Judgment — ECLI:EU:T:2016:243
Date: 2016-04-27
Language of the case: German
Court formation: Fifth Chamber
Subject matter: Public procurement in the European Union
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Austria

summary of the pleas in law on which the application is based. According to consistent case-law, while the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which must appear in the application. It is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (see the judgments of 9 March 2015 in Deutsche Börse v Commission, T‑175/12, EU:T:2015:148, paragraph 354 and the case-law cited, and of 25 March 2015 in Slovenská pošta v Commission, T‑556/08, EU:T:2015:189, paragraph 434 and the case-law cited). Consequently, this general reference must be rejected as inadmissible. 152 The third plea in law must therefore be rejected. 153 As regards the request for the applicant’s expert to be heard as a witness (see paragraph 137 above), in light of the foregoing and on the basis of the documents before the Court and the answers given to the questions asked by the Court at the hearing, the Court considers that it has sufficient information, is able to understand all the economic issues involved and can therefore decide whether the Commission’s assessment is vitiated by a manifest error of assessment. Consequently, it is not appropriate for the Court to accede to that request in so far as the present plea is concerned. The fourth plea in law, alleging incorrect application of Directive 2004/17 and an inadequate statement of reasons concerning direct exposure to competition on the market for postal services for addressed letters B2X and C2X on an international level 154 The applicant argues that the Commission infringed Article 30 of Directive 2004/17 and vitiated its decision by an inadequate statement of reasons in that it found, in recitals 43 to 50 of the contested decision, that postal services for addressed letters B2X and C2X at international level were not directly exposed to competition in Austria. The applicant argues that, for the same reasons as it gave in relation to the B2X and C2X markets at national level, the Commission erred in its definition of the relevant market. The applicant also argues that, in any event, its share of the market for the postal deliveries in question was below [confidential]% and that, as a result of stiff competition, it fell continually between 2010 and 2012, a point which the Commission failed to take into consideration. According to the applicant, the Commission declined its request, wrongly and without sufficient explanation taking the view that it was necessary to split the relevant market into the subcategories B2X international and C2X international. In any event, it provided the Commission with estimates of market shares in the B2X international and C2X international markets. The Commission failed to explain why, in its view, those estimates were unreliable. At very least, following its own line of argument, the Commission should have exempted the B2X international market from the application of Directive 2004/17. In order to substantiate its arguments and to explain the ACM Study and its communication to the Commission of 2 December 2013, the applicant requests that its expert, the author of the ACM Study, be heard as a witness. 155 It is clear from recitals 43 to 50 of the contested decision that the Commission concluded that Article 30(1) of Directive 2004/17 did not apply to contracts intended to enable the provision of postal services for addressed letters B2X and C2X at international level in Austria. According to recital 43 of the contested decision, the Commission rejected the applicant’s assertion that the delivery mode of cross-border mail is technologically neutral and that electronic and postal delivery services belong to the same relevant market, essentially for the same reasons as for postal services for addressed letters B2X and C2X at national level. In recital 46 of the contested decision, the Commission stated that competition for cross-border letter post was very different for private individuals and for companies, that private individuals generally had no real choice but to send international mail with their national universal service provider and that the volumes sent by private individuals were generally too small to provide an incentive for new entrants into the market. According to recital 47 of the contested decision, the competitive situation also depended on the size and population of each city, because cross-border service providers did not maintain a nationwide access network, but generally collected mail directly at customers’ premises. In recitals 48 and 49 of the contested decision, the Commission stated that, in its previous practice, it had drawn a distinction between cross-border postal services for the market for addressed B2X letters and cross-border postal services for the market for addressed C2X letters, and there was no evidence that the situation was any different in Austria. Consequently, according to the Commission, two separate product markets had to be considered, namely cross-border postal services for outbound B2X addressed letters and cross-border postal services for outbound C2X addressed letters. According to recital 50 of the contested decision, the applicant had been unable to provide detailed information on its shares of each of the relevant markets, or on the market shares of its main competitors. The Commission concluded, in that recital, that, in the absence of information on the degree of competition in each of those markets, it was not possible to conclude that the conditions for granting an exemption under Article 30(1) of Directive 2004/17 to cross-border postal services for outbound B2X addressed letters and to cross-border postal services for outbound C2X addressed letters in Austria had been fulfilled. 156 As regards, first of all, the applicant’s argument that the Commission erred in its definition of the relevant market, for the same reasons as stated in relation to the B2X and C2X markets at national level, suffice it to observe that the Court has already rejected those reasons, on examining the second and third pleas in law concerning the B2X and C2X markets at national level. 157 The applicant’s second argument is that the Commission declined its request, wrongly and without sufficient explanation taking the view that it was necessary to split the relevant market into the subcategories B2X international and C2X international. 158 As regards, first, the alleged breach of the duty to state reasons, it must be observed that, contrary to the applicant’s allegation, the Commission did not confine itself to making a general reference, in recital 48 of the contested decision, to its previous practice. Indeed, it is clear from the footnote inserted into that recital, which refers to footnote 6 to the contested decision, that the Commission referred to a specific earlier case. It also set out, in recitals 46, 47 and 49 of the contested decision, the reasons for which it was necessary in its view to draw a distinction between cross-border postal services for the market for addressed B2X letters and cross-border postal services for the market for addressed C2X letters: competition was very different and account had to be taken of the fact that the competitive situation also depended on the size and population of each city. There was no evidence that the situation was any different in Austria. That statement of reasons, in the light of the requirements mentioned in paragraphs 20 and 46 above, was sufficient to enable the persons concerned to ascertain the reasons for the measure adopted and to enable the competent Court to exercise its power of review. 