Judgment — ECLI:EU:C:2000:570
Date: 2000-10-19
Language of the case: Italian
Court formation: Sixth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: State aids;Competition;Transport
Concepts: Statement of reasons;Applications by natural or legal persons;Formal investigation procedure;Commission decision following the formal investigation procedure;Damage to competition and effect on trade
Procedure: Action for annulment - successful;Action for annulment - inadmissible
Origin: Italy

summary of the pleas in law on which it is based. As the Commission noted in its defence and as the Italian Republic itself admitted in its reply, all the pleas in law and arguments raised by the applicant relate in fact only to Decision 98/95. 30. It follows that the Italian Republic's application is, in any event, inadmissible in so far as it seeks annulment of the decision of 14 November 1997. The admissibility of Sardegna Lines' application 31. The Commission does not dispute Sardegna Lines' submission that Decision 98/95 is of direct and individual concern to it and that its application is therefore admissible. Although the decision is addressed to the Italian Republic, it has a significant effect on Sardegna Lines in its capacity as a Sardinian shipbuilder which has benefited from the aid scheme called into question by the Commission, since it will have to pay back the aid granted. The Court has, moreover, already accepted that an application made by an undertaking placed in a similar situation is admissible (Joined Cases C-324/90 and C-342/90 Germany and Pleuger Worthington v Commission [1994] ECR I-1173). 32. It is settled case-law that persons other than those to whom a decision is addressed may claim to be individually concerned only if the decision affects them by reason of certain attributes peculiar to them or by reason of circumstances in which they are differentiated from all other persons and if, by virtue of those factors, it distinguishes them individually in the same way as the person addressed (Case 25/62 Plaumann v Commission [1963] ECR 197, Case C-321/95 P Greenpeace Council and Others v Commission [1998] ECR I-1651, paragraphs 7 and 28). 33. The Court has thus held that an undertaking cannot, in principle, contest a Commission decision prohibiting a sectoral aid scheme if it is concerned by that decision solely by virtue of belonging to the sector in question and being a potential beneficiary of the scheme. Such a decision is, vis-à-vis the undertaking should it seek to contest the decision, a measure of general application covering situations which are determined objectively and entails legal effects for a class of persons envisaged in a general and abstract manner (Joined Cases 67/85, 68/85 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219, paragraph 15; and Case C-6/92 Federmineraria and Others v Commission [1993] ECR I-6357, paragraph 14). 34. However, Sardegna Lines is in a different position. It is concerned by Decision 98/95 not only by virtue of being an undertaking in the shipping sector in Sardinia and a potential beneficiary of the aid scheme for Sardinian shipowners but also by virtue of being an actual beneficiary of individual aid granted under that scheme, the recovery of which has been ordered by the Commission. 35. It follows that Sardegna Lines is individually concerned by Decision 98/95. 36. Furthermore, in so far as Article 2 of Decision 98/95 obliges the Italian Republic to recover from each beneficiary of a loan/lease the element of aid contained therein, Sardegna Lines must be regarded as directly concerned by this decision. 37. Consequently, Sardegna Lines' application is admissible. Substance Pleas in law advanced by the applicants 38. The Italian Republic alleges, first, that the Commission conducted two separate procedures in respect of the aid scheme for Sardinian shipowners instead of a single procedure and that it altered the subject-matter of the procedure which resulted in the adoption of Decision 98/95. It disputes, secondly, the finding in that decision that the scheme is incompatible with the common market on account of infringement of Articles 6, 48(2) and 52 of the Treaty and denies in any case that the Commission has power to declare during an investigation into State aid that such infringement has occurred. 39. Sardegna Lines, for its part, alleges that the Commission was in breach of Council Directive 90/684/EEC of 21 December 1990 on aid to shipbuilding (OJ 1990 L 380, p. 27). It also submits that Decision 98/95 infringes Article 92(1) of the Treaty. 40. As for the remainder of the applications, the Italian Republic and Sardegna Lines have advanced the same pleas. These allege respectively (i) that the characterisation of the aid to Sardinian shipowners as new aid is wrong, (ii) that, from the point of view of Article 92(1) of the Treaty, the statement of reasons for Decision 98/95 is inadequate, (iii) that Article 92(3)(a) and (c) of the Treaty hasbeen infringed and that, as regards that provision, the decision fails to provide sufficient reasons, and (iv) that the obligation imposed by Decision 98/95 to recover the aid is unlawful. The lack of a single administrative procedure (Case C-15/98) 41. The Italian Republic claims that the amendments made in 1988 and 1996 to the aid scheme for Sardinian shipowners did not have a substantial effect on the scheme and that there is therefore no justification for the scheme being made the subject of two separate administrative procedures (see, to that effect, Joined Cases 91/83 and 127/83 Heineken Brouwerijen v Inspecteurs der Vennootschapsbelasting, Amsterdam and Utrecht [1984] ECR 3435). If Law No 9/1996 had been taken into account, however, the Commission would have been able to adopt a definitive position in respect of the aid scheme and might have reached a different conclusion. 