61990C0313
OPINION OF ADVOCATE GENERAL
LENZ
delivered on 17 September 1992 (
*1
)
Mr President,
Members of the Court,
A — Introduction
1.
The direct action now before the Court comes within the sphere of aid within the meaning of Article 92 et seq. of EEC Treaty. It raises questions relating to individuals' legal redress against measures taken by the Commission in its capacity as supervisory authority and questions relating to the substantive law on aid where that law applies to a legal situation arising at the interface between regional and sectoral criteria for assessing an aid plan. The applicants, an association of synthetic fibres manufacturers, CIRFS, and some of its members complain that the Commission failed to take action against a regional aid plan relating to the synthetic fibres sector.
2.
Since the relevant legislation, the facts and the arguments of the parties are set out in detail in the Report for the Hearing, I shall only set out the following main details now.
3.
The French aid measure at issue is for a project to set up a new production unit for high-strength polyester yarn in the Longwy region (Meurthe-et-Moselle). This sort of fibre is used for industrial purposes, notably in the manufacture of tyres. The investment, the implementation of which has, according to information provided by the French Government at the hearing, in the meantime begun is being carried out by the company Allied Signal Fibers Europe SA, which is based in France, on behalf of its parent company, Allied Signal Inc., which is based in the United States. (
1
) By letter of 28 June 1989, Allied Signal Fibers Europe SA was promised by the French authorities regional aid amounting to FF 160 million in respect of an overall investment of FF 840 million. However, the exact amount of the aid is in dispute, since the applicants maintain that it is affected by the cost of the site, certain work on cleaning up the site and the terms on which Electricité de France (EDF) is to supply electricity.
4.
The issue which is at the centre of this dispute is the application of the texts which may constitute the criteria for assessing the aid from the regional and sectoral points of view.
5.
Those texts consist, on the one hand, of Commission Decision 85/18, (
2
) which declared compatible with the common market the award of regional planning grants in certain areas of metropolitan France, including the Longwy region. It is not disputed by any party that the aid fulfils the regional requirements which are applicable according to that decision as regards the basic legality of the aid. The aid ceilings laid down by the decision were increased for the ‘European development zone’, of which the Longwy region forms a part, by a Commission decision notified to the Governments of the Member States concerned (
3
) by letter of 1 December 1986. (
4
)
6.
Nevertheless, according to Article 7, Decision 85/18 is ‘without prejudice to compliance ... with present or future special rules on aid to particular industries’. In connection with that provision, the parties disagree as to the scope at the time when the aid was granted of the ‘discipline’ laid down by the Commission for aid to the synthetic fibre sector. Details of the evolution of those rules can be found in the Report for the Hearing (see section 1(b) of the Report), but I shall be considering their precise legal nature later in this Opinion. At this juncture, I shall merely mention that the content of the ‘discipline’ emerges from letters which the Commission regularly sends to the Member States in order to set out its policy on aid to the sector in question, its main concern in this respect being to avoid or limit excess capacity. To that end, the Commission points out that certain aid is not desirable in the sector and requires the Member States to notify it of all plans which fall within the scope of the ‘discipline’. It also asks for the aid to comply with the principles laid down by the ‘discipline’.
7.
The ‘discipline’, the essential content of which has been published since 1985 in the C series of the Official Journal, (
5
) has invariably been adopted for a limited time; after its validity expires, a decision has to be taken to renew or amend it. That was the case in 1989, when the Commission decided to extend for two years the ‘discipline’ which expired on 18 July 1989 by adopting a text differing in certain respects from that adopted in 1987.
8.
The dispute which I have already mentioned with regard to the application of the ‘discipline’ relates, on the one hand, to its scope before it was extended with effect from 19 July 1989. Contrary to the applicants, the Commission and the interveners — the French Republic and Allied Signal — maintain that at the time when the aid was granted, that is to say before the ‘discipline’s' validity was extended, it did not cover the type of fibres manufactured by Allied Signal, but only fibres intended for the textile and clothing industry. On the other hand, the parties also disagree as to the date on which the aid was ‘granted’, that is to say, whether it was granted before or after 19 July 1989.
9.
The applicants' claims for annulment are directed against two letters from the Commission of 1 August and 4 October 1990, whose content is explained by an earlier exchange of letters. In that regard, two letters, addressed to the Commission, are particularly important; these are a letter from CIRFS dated 20 June 1990 to the Head of the Directorate responsible for aid (
6
) and a letter from the applicant, AKZO, of 29 June 1990 to the Vice-President of the Commission, Sir Leon Brittan (
7
) to which the contested letters replied.
10.
When the letters were drawn up, the two applicants were manifestly unaware that the aforementioned commitment to grant aid had been given by the French authorities on 28 June 1989.
11.
In its letter of 20 June 1990, CIRFS stated that there were grounds for believing that the French authorities were maintaining their offer to subsidize Allied Signal despite the fact that that company was not bound by any formal contract. According to its information, the French authorities might take a decision ‘in the next few days’ to grant aid to Allied Signal. CIRFS argued that aid of several tens of millions of US dollars in respect of an investment of US$ 150 million would call in question the ‘discipline on synthetic fibres’, and asked the Commission to draw the French authorities' attention without delay to the consequences of any decision to subsidize Allied Signal. It further stated that European manufacturers wanted any negotiations which might be taking place between certain governments and Allied Signal to be brought to an end immediately.
12.
In the contested letter of 1 August 1990, the Commission stated, inter alia, that, according to the information which it had received, the French authorities had notified Allied Signal of their decision to grant aid in respect of Allied Signal's investment project before the ‘discipline’ in force on synthetic fibres had last been broadened, and therefore had not been under a duty to give prior notification. The Commission considered that the content and the intensity of the aid granted to Allied Signal were satisfactory. It stated that the aid constituted an application of the regional planning grant scheme (‘Prime d'aménagement du territoire’) and was within the limits authorized by the Commission for the European development zone.
13.
As for AKZO's letter of 29 June 1990, it starts out by pointing out that on several occasions CIRFS and AKZO had drawn the Commission's attention to the aid plans for Allied Signal which were under discussion in relation to the project to establish production units for industrial polyester fibres in France or other countries. It goes on to mention the restructuring drive which had already been undertaken in the sector. AKZO states that on 19 July 1989 it was pointed out that the ‘discipline’ also covered industrial yarn. ‘This is why’, the letter goes on the say, AKZO was ‘very concerned’ to learn from Les Echos (of 28 June 1990) (
8
) that Allied Signal was apparently going to receive considerable aid to set up a unit for the manufacture of industrial yarn in France with the agreement of the Community authorities. Aid to a competitor of AKZO in the field of synthetic fibres would constitute a serious threat to the principles of free enterprise. The letter closes with a request to the Commission to comment on the press article in question.
14.
It appears from Sir Leon Brittan's reply of 4 October 1990, the second contested letter, that AKZO had ‘in recent months’ sent other letters (apart from the letter which I have already mentioned) concerning the contested aid plan. Sir Leon further states that, although no reply had been given to the letter of 29 June 1990, officials of the (competent) Directorate General (DG IV) and members of Sir Leon's Cabinet had been in touch with representatives of AKZO since early September to discuss the case in detail. Sir Leon had personally reexamined the case in the light of the points raised by AKZO, but considered that the position taken by DG IV at the beginning of August was the correct one. Despite the fact that the ‘discipline’ was couched in general terms, Sir Leon considered that it applied only to synthetic fibres destined for use in the textile and clothing sectors until the extended version of the ‘discipline’ had entered into force on 19 July 1989, and that the Commission had consistently applied it in this sense. Before that date there was no obligation for Member States to notify aid which, like the aid at issue, came within a general or regional scheme already authorized by the Commission where the aid in question was to the production of fibres destined for use outside the clothing and textile sectors. Sir Leon's letter added that the French authorities had provided proof that the decision to grant aid to Allied Signal had been taken in June 1989 and that it was therefore not open to the Commission to challenge it.
15.
The applicants claim that the Court should:
—
annul the Commission's decision of 1 August 1990 and, in so far as necessary, Sir Leon Brittan's letter of 4 October 1990 on the aid granted by the French Government to Allied Signal. (
9
)
16.
They also claim that certain measures of inquiry should be taken in relation to the time when the aid was granted in order to determine, in particular, ‘the exact nature, the content, the timetable and the outcome of the discussions between the French Government and Allied Signal on the contested aid’. The Court did not grant that request. I shall be returning to this matter later on.
17.
The Commission claims that the Court should:
—
dismiss the application;
—
order the applicants to pay the costs.
18.
During the written procedure up to the stage of the rejoinder, the admissibility of the application was not discussed. However, the interveners raised an objection of inadmissibility in documents which they lodged after the rejoinder, in which the French Government expressly asks the Court to rule first on the question of admissibility. The forms of order sought by the interveners, the precise wording of which is set out in the Report for the Hearing, principally claimed that the application should be dismissed as inadmissible.
B — Appraisal
I — Preliminary remark
19.
1. In order properly to assess whether the application is admissible and well-founded it is necessary to start by determining its content.
20.