159 As regards, secondly, the argument that the Commission erred in taking the view that it was necessary to split the relevant market into the subcategories B2X international and C2X international, the applicant essentially confines itself to stating that it is impossible to give separate market share figures for those two subcategories. That argument does not, however, establish that the Commission made a manifest error of assessment in drawing a distinction between cross-border postal services for the market for addressed B2X letters and cross-border postal services for the market for addressed C2X letters. Indeed, it in no way calls into question the reasons which the Commission gave in recitals 46 to 49 of the contested decision for drawing such a distinction (see paragraph 155 above). It must be observed in this connection that the 2013 WIK Study, which was submitted to the Commission by the applicant, confirmed the conclusions which the Commission stated in recital 46 of the contested decision and that, while, in its request, the applicant drew a distinction between the B2X and C2X markets at national level, it gave no reason for not doing so with regard to the B2X and C2X markets at international level, either in its request or in its letter to the Commission of 14 January 2014. Indeed, it refused to make such a distinction, as the Commission has confirmed. 160 Thirdly, the applicant argues that it provided the Commission with estimates of market shares in the B2X international and C2X international addressed letters markets in paragraph 2.1 of its communication of 2 December 2013 and that the Commission failed to explain why, in its view, those estimates were not reliable. That argument cannot be accepted. Indeed, it is clear from paragraph 2.1.3 of that communication that the applicant confined itself to making estimates for a global B2X and C2X international market, without drawing a distinction between cross-border postal services for the market for addressed B2X letters and cross-border postal services for the market for addressed C2X letters. In so far as the applicant argues that, in paragraph 5 of its letter of 8 November 2013, it provided the estimates requested by the Commission, it must be observed that that paragraph states the proportion of C2X mail in the overall volume of the applicant’s letter deliveries, which does not, however, offer any conclusion as to the applicant’s share of the market for C2X mail at international level. The Commission was therefore entitled to state, in recital 50 of the contested decision, that the applicant had been unable to provide detailed information on its shares of each of the relevant markets, or on the market shares of its main competitors, nor did it breach its duty to state reasons by making that observation. 161 Fourthly, the applicant asserts that, at very least, following its own line of argument, the Commission should have exempted the B2X international market from the application of Directive 2004/17. According to the applicant, if account is taken of the point made in recital 46 of the contested decision that its services are not substitutable on the international C2X market, its share of the B2X international market would be considerably smaller than [confidential]%, which is also in line with the Commission’s finding in recital 47 of the contested decision that the applicant’s competitors are mainly located in urban areas. 162 That argument must be accepted. Indeed, the Commission has not disputed that the applicant’s share of the market for postal services for addressed letters B2X and C2X at international level was below [confidential]%, as indicated in point 5.2.2.2 of the applicant’s request. Moreover, as the applicant assesses, recital 46 states that the services in question are not substitutable on the international C2X market: according to the Commission, private individuals generally have no real choice but to send international mail with their national universal service provider. It follows that the applicant’s share of the market for postal services for addressed letters B2X at international level must be well below [confidential]%, a fact which the Commission failed to take into account when it concluded that those postal services were not directly exposed to competition. In light of the foregoing, it must be concluded that the Commission made a manifest error of assessment in not exempting postal services for addressed letters B2X at international level from the application of Directive 2004/17. 163 Consequently, the fourth plea in law must be upheld to the extent that it relates to postal services for addressed letters B2X at international level and dismissed in so far as it relates to postal services for addressed letters C2X at international level. 164 As regards the request for the applicant’s expert to be heard as a witness (see paragraph 154 above), in light of the foregoing and on the basis of the documents before the Court and the answers given to the questions asked by the Court at the hearing, the Court considers that it has sufficient information, is able to understand all the economic issues involved and can therefore decide whether the Commission’s assessment is vitiated by a manifest error of assessment. Consequently, it is not appropriate for the Court to accede to that request in so far as the present plea is concerned. The fifth plea in law, alleging incorrect application of Directive 2004/17 and an inadequate statement of reasons concerning direct exposure to competition on the market for postal services for addressed advertising letters on a national and international level 165 The applicant argues that the Commission infringed Article 30 of Directive 2004/17 and gave an inadequate statement of reasons in that it found, in recitals 51 to 56 of the contested decision, that postal services for addressed advertising letters on a national and international level were not directly exposed to competition in Austria. According to the applicant, following the complete liberalisation of postal services, there are no longer grounds for drawing a distinction between addressed letters B2X at national level and addressed advertising material. Consequently, for the same reasons as given in relation to the B2X market at national level, the Commission erred in its definition of the relevant market. Moreover, numerous studies have shown that the market for postal services for addressed advertising material has shrunken significantly as a result of electronic substitution. However, in the contested decision, the Commission failed to take account of the arguments and studies which it submitted, confining itself to referring to its earlier decisions, which relate to a different geographical market and do not take account of developmental trends in the communications market. 