62010CC0047_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. This case is another illustration of the problems associated with applying the case-law of the Court of Justice concerning the rights of complainants in the procedure for reviewing State aid. One of the issues it raises concerns the extent of the prerogatives enjoyed by the General Court of the European Union in interpreting the pleas raised by a party concerned where, in support of its action, that party puts forward pleas which are intended to safeguard its procedural rights as well as pleas seeking to call into question the merits of the decision by the European Commission. (2)
2. This case also provides the Court with the opportunity to draw attention to the discretion enjoyed by the Commission when it encounters serious difficulties in examining the compatibility of the aid and the scope of the related review of legality.
3. By judgment of 18 November 2009 in Scheucher-Fleisch and Others v Commission, (3) the Court of First Instance (now ‘the General Court’) upheld the action brought by Scheucher-Fleisch GmbH and other undertakings (4) (‘Scheucher-Fleisch and Others’) as being partially admissible and annulled Commission Decision C(2004) 2037 final of 30 June 2004 on State aid NN 34A/2000 concerning the quality programmes and labels AMA-Biozeichen and AMA-Gütesiegel in Austria. (5) The General Court held that the assessment of the compatibility with the common market of the aid in question in actual fact raised serious difficulties which should have led the Commission to initiate the formal investigation procedure provided for under Article 88(2) EC. The Republic of Austria and the Commission each dispute that analysis, the latter lodging a cross-appeal.
4. In this Opinion, I shall be proposing that the Court dismiss these appeals.
I – Relevant European Union legislation
5. First of all, I shall set out the relevant provisions of the EC Treaty and then indicate the applicable provisions of Regulation (EC) No 659/1999, (6) which is the regulation implementing Articles 87 EC and 88 EC. I shall also indicate the relevant points in the Guidelines for State aid for advertising.
A – The EC Treaty
6. Under Article 87 EC, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort intra‑Community competition is, in principle, prohibited, subject to the exceptions listed in Article 87(2) and (3) EC.
7. Article 87(3) EC lists the aid which may be considered to be compatible with the common market. This includes aid to facilitate the development of certain economic activities or of certain economic areas.
8. To ensure implementation of those provisions, the Treaty – in particular, Article 88 thereof – establishes a procedure for the reviewing and prior approval of State aid, in which the Commission plays the central role. That review procedure comprises two stages.
9. The preliminary examination of the aid is provided for in Article 88(3) EC. (7) Under that provision, Member States are required to notify to the Commission their plans to grant or alter aid and are not to put such plans into effect until the Commission has reached a decision. That stage is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid in question. (8)
10. If the Commission has doubts as to the conformity of the aid with the common market, it must initiate the formal investigation procedure under Article 88(2) EC. (9) In that context, the Commission must request that the parties concerned submit their comments so that it can be fully informed of all the facts of the case.(10) If, following that investigation, the Commission finds that the aid in question is not compatible with the common market in the light of Article 87 EC, or that such aid is being misused, it is to decide that the Member State concerned must abolish or alter such aid within a period of time to be determined by the Commission.
B –	Regulation No 659/1999
11. The Commission’s exercise of the powers conferred on it by the Treaty is a practice that has been codified by Regulation No 659/1999. That regulation lays down rules which have been drawn up in accordance with the case-law of the Court of Justice. (11)
12. Accordingly, Article 1(h) of Regulation No 659/1999 reproduces, with almost identical wording, the definition that the Court gave to the concept of ‘parties concerned’ (or ‘interested parties’) in the judgment of 14 November 1984 in Intermills
v Commission, (12) as consistently confirmed by the Court since then. (13) Under that provision, an ‘interested party’ is to mean ‘any Member State and any person, undertaking or association of undertakings whose interests might be affected by the granting of aid, in particular the beneficiary of the aid, competing undertakings and trade associations.’
13. Article 4 of Regulation No 659/1999 concerns the preliminary examination which the Commission must carry out when a Member State notifies to it plans to grant or to alter aid.
14. Under that provision, the Commission may adopt three types of decision: (i) it may decide that the notified measure does not constitute aid; (ii) it may find that no doubts are raised as to the compatibility with the common market of the notified measure and decide not to raise objections to the grant of the aid in question; and (iii) where doubts are raised as to the compatibility with the common market of the notified measure, it may decide to initiate the formal investigation procedure under Article 88(2) EC.
15. In that last case, the Commission must, in accordance with Article 6(1) of Regulation No 659/1999, call upon the Member State concerned and upon other interested parties to submit comments within a period prescribed by it.
16. Article 20 of Regulation No 659/1999 relates specifically to the rights of interested parties. Article 20(1) states that any interested party may submit comments following a Commission decision to initiate the formal investigation procedure. Article 20(2) further states that any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid.
C – Guidelines for State aid for advertising
17. The Community Guidelines for State aid for advertising of products listed in Annex I to the EC Treaty and of certain non-Annex I products (14) encompass the public intervention measures by which the national authorities help to finance the promotion and advertising of agricultural products either through direct financial contributions from their budgets or using government resources including parafiscal charges or compulsory contributions. Provided that certain conditions are met, the Commission takes a favourable view of such activities, since they facilitate the development of economic activities in the agricultural sector and the achievement of the objectives of the common agricultural policy. (15)
18. In accordance with paragraph 10 of the Guidelines for State aid for advertising, ‘[t]he general prohibition on State aid contained in Article 87(1) [EC] is only applicable if the publicly funded advertising distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods. Where such publicly funded advertising activities refer to the national or regional origin of the products concerned, the advertising clearly favours certain products and therefore Article 87(1) may apply.’
19. Paragraphs 49 and 50 of those guidelines read as follows:
‘49. National quality control schemes should be dependent solely on the existence of intrinsic objective characteristics … and not dependent on the origin of the products or the place of production. Irrespective of whether the quality control schemes are compulsory or voluntary, access to such schemes must therefore be granted to all products produced in the Community, irrespective of their origin, provided that they meet the conditions laid down. …
50. Where the scheme is restricted to products of a particular origin …, the scheme itself is contrary to the Treaty, and it is self-evident that the Commission cannot consider aid for the advertising of such a scheme to be compatible with the common market. …’
20. It follows from paragraph 46 of those guidelines that the origin of the products must be understood to mean ‘national, regional or local origin’.
II – Facts
21. The facts, as stated in the judgment under appeal, may be summarised as follows.
22. In 1992, the Republic of Austria adopted the Federal Law on the establishment of the market-regulating agency ‘Agrarmarkt Austria’ (Bundesgesetz über die Errichtung der Marktordnungsstelle ‘Agrarmarkt Austria’), (16) Paragraph 2(1) of which created a public-law corporation, Agrarmarkt Austria (‘AMA’). AMA’s function is to promote agricultural marketing. To that end, it is responsible for the collection of contributions which must, in particular, under Paragraph 21c(1)(3) of the AMA-Gesetz 1992, be paid for the slaughter of animals.
23. The aim of the aid in question is to encourage the production, treatment, processing and sale of agricultural products in Austria by means of the AMA bio-label and AMA quality label (‘the AMA labels’).
24. As Austrian undertakings specialising in the slaughter and butchering of animals, Scheucher-Fleisch and Others must pay contributions to AMA. However, their products are not entitled to the AMA labels. They therefore complained to the Commission on 21 September 1999, claiming that they had been adversely affected by certain provisions of the AMA-Gesetz 1992.