In that regard, it should be held that the applicants consider principally that the disputed aid constitutes new aid within the meaning of Article 93(3) on the ground that it is covered by the ‘discipline’ as a result of its subject-matter and the date on which it was granted and was therefore not covered by Decision 85/18. The contested letters do not analyse the legal situation which would exist if the aid fell within the ‘discipline’ and merely state that — and explain why — the contested aid does not fall within the ‘discipline’ and there was therefore no requirement for it to be notified.
21.
It appears from the construction of the first two sentences of Article 93(3) that the purpose of notification is substantially to enable the Commission to determine whether it is appropriate to initiate a procedure under Article 93(2) (
10
) (even though, as the Court has allowed, this is not invariably a condition precedent for initiating a procedure (
11
) ). Consequently, the fact that the Commission expresses the opinion in this context that notification is not necessary can only mean that it sees no reason for initiating a procedure. This is also suggested by the letter from Sir Leon Brittan (who expressly confirms the position adopted by the Commission in the letter of 1 August 1990) stating that it is not open to the Commission to challenge the French decision to grant the aid.
22.
Consequendy, whether the application for annulment is admissible and well-founded is to be considered in the light of the contested letters expressing the refusal to initiate a procedure under Article 93(2).
23.
2 Apart from that explanation, it seems to me to be sensible — for reasons which I shall set out forthwith — first to consider the significance of the ‘discipline’ at issue as a source of law and, in particular, in relation to Decision 85/18.
24.
The parties seem to be taking different views on the issue raised by this case in that connection, without, however, deeming it necessary to explain their respective points of view. The applicants and the French Government consider that the ‘discipline’ is in the nature of rules on aid to particular industries within the meaning of Article 7 of Decision 85/18. It follows from this that an aid plan relating to a product covered by the ‘discipline’ is a new aid. In contrast, Allied Signal seems to assume that the ‘discipline’ does not call in question Decision 85/18 as authority for the contested aid plan. In its written submissions and at the hearing, it started out from the idea that the aid plan is an existing aid within the meaning of Article 93(1) of the Treaty and that that legal situation is unaffected by the fact that the product in question may possibly be caught by the ‘discipline’.
25.
It is not precluded ab initio that that question might become relevant both as regards whether the application is admissible and as regards whether it is well-founded. Even if that were not the case, it would be necessary to formulate considerations and apply them alternately to the two hypotheses. It therefore seems sensible to consider this issue first. In this regard, it is appropriate to start with the view taken by the applicants and the French Government, since those parties attribute the greatest importance to the ‘discipline’.
26.
Turning to the case-law, it will be observed that, to date, the Court has only been faced on one occasion with questions relating to a ‘discipline’ on aid, namely in the case of Deufil. (
12
) What was involved in that case was aid granted in 1983 for the purpose of replacing equipment for the production of synthetic yarn; according to the application for aid made by the applicant, the new equipment was intended in part to replace polyamide yarns with polypropylene yarns. The applicant contested the Commission's order (which was linked with the finding that the aid was incompatible with the common market) requiring the Member State concerned to recover the aid from the applicant on the ground that it was in breach of the principle of protection of legitimate expectations. It also argued that it had obtained the aid on the basis of definitive decisions and correct information and that it had used the aid in order to switch its production to a product not covered by the aid code (the ‘discipline’; polypropylene yarn was not covered by the ‘discipline’ until 1985).
27.
In that regard, the Court held as follows (paragraphs 21 and 22 of the judgment):
‘Essentially, that submission raises the question whether the fact that polypropylene yarns were not covered by the aid code might give rise to a legitimate expectation on the part of undertakings which had converted to the production of that product which could be relied on against an order issued by the Commission to the national authorities to recover aid granted for those purposes.
However, that is not the case. The aid code constitutes guidelines setting out the course of conduct which the Commission intends to follow and with which it asks the Member States to comply in regard to aid to the synthetic yarns and fibres sector. It does not derogate from the provisions of Articles 92 and 93 of the Treaty, nor could it do so.’
28.
It seems important to stress that the scope of those considerations was limited by the issue raised by that case. After rejecting pleas alleging misapplication of Article 92(1) and (3) as substantive provisions of the law on aid, the Court ruled on whether the ‘discipline’ could serve to create a legitimate expectation, deserving of protection, that a procedure deviating from those provisions could be applied.
29.
There is no doubt that the question is clearly different from the one which is before the Court in this case. The case of Deufil turned on the relationship between the ‘discipline’ and the substantive law on aid in the Treaty or, more precisely, on its possible nature as a deviation from those rules which should be taken into account. The matter at issue here relates to Commission decisions finding that domestic aid systems are compatible with the Treaty.
30.
As far as the answer given by the Court to the question raised in Deufil is concerned, the only aspect which is applicable to this case is that the Court held that the ‘discipline’ contains only ‘guidelines setting out the course of conduct which the Commission intends to follow’ in the sector in question and ‘with which it asks the Member States to comply’. It is plain, however, that the communications in which the Commission sets out its future policy are not as such binding legal measures. In view of the power conferred on the Commission by Article 93(2), which is confined to taking decisions, the Commission could not adopt a measure setting out the principles of the ‘discipline’ as binding provisions of general scope. Besides, the fact that the ‘discipline’ does not comply with the formal legal requirements and that the Member States are asked to agree to it shows that that is not even the intention. Moreover, the parties seem to be in agreement on this. (
13
)
31.
I can conclude my examination of the case-law at this point and make the incontestable and unchallenged finding that merely a unilateral declaration of the Commission with regard to its future policy on aid in a particular sector does not contain ‘special rules’ within the meaning of Article 7 of Decision 85/18.
32.
Does this mean that the content of the ‘discipline’ can never be taken into account in connection with Article 7?
33.
At the hearing, the Commission stated in answer to a question that the principles set out in its communication had been agreed by the Member States; where there was no such agreement, it stated, it would initiate the procedure provided for in Article 93(2) with regard to the national aid system against the Member State concerned and, where appropriate, would adopt a binding decision, as it had done against the Federal Republic of Germany (
14
) in the case of the Community framework on State aid to the motor vehicle industry. (
15
)
34.
For its part, the French Government states that it considers itself bound by the ‘discipline’, even though this is not suggested by the wording of Article 7 of Decision 85/18 (which refers to ‘special rules on aid to particular industries’).
35.
To my mind, the reasons given by the Commission warrant the principles laid down by the ‘discipline’ being held to be special rules within the meaning of Article 7 of Decision 85/18.
36.
In the first place, it is observed that the wording of the letter of 19 July 1977 (Annex 2 to the application), the letter accompanying the ‘discipline’, required the Member States to desist from granting aid which would lead to an increase in production capacity, even aid which, under systems of regional aid, are granted automatically with no need for prior notification. By that form of words, which, in the absence of any indications to the contrary, is part of the subsequent ‘extensions’ (
16
) of the ‘discipline’, the Commission asks the Member States to forgo, to the extent indicated (in relation to a particular sector and for a certain period), exercising the rights to grant regional aid which they may derive from any Commission decision declaring their national aid systems compatible with the common market.
37.
Consequently, the aim of that request is to make the Commission decision no longer serve as Community justification for the aid by way of forbearance on the part of the Member States, with the result that the aid becomes new aid.
38.
The fact that the Commission refers to Article 93(3) of the Treaty at the end of the passage of the ‘discipline’ published in the Official Journal and the way in which it refers to it are further indications that this is the case.
39.
In the version published in 1985, the following passage can be found:
‘The Commission also wishes to inform third parties that it requires the prior notification of all aid proposals, of whatever form, in favour of companies in the synthetic fibres sector under Article 93(3) of the EEC Treaty, as any such national measure may not be implemented unless and until the Commission approves it.’
40.
The versions published in 1987, 1989 and 1991 contain very similar passages.
41.
As a result of their wording and their reference to Article 93(3), all those texts clearly indicate that, in any event, the Commission regards aids coming within the scope of the ‘discipline’ as new aid.
42.
However, where, as in this case, the aid comes under a regional aid system which the Commission has held to be compatible with the common market, this cannot be the legal position unless the Member State concerned has agreed to the ‘discipline’. In other words, the (partial) renunciation requested by the Commission of the advantages resulting from decisions finding national aid systems compatible with the common market must have actually taken place by the Member State giving its agreement, whether the renunciation is to be construed as a unilaterally effective measure or as part of an agreement with the Commission. Otherwise, the ‘discipline’ would remain nonbinding as described above.
43.
In this context, it should also be observed for completeness' sake that that conclusion is not at odds with the judgment in Deufil v Commission. In that judgment, the Court refers to the courses of conduct which the Commission asks the Member States to comply with. Admittedly, such courses of conduct cannot be the basis for derogations from Articles 92 and 93 and are not intended to be so, but a Member State is perfectly entitled to renounce rights which have been (or are to be) granted to it by complying with the Commission's ‘request’.
44.
As far as the instant case is concerned, it is not contested that the French Government has invariably agreed to the principles formulated by the Commission ever since the ‘discipline’ was introduced. Consequently, in the remainder of this Opinion I shall proceed on the footing that the ‘discipline’ forms part of the ‘special rules on aid to particular industries’ referred to in Article 7 of Decision 85/18, as a result of which an aid which falls within the scope of the ‘discipline’ constitutes new aid within the meaning of Article 93(3).