166 It is clear from recitals 51 to 56 of the contested decision that the Commission concluded that postal services for addressed advertising letters on a national and international level were not directly exposed to competition in Austria and that, consequently, Article 30(1) of Directive 2004/17 did not apply to contracts intended to enable the provision of those services in Austria. In reaching that conclusion, the Commission noted, in recital 51 of the contested decision, that addressed advertising mail was defined as mail consisting solely of advertising, marketing or publicity material and comprising an identical message. According to that recital, that type of advertising mail, which could be addressed to companies or to private individuals, had to bear the customer’s name and address and required the customer’s agreement to receive such information. In recital 52 of the contested decision, the Commission rejected the applicant’s assertion that the market for addressed advertising mail could be included in the market for B2X postal services for addressed letters, because the applicant had not, according to the Commission, provided any empirical evidence thereof and its assertion was not in line with Commission Decision 2007/564/EC of 6 August 2007 exempting certain services in the postal sector in Finland, excluding the Åland Islands, from the application of Directive 2004/17 (OJ 2007 L 215, p. 21). It therefore concluded, in recitals 53 and 54 of the contested decision, that the relevant product market was postal services for addressed advertising letters, of which the applicant held a market share of [confidential]%. 167 It must be observed that, even supposing the applicant’s allegation to be correct and that addressed letters B2X at national level and addressed advertising mail belong to the same market, the applicant’s argument would still be incapable of calling into question the merits of the Commission’s findings. Indeed, since the Commission was entitled to conclude that the relevant product market for postal services for addressed letters B2X at national level was the market for postal services for addressed letters B2X of which the applicant had an estimated market share of [confidential]% (see the second plea) and given that it is common ground that the applicant’s share of the market for postal services for addressed advertising letters on a national and international level was also [confidential]%, it must be held that the Commission did not make a manifest error of assessment in concluding that the applicant was not directly exposed to competition in Austria on that market. 168 In any event, the applicant’s arguments do not show that the Commission made a manifest error of assessment in finding, in recital 53 of the contested decision, that the relevant product market was the market for postal services for addressed advertising letters. In support of its argument that, following the complete liberalisation of postal services, there are no longer grounds for drawing a distinction between addressed letters B2X at national level and addressed advertising material, the applicant refers, in particular, to recital 17 of Directive 2008/6, which states that direct mail consisting solely of advertising, marketing or publicity material and comprising an identical message, except for the addressee’s name, address and identifying number, may be considered as an item of correspondence. However, as the Commission asserts, the fact that Directive 2008/6 treats addressed advertising mail as an item of correspondence from a regulatory point of view has no bearing on the correct definition of the relevant market in the context of the examination carried out under Article 30 of Directive 2004/17. Moreover, as the Commission states, the 2013 WIK Study, which the applicant submitted during the administrative procedure, similarly does not regard addressed letters B2X at national level and addressed advertising letters as belonging to the same market. Furthermore, it must be observed that the ACM Study also considers addressed advertising letters as a specific product and indicates that the applicant’s tariffs for addressed advertising letters and B2X letters are different. 169 The applicant also argues that numerous studies have shown that the market for postal services for addressed advertising material has shrunken significantly as a result of electronic substitution. However, in the contested decision, the Commission failed to take account of the arguments and studies which it submitted with its request, confining itself to referring to its earlier decisions, which related to a different geographical market and did not take account of developmental trends in the communications market. 170 It must be observed in this connection that, inasmuch as the applicant confines itself to referring to the arguments and studies which it submitted with its request in order to substantiate its assertion that the Commission failed to take into account all the relevant information when it considered whether electronic delivery had replaced postal delivery of addressed advertising letters at national and international level, the Court has already pointed out that a mere reference to annexes cannot make up for the absence of the essential arguments in law which must appear in the application, since it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (see paragraph 151 above). Consequently, this general reference must be rejected as inadmissible. 171 In any event, it is common ground that the applicant’s share of the market for addressed advertising letters in Austria was [confidential]%, as is stated in recital 54 of the contested decision, which refers to the applicant’s communication of 2 December 2013. Given that percentage, and the fact that the Commission noted, in recital 55 of the contested decision, that the liberalisation of the postal market for addressed advertising letters in January 2011 had resulted in competitors gaining a total aggregated estimated market share of just [confidential]% by the time the contested decision was adopted, it was entitled to conclude, without making any manifest error of assessment, that postal services for addressed advertising letters at national and international level were not directly exposed to competition in Austria. Indeed, by merely making a general reference to the declining market for postal services for addressed advertising letters, the applicant has not proven that there is any relevant information that the Commission should have taken into account when assessing the situation in the relevant market, having regard to the market shares mentioned above. 