42. The Commission contends, on the contrary, that Article 93(2) of the Treaty obliged it to open a new procedure in respect of the aid scheme as amended by Law No 9/1996. Moreover, if it were required to take into account amendments made to aid schemes in the course of an administrative procedure, Member States would be in a position to delay the adoption of a final decision ad infinitum. 43. In that regard, it should be pointed out that, when the Commission has initiated the procedure provided for in Article 93(2) of the Treaty in respect of an aid scheme which has already been implemented, it cannot be required to extend that procedure when the Member State concerned modifies the scheme in question. If the opposite were the case, the State would in fact be able to draw out the procedure for as long as it pleased, and thus postpone the adoption of a final decision. 44. That conclusion is not at variance with the Heineken Brouwerijen judgment, cited above, in which the Court held that the obligation laid down in the first sentence of Article 93(3) of the Treaty to inform the Commission of any plans to grant or alter aid does not apply solely to an initial plan but also covers subsequent alterations to that plan; such information may be supplied to the Commission in the course of the consultations which take place following the initial notification. The Heineken Brouwerijen judgment is concerned with alterations that may affect an aid plan in the course of its adoption and the decision in that case is not, therefore, applicable to a situation in which the aid scheme was already operational when the Commission learned about it. 45. In addition, even supposing that, as the Italian Republic claims, Law No 9/1996 did in fact ensure that the aid scheme for Sardinian shipowners complied with Community law, the Commission's taking account of that law would in any eventhave been of no consequence as regards its assessment of aid granted under the scheme as it previously stood. 46. The Italian Republic's plea based on the absence of a single administrative procedure must, therefore, be rejected. Alteration of the subject-matter of the procedure (Case C-15/98) 47. The Italian Republic claims, however, that the Commission, in deciding not to take Law No 9/1996 into account in Decision 98/95, substantially altered the subject-matter of the procedure initiated in 1996. While the latter was initially concerned with an aid scheme allegedly in force, the decision which concluded the procedure related to a scheme which was no longer applicable. The Commission's power of review could be exercised only in respect of an aid scheme which was still applicable. When a scheme has come to an end, the power of review should no longer relate to the scheme itself but to aid which has in fact been granted on the basis of the scheme. 48. The Italian Republic submits that the Commission, however, proceeded exactly on that basis in the present case when, having initiated the procedure in respect of the aid scheme as it stood following Law No 11/1988, it held in Decision 98/95 that loans/leases amounting to ITL 12 697 450 000 granted to Sardinian shipping companies were incompatible with the common market. However, to avoid a breach of the audi alteram partem rule, the Italian Government and the parties concerned should have been notified that the subject-matter of the procedure had been altered in order to enable them to submit relevant observations and defend their interests. 49. The Commission challenges, in the first place, the Italian Republic's premiss that its power of review may not be exercised in respect of an aid scheme which has ceased to be applicable. It is common ground that the Commission is entitled, with a view to restoring the status quo ante, to require the recovery of aid granted under any scheme in breach of the Treaty (Case C-280/95 Commission v Italy [1998] ECR I-259). 50. In second place, the Commission refutes the allegation that it altered the subject matter of the procedure. It observes that, by its very heading, the 1996 communication informing interested parties of the initiation of the procedure in respect of the contested aid scheme was directed at aid which the Sardinian authorities had granted to Sardinian shipowners. The communication further stated that the Italian Republic was obliged to restore the status quo ante by recovering unlawfully granted aid. There could therefore be no doubt that the procedure did not concern a scheme in the abstract but was concerned with actual aid granted in disregard of Community law. 51. The Court observes, first, that, in the case of an aid scheme, the Commission may confine itself to examining the general characteristics of the scheme in question without being required to examine each particular case in which it applies (see, to that effect, Case 248/84 Germany v Commission [1987] ECR 4013, at paragraph 18; and Case C-75/97 Belgium v Commission [1999] ECR I-3671, paragraph 48). That power is not impaired by the fact that the aid scheme in question has ceased to apply. In that case as well, the Commission must be entitled to assess the compatibility of the scheme with Community law on the basis of its general characteristics. 