid, must be 
confined to verifying whether the Com­
mission complied with the relevant 
rules governing procedure and the 
statement of reasons, whether the facts 
on which the contested finding was 
based have been accurately stated and 
whether there has been any manifest 
error of assessment or a misuse of 
powers. 
(see para. 39) 
4. The recovery of unlawful aid is the 
logical consequence of a finding that it 
is unlawful. 
(sec paras 53, 66) 
5. To ensure that a Commission decision 
ordering the recovery of State aid 
incompatible with the common market 
is implemented correctly, the Member 
State is required to act as if it were a 
private creditor. It must recover the aid 
without delay, using all the legal means 
at its disposal, including seizure of the 
beneficiary's assets and, where necess­
ary, its liquidation. 
(see paras 68-69) 
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SUMMARY — JOINED CASES C-328/99 AND C-399/00 
6. The possibility of a company in econ­
omic difficulties taking measures to 
rehabilitate the business cannot be 
ruled out a priori because of require­
ments relating to recovery of State aid 
which is incompatible with the com­
mon market. 
However, if it were permissible, with­
out any condition, for an undertaking 
experiencing difficulties and on the 
point of being declared bankrupt to 
create, during the formal inquiry into 
the aid concerning it individually, a 
subsidiary to which it then transfers its 
most profitable assets before the con­
clusion of the inquiry, that would 
amount to accepting that any company 
may remove such assets from the 
p a r e n t u n d e r t a k i n g w h e n aid is 
recovered, which would risk depriving 
the recovery of aid of its effect in whole 
or in part. 
In order to prevent the effectiveness of 
the decision from being frustrated and 
the market from continuing to be 
distorted, the Commission may be 
compelled to require that the recovery 
is not restricted to the original firm but 
is extended to the firm which continues 
the activity of the original firm, using 
the transferred means of production, in 
cases where certain elements of the 
transfer point to economic continuity 
between the two firms. 
(see paras 76-78) 
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