II — Admissibility
45.
As has already been noted, the two interveners contest the admissibility of the application in various respects in reliance on Articles 91 and 92 of the Rules of Procedure.
46.
1.(a) In this regard, it should first be observed that the formal requirements for a preliminary objection or other preliminary plea are not satisfied, since application was not made by a separate document.
47.
(b) I am further convinced that, in view of Article 93(4) of the Rules of Procedure, it is not possible for the interveners to raise an objection of inadmissibility — no matter what form it is made in; the Commission's argument to the contrary is not supported by the case-law which it cites. According to Article 93(4), which the applicants expressly mention in their response to the statements in intervention, the intervener has to accept the case as he finds it at the time of his intervention. At the time of the intervention, the Commission had lodged its defence, but did not raise therein any reservations in relation to admissibility.
48.
Admittedly, an intervener cannot be denied the use of any argument which has not been used by the party which it supports. (
17
) Consequently, an intervener is entitled to support an objection of inadmissibility raised by the defendant by putting forward pleas and arguments different from those advanced by the defendant. (
18
) In contrast, to plead inadmissibility when it has not been pleaded by the defendant constitutes a defence in its own right and this is precluded by Article 93(4) of the Rules of Procedure. That provision is designed to prevent the provision of a main party from being more strongly attacked by a plea of an intervener than it is by the submissions of the opponent whom the intervener is supporting. It should be borne in mind in this regard that, according to Article 42 of the Rules of Procedure (subject to the exceptions provided for therein), a main party (in this case, the defendant) is not entitled to introduce a new plea after it has lodged its initial pleading (application or defence). Accordingly, the aim and purpose of Article 93(4) require that the intervener should be debarred from doing so also. (
19
)
49.
2. However, it is desirable for the Court to consider the question of admissibility of its own motion under Article 92(2) of the Rules of Procedure; it was with this in mind that the Court — rightly — gave the applicants and the Commission an opportunity of replying to the interveners' arguments.
50.
I shall deal with the question of admissibility under four heads. Under the first (a), I shall consider the question raised by Allied Signal as to whether the Commission's refusal to initiate the procedure provided for by Article 93(2) of the Treaty constitutes an act against which an action for annulment will lie under Article 173 of the Treaty. Under the second (b), I shall examine whether, and if so on what terms, persons, in particular competitors of the recipient of the aid and their associations, may have locus standi under the second paragraph of Article 173. Both the French Government and Allied Signal contest the admissibility of the application from that point of view. Under the third head (c), I shall test the applicants' situation against the criteria so identified. Lastly, under head (d), I shall appraise Allied Signal's additional argument to the effect that the Commission's discretion with regard to initiating the procedure for the supervision of aid and the procedural rules set out in Articles 169 and 170 of the EEC Treaty mean that the application must be declared inadmissible.
51.
(a) (aa) The imperative requirement to which the possibility of challenging a measure under Article 173 of the EEC Treaty is subject is that the measure must have legal effects. (
20
)
52.
Contrary to the view taken by Allied Signal, that requirement is incontestably satisfied in this case.
53.
(1) In that regard, mention should first be made of the effects that the contested refusal has on the possibility of reviewing the compatibility of the aid with the common market. In this respect, the Commission, unlike the applicants, assumes that the French measure is covered by Decision 85/18 and that its compatibility with the common market is therefore established. Except in the event of new factors warranting a change in the Commission's position, the Commission is therefore precluded from the outset from declaring the aid to be incompatible with the common market. If the starting point taken is the applicants' view, which is the only relevant one from the point of view of reviewing the question of admissibility, (
21
) namely that, unless the contested aid can be justified by Decision 85/18, it must be regarded as being new aid, the contested measure resembles a Commission decision holding that the French plan is compatible with the common market.
54.
It is now necessary to consider Allied Signal's argument that a refusal to carry out an act is not amenable to an action for annulment unless such an action would also lie against the act itself. It must be admitted that the Court has applied that principle on many occasions, either expressly or impliedly. Apart from the exception to which I shall be coming forthwith, those cases were, however, all instances in which the refusal related to the adoption of measures terminating the Commission's (internal) procedure (and not to the initiation of such a procedure). (
22
) In so far as that principle has been applied in that context, it cannot be used in this case to answer the question concerning the legal effects of the contested refusal, since the refusal has effects by precluding other measures on the part of the Commission which the initiation of the procedure would not have had.
55.
The exception to which I referred is the judgment in Lütticke and Others v Commission, (
23
) which was concerned with the initiation of proceedings for infringement of the Treaty. (
24
) Following the Opinion of the Advocate General, the Court applied that principle and held as follows: (
25
)
‘The part of the procedure which precedes reference of the matter to the Court constitutes an administrative stage intended to give the Member State concerned the opportunity of conforming with the Treaty. During this stage, the Commission makes known its view by way of an opinion only after giving the Member State concerned the opportunity to submit its observations.
No measure taken by the Commission during this stage has any binding force.
Consequently, an application for the annulment of the measure by which the Commission arrived at a decision on the application is inadmissible.’
56.
Contrary to the view taken by Allied Signal, those considerations cannot be transposed to this case, since the Commission may take measures having binding force in a procedure under Article 93(2).
57.
Moreover, the fact that the Commission's refusal has legal effects is emphatically confirmed by the case-law.
58.
In the judgment in Irish Cement v Commission (
26
) — and even though Advocate General Darmon had expressly argued that an action brought against a decision of refusal is admissible only in so far as a positive decision would itself have been open to challenge — the Court categorized the refusal to initiate the procedure provided for in Article 93(2) as a measure having legal effects (at paragraph 11):
‘... the letter ... constitutes a decision by the Commission rejecting the complaint relating to the aid granted to Quinn. It has definitive legal effects ...’. (
27
)
59.
For completeness' sake, I shall also consider Allied Signal's — less significant — arguments designed to call in question the judgment in Irish Cement v Commission as support for this view.
60.
Allied Signal considers that the passage quoted was merely an obiter dictum (
28
) and that the Court merely held that the time prescribed for bringing an application for annulment had expired.
61.
That does not seem correct to me. I understand the construction of the grounds of the judgment as signifying that, in order to comply with the time-limit laid down in Article 173, the applicant should have made the letter in question the subject of its action for annulment, since that letter already expressed the relevant legal effects, and it could not comply with the time-limit by contesting a later letter which merely confirmed the contested measure (see paragraphs 11 to 16).
62.
In support of its argument that the passage quoted is an obiter dictum, Allied Signal also relied on the fact that the Court raised in paragraph 16 the question whether the applicant in those proceedings was directly and individually concerned (by the contested letter). Allied Signal argues that, if the Commission's letter had in fact been in the nature of a decision, that question would not have arisen, since Irish Cement was the only possible addressee of the measure and hence would have had locus standi irrespective as to whether it was directly and individually concerned.
63.
That view is untenable. In the first place, paragraph 16 of the judgment refers to the ‘contested’ decision and not to the letter which the Court held to have ‘definitive legal effects’.
64.
Secondly, the refusal to initiate a procedure was indeed notified to the applicant, since it had asked for the procedure to be initiated, yet the addressee of the decision was the Member State, as the subject-matter of the procedure was the legality of its conduct in the aid sector. (
29
)
65.
Allied Signal's other arguments in this connection are based on the erroneous view that a measure has legal effects only if the applicant can prove that it detracts from an individual right conferred on it by provisions of Community law. (
30
) That approach disregards the difference between the requirement that a measure should have legal effects and the requirements laid down by the second paragraph of Article 173 with regard to the locus standi of individuals. (
31
) Since Allied Signal's arguments relate intrinsically to the latter point, I shall not consider them until I come to the appropriate section of my Opinion.
66.
(2) Secondly, the contested refusal also has legal effects in so far as it embodies a decision with regard to the prohibition of implementation provided for in Article 93(3). Whereas the Commission takes the view that Decision 85/18 covers the plan at issue, with the result that the plan comes under Article 93(1), the applicants consider that the aid plan falls within the ‘discipline’ and consequendy, as has been seen, within Article 93(3), which provides for a prohibition on the implementation of new aid until it has been found — expressly or impliedly (
32
) — to be compatible with the common market. Simply because by the contested refusal the Commission decided not to implement that bar, it adopted a measure with legal effects. (
33
)
67.
(3) Before I wind up this point, I would also point out that the view expressed by the Commission — in a different context — to the effect that the letter of 4 October 1990 merely confirmed that of 1 August 1990 does not detract from the conclusions which I have reached. Quite apart from the fact that those letters have different addressees (CIRFS, on the one hand, AKZO, on the other), which means, in my view, that the second letter cannot be confirmatory, it should be observed that the true subject-matter of the application is not one or both of those letters, but the refusal which they express and whose legal effects I have just been considering. Legally speaking, that refusal can only exist on one occasion, even if it may be made manifest in two different letters. The allegedly confirmatory nature of the second letter could therefore be relevant only for the purpose of the operative part of the judgment, since the question of compliance with the time-limit for bringing proceedings does not arise.