25. By the contested decision, the Commission decided not to raise any objections to the measures ‘notified’. In that regard, it considered those measures to be compatible with the common market for the purposes of Article 87(3)(c) EC in that they complied with the conditions imposed by the Community Guidelines for State aid in the agriculture sector (17) and by the Guidelines for State aid for advertising.
III – Procedure before the General Court and the judgment under appeal
26. By application lodged at the Registry of the General Court on 17 September 2004, Scheucher-Fleisch and Others brought an action for annulment of the contested decision. They relied, in essence, on three pleas in law in support of their action.
27. The first plea in law alleged infringement of procedural rules. It was put forward in four parts: (i) failure to notify to the Commission the aid in question; (ii) breach of the procedural guarantees provided for in Article 88(2) EC; (18) (iii) breach of the duty to state the reasons for a decision; and (iv) breach of the principle that the Commission must act within a reasonable time. The second plea in law alleged infringement of Article 87(3)(c) EC. (19) In support of their third plea in law, Scheucher-Fleisch and Others alleged that the Commission had infringed the ‘standstill clause’ laid down in Article 88(3) EC and Article 3 of Regulation No 659/1999.
28. The Commission raised a preliminary objection of inadmissibility vis-à-vis the action, on the view that Scheucher-Fleisch and Others were neither directly nor individually concerned by the contested decision. With regard to the procedural guarantees laid down in Article 88(2) EC, it also took the view that it had not been required to give formal notice to Scheucher-Fleisch and Others to submit their comments since, by lodging a complaint, they had already stated their views and had thus exhausted their right to submit comments in the formal investigation procedure.
29. The General Court declared that the action was partially admissible and annulled the contested decision.
IV – Procedure before the Court of Justice and forms of order sought
30. By application lodged at the Registry of the Court of Justice on 28 January 2010, the Republic of Austria brought an appeal against the judgment of the General Court.
31. It is requesting that the Court set aside the judgment under appeal and, in disposing of the case, dismiss the application as inadmissible or, in the alternative, as unfounded. The Republic of Austria is also claiming that Scheucher-Fleisch and Others should be ordered to pay the costs on appeal and at first instance.
32. In its response lodged on 22 April 2010, the Commission states that it unreservedly supports the appeal brought by the Republic of Austria and subscribes to all the grounds of appeal put forward. However, it sets out supplementary arguments. Both Scheucher-Fleisch and Others and the Republic of Austria construed those arguments as introducing new grounds of appeal and responded to them by way of separate pleadings of 28 June 2010 and 22 July 2010 respectively, pursuant to Article 117(2) of the Rules of Procedure of the Court of Justice.
33. According to the Court, for a submission to be regarded as a cross-appeal, under the above provision, the party which relies on it must seek the setting aside, in whole or in part, of the judgment under appeal on a ground which was not raised in the appeal. To establish whether that is the case, the Court considers it necessary to look at the wording, aim and context of the passage in question in the response. (20)
34. Nowhere in its response does the Commission use the expression ‘cross-appeal’. At paragraph 1 of that response, it states that ‘since all aspects of the reasons for the appeal [by the Republic of Austria] are properly and clearly stated, [it] will simply submit additional arguments’.
35. Although conclusions regarding the Commission’s intentions cannot be drawn from that wording, a cross-appeal can be considered to exist in the light of the substance of the arguments put forward.
36. My understanding is that the Commission is raising three new grounds of appeal. By the first ground, the Commission is seeking to illustrate that the General Court incorrectly assessed the admissibility of the action by relying on arguments which were not put forward by the Republic of Austria. The second and third grounds of appeal respectively allege failure on the part of the General Court to have due regard for the scope of its jurisdiction to review legality and failure to fulfil the duty to state reasons.
37. The Commission endorses all the claims made by the Republic of Austria, namely that the Court of Justice should set aside the judgment under appeal and, in disposing of the case, dismiss the application as inadmissible or, in the alternative, as unfounded. The Commission also claims that Scheucher-Fleisch and Others should be ordered to pay the costs on appeal and at first instance.
38. For their part, Scheucher-Fleisch and Others contend that the Court should dismiss the appeal and order the Republic of Austria to pay the costs.
V – The main appeal
39. The Republic of Austria puts forward four grounds of appeal.
40. By the first ground, it argues that the General Court incorrectly assessed the admissibility of the action at first instance. It claims, in particular, that the Court erred in law in treating Scheucher-Fleisch and Others as ‘parties concerned’ for the purposes of Article 88(2) EC. Furthermore, it wrongly applied the case-law in accepting the admissibility of the third part of the first plea (alleging failure to state reasons), and of the second plea (alleging infringement of Article 87(3)(c) EC), inasmuch as Scheucher-Fleisch and Others failed to show that their competitive position had been significantly affected.
41. The second ground of appeal is that the General Court wrongly assessed the need to initiate the formal investigation procedure. By acknowledging that there were serious difficulties of assessment, the General Court erred in law and failed to fulfil its duty to state reasons.
42. The third and fourth grounds of appeal respectively allege breach of the rules governing the burden of proof and infringement of Article 64 of the Rules of Procedure of the General Court.
A –	The first ground of appeal: incorrect assessment of the admissibility of the action at first instance
43. Before commencing my analysis, I must set out the main themes of the reasoning adopted by the General Court in the judgment under appeal.
1. The judgment under appeal
44. First, the General Court held that Scheucher-Fleisch and Others were directly concerned by the contested decision as defined by the fourth paragraph of Article 230 EC. The Court established that, since the aid at issue had already been implemented, the possibility that the Austrian authorities would decide not to grant it was purely theoretical.
45. Secondly, the General Court assessed whether Scheucher-Fleisch and Others were individually concerned by the contested decision. In contrast to the cases which enabled the Court of Justice to establish its case-law in the matter and, in particular, the cases which gave rise to the judgments in Cook
v Commission, Matra
v Commission
and Commission
v Aktionsgemeinschaft Recht und Eigentum as well as the judgments in Germany and Others
v Kronofrance (21) and British Aggregates
v Commission, (22) Scheucher-Fleisch and Others advanced pleas intended to safeguard their procedural rights as well as pleas seeking to call into question the merits of the contested decision. In the judgment under appeal, the General Court therefore evaluated the admissibility of the action on the basis of each of the pleas put forward.
46. First, in paragraphs 51 to 56 of that judgment, the General Court held the second part of the first plea in law, alleging infringement of the procedural guarantees, to be admissible. The Court took the view that Scheucher-Fleisch and Others, operating on the same geographical market as the undertakings entitled to the AMA labels, were competitors of those undertakings. It also stated, in response to the argument put forward by the Commission, that Scheucher-Fleisch and Others could not be deprived of the right to enforce their procedural guarantees simply because they had been able, by lodging their complaint, to put forward their comments during the preliminary examination procedure under Article 88(3) EC.
47. Secondly, in paragraphs 57 to 61 of the judgment under appeal, the General Court assessed whether Scheucher-Fleisch and Others had standing to challenge the validity of the contested decision. The Court established that they had not shown, for the purposes of the case-law, that their competitive position on the market could be substantially affected by the aid at issue. Consequently, the Court held to be inadmissible, on the one hand, the first and fourth parts of the first plea in law, alleging respectively failure to notify the aid at issue and failure to observe the principle that the Commission must act within a reasonable time and, on the other hand, the third plea in law, alleging infringement of the ‘standstill clause’ laid down in Article 88(3) EC and Article 3 of Regulation No 659/1999.