52. Secondly, contrary to the allegations of the Italian Republic, the Commission did not alter the subject-matter of the procedure which was throughout concerned with the aid scheme for Sardinian shipowners established by Law No 20/1951, as amended by Law No 11/1988. Thus, the Commission states in Part VII of Decision 98/95 that, the aid scheme in question is unlawful and incompatible with the common market and it is in light of that finding that the operative part of the decision must be read (see, to that effect, Case C-404/97 Commission v Portugal [2000] ECR I-0000, paragraph 41). 53. The Italian Republic's plea alleging that the subject-matter of the procedure was altered must therefore be rejected. Inadequacy of the statement of reasons in respect of the conditions for application of Article 92(1) of the Treaty: infringement of that provision 54. The Italian Republic submits, first, that Decision 98/95 in no way states why the aid scheme for Sardinian shipowners is liable to distort or threaten to distort competition. 55. As regards the condition relating to the effect on trade between Member States, Decision 98/95 is confined to stating that over 90% of goods transported between Member States and Sardinia are transported by sea and that 65% of tourist traffic (passengers and vehicles) between the Community and Sardinia is handled by shipping companies. First, these high percentages are merely the natural consequence of Sardinia being an island. Second, they do not necessarily entail any effect on trade between Member States in so far as traffic to and from small islands may well depend entirely on maritime transport without such trade being affected. Lastly, the volume of trade between Sardinia and the other Member States is, in any event, minimal since 89% of the goods and 97% of the passengers coming from, or going to, the island travel through Italian ports. 56. The Italian Republic accordingly concludes that Decision 98/95 does not contain a sufficient statement of reasons regarding the application of Article 92(1) of the Treaty. 57. Sardegna Lines claims, first, that the Commission infringed Article 92(1). 58. In that regard, it submits that, contrary to the requirements of case-law, the decision does not give any information about the market under consideration, the share of the undertakings concerned in that market, their exports or the patterns of trade between Member States. 59. That fact is particularly serious since the market concerned is not the market in goods or tourist services but the market in transport to and from Sardinia. Under Article 6(2) of Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) (OJ 1992 L 364, p. 7), island cabotage in the Mediterranean was not liberalised until 1 January 1999. Until that time there was therefore no risk that the aid scheme for Sardinian shipowners would distort or threaten to distort competition between Italian traders nor that it would affect trade between Member States. 60. Relying on the same arguments, Sardegna Lines also claims that the Commission has not in that regard given an adequate statement of reasons in Decision 98/95. 61. The Commission contends, first, that aid is granted selectively to Sardinian shipping companies and that it therefore necessarily distorts competition. It also asserts that Sardinia is one of the three biggest islands in the Mediterranean, that by sea it is just as accessible from France and Spain as from Italy, that France and Spain also have shipping companies and that, consequently, there is no doubt that there is an effect on trade between those Member States. 62. Lastly, according to the Commission, Regulation No 3577/92 is irrelevant in the present case. By definition, it does not cover maritime transport between Member States while the condition in Article 92(1) of the Treaty relating to the effect on trade is of relevance only to such transport. The Sardinian companies benefiting from the aid could also run services on the shipping routes between Sardinia and France or Spain. Furthermore, Regulation No 3577/92 does not preclude competition between undertakings in the maritime transport market between Sardinia and the Italian peninsula. Accordingly, even before 1 January 1999, non-Italian companies were entitled to operate maritime cabotage services in Italy by registering their vessels in Italy, although they did not benefit from the aid scheme for Sardinian shipowners. In any event, the scheme continued to have an effect after 1 January 1999. 63. As a preliminary point, it should be observed that Sardegna Lines, although referring to infringement of Article 92(1) of the Treaty, also alleges that the Commission did not in Decision 98/95 provide an adequate statement of reasons in respect of that provision. 64. It must also be borne in mind that Article 92(1) of the Treaty provides that any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is, in so far as it affects trade between Member States, incompatible with the common market. 65. Furthermore, it is settled case-law that the statement of reasons required by Article 190 of the EC Treaty (now Article 253 EC) must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community Court to exercise its power of review. The requirement to state reasons must be evaluated according to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty 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 (see, in particular, Case C-367/95 P Commission v Sytraval and Brink's France [1998] ECR I-1719, paragraph 63). 