68.
It should therefore be considered that the objection raised by Allied Signal to the effect that the contested refusal does not have legal effects, does not stand up.
69.
(bb) As the second condition precedent for the admissibility of an application brought against a measure under Article 173 of the EEC Treaty, the Court has held (
34
) that the measure should not constitute merely a preparatory measure. (
35
)
70.
As far as the significance of that factor is concerned, it appears to me that the case-law has evolved. Whereas initially (
36
) the Court stressed the formal criterion of the culmination of a special procedure, it subsequently (
37
) regarded as decisive a substantive criterion based on the effectiveness of legal protection. In fact, it has considered whether the possibility of contesting the decision terminating the procedure afforded sufficient protection against the unlawfulness of the measure. That criterion, which has my preference having regard to the nature of the Community as a community governed by the rule of law, is moreover also the more general one. Where a measure constitutes the culmination of a special procedure, such as the preliminary examination referred to in Article 15(6) of Regulation No 17, (
38
) this may be an indication that effective legal protection requires that it should be capable of being challenged; (
39
) conversely, if a lacuna in legal protection arises by reason of the inability to challenge a measure adopted before the culmination of the normal procedure, that does not constitute an indication that the measure in question was adopted pursuant to a special procedure.
71.
If that criterion is applied to the present case, it will be found that to bring an action against a subsequent measure terminating the procedure as an alternative form of legal protection is inevitably precluded since what was refused was precisely the initiation of the procedure.
72.
Neither in this context does the principle relied on by Allied Signal to the effect that whether a decision of refusal can be challenged depends on whether an action would lie against the positive measure constitute an argument in favour of the inadmissibility of the application. As regards, on the one hand, challenging the measures which the Commission might have adopted if it had initiated the procedure and therefore adopted the positive measure used for comparison purposes, access to such measures is created by initiating the procedure, (
40
) yet precluded by the contested refusal. On the other hand, in the case of a refusal to initiate a procedure — just as would have been the case had a procedure been initiated — there is a decision on the prohibitory effect of Article 93(3); if a procedure had been initiated the Member State concerned would been affected and could have contested the decision.
73.
Completely in accordance with the judgment in Irish Cement, (
41
) it should therefore be held that the contested refusal to initiate the procedure provided for in Article 93(2) is not in the nature of a preparatory measure.
74.
For all those reasons, I conclude that the refusal complained of by the applicants constitutes an act against which an action will lie.
75.
(b) I would now turn to the question whether the applicants have locus standi under the second paragraph of Article 173. Whether they have is in fact doubtful and contested in one respect, namely whether they are individually concerned.
76.
As the Court has consistendy held, persons are individually concerned if the measure affects them by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed. (
42
)
77.
(aa) Before I go into the objection of inadmissibility raised by the interveners in this connection, I would first point out that, as a rule, a person can be individually concerned only if he can assert an individual interest. If this is related to the form of words quoted above, it can be explained as meaning that equating the person with an addressee is justified only if that condition is met. The Court therefore has rightly held (
43
) that one cannot accept
‘the principle that an association, in its capacity as the representative of a category of businessmen, could be individually concerned by a measure affecting the general interests of that category.’
78.
Such a principle
‘would result in the grouping, under the heading of a single legal person, of the interests properly attributed to the members of a category, who have been affected as individuals by genuine regulations, and would derogate from the system of the Treaty which allows applications for annulment by private individuals only of decisions which have been addressed to them, or of acts which affect them in a similar manner.’ (
44
)
79.
The Court has introduced an exception to this rule where (as in antidumping and anti-subsidy cases) (
45
) undertakings' interests can be asserted by associations during the administrative procedure. (
46
) Those principles play a role in the examination of admissibility which the Court should carry out (of its own motion), namely with regard to the application brought by CIRFS. I shall, however, leave the application of those principles for a later section, in which I shall consider the applicants' position in the light of all the criteria relating to admissibility.
80.
(bb) The interveners maintain that the application is inadmissible on the basis of the considerations relied on by the Court in the judgment in Cofaz and Others v Commission. (
47
) In that case, the Court, ruling on the admissibility of an application brought by French manufacturers of nitrate fertilizers against the termination of a procedure relating to an aid allegedly granted to competitors in the Netherlands by means of a special tariff for the supply of natural gas, held as follows (paragraphs 23, 24 and 25):
‘More particularly, as regards the circumstances referred to in that judgment [concerning whether an applicant is individually concerned], the Court has repeatedly held that where a regulation accords applicant undertakings procedural guarantees entitling them to request the Commission to find an infringement of Community rules, those undertakings should be able to institute proceedings in order to protect their legitimate interests [here the Court refers to the judgments in Metro I, (
48
) in Fediol (
49
) and in Demo-Studio Schmidt (
50
)].
In its judgment of 20 March 1985 in Case 264/82 (Timex Corporation v Council and Commission [1985] ECR 849) the Court pointed out that it was necessary to examine in that regard the part played by the undertaking in the administrative proceedings. The Court accepted as evidence that the measure in question was of concern to the undertaking, within the meaning of the second paragraph of Article 173 of the EEC Treaty, the fact that the undertaking was at the origin of the complaint which led to the opening of the investigation procedure, the fact that its views were heard during that procedure and the fact that the conduct of the procedure was largely determined by its observations.
The same conclusions apply to undertakings which have played a comparable role in the procedure referred to in Article 93 of the EEC Treaty provided, however, that thenposition on the market is significantly affected by the aid which is the subject of the contested decision. Article 93(2) recognizes in general terms that the undertakings concerned are entitled to submit their comments to the Commission but does not provide any further details.’
81.
The interveners consider that in this case the Commission initiated only the preliminary procedure during which it considers whether the conditions for initiating the procedure under Article 93(2) are met, but did not initiate the later procedure itself, and that, as a result, the applicants were not entitled to submit observations as provided for by that provision. Accordingly, the interveners take the view that the criteria applied in the judgment in Cofaz have the result that the application is inadmissible.
82.
Even if the interveners are starting from a correct premiss in assuming that the right to submit observations is confined to the procedure properly so called (the procedure provided for in Article 93(2)), (
51
) I cannot agree with their conclusion.
83.
In order to explain my point of view, I shall consider, by setting it in its context, the criterion of ‘procedural guarantees’, (
52
) to which the Court's reasoning relating to the right to submit observations and the objections of the intervener refer. This exercise is also intended to create the basis on which applicants' capacity to bring proceedings may be tested in concrete terms.
84.
The relevant context is defined by the principle referred to in paragraph 23 of the judgment in Cofaz and Others v Commission, which, as the Court confirmed in that judgment, it has consistently applied since the judgment in Metro I (
53
) in its case-law on the locus standi of third undertakings in relation to competition law, (
54
) antidumping law, (
55
) anti-subsidy law (
56
) and the law on aid. (
57
) According to that principle, an action brought by undertakings which are third parties against an application of the competition rules which they consider to be insufficient and insufficiently strict is regarded as a means of ‘protecting their legitimate interests’.
85.
The interest of such undertakings in bringing such actions consists in their interest in preventing other undertakings from receiving, creating or securing unjustified advantages under the competition rules which result in corresponding disadvantages for the applicants. If the Court refers to a ‘legitimate’ interest in that context, this can only mean, as it has not yet been shown that the application is well-founded at the stage of the examination of admissibility, that the relevant provisions are designed to protect that interest. This appears especially clearly from the judgment and the Opinion in FEDIOL. (
58
)
86.
It is easy to see why the Court refers in particular to that factor. In order for a person to be regarded as concerned in like manner to an addressee (and hence as individually concerned), it must be able to be held that, as a result of the contested decision, the relevant provisions were applied to that specific person. Viewed from that angle, it is clear from the aforementioned reference that purely external circumstances, such as in particular participation in the procedure, are not sufficient in order for the complainant to be equated to an addressee; it is instead necessary that the plaintiff, as a person to be protected, should fall within the scope of the relevant provision of competition law.
87.
In this context, it is further essential that the Community measure should, potentially, have effects on the applicant's interest which is so protected which distinguish his situation from that of any other market participants. This is determined — negatively — on the basis of the effects to which the contested State or private conduct gives rise in the light of its economic significance and of the applicant's activity and position on the market. It may, for instance, consist of the effects of excluding the applicant from a selective distribution system in the case of Article 85, (
59
) damage caused by dumping (
60
) or subsidies (
61
) or disadvantages caused by aid granted to competing undertakings. (
62
) Although the Court sometimes does not even mention that condition — in cases in which it was plainly satisfied — (
63
) or considers it only summarily, (
64
) it is clear since the judgment in Cofaz that it is essential.
88.
Generally, (
65
) however, the circumstances to be considered from this point of view are not sufficient to make the decision appear to be a case of the application of the competition rules to the applicant itself. (
66
) The Court additionally requires that the applicant should have participated in the procedure in reliance on the guarantees afforded it and had an influence on it. As far as influencing the procedure is concerned, this appears completely logical, since the administrative procedure is designed specifically to identify the bases for the decision on the steps to be taken by the Community authorities. (
67
)
89.