48. Thirdly, in paragraphs 62 to 64 of the judgment under appeal, the General Court considered the admissibility of the third part of the first plea in law, alleging breach of the duty to state the reasons for a decision, and the admissibility of the second plea in law, alleging infringement of Article 87(3)(c) EC. Relying on the judgment given by the Court of Justice on 15 December 1961 in Fives Lille Cail and Others
v High Authority, (23) the General Court interpreted those pleas in terms of their substance rather than of their classification. It took the view that those pleas contributed evidence of arguments in support of the infringement of procedural guarantees alleged by Scheucher-Fleisch and Others and held them to be admissible.
2. Arguments of the parties
49. By its first ground of appeal, the Republic of Austria – supported by the Commission – submits that the General Court wrongly applied the case-law on the circumstances in which an action for annulment brought with regard to State aid is admissible. According to the Republic of Austria, the Court should have dismissed the action in its entirety as inadmissible.
50. First of all, the Republic of Austria maintains that the General Court erred in law by considering Scheucher-Fleisch and Others to be directly and individually concerned for the purposes of the fourth paragraph of Article 230 EC and by treating them as ‘parties concerned’ for the purposes of Article 88(2) EC.
51. As to whether Scheucher-Fleisch and Others are directly affected, the Republic of Austria alleges that the General Court based its reasoning on the implementation of the aid scheme in question. It further submits that Scheucher-Fleisch and Others are not directly concerned by the AMA-Gesetz 1992, since that legislation constitutes a general measure, or by the contested decision. The Republic of Austria also points out that Scheucher-Fleisch and Others are not engaged in the slaughter or butchering of animals imported from other Member States and would, furthermore, have decided voluntarily to dispense with the aid in question.
52. Secondly, the Republic of Austria submits that the General Court erred in law by accepting as admissible the third part of the first plea in law, alleging failure to fulfil the duty to state the reasons for a decision, and the admissibility of the second plea in law, alleging infringement of Article 87(3)(c) EC, even though Scheucher-Fleisch and Others had not shown that their competitive position had been substantially affected. Indeed, once Scheucher-Fleisch and Others had called into question the merits of the contested decision, they were required to furnish evidence to that effect.
53. According to the Republic of Austria, by accepting those arguments as admissible, the General Court consequently distorted the requirements laid down by the case-law and substantially extended the circle of potential applicants. Furthermore, it vitiated its reasoning with a contradiction.
54. In its response, the Commission levels strong criticism against the case-law established by the Court of Justice in Cook
v Commission, Matra
v Commission and Commission
v Aktionsgemeinschaft Recht und Eigentum, on which the General Court relies in the judgment under appeal. That case-law, it maintains, inasmuch as it creates procedural rights for the parties concerned, is contrary to Article 88 TFEU, given that that provision protects the interests of Member States only.
55. In addition, the Commission contends that applying the case-law devolving from Cook
v Commission and Matra v Commission leads to irresolvable contradictions. An individual who brings an action to safeguard his procedural rights under Article 88(2) EC is, it argues, individually concerned, although he does not meet the criteria laid down by the Court of Justice in Plaumann
v Commission . (24) Such an approach in that case renders entirely meaningless the concept of the ‘person individually concerned’ for the purposes of the fourth paragraph of Article 230 EC and paves the way for popular actions.
56. Such contradictions, the Commission adds, are accentuated by the approach adopted by the General Court which seeks henceforth to interpret an applicant’s pleas on the basis of their substance rather than their classification. The Commission consequently suggests that, in all cases where the applicant challenges a decision adopted under Article 88(3) EC, the Court of Justice should apply the criterion of direct and individual concern established by Plaumann
judgment.
57. Scheucher-Fleisch and Others consider that the General Court properly applied the case-law and was fully entitled to assess separately the various pleas in law raised in their action for annulment. Moreover, the General Court was right to treat them as ‘parties concerned’ inasmuch as the contested decision established that the interests of certain undertakings were promoted, irrespective of their position in the production and distribution chain.
3. My assessment
58. Before turning to the merits of the arguments put forward by the Republic of Austria, I must, at the outset, consider the case-law of the Court of Justice on the rights of complainants in the procedure for reviewing State aid.
(a) The case-law on the rights of complainants in the procedure for reviewing State aid
59. The case-law relating to complainants’ rights in the procedure for reviewing State aid is founded on the premiss that decisions adopted by the Commission in that context are addressed to the Member States concerned, including in cases where such decisions are given following complaints alleging that a measure is State aid contrary to the Treaty. (25)
60. It should also be noted that, under the fourth paragraph of Article 230 EC, a natural or legal person may institute proceedings against a decision addressed to another person only if that decision is of direct and individual concern to him.
61. Complainants’ rights in the procedure for reviewing State aid, as they have been defined in the case-law, depend, first, on whether those complainants have the status of ‘parties concerned’ within the meaning of Article 88(2) EC and, secondly, on the purpose of the action brought by them.
62. First, the concept of ‘parties concerned’ for the purposes of that provision has been broadly defined as covering the persons, undertakings or associations of undertakings whose interests might be affected by the granting of aid, in particular competing undertakings and trade associations. That definition was reproduced in Article 1(h) of Regulation No 659/1999.
63. The Court of Justice has very recently noted that the specific status of ‘interested party’ is sufficient to distinguish an undertaking individually for the purposes of the fourth paragraph of Article 230 EC.
64. It follows that any undertaking invoking the existence of a competitive relationship, albe it potential, may be regarded as having the status of ‘party concerned’ for the purposes of Article 88(2) EC and be considered to be directly and individually concerned by the decision at issue. (26)
65. Secondly, the right of action of those parties concerned is based on the procedural rights which are conferred on them by that provision. Under that provision, the Commission, when it initiates the formal investigation procedure and only at that stage, is required to obtain their comments. (27)
66. However, where the Commission takes no further action on a complaint or considers that the measure complained of by the complainants does not constitute aid or constitutes aid compatible with the common market, it does not initiate the formal investigation stage, thereby depriving the complainants, in so far as they are parties concerned, of the opportunity to submit comments.
67. In order to enable enforcement of that procedural right to be secured for them, the case-law therefore afforded them the right to challenge those decisions before the European Union judicature. However, the Court has stated that the subject-matter of such an action must be limited to safeguarding the procedural rights referred to in Article 88(2) EC, that is to say, it must call into question the failure to initiate the formal investigation procedure. That right of action, established in Cook
v Commission
and Matra
v Commission, has since been consistently upheld. (28)
68. It follows that if the complainant has the status of ‘party concerned’, for the purposes of Article 88(2) EC, he may be regarded as directly and individually concerned by the contested decision in question, for the purposes of the fourth paragraph of Article 230 EC, in so far as he is challenging the failure to initiate the formal investigation procedure. (29)
69. On the other hand, where the applicant immediately calls into question the merits of the Commission’s appraisal, he is in the same situation as any person seeking to challenge a decision which is not addressed to him. The mere fact that the applicant may be regarded as a ‘party concerned’ for the purposes of Article 88(2) EC no longer suffices and he must then demonstrate that he has a particular status for the purposes of the Plaumann
v Commission case-law. (30) In the context of State aid, the Court allows a demonstration of that kind and holds the action to be admissible where the applicant undertaking demonstrates that its competitive position on the market is substantially affected by the aid to which the decision at issue relates. (31)
70. It is therefore apparent from the case-law that if an applicant challenges the Commission’s refusal to initiate the formal investigation procedure, on the ground that that decision infringes his procedural rights, he must show that he is a ‘party concerned’ for the purposes of Article 88(2) EC inasmuch as its interests might be affected (32) by the grant of the aid in question.