172 Lastly, as regards the argument that the Commission confined itself to referring to its earlier decisions, which related to a different geographical market and did not take account of developmental trends in the communications market, that too must also be rejected. Indeed, in recital 52 of the contested decision, in addition to referring to Decision 2007/564, the Commission also stated that the applicant had not provided any empirical evidence to substantiate its assertion that the market for addressed advertising mail could be included in the market for B2X postal services for addressed letters. 173 The fifth plea must therefore be dismissed. The sixth plea in law, alleging incorrect application of Directive 2004/17 and an inadequate statement of reasons concerning direct exposure to competition on the market for postal services for unaddressed advertising letters on a national and international level 174 The applicant argues that the Commission infringed Article 30 of Directive 2004/17 and gave an inadequate statement of reasons in that it found, in recitals 57 to 64 of the contested decision, that postal services for unaddressed advertising letters on a national and international level were not directly exposed to competition in Austria. According to the applicant, if the Commission had taken all the relevant facts into account it would have reached the conclusion that, in 2012, the applicant had an estimated market share of only [confidential]% of the market for unaddressed advertising material. In its reply, the applicant requests that its expert be heard as a witness. 175 It is clear from recitals 57 to 64 of the contested decision that the Commission concluded that postal services for unaddressed advertising letters on a national and international level were not directly exposed to competition in Austria and that, consequently, Article 30(1) of Directive 2004/17 did not apply to contracts intended to enable the provision of those services in Austria. In reaching that conclusion, the Commission noted, in recital 57 of the contested decision, that unaddressed advertising mail was characterised by the absence of a particular destination address and consisted in unsolicited advertising mail that met certain criteria such as uniform weight, format, contents and layout, for distribution to a group of recipients. In recital 58 of the contested decision, the Commission stated that the applicant had defined the market for unaddressed advertising material as including advertising in other media such as advertisements in daily newspapers and weekly regional newspapers. The starting point for the applicant’s reasoning had been, according to the Commission, a ruling of the Austrian cartel court of 2009 in which it was accepted that both direct advertising and unaddressed advertising material could be regarded as part of the same relevant market for free newspapers. That court, however, had recognised substitutability only for large customers and had drawn several distinctions in respect of the relevant geographical market. In recital 59 of the contested decision, the Commission stated that the applicant had extended that conclusion to include all newspapers and had implied that the delivery of free, unaddressed mail competed with advertising in all newspapers. The applicant had also performed an HM test the results of which the Commission had duly considered. According to the Commission, the applicant’s broad interpretation of the ruling of the Austrian court was not in line with its previous decisions, according to which different media types are complementary to one another, rather than interchangeable. According to recital 60 of the contested decision, on being invited by the Commission to express their views with regard to the proposed definition of the unaddressed advertising market, having due regard to the abovementioned ruling of the Austrian court and the current legal and factual situation in Austria, the Austrian authorities had been unable to provide additional information to support the applicant’s assertions. In recital 61 of the contested decision, the Commission therefore stated that the information currently available to it was not conclusive enough to support the market definition proposed by the applicant. Recitals 62 and 63 of the contested decision state that the relevant product market was defined as postal services for unaddressed advertising letters, of which the applicant had a market share of [confidential]%. 176 It must be observed as a preliminary point (see paragraphs 38 to 41 above) that, in defining the relevant market, the Commission enjoyed a broad discretion that is subject to only limited review by the Courts of the European Union and that the burden of proof as regards definition of the relevant market rests on the applicant. Contrary to the applicant’s allegation, the Commission was therefore not obliged to perform its own analysis, as the Court has already observed (see paragraph 125 above). Moreover, the Court has also already observed (see paragraphs 56 and 57 above) that a relevant product market comprises all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, their prices and their intended use. 177 First of all, the applicant argues, referring to a study by the consulting firm E. entitled ‘Austrian print advertising market’, of September 2013 (‘the APAM Study’), which it annexed to its request for the application of Article 30 of Directive 2004/17, that the Commission failed to take account of the fact that, in the eyes of users, unaddressed advertising material, direct marketing and advertisements in free newspapers all have the same characteristics and the same intended use and that the relevant market therefore includes unaddressed advertising material, direct marketing and advertisements in free newspapers. According to the applicant, from the demand point of view, direct marketing and advertisements in free newspapers are interchangeable as a form of advertising, since the cost of such forms of advertising and the access to potential customers which they offer are practically the same. As regards access to potential customers, the applicant considers that it has demonstrated that, beside the two major newspapers published in Austria, there has, since 2009, been cooperation among free weekly newspapers in Austria which together cover the majority of the country. According to the applicant, very extensive reach could already be achieved via free newspapers. In so far as price is concerned, the applicant asserts that the price of one thousand contacts for these forms of advertising ranges from EUR [confidential] for advertisements in daily newspaper supplements to EUR [confidential] for unaddressed advertising material and direct marketing. The difference in price between advertisements in daily newspapers (EUR [confidential]) and unaddressed advertising in the form of brochures (EUR [confidential]) is in the order of just four euros. According to the APAM Study, the only thing that matters is that the advertising information contained in the direct marketing material or the advertisement actually reaches households. 178 Those arguments do not demonstrate that the Commission made a manifest error of assessment in finding, in recital 61 of the contested decision, that it did not have sufficiently conclusive information to support the market definition proposed by the applicant. Indeed, as the Commission asserts, it is clear from the APAM Study that there are significant differences between the characteristics of unaddressed printed advertising material and of advertisements in newspapers. 