66. As regards more particularly a decision concerning State aid, the Court has held that although in certain cases the very circumstances in which the aid has been granted may show that it is liable to affect trade between Member States and to distort or threaten to distort competition, the Commission must at least set out those circumstances in the statement of reasons for its decision (Joined Cases 296/82 and 318/82 Netherlands and Leeuwarder Papierwarenfabriek v Commission [1985] ECR 809, at paragraph 24; and Joined Cases C-329/93, C-62/95 and C-63/95 Germany and Others v Commission [1996] ECR I-5151, at paragraph 52). 67. In the present case, as the Italian Republic has pointed out, Decision 98/95 does not contain any reasons explaining why the aid to Sardinian shipowners adversely affected competition. The mere statement that the aid is selective and restricted to the shipping sector in Sardinia is not a statement of reasons. Moreover, those aspects of the decision are connected less with the condition relating to the distortion of competition than to the condition of specificity which constitutes one of the other characteristics of the concept of State aid (see Belgium v Commission, cited above, at paragraph 26). 68. As regards the condition relating to the effect on trade between Member States, the Commission stated in Decision 98/95 that the aid to the Sardinian shipowners had an effect on trade between Member States in so far as over 90% of goods are transported between the Member States and Sardinia by sea and 65% of touristtraffic (passengers and vehicles) between the Community and Sardinia is handled by shipping companies. 69. It is true that the Commission thereby emphasised the importance of maritime transport to trade between Sardinia and the rest of the Community. It did not, however, provide the least information concerning competition between the Sardinian shipping companies and those established in Member States other than Italy. The Commission thus failed to take into account, in that respect, the fact that, until 1 January 1999, island cabotage in the Mediterranean was excluded from the liberalisation of maritime transport services within Member States. 70. Whilst the Commission pointed out at the hearing that a number of factors tended to show that that situation was not liable to preclude an effect on trade in maritime transport services between Sardinia and Member States other than the Italian Republic, in particular the Kingdom of Spain and the French Republic, that reasoning is not found in Decision 98/95. 71. The Commission also contended before the Court that the aid scheme for Sardinian shipowners had all the more effect on trade between Member States since several of the additional conditions adopted in Law No 11/1988 were in breach of the fundamental principles of freedom of establishment and the prohibition on any discrimination on grounds of nationality. 72. However, it should be noted that, in Parts I and VI of Decision 98/95, the Commission takes those alleged breaches into account only for the purpose of rejecting any possibility that the exceptions in Article 92(2) and (3) of the Treaty may apply. 73. Accordingly, the plea alleging that Decision 98/95 lacks an adequate statement of reasons in respect of the conditions for application of Article 92(1) of the Treaty must be accepted. 74. Consequently, Decision 98/95 must be annulled without there being any need to examine the other pleas in law put forward by the Italian Republic and Sardegna Lines. Costs 75. Under Article 69(2) 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. Under Article 69(3), the Court may order that the costs be shared or that the parties bear their own costs if the parties are successful on some heads and unsuccessful on others, or where the circumstances are exceptional. 76. In the present case, the Italian Republic's application in respect of the decision of 14 November 1997 has been dismissed as inadmissible. By contrast, the applications made by the Italian Republic and Sardegna Lines in respect of Decision 98/95 have been upheld. 77. Consequently, in Case C-15/98 the Italian Republic and the Commission must be ordered to bear their own costs. However, in Case C-105/99 the Commission must be ordered to pay the costs in their entirety. On those grounds, THE COURT (Sixth Chamber) hereby: 1. Dismisses as inadmissible the Italian Republic's application in respect of the letter of 14 November 1997 by which the Commission notified the Italian Republic of its decision to initiate the procedure provided for in Article 93(2) of the EC Treaty (now Article 88(2) EC) regarding aid to the shipping sector (loans/leases at concessionary conditions for the acquisition, conversion and repair of vessels): amendment of aid scheme under C 23/96 (ex NN 181/95); 2. Annuls Commission Decision 98/95/EC of 21 October 1997 concerning aid granted by the Region of Sardinia (Italy) to shipping companies in Sardinia; 3. In Case C-15/98, orders the Italian Republic and the Commission of the European Communities to bear their own costs; 4. In Case C-105/99, orders the Commission of the European Communities to pay the costs. Gulmann Puissochet Macken Delivered in open court in Luxembourg on 19 October 2000. R. Grass C. Gulmann Registrar President of the Sixth Chamber 1: Language of the case: Italian.