71. On the other hand, if the applicant challenges the merits of the decision appraising the aid as such, he must then demonstrate that incompetitive position on the market is substantially affected . (33) His access to the European Union judicature is therefore less straightforward than in the first situation.
72. That case-law, which was again borne out in Germany and Others
v Kronofrance
and British Aggregates
v Commission, has been heavily criticised. (34)
73. That case‑law gives rise to questions and makes Article 88(3) EC not readily comprehensible. The present case illustrates that point perfectly as it highlights the problems which the Court may encounter when it must draw the distinction between the conditions for the admissibility of one and the same action challenging one and the same decision, depending on whether the aim of the application is to safeguard procedural rights or to challenge the merits of the decision in question.
74. The present case thus raises specific issues to which I have already referred in my Opinion in the case which gave rise to the judgment in Germany and Others
v Kronofrance . (35)
75. I have taken the view that it is entirely artificial to draw distinctions between the conditions for the admissibility of one and the same action challenging one and the same decision in an application ultimately seeking the same relief. The aim pursued by the applicant is, in my view, the same whether it invokes the protection of its procedural rights or challenges the merits of the decision appraising the aid. In both situations, the applicant seeks, by its action, the initiation of the formal procedure to investigate the aid.
76. The consequence of that case-law is, therefore, to limit the rights of interested parties in the procedure for reviewing State aid. Although the Court affords rights to those parties where, in support of their action, they allege infringement of their procedural guarantees, at the same time it denies them those rights where they seek to call into question the merits of the decision appraising the aid. Yet access to the European Union judicature is, I believe, an area in which, more than in any other, the law must be clear and consistent. The restrictions on the right of persons to obtain judicial review of the rules and measures applied by the institutions to their activity or situation must be easy to understand.
77. Furthermore, such a distinction complicates the task of the European Union judicature, since it is not necessarily easy, when reading an application for annulment, to distinguish between the two situations. The present case therefore illustrates this point perfectly, as the General Court is now alleged to have failed properly to carry out its function, Scheucher-Fleisch and Others invoking pleas seeking protection of their procedural rights as well as pleas seeking to challenge the merits of the contested decision.
78. In these circumstances, should we concur with the view expressed here by the Austrian Government and, as Scheucher-Fleisch and Others are not substantially affected, hold the action to be inadmissible in its entirety, or should we favour the approach adopted by the General Court in the judgment under appeal and hold the action to be partially inadmissible?
79. The Court has recently resolved identical issues in Commission
v Kronoply and Kronotex .
80. In Kronoply and Kronotex v Commission, (36) the General Court did not confine itself simply to setting out the pleas raised by the undertakings. It examined whether, by their very substance, some of the arguments put forward by those undertakings support the existence of a breach of their procedural guarantees and create doubts as to the compatibility of the aid at issue, thus providing grounds for the initiation of the procedure referred to in Article 88(2) EC. The General Court accordingly examined the pleas alleging a manifest error of assessment on the part of the Commission and a breach of Article 87(1) and (3)(c) EC. According to that court ruling at first instance, those arguments can be linked to the plea alleging disregard for the procedural guarantees which is also cited by the undertakings.
81. The Court of Justice held that, in adopting that line of reasoning, the General Court had not erred in law.
82. In this regard it is interesting to note the Court’s fundamental reasoning, set out in paragraph 59 of Commission
v Kronoply and Kronotex :
‘Where an applicant seeks the annulment of a decision not to raise objections, it essentially contests the fact that the Commission adopted [that] decision … without initiating the formal investigation procedure, thereby infringing its procedural rights. In order to have its action for annulment upheld, the applicant may invoke any plea to show that the assessment of the information and evidence which the Commission had at its disposal during the preliminary examination phase of the measure notified should have raised doubts as to the compatibility of that measure with the common market …’
83. In that judgment the Court appears to have overlooked some difficulties posed by the classic line of authority in adopting an approach that is more respectful of the fundamental rights conferred on litigants by the Charter of Fundamental Rights of the European Union.
84. Where a person contests the merits of the Commission’s assessment, adopted at the end of the preliminary examination, it necessarily calls into question the failure to initiate the formal investigation procedure and therefore seeks to obtain protection of its procedural rights. The purpose of the action is the initiation of the formal investigation procedure, in which the person may submit observations, and that is its sole purpose, whatever plea in law is invoked. Similarly, where a person invokes the protection of procedural rights, he necessarily calls into question the assessment of the compatibility with the common market of the measures at issue and, in particular, the existence of doubts or serious difficulties of assessment which, for the purposes of Article 88(2) EC, would have warranted the initiation of the formal investigation procedure.
85. The claims made by the Republic of Austria must now be considered against the background of that case-law.
(b) The status of Scheucher-Fleisch and Others as parties concerned
86. In paragraphs 51 to 53 of the judgment under appeal, the General Court considered whether Scheucher-Fleisch and Others actually had standing to bring proceedings to enforce their procedural rights. For that purpose, the General Court identified the recipients of the aid in question by relying on the findings of the Commission in paragraphs 14 and 27 of the grounds of the contested decision and on the observations submitted by Scheucher-Fleisch and Others in their application. In that regard, it noted that those entitled to the AMA labels ‘are not only retailers’; they ‘also include all undertakings forming part of the chain of production and distribution specific to the AMA labels’.
87. The General Court went on to consider the competitive position of Scheucher-Fleisch and Others on the market. In that regard, it found that ‘[Scheucher-Fleisch and Others], undertakings specialising in the slaughter and butchering of animals, are competitors of the slaughtering and butchering undertakings entitled to the AMA labels [and that they] operate on the same geographical market, namely Austria’. Consequently, the General Court took the view that Scheucher-Fleisch and Others had the necessary standing to bring proceedings in so far as they sought to enforce their procedural rights under Article 88(2) EC.
88. To my mind, such consideration is not vitiated by any error of law.
89. First of all, it is essential that the assessment of the facts by the General Court should not be challenged. Indeed, although the Republic of Austria alleges that the Court treated Scheucher-Fleisch and Others as ‘competitors of the slaughtering and butchering undertakings’, it does not allege that the Court distorted the evidence in the case-file. The Republic of Austria is therefore calling on the Court of Justice to review the facts which were submitted to the General Court, a measure which falls outside its appellate jurisdiction.
90. It is settled case-law that, under Article 225(1) EC and the first paragraph of Article 58 of the Statute of the Court of Justice, an appeal is limited to points of law. The General Court therefore has exclusive jurisdiction to find and appraise the relevant facts. It is also for the General Court alone to assess the value which should be attached to the evidence presented to it, provided that the evidence which it has accepted in support of those facts has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed. In those circumstances, the Court of Justice has exclusive jurisdiction to review the legal characterisation of those facts by the General Court and the legal conclusions it has drawn from them, unless the appellant alleges that the General Court distorted the clear sense of the evidence presented to it. In that case, the appellant must indicate clearly the evidence the clear sense of which was allegedly distorted by the General Court and show the errors in analysis which, in its view, led the General Court to that distortion. (37)
91. No such indication of distortion is given in this case.
92. Bearing that in mind, I must now turn my attention to whether Scheucher-Fleisch and Others, in so far as they specialise in the slaughter and butchering of animals, could, rightly, be regarded as ‘parties concerned’ for the purposes of Article 88(2) EC.
93. To my mind, there is no doubt of that. After all, Scheucher-Fleisch and Others are active on the market for the slaughter and butchering of animals in Austria, as are the undertakings receiving the aid. The products market is therefore the same, as is the geographical market. As undertakings in competition with the companies benefiting from the measures complained of, Scheucher-Fleisch and Others therefore are without doubt ‘parties concerned’ for the purposes of Article 88(2) EC. (38)
94. Having regard to the above case-law, that standing is accordingly enough for them to be regarded as directly and individually concerned by the contested decision.