What role, however, is played in this context by the criterion that the action by the applicant must have taken place in reliance on procedural guarantees?
90.
I take the view that, in the first place, this shows a close connection with the examination of the protective aim peculiar to the competition rule of which the procedural guarantees are the expression. In addition, this protection under the applicable provisions must be effectuated precisely through the participation of the party concerned in the administrative procedure. In that event, the Community authority has to take account of that party's arguments — not only in the interest of the proper application of Community law but also in its own interest.
91.
In spite of the appearances, in this case those principles do not mean that the application is inadmissible simply because the stage in the procedure in which those guarantees exist was not initiated. An undertaking which, as a competitor of the beneficiary undertaking, is eligible for the protection of the law relating to aid, does not forfeit that status because the Commission refuses to initiate the procedure provided for by Article 93(2). Moreover, if the procedure had been initiated, that undertaking would have been entided to the guarantees provided for in that connection for the purposes of effectuating that protection. Seen from that point of view, such refusal to initiate the procedure, in so far as it takes place following substantive involvement of the applicant in the preliminary procedure, appears to be no less a (negative) application of the competition provisions to that very undertaking than a decision to terminate the procedure once it has been initiated. The most obvious difference between those two cases consists in the fact that in a case such as the present one an negative decision is also taken with regard to the application of the procedural guarantees. It would be inappropriate and contradictory to hold that fact against the applicant: inappropriate, since the applicant has no direct influence over this; contradictory, because by means of its application the applicant is indeed seeking the initiation of the stage of the procedure in which it is entitled to those guarantees.
92.
It should therefore be held that to follow the interveners' view would produce substantial gaps in the system of legal redress. It is not just a question of judicial review by the Court of the application of the law relating to aid, but also of the direct effect of the prohibition on implementation provided for in Article 93(3) of the Treaty. Where, as in this case, the Commission takes a negative decision on this, the interveners' argument would mean if it were upheld, that, in the event of an error on the part of the Commission, the competitor concerned would not be able to assert the rights which the Court has recognized it as having.
93.
Whilst I am therefore unable to follow the interveners' views on the question of the capacity to bring proceedings, Allied Signal's reference to the judgment in Lord Bethell's case (
68
) is not capable of altering my view. In that case, the Court dismissed an application brought by a user of scheduled airlines (who was also a Member of the European Parliament) in which he accused the Commission of failing to initiate the procedure provided for in Article 89, although requested to do so, against certain airlines in order to review their tariffs on the basis of Articles 85 and 86 of the EEC Treaty. In those proceedings, which were based on Article 175 and in the alternative on Article 173, the Court did not clarify whether the Commission's conduct was in the nature of a refusal (which was significant for the purposes of choosing between the two provisions). Instead, it examined the two articles together. In the key passage of the judgment (paragraph 16), it held as follows:
‘It is clear therefore that the applicant is asking the Commission, not to take a decision in respect of him, but to open an inquiry with regard to third parties and to take decisions in respect of them. No doubt the applicant, in his double capacity as a user of the airlines and a leading member of an organization of users of air passenger services, has an indirect interest, as other users may have, in such proceedings and their possible outcome, but he is nevertheless not in the precise legal position of the actual addressee of a decision which may be declared void under the second paragraph of Article 173 or in that of the potential addressee of a legal measure which the Commission has a duty to adopt with regard to him, as is the position under the third paragraph of Article 175.’
94.
It should first be observed with regard to this passage that the Court did not expressly rule on the question as to whether the applicant was individually concerned by the Commission's measure, but simply held that he could not be regarded as the addressee of the measure. Secondly, as far as the answer to that question is concerned, the position of the applicant was that of a consumer and not that of an (injured) third undertaking; the Court may have regarded that fact as an important distinction for the purposes of determining whether the applicant was individually concerned in so far as that depended on the effects of the anticompetitive conduct. (
69
) Thirdly, at that time there were no provisions on the field of air transport affording private individuals procedural guarantees: on the one hand, such guarantees could not be inferred from the provision of Article 89; on the other, Regulation No 17 did not apply, in so far as its scope was limited in this connection by Regulation No 141, (
70
) and Regulation No 3975/87, (
71
) which now provides in the field of air transport guarantees comparable to those afforded by Regulation No 17 (see, in particular, Article 3(2)(b)), was not yet in force.
95.
Consequently, the reasoning of that judgment cannot be transposed to this case.
96.
(c)(aa) If the criteria set out so far are applied to the application in this case, it must be held that in so far as it was brought by CIRFS, it is inadmissible. This clearly follows in my view from the principles set out above with regard to the capacity to bring proceedings of associations of undertakings.
97.
The judgment in Van der Kooy and Others v Commission, (
72
) cited by the applicants, does not affect that conclusion, since it does not relate to an action brought by an association in the sense discussed here. In that case, among others, the Landbouwschap, a Dutch body responsible for looking after traders' interests in the agricultural sector, sought the annulment of a Commission decision declaring incompatible with the common market an alleged aid in the form of a preferential gas tariff for glasshouse growers. After Advocate General Sir Gordon Slynn (
73
) considered (but rejected) the option of admitting applications brought by associations in the field of aid, the Court, for its part, clearly showed that it wished to adhere to existing principles. In paragraph 21, it confirmed that locus standi under the second paragraph of Article 173 assumes that the applicant has an interest of its own. It held as follows:
‘... the Landbouwschap cannot be considered to be directly and individually concerned by [the] Decision ... as a recipient of the contested aid ...’.
98.
The Court then considered the position of the Landbouwschap, which it equated in a certain way with a body which had granted aid (
74
) (paragraphs 21 to 24):
‘it is none the less true that, as the Landbouwschap rightly argues, its position as negotiator of gas tariffs in the interests of the growers is affected by Decision 85/215.
Furthermore, in that capacity the Landbouwschap has taken an active part in the procedure under Article 93(2) by submitting written comments to the Commission and by keeping in close contact with the responsible officials throughout the procedure.
Lastly, the Landbouwschap is one of the parties to the contract which established the tariff disallowed by the Commission, and in that capacity is mentioned several times in Decision 85/215. In that capacity it was also obliged, in order to give effect to the decision, to commence fresh tariff negotiations with Gasunie and to reach a new agreement.
It must therefore be concluded that in the circumstances of this case the Landbouwschap was entitled to bring proceedings under the second paragraph of Article 173 for the annulment of Commission Decision 85/215.’
99.
The situation of CIRFS is not at all comparable. Consequently, in so far as the application was brought by that association it should be dismissed as inadmissible.
100.
(bb) Likewise, the application should also be dismissed as inadmissible in so far as it was brought by undertakings other than AKZO. Those undertakings did not take part in the procedure which led to the contested refusal — either directly or by CIRFS acting on their behalf. Neither of the two contested letters was addressed to them. Lastly, there is no evidence suggesting that the effects of the aid are sufficient in themselves as to make them individually concerned as if they were addressees.
101.
(cc) In contrast, AKZO's application satisfies the criteria which I have discussed.
102.
In the first place, AKZO produces a wide range of materials, including polyester fibres used to reinforce tyres. (
75
) According to estimates of a market participant, the share accounted for by tyres of industrial polyester fibres will increase worldwide from 38% (1988) to 42% (1992). (
76
) Furthermore, Allied Signal admitted that AKZO is the largest manufacture of viscose, a material used in the manufacture of most tyres in Western Europe. Accordingly, Allied Signal's production at Longwy would compete significantly with AKZO, with the result that the latter's legitimate interests come under the protection of the law on aid.
103.
In that connection, it should also be observed that in 1990 existing production capacity in the Community of those fibres amounted to 109 kilotonnes. (
77
) In view of the uncertainty of forecasts of trends in demand and the future importance of competing materials, the 25 kilotonne increase in capacity to which Allied Signal's investment would give rise between now and 1993 cannot, on the face of it, be regarded as small, not even if the 7 kilotonnes which Allied Signal has to date imported into the Community from the United States each year is deducted.
104.
Lastly, it is uncontested that the proportion of the investment accounted for by the aid will amount to at least 19% in gross terms (FF 160 million out of FF 840 million), which, according to Commission figures, which take account of the differing tax systems of the Member States, corresponds to a net grant equivalent of 16.5%.
105.
Those considerations suffice for it to be held that AKZO is significantly affected (within the meaning of the criteria set out in the judgment in Cofaz v Commission).
106.
Lastly, AKZO also significantly influenced the procedure which preceded the decision. The refusal, as notified to AKZO, took account of the letter of 29 June 1990 and of other correspondence mentioned in the contested letter of 4 October 1990. Moreover, the letter of 4 October 1990 confirms that the case was discussed in detail by members of various Commission departments together with representatives of AKZO and that the signatory of the letter personally examined the case in the light of points raised by AKZO.
107.
(d) Allied Signal's other objections do not affect the admissibility of AKZO's application either.
108.