179 First, contrary to the applicant’s allegation, it is not apparent from the APAM Study that the only thing that matters is that the advertising information contained in the direct marketing material or the advertisement actually reaches households. As the Commission asserts, according to point 2.2.2 of the study, the most important criteria in advertising are usefulness, credibility and whether the advertisement is informative. While it is true that, in that passage of the APAM Study, no comparison is made between unaddressed advertising mail, advertising supplements to newspapers and advertisements in newspapers, as the applicant asserts, the fact remains that those criteria relate to the characteristics of different forms of advertising. The study shows that it is precisely with regard to those characteristics that differences exist between postal services for unaddressed advertising mail and advertisements in newspapers. Accordingly, point 2.2.1 of the APAM Study indicates that the main problem with direct marketing is the lack of context or connection with a medium such as a newspaper, unaddressed advertising often being experienced as an ‘unwanted visitor’. According to point 2.2.1 of the study, in short, while [confidential]% of people receiving newspapers take their newspaper, including the advertising pages, home with them, only [confidential]% of recipients of unaddressed advertising do the same. The APAM Study concludes that it is therefore less likely that unaddressed advertising material will be read than advertisements in a newspaper. As the Commission asserts, the APAM Study also indicates that readers have greater confidence in advertisements appearing in newspapers and that confidence is a highly important factor in advertising. 180 Secondly, as regards the argument that the costs of direct marketing and of advertisements in free newspapers are practically the same, it must be observed that that argument is based on the findings relating to the cost per thousand contacts set out in the APAM Study. According to point 1.2 of the study, in the 4.3 million households in Austria, 2.3 people on average read advertising mail. Given that, as the Commission asserts, the population in Austria was approximately 8.51 million in January 2013 — a fact which the applicant did not dispute when asked by the Court at the hearing — it cannot be concluded that the applicant was entitled to assume that the 4.3 million households in Austria comprised 2.3 people on average. It must also be observed that, according to point 2.2.1 of the APAM Study, [confidential]% of recipients throw away unaddressed advertising mail. 181 In addition, the Commission was right to state that the applicant had based its calculation on the lowest of its three applicable tariffs, as is apparent from point 1.2 of the APAM Study. In so far as the applicant justifies the use of that tariff by saying that the majority of direct marketing material is delivered in areas of urban concentration, in which the tariff which it used applies, it must be observed that, according to point 2.2.1 of the APAM Study, the average recipient of direct marketing material lives in a rural area. It must also be observed that, as the Commission asserts, point 1.2 of the study shows that the applicant chose the price for the lowest weight category, without explaining why that was specifically relevant. Furthermore, as the Commission states, it is common ground that the tariffs which the applicant used do not include the cost of printing the advertising material, by contrast with the cost per thousand contacts of advertisements in newspapers. 182 In so far as the applicant argued at the hearing that, in Implementing Decision 2014/299, the Commission did not dispute the existence of a common market for unaddressed advertising mail and advertisements in free newspapers, it must be observed that that decision related to the postal sector in Hungary. While it is true that, in recital 16 of that decision, the Commission defined the relevant market as the market for services for the distribution of unaddressed advertising material provided by postal operators, the fact remains that that definition was specifically based on the information relating to the Hungarian market mentioned in recitals 11 to 15 of the decision. The applicant has neither asserted nor established that the situation in the Austrian market is comparable to the situation in the Hungarian market, which the Commission examined in Decision 2014/299. This argument must therefore be rejected. 183 Secondly, the applicant argues that, in accordance with the Notice on market definition, it studied demand substitutability and supply substitutability and, in the context of the APAM Study, performed an HM test, which confirmed the existence in Austria of a common market for unaddressed direct marketing materials and advertisements in or advertising supplements to free newspapers. The applicant asserts that, according to the HM research conducted among 248 undertakings, not individuals, as the contested decision suggests, a 5% price increase would lead to a decline in direct marketing of [confidential]%. That fall in demand would be so significant that a price increase of that kind would not be profitable for the applicant. The applicant asserts that, in the contested decision, the Commission failed to take sufficient account of its arguments or of the results of the APAM Study, in particular regarding the structure of the Austrian advertising market and the results of the HM test. The APAM Study shows, according to the applicant, that, on the demand side, direct marketing and advertisements in newspapers are interchangeable. The ruling of the Austrian court mentioned in recital 58 of the contested decision was merely the starting point for the applicant’s definition of the market and was not intended to replace the analyses and studies which it submitted. Moreover, by confining itself to stating, in recital 61 of the contested decision, that the information available to it was not sufficiently conclusive to support the market definition proposed by the applicant, the Commission breached its duty to state reasons. In addition, by failing to examine the arguments and evidence submitted by the applicant, the Commission also infringed the applicant’s right to be heard. 184 As regards, first, the applicant’s argument that the Commission’s assessment is vitiated by a manifest error in that an HM test showed that there existed in Austria a common market for unaddressed direct marketing material and advertisements in or advertising supplements to free newspapers, that argument cannot be upheld. Indeed, the Commission was entitled to find in recitals 59 and 61 of the contested decision, without making any manifest error of assessment, that after duly considering the results of that test, the questionnaires for which had been sent to it by the applicant in a communication of 2 December 2013, it did not have sufficiently conclusive information to support the market definition proposed by the applicant. 