95. In paragraph 55 of the judgment under appeal, the General Court was therefore right to declare that Scheucher-Fleisch and Others were entitled to seek the annulment of the contested decision in so far as they sought to protect their procedural rights.
96. In the light of that conclusion, there is no need, to my mind, to consider the criticisms levelled by the Republic of Austria against paragraphs 36 to 39 of the judgment under appeal, with regard to whether Scheucher-Fleisch and Others are directly affected. In those paragraphs, the General Court – albeit not required to do so – carried out a traditional analysis of Scheucher-Fleisch and Others’ direct interest. As I have explained above, the status of parties concerned was sufficient to consider them to be directly (39) and individually concerned for the purposes of the fourth paragraph of Article 230 EC. (40)
97. The Republic of Austria’s criticisms are therefore, to my mind, irrelevant. Even if they were valid, they could not invalidate the General Court’s finding in paragraph 55 of the judgment under appeal.
(c) Whether the third part of the first plea in l aw, alleging breach of the duty to state reasons, and the second plea in law, alleging infringement of Article 87(3)(c) EC, are admissible
98. I should point out that the Republic of Austria criticises the General Court for failing to declare the action in its entirety to be inadmissible and, since Scheucher-Fleisch and Others were not substantially affected, for establishing that pleas seeking to challenge the merits of the contested decision were admissible.
99. To my mind, that criticism must be rejected in view of Commission
v Kronoply and Kronotex .
100. In the judgment under appeal, the General Court adopted an identical line of reasoning to that set out in Kronoply and Kronotex
v Commission . It examined the third part of the first plea in law and the second plea in law put forward by Scheucher-Fleisch and Others and formed the view that those arguments could support the existence of an infringement of their procedural guarantees and foster doubts as to the compatibility of the aid in question, thus providing grounds for initiating the procedure mentioned in Article 88(2) EC.
101. It is clear, in my view, that consideration of the third part of the first plea in law alleging failure to fulfil the duty to state reasons provides evidence to support an alleged infringement of procedural guarantees.
102. It is apparent from the case-law that the Commission must provide the complainant with an adequate explanation of the reasons for which the facts and points of law put forward in the complaint have failed to demonstrate the existence of State aid. (41) In my view, the same requirement to state reasons must be imposed if the Commission finds that the measure complained of constitutes aid compatible with the common market. In the absence of such a statement of reasons, as the General Court states in paragraph 63 of the judgment under appeal, the parties concerned are not able to ascertain the reasons for the Commission’s finding that there were no serious difficulties of assessment warranting a more detailed investigation.
103. Assessment, at this juncture, of the admissibility of the second plea in law, alleging infringement of Article 87(3)(c) EC, in fact leads the European Union judicature to consider the arguments relating to the substance of the aid at issue. None the less, such consideration is necessary in my view.
104. To my mind, Scheucher-Fleisch and Others are entitled to obtain a review by the European Union judicature of the Commission’s assessment that, on the evidence available to it on 30 June 2004, it could reasonably decide to take no further action in the case and, by implication, indicate that there was no doubt regarding the compatibility of the aid at issue.
105. I must not overlook the fact that, by making a legal remedy available to the complainant, the Court sought to make the procedural rights guaranteed by Article 88(2) EC the subject of specific protection and to make them subject to judicial review. By thus extending access to the European Union Courts, the Court also strengthened the monitoring of the effective application of the law in matters relating to State aid, by allowing a competitor – albeit potential – of the beneficiary of the disputed measure to challenge the Commission’s assessment that the compatibility of that measure raised no serious difficulties in the light of the Treaty.
106. I consequently take the view that the General Court could reasonably establish that the third part of the first plea, alleging breach of the duty to state reasons, and the second plea, alleging infringement of Article 87(3)(c) EC, were admissible.
107. The Republic of Austria’s claim that the reasoning was contradictory must therefore be rejected.
108. In the light of those factors, I take the view that the General Court correctly assessed the admissibility of the action for annulment brought by Scheucher-Fleisch and Others in relation to the contested decision.
109. Consequently, I suggest that the Court should reject as unfounded the first ground of appeal, alleging incorrect assessment of the admissibility of the action at first instance.
B – The second ground of appeal: the General Court erred in finding that there were serious difficulties of assessment
1. Arguments of the parties
110. By the second ground of appeal, the Republic of Austria, supported by the Commission, submits that the General Court erred in law in finding that assessment of the compatibility of the aid at issue raised serious difficulties warranting initiation of the formal investigation procedure referred to in Article 88(2) EC.
111. First of all, the Republic of Austria complains that the General Court based its assessment exclusively on the wording of Paragraph 21a(1) of the AMA-Gesetz 1992, point 1 of which restricts the grant of the State aid at issue to national products only. The General Court failed to take account of the commitments adopted by the Republic of Austria to remove that restriction. Nor did the General Court take account of the amendments made after 26 September 2002 to the wording of AMA’s directives and it also failed to take account of the wording of Paragraph 21a(1), point 5, of the AMA-Gesetz 1992.
112. Secondly, the Republic of Austria maintains that the compatibility of the aid in question should have been assessed exclusively in the light of AMA’s directives, inasmuch as they govern the conditions in accordance with which the aid is granted, whereas the AMA-Gesetz 1992 merely states the general objectives and the conditions for the financing of such aid.
113. Thirdly, the Republic of Austria maintains that, since there is no legal analysis of AMA’s directives, the judgment under appeal is vitiated by failure to state reasons.
114. The Commission adds that the General Court did not propose any clear criteria for establishing the existence of serious difficulties, that concept being, in its view, subjective. Furthermore, in Cook
v Commission
and Matra
v Commission, the Court of Justice did not state the circumstances in which a formal investigation procedure must be initiated. The Commission states, lastly, that it adopted the contested decision on the basis of the undertaking by the Austrian authorities that AMA’s directives only – not Paragraph 21a of the AMA-Gesetz 1992 – would be applied.
115. Scheucher-Fleisch and Others dispute those assessments.
2. My assessment
116. Before considering whether the criticisms raised by the Republic of Austria are valid, I shall be noting the principal themes of the case-law regarding the Commission’s obligations in the procedure for reviewing State aid, in particular where it encounters serious difficulties of assessment.
(a) The Commission’s obligations
117. The Commission enjoys exclusive competence in assessing whether aid is compatible with the Treaty. On that basis, it is under an obligation to ensure that no aid contrary to the Treaty is granted or maintained. (42)
118. Accordingly, where a complaint alleging unlawful aid has been made to the Commission, it is the Commission’s responsibility, first of all, to conduct a diligent and impartial examination of that complaint. (43)
119. Then, if the Commission decides that the measure to which the complaint relates does not constitute aid, it is required to provide an adequate explanation of the reasons for which the facts and points of law put forward in the complaint have failed to demonstrate the existence of such aid. (44)
120. Ultimately, if, after the preliminary examination stage, the Commission is unable to satisfy itself (45) that the aid is compatible with the common market or if it has failed to overcome all the difficulties involved in determining whether the aid is compatible, it is then under an obligation to initiate the formal investigation procedure under Article 88(2) EC. (46) It is only in connection with the latter investigation, which is designed to enable the Commission to be fully informed of all the facts of the case, that the Treaty imposes an obligation on the Commission to give the parties concerned notice to submit their comments. (47)
121. The Commission’s powers are circumscribed in this regard. (48) The courts tend to protect the rights conferred on the parties concerned, given that a discretionary power conferred on the Commission might adversely affect them because it is difficult to furnish evidence of a manifest error of assessment.