The first objection is that to hold the application admissible would detract from the Commission's discretion with regard to the initiation of the procedure. Against that, it should be held that the Court, as a matter of course, also reviews measures which were adopted in the exercise of a discretion. (
78
) In that connection, the Court examines in particular whether the Commission properly applied the ‘principles of the applicable law’ in carrying out its evaluation. (
79
) From that point of view, it cannot be seen how an application which calls in question precisely whether Community law was complied with in the exercise of the discretion (
80
) can be made inadmissible by the existence of such a discretion. (
81
) That objection should therefore be rejected.
109.
Allied Signal's other objection is that, in considering whether the application is well-founded, the Court would also have to determine whether the French Republic failed to fulfil its obligation of notification; in that event, however, the procedural guarantees of Article 169 and 170 of the EEC Treaty would not be secured.
110.
Such an argument may have some justification where the assessment of the application for annulment in the final analysis itself is conditional on finding an infringement of the Treaty, in particular where the application is directed against the Commission's refusal to initiate proceedings against an infringement of the Treaty. However, examination of the instant application does not necessitate such a finding. In contrast, at the most one might envisage the judgment finding an error of the Commission and concluding that there had been an infringement by the Member State. Naturally, such conclusions could not be attributed to the Court, let alone partake of the legal force of the judgment. Neither the wording nor the spirit of the procedural rules of Articles 169 and 170 would be called in question by such a judgment.
Ill — As to whether the application is well-founded
111.
I consider that AKZO's application, which on the basis of the foregoing is admissible, is well-founded.
112.
The applicant (
82
) rightly maintains that at the time when the aid was granted the ‘discipline’ (the requirements of which are, moreover, indisputably fulfilled) covered fibres of the type which Allied Signal intends to produce at Longwy, and that the Commission proceeded on the basis of an incorrect view of the law when it exercised its discretion.
113.
First, contrary to the view of the French Government, the legal nature of the ‘discipline’ does not prevent the applicant from relying on its content. As I have already stated, (
83
) it follows from the agreement give by the Member State concerned that the ‘discipline’ has a direct bearing on the legal consequences resulting for individual aid plans from Decision 85/18. Consequently, a complaint based on the content of the ‘discipline’ ranks the same as any other complaint based on the misapplication of that decision. Consequently, that objection must be dismissed irrespective of the assessment which would have to have been given to it if the ‘discipline’ had a different legal nature.
114.
As far as the disputed scope of the ‘discipline’ is concerned, I completely agree with the applicant's argument: the ‘discipline’ was not confined (as the interveners argue) to fibres intended for the textile and clothing sector when it was introduced in 1977 and was not (as the Commission maintains) subsequently confined to that sector by the Commission's decision in the ‘Faserwerk Bottrop’ case.
115.
As the object of a binding legal measure, the ‘discipline’ must be interpreted in accordance with objective criteria. In that regard, its aim and origin may admittedly be taken into account and determined with the assistance of subsequent explanations and measures of the Commission, in so far as such explanations have evidential value. However, contrary to that which Allied Signal maintains, the Court is not bound by the interpretation which the Commission may have given to the discipline at one time or another.
116.
In view of those interpretative criteria, reference should first be made to the wording of the 1977 letter. That letter refers to synthetic fibres generally, without distinguishing between industrial fibres and fibres intended for the textile and clothing sector. That wording was also covered by the aim of the ‘discipline’ — that of avoiding aggravating the problems caused by the underutilization of capacity. The Commission itself has admitted, on the basis of figures, that during the 1970s and in particular in 1977, there was also excess capacity in the Community as regards industrial fibres. At the hearing, Allied Signal did, it is true, deny that excess capacity existed at that time, but it did not provide any particulars capable of invalidating the Commission's statements.
117.
The fact that my interpretation is also confirmed by the annex to a letter of 1978 in which the Commission explained the precise content of the ‘discipline’ to the Member States. (
84
) At the end of that annex, the Commission stated that the rules in question applied to aid granted in respect of investment projects ‘relating to synthetic fibres of any kind, in particular acrylic, polyester and polyamide fibres, whether intended for use in the textile sector or for industrial applications’. (
85
) The letter further points out that the explanations given in the annex take account of replies received from the Member States. In the annex itself, it was stated that ‘in view of the replies received, the Commission has reached the view that its requests will be complied with’. Consequendy, there is every indication that those explanations reflect the interpretation assumed in common by the Commission and the Member States and that both sides regarded the measure as being justified from the economic point of view also with regard to industrial fibres.
118.
It may be that, as regards the utilization of capacity, the situation subsequently changed, but that question may be left open. Nor is it necessary to clarify whether, as Allied Signal claims, having regard to the present situation and the characteristics of the fibres to be produced by that company, the contested product will not create any surplus capacity. None of those factors is capable of affecting the interpretation of the legal measure in question. Naturally, that does not alter the Commission's obligation, after the procedure has been initiated, to take account of everything which may be relevant to the examination under Article 92(3).
119.
The arguments put forward by the interveners against that interpretation cannot shake my conviction.
120.
It is irrelevant that the 1977 letter refers in general terms to the Community code on aid to the textile and clothing industry. There is undeniably a link between the ‘discipline’ and the Community code, but there is no evidence to suggest that the ‘discipline’ was intended to apply solely to fibres used in that industry.
121.
Contrary to the view taken by the French Government, the letter sent by the Commission to the Member States in preparation for the renewal of the ‘discipline’ in 1987 does not contain any convincing evidence either. Admittedly, that letter refers only to textile fibres in connection with the Commission's view that demand would at best stagnate in the near future. Even if the conclusion could be drawn from this that the opposite was true of industrial fibres, that conclusion would relate only to the situation on the market at that time and not to the content of the ‘discipline’ introduced in 1977.
122.
The two interveners also refer to the Commission's 1988 decision relating to an aid plan for a new unit for the production of industrial polypropylene and polyethylene fibres. That unit was to be set up at Bottrop (and the relevant decision will accordingly be referred to hereinafter as ‘the Faserwerk Bottrop decision’). (
86
) In that decision, the Commission held that the aid in question was compatible with the common market — without initiating an Article 93(2) procedure. As regards polypropylene fibres (polyethylene fibres, as the Commission rightly points out in the decision, are not covered by the ‘discipline’), two considerations essentially are set out with regard to the question of compatibility with the ‘discipline’:
—
the product in question was an innovative one for which there was no excess capacity and hence the aid could not harm other manufacturers producing conventional fibres. Accordingly, the aid did not conflict with the objective of the ‘discipline’, namely that of avoiding increases in capacity in sectors where there was excess supply;
—
the ‘discipline was and still is intended to apply to fibres and yarns for the textile and clothing sector. In this case, however, the only relevant market is outside that sector’.
123.
The second consideration is relevant for present purposes.
124.
However, in answer to a question put at the hearing, the Commission stated that that was the only measure (in any event before the contested decision was adopted) in which it was assumed that the scope of the ‘discipline’ was limited to textile fibres. That — credible (
87
) — admission should be seen in the context of the Commission's further statement that this was an instance of a deviation from the ‘discipline’.
125.
It is unnecessary to decide whether that decision was actually based on the idea that the scope of the ‘discipline’ was limited to textile fibres. The decision was nothing more than a isolated case, which the Commission itself describes as a deviation as far as the contested point of the ‘discipline’ is concerned. It therefore provides no evidence in support of the narrow interpretation of the ‘discipline’ rejected in this Opinion.
126.
In contrast, the fact that in the correspondence (
88
) exchanged with the Commission before the extension of the ‘discipline’ decided upon in 1988 CIRFS maintained that the ‘discipline’ should be ‘extended’ to cover industrial fibres may be connected with the fact that, as the letter of 27 October 1988 (
89
) from CIRFS indicates, some of its members wished for an ‘extension’. A measure of uncertainty as to the law may in fact have arisen among its members following the Faserwerk Bottrop decision, which CIRFS did take issue with — from the point of view of relevance here — but did not subsequently challenge. Accordingly, it might have seemed advisable in those circumstances to propose ‘extending’ the ‘discipline’ by way of a precautionary measure. In the final analysis, I do not regard this either as evidence against my interpretation.
127.
Lasdy, that approach on the part of CIRFS explains why the text of the ‘discipline’ as it was laid down for the period commencing 19 July 1989 states that the Commission
‘will continue to express an unfavourable a priori opinion with regard to proposed aid by Member States, be it sectoral, regional or general, which has the effect of increasing the net production capacity of companies in the synthetic fibres sector (acrylic, polyester, polypropylene and polyamide fibre and yarn and the texturization of these filaments, irrespective of the nature or type of product or end-use).’ (
90
)
128.
As appears from the above considerations, no conclusions can be inferred from this by contrary inference, as the interveners maintain, as regards the legal situation prior to 19 July 1989.
129.
Since the ‘discipline’ therefore applied from the outset to industrial fibres too, it is necessary to consider the Commission's argument that it itself confined its scope to fibres for the textile and clothing industry by means of the Faserwerk Bottrop decision.
130.
That argument can be rejected forthwith. As the object of a binding legal measure which comes into being only as a result of the Member States' agreement, the ‘discipline’ cannot be amended by a unilateral act on the part of the Commission. The fact that the Faserwerk Bottrop decision was not challenged, even though it was notified to all the Member States, is irrelevant. The Member States could not have been aware that their ‘silence’ would trigger such a legal consequence. It cannot therefore be regarded as consent.