185 Having regard to the fact that the Austrian statistics produced by the Commission show that there were approximately 311 000 undertakings in Austria in 2011, while just 248 undertakings were questioned, the Commission cannot be criticised for expressing doubt as to whether the survey carried out was representative. It must also be observed that table 52 of the APAM Study shows that the range of undertakings questioned, in terms of their size, was not representative of the range of undertakings in the Austrian economy. As regards the argument that it is first and foremost retail undertakings having more than 250 workers that use circulars as a form of advertising, it must be observed that the applicant has furnished no evidence to show that its selection was representative, especially since, according to the applicant, its selection of 248 undertakings from among its customers having the highest turnover was dictated solely by their availability. 186 Moreover, in so far as the applicant points out that, contrary to the Commission’s suggestion in recital 59 of the contested decision, undertakings were questioned, not individuals, suffice it to observe that the term ‘subjects’ includes both natural and legal persons. The use of the term ‘subjects’ does not, therefore, demonstrate any imprecision on the Commission’s part. 187 The applicant also argues that the Commission breached its duty to state reasons in that it confined itself to stating, in recital 61 of the contested decision, that the information available to it was not conclusive enough to support the market definition proposed by the applicant. According to the applicant, that finding was merely stated, without any indication being given of whether it was based solely on the research which it had carried out or also on the additional information gathered from the Austrian authorities. That argument must be rejected. It is clear from the word ‘consequently’, used in recital 61 of the contested decision, that the finding reached in that recital is a conclusion based on recitals 57 to 60 of the decision, which include an appraisal of both the applicant’s research and the reply from the Austrian authorities. 188 Thirdly, in so far as the applicant asserts that, by failing to examine the arguments and evidence which it submitted, the Commission infringed its right to be heard, which is guaranteed by Article 6 TFEU and Article 41 of the Charter of Fundamental Rights of the European Union, it must be recalled that Article 41 of the Charter, entitled ‘Right to good administration’, provides, in paragraph 1 thereof, that ‘every person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies, offices and agencies of the Union’. Article 41(2)(a) of the Charter provides that that right includes the right of every person to be heard, before any individual measure which would affect him or her adversely is taken. According to the case-law on the principle of sound administration, where the institutions of the European Union have a power of appraisal, observance of the rights guaranteed by the legal order of the European Union in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (judgment of 21 November 1991 in Technische Universität München, C‑269/90, ECR, EU:C:1991:438, paragraph 14). It is clear from paragraphs 176 to 187 above that the Commission did not breach that duty. 189 The sixth plea must therefore be dismissed. 190 As regards the request for the applicant’s expert to be heard as a witness (see paragraph 174 above), the applicant considers that its expert should be heard so that he can explain the APAM Study and the criteria relating to accessibility, costs per thousand contacts and the research proving the substitutability of unaddressed advertising mail and advertisements in free newspapers. That request was made in the reply, without any reason being given for its lateness, and it must therefore be rejected as inadmissible, pursuant to Article 48(1) of the Rules of Procedure of 2 May 1991. In any event, in light of the foregoing and on the basis of the documents before the Court and the answers given to the questions asked by the Court at the hearing, the Court considers that it has sufficient information, is able to understand all the economic issues involved and can therefore decide whether the Commission’s assessment is vitiated by a manifest error of assessment. Consequently, it is not appropriate for the Court to accede to that request in so far as the present plea is concerned. The seventh plea in law, alleging an incorrect statement of reasons and breach of the duty to state reasons in relation to the market for postal services for the standard delivery of addressed and unaddressed newspapers 191 The applicant argues that the Commission gave an incorrect statement of reasons and breached its duty to state reasons in that it found, in recitals 65 to 69 of the contested decision, that postal services for the standard delivery of addressed and unaddressed newspapers were not directly exposed to competition in Austria. According to the applicant, if the Commission had taken all the relevant facts into account it would have reached the conclusion that there existed a common market for the standard delivery of daily, weekly and monthly titles and that the applicant was directly exposed to competition on that market. Consequently, the Commission had also breached its right to be heard. In order to substantiate its arguments and to explain the study by the consultancy firm E., entitled ‘Austrian Delivery Market for Newspapers’, of September 2013 (‘the ADMN Study’), the applicant requests that its expert, the author of the ADMN Study, be heard as a witness. 192 It is clear from recitals 65 to 69 of the contested decision that the Commission concluded that postal services for the standard delivery of addressed and unaddressed newspapers were not directly exposed to competition in Austria and that, consequently, Article 30(1) of Directive 2004/17 did not apply to contracts intended to enable to pursuit of those activities in Austria. In reaching that conclusion, the Commission noted, in recital 65 of the contested decision, that Decision 2007/564 established a distinction between early delivery of newspapers and standard delivery. According to recital 66 of the contested decision, the applicant was not active in the early delivery of newspapers, but was active in the standard delivery of newspapers. In recitals 67 and 68 of the contested decision, the Commission stated that the relevant product market was the market for postal services for the standard delivery for addressed and unaddressed newspapers and that the applicant had a [confidential]% share of that market. The main competitors were, according to the Commission, the national and regional networks organised by publishers, which deliver addressed and unaddressed newspapers to households. However, those competitors together had a combined market share of only [confidential]%. 