122. In its review of the legality of the aid, the EU judicature must therefore consider whether, in the light of the facts and law specific to the case, the Commission was under an obligation to initiate the procedure referred to in Article 88(2) EC. (49)
123. The concept of serious difficulties of assessment has been defined neither by the EU legislature nor by the EU judicature. According to the case-law, that concept must, none the less, be objective, and some criteria can enable the EU judicature to determine whether the assessment of aid gave rise to that type of difficulty. (50) This Court must therefore examine the circumstances in which the contested measure was adopted and, in particular, the substance of the discussions held between the Commission and the Member State concerned. It must also examine the content of that measure, comparing the grounds of the decision with the information available to the Commission when it took a decision on the compatibility of the disputed aid. Lastly, the EU judicature may take account of the duration of the pre-litigation procedure.
(b) The merits of the General Court’s conclusion regarding the existence of serious difficulties of assessment
124. To my mind, the General Court did not err in law in finding that the restriction to national products set out in Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 gave rise to doubts as to the compatibility of the aid at issue with the common market and should, consequently, have led the Commission to initiate the procedure under Article 88(2) EC.
125. Having rightly pointed to the obligations incumbent on the Commission in the procedure for reviewing State aid, the General Court made every effort, in paragraphs 75 to 85 of the judgment under appeal, to examine the circumstances that might prove the existence of serious difficulties.
126. In paragraphs 75 to 80 of the judgment under appeal, the General Court first considered the assessments made by the Commission in the contested decision. The Commission relied, in substance, on AMA’s directives for concluding that the measures notified were not restricted to Austrian products, in accordance with the Guidelines for State aid for advertising.
127. In paragraphs 81 to 85 of the judgment under appeal, the General Court went on to consider the contradictions arising from the wording of Paragraph 21a of the AMA-Gesetz 1992. Under Paragraph 21a(1), point 1, of the AMA-Gesetz 1992, the contribution to the AMA must make it possible ‘to promote and guarantee the sale of national  [(51) ] agricultural and forestry products’.
128. As the General Court points out, the Commission did not challenge the wording of that provision, as the Republic of Austria undertook to remove the term ‘national’ with effect from 1 July 2007.
129. The General Court concluded from this that, when the Commission considered the compatibility of the aid at issue, the principal provisions of Paragraph 21a of the AMA-Gesetz 1992 therefore applied to national products only.
130. Lastly, contrary to the Republic of Austria’s claims, the General Court did assess the provisions of Paragraph 21a(1), point 5, of the AMA-Gesetz 1992 and the amendments to AMA’s directives.
131. At the end of that assessment, the General Court established the existence of a contradiction between the expressions used in the AMA-Gesetz 1992, which constitutes the basic rule, and those used in AMA’s directives on which the Commission based its assessment.
132. In the light of those factors, the General Court concluded that the restriction to national products in Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 gave rise to serious difficulties regarding the compatibility of the aid in question with the Guidelines for State aid for advertising.
133. Clearly, it is difficult to maintain that a contradiction between the basic rule and the implementing regulations, in the form of the AMA-Gesetz 1992 and AMA’s directives respectively, did not create difficulties regarding the compatibility with the common market of the aid at issue. That contradiction, inasmuch as it concerned essential information – namely, the inclusion of foreign products among the products benefiting from the AMA labels – openly raised the question whether the scheme at issue was compatible with Article 28 EC and the Guidelines for State aid for advertising. (52) The former prohibits all quantitative restrictions on imports between the Member States. The latter point out that a national quality control scheme, restricted to products of a particular origin (national, regional or local), is contrary to the Treaty.
134. The content of the discussions between the Commission and the Republic of Austria was capable of revealing the existence of difficulties of assessment, (53) since that Member State undertook subsequently to amend the wording of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992.
135. That undertaking did not, to my mind, facilitate a resolution of those difficulties, in particular, in the context of a scheme of non‑notified aid and did not authorise the Commission to refrain from initiating the formal investigation procedure.
136. It is apparent from the case-law that the Commission may not decline to initiate the formal investigation procedure in reliance upon circumstances other than those connected with the existence of serious difficulties. Accordingly, as the General Court states in paragraph 72 of the judgment under appeal, the Commission may not rely on third-party interests in the procedure or considerations of economy of procedure or administrative convenience to decline to initiate the procedure under Article 88(2) EC. In the same way, the Commission cannot, in my view, rely on the undertaking made by the Republic of Austria with regard to the subsequent amendment of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992. The compatibility of State aid with the common market must be assessed objectively and cannot, I believe, be dependent on declarations, undertakings or the conduct that the Member State concerned intends to adopt in the future. In this instance, I clearly have to accept that the wording of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 gave rise – when the Commission looked at the scheme at issue and decided whether it was compatible with the common market – to a difficulty that could not be resolved by means of the Republic of Austria’s undertaking.
137. Only by initiating the procedure under Article 88(2) EC would the Commission have been in a position to clarify that grey area and to determine whether or not, in accordance with the wording of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992, the grant of the aid at issue constituted an infringement of Article 28 EC and Article 87 EC and, therefore, whether or not the aid scheme was compatible with the common market. The initiation of that procedure seemed to be justified a fortiori
in view of the Commission’s obligations regarding the handling of complaints. After all, it should not be forgotten that the Commission is required to conduct a diligent and impartial examination of the complaint (54) so as to ensure that no aid contrary to the common market can be implemented.
138. In the light of those factors, I therefore concur with the General Court’s view that the restriction to national products mentioned in Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 raised serious difficulties as to the compatibility of the aid in question with the common market and should, consequently, have led the Commission to initiate the procedure under Article 88(2) EC.
139. I should note that this conclusion was justified also in the light of the duration of the preliminary examination stage, an argument that was also advanced by Scheucher-Fleisch and Others.
140. I note that the contested decision, of 30 June 2004, was adopted at the end of a preliminary examination stage commenced on 21 September 1999, the date on which Scheucher-Fleisch and Others’ complaint was lodged, that is to say, more than four years and nine months earlier. It is true that in a case where – as here – the disputed aid was not notified, the Commission is not required to carry out an initial examination of those measures within the two-month period envisaged by the case-law. (55) None the less, where an interested third party submits a complaint to the Commission relating to State measures which have not been notified, the Commission is under an obligation, in the context of the preliminary examination stage, to conduct a diligent and impartial examination of that complaint. (56)
141. Here, I consider that the periods concerned exceed the period normally required for a preliminary examination, the purpose of which is simply to allow the Commission to form an initial opinion on the classification of the measures submitted for its assessment and their compatibility with the common market. (57)
(c) Whether the statement of reasons regarding the existence of serious difficulties is adequate
142. I observe that the Republic of Austria considers that the grounds for the judgment under appeal are incomplete in so far as the General Court based its assessment exclusively on the wording of Paragraph 21a of the AMA-Gesetz 1992 without even conducting a legal analysis of AMA’s directives.
143. I am not persuaded by that argument.
144. I should note, first of all, that the duty incumbent upon the General Court under Article 36 and the first paragraph of Article 53 of the Statute of the Court of Justice to state reasons for its judgments does not require the General Court to provide an account that follows exhaustively and one by one all the arguments articulated by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons concerned to know the grounds for the decision adopted and provides the Court of Justice with sufficient material for it to exercise its powers of review. (58) In the case of an action under Article 230 EC, the requirement to state reasons means that the General Court must examine the pleas in law relied on by the applicant in seeking annulment and state the grounds on which it rejects a plea or annuls a contested measure.