131.
It follows from the whole of the foregoing that the ‘discipline’ covered fibres of the type at issue here from the beginning and that its scope was not temporarily narrower (until the 1989 version of the ‘discipline’ was adopted). Consequently, it was also applicable to that extent on 28 June 1989, the date taken by the Commission as the time at which the aid was granted. It is true that the applicant objects to the fact that the Commission used that date as the basis for its decision. However, it does not mention the date which it considers to be the right one, but merely mentions events which took place in the first half of 1990, from which, in its view, it follows that the aid could not have been granted as early as June 1989. Since this means that in so far as the Commission locates the relevant date before the contested decision was adopted, its point of view cannot be regarded as contested. In view of the foregoing considerations there is therefore no need to consider the question of the relevant date or the application made by the applicants for witnesses to be examined in this regard.
132.
The Commission consequently disregarded the fact that the aid fell within the scope of the ‘discipline’ and therefore constituted new aid. It based itself on this erroneous view when it took its decision as to whether to initiate a procedure under Article 93(2) and attached decisive importance to that point in doing so. It cannot be ruled out that it might have taken a different view if it had correctly applied Community law by taking into account the criteria set out in the judgment in Germany v Commission. (
91
) Consequently, the contested Commission decision is based on an exercise of its discretion contrary to Community law. The decision should therefore be annulled.
IV — Costs
133.
The applicants and the Commission should pay their own costs pursuant to Article 69(3) of the Rules of Procedure, except for the costs of the interlocutory proceedings which, in accordance with the form of order sought by the Commission, should be paid by the applicants. For the purposes of Article 69(3), it should be considered that AKZO succeeds but did not ask for an order for costs in time (in the application) in accordance with Article 69(2). It should further be observed that the Commission did not incur additional costs on account of the involvement of the other applicants, since their submissions are set out in the same documents as AKZO's.
134.
As far as the interveners are concerned, the French Government should bear its own costs pursuant to Article 69(4) regardless of the outcome of the proceedings. In accordance with the claim made by the applicants, Allied Signal should bear its own costs as it was unsuccessful; for the aforementioned reasons it is not appropriate for those costs to be apportioned.
C — Conclusion
135.
In view of the whole of the foregoing, I propose that the Court should
—
Dismiss the application as inadmissible in so far as it was brought by CIRFS, Hoechst Aktiengesellschaft, Imperial Chemical Industries PLC and SNIA Fibre SpA;
—
Uphold AKZO NV's application and annul the Commission decision notified to that applicant by letter of 4 October 1990;
—
Order the applicants and the Commission to bear their own costs, with the exception of the costs of the interlocutory proceedings, which must be borne by the applicants alone;
—
Order the interveners to bear their own costs.
(
*1
)	Original language: German.
(
1
)	In the remainder of this Opinion, I shall not distinguish between those two companies, to which I shall refer simply as ‘Allied Signal’.
(
2
)	Commission Decision 85/18/EEC of 10 October 1984 on the French regional planning grant scheme (‘Prime d'aménagement du territoire’) (OJ 1985 L 11, p. 28).
(
3
)	Belgium, France, Luxembourg.
(
4
)	Annex 8 to the defence.
(
5
)	See OJ 1985 C 171, p. 2, OJ 1987 C 183, p. 4, OJ 1989 C 173, p. 5, OJ 1991 C 186, p. 11, and OJ 1992 C 179, p. 3.
(
6
)	Annex 12 to the application.
(
7
)	Annex 14 to the application.
(
8
)	Annex 13 to the application.
(
9
)	In the reply, they further claimed that the Commission should be ordered to pay the costs (see section 133 below).
(
10
)	Judgments in Case 120/73 Lorenz v Germany [1973] ECR 1471, paragraph 3, in Joined Cases 91 and 127/83 Heineken Brouwerijen v Inspecteurs der Vennootschapsbelasting Amsterdam en Utrecht [1984] ECR 3435, paragraph 14, and in Case C-301/87 France v Commission [1990] ECR I-307, paragraph 17.
(
11
)	Judgment in Case 173/73 Italy v Commission [1974] ECR 709, paragraph 16; judgment in France v Commission, cited in footnote 10, paragraph 22.
(
12
)	Judgment in Case 310/85 Deufil v Commission [1987] ECR 901.
(
13
)	At the hearing, the Commission described the ‘discipline’ as a proposal within the meaning of the second sentence of Article 93(1) (by referring to the adoption of ‘appropriate measures’). This does not seem to be to as straightforward as the Commission would have it be. According to its wording, the ‘discipline’ does not cover only existing aid, but also new aid, and existing aid also encompasses cases in which the domestic aid system has been declared to be compatible with the common market and adopted after the ‘discipline’ was adopted or extended. However, this question does not have to be explored in this case; see section 35 et seq. below.
(
14
)	Commission Decision 90/381/EEC of 21 February 1990 amending German aid schemes for the motor vehicle industry (OJ 1990 L 188, p. 55).
(
15
)	OJ 1989 C 123, p. 3.
(
16
)	See the communications published in the C series of the Official Journal cited in footnote 5.
(
17
)	Judgment in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1, at 18.
(
18
)	Judgment in Joined Cases 42 and 49/59 SNUPAT v High Authority [1961] ECR 53, at 75.
(
19
)	Opinion of Advocate General Lagrange in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 34, at 36.
(
20
)	As the Court has consistendy held: see, most recendy, the judgments in Case C-312/90 Spain v Commission [1992] ECR I-4117 and in Case C-47/91 Italy v Commission [1992] ECR I-4145.
(
21
)	The question of what the content of the ‘discipline’ was at the time when the aid was granted should be left for the Court's decision on whether the application is well-founded.
(
22
)	See, in particular, the judgments in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority, cited in footnote 19, in Case 42/71 Noragetreüle v Commission [1972] ECR 105 and in Joined Cases 97, 193, 99 and 215/86 Asteris v Commission [1988] ECR 2181.
(
23
)	Judgment in Case 48/65 LUtticke and Others v Commission [1966] ECR 19.
(
24
)	The judgment in Case C-87/90 Sonito v Commission [1990] ECR I-1981 also relates to this eventuality. However, the considerations set out in that judgment are not concerned with the principle at issue in this case, but with the parallels between an action for annulment and an action for failure to act; I shall be returning to this later (section 108, footnote 81).
(
25
)	At 27.
(
26
)	Judgment in Joined Cases 166 and 220/86 Irish Cement v Commission [1988] ECR 6473.
(
27
)	It should also be observed that the Court did not reject the Advocate General's view that the aid was existing aid. However, the Commission's action against existing aid is confined to the future, a restriction which can have no application, if only conceptually, to new aid. It should therefore be considered that the legal effects produced by a refusal to initiate a procedure (in so far as it precludes other measures on the part of the Commission) are even more marked in the case of new aid than they are in the case of existing aid. The solution adopted in Irish Cement should apply — with even greater reason, one might say — in this case.
(
28
)	Pages 11 and 12 (section 19) of the statement in intervention.
(
29
)	It is that distinction between the addressee of the actual measure and the addressee of the tetter expressing that measure from which the whole of the case-law on third undertakings' right to bring proceedings in the field of competition law tacitly proceeds (see footnotes 48, 50 and 54 below (judgment in Metro II); only the judgment in Joined Cases 142 and 156/84 BAT II [1987] ECR 4487, paragraph 12, seems to constitute an exception); this is also true in the field of antidumping and anti-subsidy law (see footnote 49, below, and the judgment in Timex Corporation v Council and Commission, cited in section 80).
(
30
)	Citing the judgment in Case 169/84 Cofaz and Others v Commission [1986] ECR 391, Allied Signal refers in particular in this connection to rights relating to participation in the procedure which, according to Allied Signal, do not exist until the procedure has been initiated.
(
31
)	It is certainly no accident that the wording employed by the Court in paragraph 9 of the judgment in Case 60/81 IBM v Commission [1981] ECR 2639, according to which the measure must have ‘legal effects ... which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position’, has not been taken up in the more recent case-law; see the judgments cited in footnote 20, Spain v Commission, paragraph 11, and Italy v Commission, paragraph 19.
(
32
)	See the judgment in Lorenz v Germany, cited in footnote 10, paragraph 4.
(
33
)	Cf., as regards that aspect, the judgments in Spain v Commission and Italy v Commission, cited in footnote 20.
(
34
)	Judgments in Spain v Commission and Italy v Commission, cited in footnote 20.
(
35
)	The judgment in Joined Cases C-133/87 and C-150/87 Nashua Corporation and Others v Commission and Council [1990] ECR I-719, paragraph 9, refers to an ‘intermediate measure whose purpose is to prepare for the final decision’ as does the judgment of the Court of First Instance in Case T-64/89 Automec v Commission [1990] ECR II-367.
(
36
)	Judgments in IBM v Commission, cited in footnote 31, paragraph 11, and in Case 182/80 Gauff v Commission [1982] ECR 799, paragraph 18.