193 First of all, as regards its argument that the Commission breached its duty to state reasons, the applicant submits that the general reference made in recital 65 of the contested decision to an earlier decision does not constitute an adequate statement of reasons. That earlier decision concerned the delivery market in Finland and the Commission has not explained why there should be a connection between the situation in the Finnish market and the situation in the particular market in Austria. Nor did it give any reason in that earlier decision for drawing a distinction between early delivery and standard delivery of newspapers. The applicant asserts that, since the structures of the markets in the various Member States differed significantly in some respects, the Commission should have demonstrated that there was a similarity between the Finnish and Austrian markets for newspaper delivery, so as to render its decision comprehensible. The Commission should also have analysed the specific situation in the Austrian market, and should have stated reasons for its decision accordingly. 194 It must be observed in this connection that, while it is true that the contested decision offers no substantial reason for the Commission’s decision to distinguish between early delivery and standard delivery of newspapers, the fact remains that the contested decision refers to the Commission’s practice as reflected in Decision 2007/564, in which it exempted certain services in the postal sector in Finland from the application of Directive 2004/17. It is clear from recitals 13 and 14 of Decision 2007/564 that, as a matter of practice, the Commission drew a distinction between the early delivery of newspapers and the standard delivery of newspapers. The Court has already noted that the applicant was closely involved in the administrative procedure and that the Commission even sent a draft of the decision to the expert engaged by the applicant, who had a discussion with the Commission at a meeting on 28 March 2014 (see paragraph 83 above). The draft of the decision considered at that meeting already contained the wording in recital 65 of the contested decision. 195 Moreover, it is clear from the Commission’s letter to the applicant of 28 November 2013 and its letter to the Republic of Austria of 5 December 2013 that it informed the applicant and that Member State of the fact that its previous practice had been to draw a distinction between early delivery of newspapers and standard delivery of newspapers. In its letter of 13 January 2014 to the expert engaged by the applicant, the Commission expressly mentioned that distinction. 196 Furthermore, it must be observed that, in point 3.1.6 of its request, concerning postal services for the standard delivery of addressed and unaddressed newspapers, the applicant confined itself, in substance, to asserting that the relevant product market included the distribution of addressed and unaddressed daily, weekly and monthly titles in Austria and to referring, generally, to the ADMN Study. It gave no indication of the reason for which the distinction which the Commission drew in practice between early and standard delivery of newspapers might be incorrect. In so far as the applicant argues that it established parameters for defining the market in a particular page of the ADMN Study, it must be observed that the passage to which the applicant refers simply contains a description of the Opinion of Advocate General Jacobs in Bronner (C‑7/97, ECR, EU:C:1998:264). However, it is clear from point 31 of that Opinion that the precise definition of the market was left open in that case. In its judgment of 26 November 1998 in Bronner (C‑7/97, ECR, EU:C:1998:569, paragraph 34), the Court of Justice left it to the national court to consider the question of market definition. 197 Consequently, since the applicant was informed of the Commission’s practice and, as the Commission also states, put forward no substantial reasons to warrant a different definition of the relevant market, and since the Commission was not obliged to anticipate potential objections (see paragraph 46 above), it cannot be concluded that the Commission failed to satisfy the requirements of the duty to state reasons, as mentioned in paragraphs 20 and 46 above (see, to that effect, the judgment of 1 July 2010 in AstraZeneca v Commission, T‑321/05, ECR, EU:T:2010:266, paragraph 81 and the case-law cited). 198 Secondly, in so far as the applicant alleges an incorrect statement of reasons and breach of its right to be heard (see paragraph 188 above), its position is essentially that the Commission failed to give sufficient consideration to its arguments and to the ADMN Study, which it produced during the administrative procedure. According to the applicant, in its request for the application of Article 30 of Directive 2004/17, it explained in detail that the relevant market included the delivery in Austria of addressed and unaddressed daily, weekly and monthly titles. Referring to the ADMN Study, it asserts that, in addition to itself, two networks also provided the nationwide delivery of newspapers and magazines. Also, in its request, it stated that any competitor could have free access to the delivery of newspapers and magazines and that, in the daily deliveries sector, its market share was [confidential]%. Even including the delivery of weekly and monthly newspapers and magazines, it would still, with a market share of [confidential]%, be directly exposed to competition from other distributors. According to the applicant, having regard to the ADMN Study, the Commission should in any event have defined the relevant market precisely, as it was required to do by point 41 of the Notice on market definition and as it failed to do in recital 6 of the contested decision. Moreover, the networks of its competitors already existed in Austria and those competitors might at any moment enter the market. 199 First of all, it must be observed that that line of argument does not demonstrate that the Commission made a manifest error of assessment by defining, in recital 67 of the contested decision, the relevant product market as the market for postal services for the standard delivery of addressed and unaddressed newspapers and by excluding the early delivery of newspapers. Indeed, the Court has already observed (see paragraph 196 above) that, in the arguments set out in its request and in the ADMN Study to which the applicant has referred in these proceedings, the applicant has in no way indicated why the distinction which the Commission draws in practice, and which it drew in the contested decision, between the early delivery of newspapers and the standard delivery of newspapers might be incorrect. 200 Moreover, as regards the general reference which the applicant makes to its request and to the ADMN Study, the Court has already pointed out that a mere reference to annexes cannot make up for the absence of the essential arguments in law which must appear in the application, since it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (see paragraph 151 above). Consequently, this general reference must be rejected as inadmissible. In any event, it must be observed that, contrary to the applicant’s allegation, the ADMN Study also contains passages which suggest that, for the purposes of defining the relevant product market, a distinction should be drawn between the early delivery of newspapers and the standard delivery of newspapers. Indeed, according to point 1 of the study, newspapers are delivered at different times of the day, and this is a quality factor. Point 1 also states that daily newspapers must arrive in the letter box before people the house, whereas weekly and regional titles, which are financed mainly from advertising, are delivered during the day, since they are not time-sensitive. 