145. Here, I consider that the General Court gave a proper presentation and explanation of the reasons for its view that difficulties of assessment arise concerning the aid at issue. As I have shown, the Court relied not only on the wording of Paragraph 21a of the AMA-Gesetz 1992 but also on a whole set of circumstances surrounding the adoption of the contested decision, rightly and sufficiently demonstrating that there is a contradiction in the national legislation that a legal analysis of AMA’s directives could not have resolved. The General Court’s reasoning made it possible, moreover, for the Republic of Austria and the Commission to know and to criticise the judgment under appeal and, to my mind, enables the Court of Justice to exercise its powers of review.
146. In that context, I consider that the General Court’s reasoning, set out in paragraphs 75 to 87 of the judgment under appeal, is not open to criticism.
147. In the light of all those factors, I suggest that the Court should reject as unfounded the second ground of appeal, alleging erroneous assessment by the General Court of the need to initiate the formal investigation procedure.
C – The third ground of appeal: breach of the rules governing the burden of proof
1. Arguments of the parties
148. By its third ground of appeal, the Republic of Austria – supported by the Commission – submits that, in accordance with the case-law, it is for the applicants to prove that there are serious difficulties of assessment. In this case, it claims, Scheucher-Fleisch and Others did not succeed in demonstrating that those difficulties existed. Indeed, the specific measures for implementing the scheme which are mentioned by Scheucher-Fleisch and Others do not, a priori, come under the contested decision. Moreover, they were unable to prove that the grant of the aid at issue is restricted to national producers. On the contrary, the Republic of Austria showed that the AMA labels are also granted to foreign producers.
149. Scheucher-Fleisch and Others dispute that assessment.
2. My assessment
150. The third ground of appeal is, to my mind, inadmissible.
151. The Republic of Austria seeks by another means to challenge the General Court’s assessment of the facts and of the value which that court attributed to the various items of evidence submitted to it. I note that the General Court has exclusive jurisdiction to assess the facts and the value to be attributed to the evidence submitted to it, save where the appellant alleges that the evidence has been distorted in some way. In this instance, the Republic of Austria does no more than criticise the General Court’s conclusions without demonstrating the errors which, it submits, led that court to distort the evidence. Its criticism therefore constitutes merely an attempt to substitute its version of the events for the assessment by that Court, which falls outside the jurisdiction of the Court of Justice.
152. In any event, even if the Court were to hold that plea to be admissible, I consider it to be unfounded.
153. By presenting before the General Court the wording of the AMA-Gesetz 1992, Scheucher-Fleisch and Others, in my view, provided a sufficiently strong indication that there are doubts as to the compatibility of the aid at issue with the common market and made it possible for that court to assess, by means of the questions it put to the Commission, the circumstances in which the contested decision was adopted.
154. I consequently suggest that the Court should reject the third ground of appeal as inadmissible or, in the alternative, as unfounded.
D – The fourth ground of appeal: infringement of Article 64 of the Rules of Procedure of the General Court
1. Arguments of the parties
155. By its fourth ground of appeal, the Republic of Austria – supported by the Commission – submits that the General Court infringed Article 64 of its Rules of Procedure by failing to adopt the measures of organisation of procedure necessary for assessing the dispute. In particular, it maintains that the General Court should have required Scheucher-Fleisch and Others to supply specific information demonstrating their status as parties concerned. It further complains that the Court failed to ascertain the impact of the wording of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 on the conditions for the grant of the aid at issue.
156. Scheucher-Fleisch and Others dispute that assessment.
2. My assessment
157. That ground must be rejected at the outset for the following reasons.
158. First, it follows from established case-law that the General Court is the sole judge of any need for the information available to it concerning the cases before it to be supplemented. (59)
159. Secondly, my view is that the Republic of Austria cannot express that criticism inasmuch as it did not request from the General Court any measure of organisation of procedure.
160. Thirdly, it is clear from the documents in the case and, in particular, from the questions that the General Court put to the parties that the matters raised by the Republic of Austria were expressly taken into consideration.
161. Accordingly, in its questions requiring a written response, the General Court requested that Scheucher-Fleisch and Others ‘state in detail the manner in which their interests are affected by the grant of the aid at issue’, ‘whether they are in direct competition with the slaughtering and butchering undertakings receiving the aid at issue, stating whether they operate on the same geographical market as those undertakings and in what form those undertakings receive the aid at issue’, ‘why they do not receive the aid at issue and the conditions that they would have to satisfy in order to become recipients’ and, lastly, ‘whether and in what manner their position on the market is substantially affected by the aid covered by the contested decision’.
162. Furthermore, in that context, the General Court called on the Commission to take a view on the wording of Paragraph 21a(1), point 1, of the AMA-Gesetz 1992 and on a possible restriction of the scheme at issue to national products.
163. In its questions requiring a written response and at the hearing, the General Court then called on all the parties to the dispute to state whether undertakings established on the territory of another Member State could benefit from the scheme at issue.
164. The inevitable conclusion must accordingly be that the Republic of Austria’s criticisms are unfounded.
165. Consequently, I would urge the Court of Justice to reject as unfounded the fourth ground of appeal, alleging infringement of Article 64 of the Rules of Procedure of the General Court.
166. In the light of all those considerations, I suggest that the Court should dismiss the appeal brought by the Republic of Austria as being in part inadmissible and in part unfounded.
VI – The cross-appeal
167. For the reasons set out above, I take the view that the Commission lodged a cross-appeal in its response.
168. By my understanding, the Commission raises three grounds of appeal.
169. By the first ground, the Commission is seeking to show that the General Court wrongly assessed the admissibility of the action by relying on two arguments which were not put forward in the main appeal. The second ground of appeal alleges failure on the part of the General Court to observe the scope of its jurisdiction to review legality and the third ground alleges breach of the duty to state reasons.
A – The first ground of appeal: erroneous assessment by the General Court of the admissibility of the action at first instance
170. The first ground of appeal is in two parts, the first of which alleges that Scheucher-Fleisch and Others are not directly affected and the second that the Court incorrectly assessed their rights to submit comments.
1. The first part of the first ground of appeal: Scheucher-Fleisch and Others are not directly affected
(a) Arguments of the parties
171. By the first part of the first ground of appeal, the Commission is challenging the General Court’s assessment of the admissibility of the action in so far as it stated, in paragraph 39 of the judgment under appeal, that, for the purposes of the fourth paragraph of Article 230 EC, Scheucher-Fleisch and Others are directly concerned by the contested decision.
172. According to the Commission, the General Court erred in law by basing the argument as to whether Scheucher-Fleisch and Others are affected in that way on the obligation incumbent on them to contribute to the AMA. It is clear, it maintains, from the case-law that the charges concerned fall outside the scope of Article 87 EC unless they constitute the method of financing of State aid. In this instance, there is no link between the amount of the contributions paid to the AMA and the benefits given. Consequently, those contributions are not an integral part of the aid and, thus, it cannot be established on that basis that Scheucher-Fleisch and Others are directly affected.
(b) My assessment
173. I consider this argument to be unfounded.
174. It is apparent from a reading of paragraphs 36 to 39 of the judgment under appeal that the General Court did not base the argument as to whether Scheucher-Fleisch and Others were directly affected on the obligation incumbent on them to contribute to the AMA. In its reasoning, which is relatively brief, I have found nothing to bear out the Commission’s claim.