(
37
)	Judgment in Case 53/85 AKZO Chemie v Commission [1986] ECR 1965, paragraph 19, and judgments in Spain v Commission and Italy v Commission, cited in footnote 20.
(
38
)	OJ, English Special Edition 1959-62, p. 57.
(
39
)	See, by way of illustration, the judgment in Joined Cases 8 to 11/66 Cimenteries and Others v Commission [1967] ECR 75, in particular at 92; this case-law has been followed by the Court of First Instance, see the judgment in Case T-19/91 Vichy v Commission [1992] ECR II-415, paragraph 38.
(
40
)	In the final analysis, similar reasoning justifies holding an application brought against the initiation of a procedure under Regulation No 17 as inadmissible, as the Court did in the IBM case (see footnote 36).
(
41
)	Judgment cited in footnote 26, paragraph 11, which refers to ‘definitive’ legal effects.
(
42
)	See, for example, the judgment in Cofaz and Others v Commission, cited in footnote 30, paragraph 22.
(
43
)	Judgment in Joined Case 16 and 17/62 Confédération nationale des producteurs de fruits et légumes [1962] ECR 471, at 479 and 480.
(
44
)	See, to the same effect, the judgment in Case 72/74 Union
Syndicale v Council [1975] ECR 401, the order in Case 60/79 Fédération nationale des producteurs de vins de table et vins de pays v Commission [1979] ECR 2429, the judgment in Case 282/85 DEFI v Commission [1986] ECR 2469 and the order in Case 117/86 UFADE v Council [1986] ECR 3255. The judgment in Case 135/81 Groupement des agences de voyages v Commission [1982] ECR 3799, dealing with the question of being ‘directly’ concerned, has remained an isolated case.
(
45
)	Cf. the judgment in Case 191/82 Fediol v Commission [1983] ECR 2913.
(
46
)	As regards Articles 85 and 86, reference should be made for the sake of completeness to the judgment in Case 283/83 CICCE v Commission [1985] ECR 1105. Since the Commission did not contest the admissibility of the application from the point of view of the locus standi of the applicant association, that issue was not tackled either in the judgment or in the Opinion. See, in that connection, (the German version of) Article 3(2)(b) of Regulation No 17, cited in footnote 38, which recognizes the right to bring proceedings of associations.
(
47
)	Cited in footnote 30.
(
48
)	Case 26/76 Metro v Commission [1977] ECR 1875.
(
49
)	Case 191/82 Fediol v Commission [1983] ECR 2913.
(
50
)	Case 210/81 Demo-Studio Schmidt v Commission [1983] ECR 3045.
(
51
)	Judgment in Case 84/82 Germany v Commission [1984] ECR 1451; judgment in Heineken Brouwerijen, cited in footnote 10.
(
52
)	Judgment in Cofaz v Commission, cited in footnote 30, paragraph 23.
(
53
)	See footnote 48.
(
54
)	See the preceding footnote and the judgment in Demo-Studio Schmidt v Commission, cited in footnote 50; according to the judgment in Cofaz: judgment in Case 75/84 Metro v Commission [1986] ECR 3021 (Metro II).
(
55
)	See the judgment in Timex Corporation v Commission and Council, cited in section 80 in the passage from the judgment in Cofaz.
(
56
)	Judgment in Fediol v Commission, cited in footnote 45.
(
57
)	Judgment in Cofaz and Others v Commission, cited in footnote 30.
(
58
)	Paragraph 25 of the judgment in conjunction with the Opinion of Advocate General Rozès [1983] ECR 2937, at 2949, right-hand column.
(
59
)	Judgments in Metro I and Metro II, cited in footnotes 48 and 53, respectively, and in Demo-Studio Schmidt, cited in footnote 50.
(
60
)	Judgment in Timex Corporation v Council and Commission, cited in section 80.
(
61
)	Judgment in Fediol, cited in footnote 45.
(
62
)	Judgment in Cofaz and Others v Commission, cited in footnote 30.
(
63
)	See the judgments in Metro I and Demo-Studio Schmidt, where the applicants' situation was distinguished by the fact that the refusal of admission to a selective distribution system was directly precisely against it (see, to that effect, paragraph 21 of the judgment m Metro II). In the judgment in FEDIOL v Commission, the Court did not have to consider the effects of the contested subsidies which had been granted to the soya industry in a third country, since the applicant represented the whole of the Community's seedcrushing sector and was therefore entitled to invoke the aggregate effects of the subsidies on the competitive position of its member undertakings (see also section 79 above).
(
64
)	See the judgment in Timex Corporation v Commission, in which the Court investigated only the applicant's position on the market.
(
65
)	The judgment in Case 358/89 Extramet Industrie v Counci [1991] ECR I-2501 is an exception in this regard. Despite appearances, what was involved in a certain way in that case was an action brought by a third undertaking. The applicant complained that the imports on which its business largely depended had been made more expensive by an antidumping duty justified by damage caused to one of the applicant s competitors, on the ground that, in its view, the damage was caused by the competitor itself. In the applicant's view, the antidumping duty had the effect of an — unjustified — aid to its competitor. In the view of the specific features of the case, the Court held that the applicant was individually concerned solely on the basis of the economic effects of the antidumping duty on its undertaking.
(
66
)	See a similar consideration (relating to an aid of the Community) in the judgment in Joined Cases 10 and 18/68 Edidania v Commission [1969] ECR 459, paragraph 7.
(
67
)	See the judgment in Case 290/83 Commission v France [1985] ECR 439.
(
68
)	Judgment in Case 246/81 Lord Bethell v Commission [1982] ECR 2277.
(
69
)	See section 87 above.
(
70
)	Regulation No 141 of the Council of 26 November 1962 exempting transport from the application of Council Regulation No 17, OJ, English Special Edition 1959-62, p. 291.
(
71
)	Council Regulation (EEC) No 3975/87 of 14 December 1987 laying down the procedure for the application of the rules on competition to undertakings in the air transport sector (OJ 1987 L 374, p. 1), as most recently amended by Council Regulation (EEC) No 2410/92 of 23 July 1992 (OJ 1992 L 240, p. 18).
(
72
)	Judgment in Joined Cases 67, 68 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219.
(
73
)	Opinion of 2 April 1987, [1988] ECR 240, at 246.
(
74
)	See, in this connection, the judgment in Joined Cases 62 and 72/87 Exécutif regional wallon v Commission [1988] ECR 1573.
(
75
)	See Annex 13 to Allied Signal's statement in intervention and Annex 10 to the applicants' reply to the statements in intervention.
(
76
)	Annex 13 to Allied Signal's statement in intervention.
(
77
)	Allied Signal's statement in intervention, section 63; section 47 of the applicant's response thereto.
(
78
)	I am assuming here in the Commission's favour that the initiation of a procedure pursuant to Article 93(2) is a matter for its discretion. As far as this question is concerned, to date it has merely been established that a legal obligation to initiate a procedure exists where the Commission in fact has serious difficulties in determining whether an aid is compatible with the common market (cf. the judgment in Germany v Commission, cited in footnote 51). Since that was not the case here, the only question liable to arise is whether the Commission has a discretion when it has to assess whether such difficulties exist. That question is irrelevant here, however, as the contested decision results in an incorrect application of Community law and should therefore be annulled irrespective as to whether or not the Commission has a discretion: see section 132 above.
(
79
)	Cf. the judgment in Joined Cases 56 and 58/64 Consten and Grundig v Commission [1966] ECR 299, at 347.
(
80
)	Admittedly, it is stated at the end of the application that the Commission was bound to initiate a procedure, but the gravamen of the application is that the Commission wrongly assumed that the ‘discipline’ did not preclude the contested aid (cf. section 24 of the application).
(
81
)	I am not disregarding the fact that a problem of the consistency between Article 173 and Article 175 arises here. According to its wording, Article 175 does not enable the discretion to be reviewed in the event of a mere failure to act in the absence of a refusal to act, but applies only where there is a legal duty to act. In order to resolve that contradiction in the course of the development of Community law, it seems to me to be more appropriate, as a general guideline, to apply the third paragraph of Article 175 in the light of the second paragraph of Article 173, rather than the other way around (see, to this effect, inter alia the Opinion of Advocate General Gulman of 8 July 1992 in Joined Cases C-15/91 and C-108/91 Buckl and Others v Commission [1992] ECR I-6061, section 19; aliter, the judgment in Sonito v Commission, cited in footnote 24, paragraphs 6 and 7).
(
82
)	Since the application is admissible only in the case of AKZO, I shall use the singular in the remainder of this Opinion.
(
83
)	See section 23 et seq. above.
(
84
)	Annex 5 to the application.
(
85
)	My emphasis.
(
86
)	Annex 11 to the defence.
(
87
)	Especially since the Commission thereby concedes that a consistent practice referred to in the contested letter of 4 October 1990 did not exist
(
88
)	See Annexes 14 and 15 to the defence.
(
89
)	Annex 14 to the defence.
(
90
)	My emphasis.
(
91
)	Judgment in Case 84/82 Germany v Commission, cited in footnote 51, and see footnote 78.