201 Secondly, it must be observed that the applicant has not disputed the Commission’s findings, in recitals 66 and 68 of the contested decision, that it was not active in the early delivery of newspapers and that it had a market share of [confidential]% of the market for postal services for the standard delivery of addressed and unaddressed newspapers. 202 Thirdly, the applicant argues that, having regard to the ADMN Study, the Commission should in any event have defined the market precisely in so far as concerns postal services for the delivery of addressed and unaddressed newspapers. The position which the Commission expressed in recital 6 of the contested decision, namely that the precise definition of the relevant market could be left open, is incorrect. According to the applicant, a precise definition of the market, in accordance with the methods prescribed in the case-law and in point 41 of the Notice on market definition, was indispensable. 203 That argument cannot be accepted. Indeed, in so far as the applicant refers to the ADMN Study for the purposes of defining the relevant product market, its arguments have already been rejected (see paragraph 200 above). Next, in so far as the applicant refers to recital 6 of the contested decision, it must be observed that, according to that recital, which appears in the part of the contested decision dealing with the legal framework of the decision, although a narrower market definition could be envisaged in certain cases, the precise definition of the relevant market could be left open for the purposes of the contested decision to the extent that the result of the analysis remained the same whether it was based on a narrow or a broad definition. In the present case, while the precise definition of the relevant market was left open by the Commission in so far as concerned, in particular, postal services for addressed letters B2X at national level, as is apparent from recital 29 of the decision, that was not the case for postal services for the standard delivery of addressed and unaddressed newspapers. 204 As regards the argument that the Commission should have defined the market precisely, in accordance with the methods prescribed in the case-law and in point 41 of the Notice on market definition, according to which consumer preferences are a relevant criterion in the assessment of the demand substitutability of two products, it must be recalled that the burden of proving that the conditions laid down in Article 30(1) of Directive 2004/17 are fulfilled rests on the applicant and the Member State concerned, inasmuch as, in this instance, the Commission has only limited powers in comparison with the very extensive investigatory powers that are conferred on it in the sphere of EU competition law by Regulation No 1/2003 and Regulation No 139/2004 (see paragraph 41 above). In the present case, it was therefore incumbent on the applicant to provide sufficient information to define the relevant product market. 205 Fourthly, in so far as concerns the argument that networks of competitors already existed in Austria and that those competitors might at any moment enter the market, since there are no barriers to entry, it must be observed that, given the very large market shares which the applicant enjoys on the market for the standard delivery of addressed and unaddressed newspapers, that is to say, [confidential]%, and on the markets for postal services for addressed letters B2X and C2X at national level, [confidential]% and [confidential]% respectively (see paragraphs 99 and 139 above), it cannot be held that the Commission made a manifest error of assessment by concluding that postal services for the standard delivery of addressed and unaddressed newspapers were not directly exposed to competition in Austria. 206 The seventh plea must therefore be dismissed. 207 As regards the request for the applicant’s expert to be heard as a witness (see paragraph 191 above), in light of the foregoing and on the basis of the documents before the Court and the answers given to the questions asked by the Court at the hearing, the Court considers that it has sufficient information, is able to understand all the economic issues involved and can therefore decide whether the Commission’s assessment is vitiated by a manifest error of assessment. Consequently, it is not appropriate for the Court to accede to that request in so far as the present plea is concerned. 208 In light of all the foregoing, the action must be partly upheld, to the extent that it relates to postal services for addressed letters B2X at international level (see paragraph 163 above). Consequently, the contested decision must be annulled in so far as it states that Directive 2004/17 continues to apply to the market for postal services for addressed letters B2X on an international level in Austria. The action must be dismissed as to the remainder. Costs 209 Under Article 134(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the Court may order each party to bear its own costs. However, if it appears justified in the circumstances of the case, the General Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party. 210 In the present case, the Court must grant the form of order sought by the applicant in so far as it seeks the annulment of the contested decision in so far as it states that Directive 2004/17 continues to apply to the market for postal services for addressed letters B2X on an international level in Austria. On the other hand, it must dismiss the action to the extent that it relates to the other markets for postal services at issue. Accordingly, it is fair in the circumstances of the case to decide that the applicant is to bear its own costs and pay eight tenths of the Commission’s costs. The Commission must bear two tenths of own costs. On those grounds, THE GENERAL COURT (Fifth Chamber) hereby: 1. Annuls Commission Implementing Decision 2014/184/EU of 2 April 2014 exempting certain services in the postal sector in Austria from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors in so far as it states that that directive continues to apply to the market for postal services for addressed letters between business customers and between business customers and private customers on an international level in Austria; 2. Dismisses the action as to the remainder; 3. Orders Österreichische Post AG to bear its own costs and to pay eight tenths of the costs incurred by the Commission; 4. The Commission shall bear two tenths of its own costs. Dittrich Schwarcz Tomljenović Delivered in open court in Luxembourg on 27 April 2016. [Signatures] * Language of the case: German. 1 Confidential information omitted.