175. After referring to the case-law on direct concern, the General Court stated as follows in paragraphs 37 to 39 of the judgment under appeal:
‘37. In this case, it is clear from the contents of the Court file that, at the date the contested decision was adopted, 30 June 2004, the aid in question had already been implemented by the Republic of Austria. In that regard, [Scheucher-Fleisch and Others] adduced internet pages of AMA and a retailer, showing that the AMA labels had already been issued prior to the contested decision. They also produced the demand for payment addressed by AMA to Grandits [GmbH] concerning contributions due for the period from May 2002 to April 2003, which covers, at least partially, the period of application of the measures covered by the contested decision.
38. Therefore, the possibility of the Austrian authorities deciding not to grant the aid in question was purely theoretical.
39. It follows that [Scheucher-Fleisch and Others] are, for the purposes of the fourth paragraph of Article 230 EC, directly concerned by the contested decision.’
176. Although the General Court refers to the demand for payment addressed to Grandits GmbH, it does so for the sole purpose of illustrating that the scheme was implemented before the contested decision was adopted and not for the purpose of propping up its reasoning on the contributions payable by Scheucher-Fleisch and Others under Paragraph 21c(1), point 3, of the AMA-Gesetz 1992.
177. Consequently, there is no question, to my mind, of upholding that first part alleging that Scheucher-Fleisch and Others are not directly affected.
178. In any event, for the reasons I have already set out in points 96 and 97 above, I consider this criticism to be irrelevant. After all, even if it were valid, it could not, to my mind, invalidate the General Court’s finding regarding Scheucher-Fleisch and Others’ legal interest in bringing proceedings.
179. Consequently, I call upon the Court of Justice to reject the first part of the first ground of appeal as unfounded or, in the alternative, as irrelevant.
2. The second part of the first ground of appeal: erroneous assessment of the right of Scheucher-Fleisch and Others to submit comments
(a) Arguments of the parties
180. By the second part of the first ground of appeal, the Commission submits that the General Court erred in law in finding, in paragraph 54 of the judgment under appeal, that the lodging of a complaint is not sufficient to deprive Scheucher-Fleisch and Others of the right to enforce the procedural guarantees conferred on them by Article 88(2) EC.
181. According to the Commission, Scheucher-Fleisch and Others already had the opportunity to submit their observations when lodging their complaint on 21 September 1999 and had therefore exhausted their right to express their views again. Furthermore, the Commission explains that it does not see the point of allowing the complainants to submit comments for a second time. Lastly, it comments that Article 88(2) EC ‘does not confer … rights on anyone’ and ‘merely imposes an obligation on the Commission’.
(b) My assessment
182. In my view, scrutiny of the arguments raised by the Commission does not call for lengthy explanations, as they appear to be unfounded.
183. In paragraph 54 of the judgment under appeal, the General Court held that ‘the fact that … [Scheucher-Fleisch and Others] were able, by lodging their complaint …, to put forward their arguments already during the preliminary examination procedure under Article 88(3) EC cannot deprive them of the right to enforce the procedural guarantee expressly conferred on them by Article 88(2) EC’.
184. I fully endorse that analysis.
185. That reasoning is absolutely consistent with the wording and scheme of the procedure for reviewing State aid and with the case-law of the Court of Justice.
186. Although it is common ground that Regulation No 659/1999 does not provide for specific rights for complainants per se, Articles 6(1) and 20(1) and (2) of that regulation expressly acknowledge, with respect to interested parties, the right to inform the Commission of any alleged unlawful aid and the right to submit comments following a Commission decision to initiate the formal investigation procedure. By allowing the interested parties to lodge with the Commission a complaint against alleged State aid, the EU legislature did not, therefore, intend to deprive those parties of the right to submit comments once the formal investigation procedure had been initiated.
187. The lodging of a complaint and the submission of comments are not comparable measures.
188. The lodging of the complaint makes it possible to bring to the Commission’s attention a possible infringement of the rules on State aid. That complaint may be lodged by any natural or legal person who considers that alleged unlawful aid has been paid by a Member State. It triggers the preliminary examination stage during which the Commission will, on the basis of the information disclosed by the complainant, produce an initial opinion as to the partial or total compatibility of the measure in question. (60) In its complaint, the complainant must inform the Commission of the Member State concerned, the presumed aid measures and the grounds for the complaint. (61) At that stage of the procedure, the Commission is not required to give the complainant or the other ‘parties concerned’ for the purposes of Article 88(2) EC the right to be heard.
189. At the end of a diligent and impartial examination of the complaint, (62) the Commission can adopt four types of decision. The Commission may decide to take no action on the complaint. It may also decide, in line with Article 4 of Regulation No 659/1999, that the measure in question is not aid, or constitutes aid compatible with the common market or raises doubts as to its compatibility and consequently calls for the formal investigation procedure to be initiated.
190. The complainants have the right to submit comments pursuant to Article 88(2) EC and Articles 6(1) and 20(1) and (2) of Regulation No 659/1999 specifically in the formal investigation. Only the parties concerned, that is to say, only the undertakings and trade organisations in a competitive relationship, albeit potential, with the undertakings benefiting from the measure in dispute, enjoy that right. As I have shown, the prior lodging of a complaint does not call into question the enjoyment of that right. On the contrary, enforcement of the right to submit comments is subject to enhanced judicial review where the Commission refuses, by implication, to initiate the formal investigation procedure and consequently deprives the complainant of such a right. That was already shown clearly in the Court’s case-law devolving from Cook
v Commission and Matra
v Commission, which I have already set out above. However, that has become all the more apparent since the Athinaïki Techniki
v Commission
judgments (63) in which the Court held that a decision to take no action on a complaint constituted an act open to challenge in so far as, by refusing, by implication, to initiate the formal investigation procedure, that decision was depriving the complainant of the right to submit its comments pursuant to Article 88(2) EC.
191. In the light of those factors, and since Scheucher-Fleisch and Others may be treated as ‘parties concerned’, the General Court was fully entitled to find that, by lodging a complaint, those applicants none the less were not deprived of the right to submit comments in the formal investigation procedure referred to in Article 88(2) EC.
192. I consequently suggest that the Court should not uphold the second part of the first ground of appeal, alleging erroneous assessment of the right of Scheucher-Fleisch and Others to submit comments.
193. In the light of all those considerations, I take the view that the Commission’s first ground of appeal, alleging erroneous assessment by the General Court of the admissibility of the action at first instance, is unfounded.
B – The second ground of appeal: the General Court failed to observe the scope of its jurisdiction to review legality
194. In support of its second ground of appeal, the Commission complains that the General Court exceeded the bounds of its jurisdiction to review legality in finding that assessment of the compatibility of the aid at issue gave rise to serious difficulties which gave grounds for initiating the formal investigation procedure. Since the contested decision required assessments to be made of complex economic and social circumstances, the Commission enjoyed broad discretion with the consequence that the scope of judicial review was restricted.
195. In my view that complaint must be rejected at the outset as unfounded.
196. It is clear from the case-law that the Commission enjoys broad discretion in establishing whether State aid exists and in assessing the functioning of the derogations expressly allowed under Articles 87(2) and (3) EC. (64) In such circumstances, the Commission may find it necessary to carry out complex social and economic assessments. The review carried out by the General Court must, in that case, be restricted to verifying that the rules of procedure and the rules on stating reasons are complied with and to verifying the material accuracy of the facts, the lack of any manifest error of assessment or of any misuse of powers.
197. That is not the case here.
198. The question that was put to the General Court is not concerned with ascertaining whether the measures implemented by the Republic of Austria can be regarded as ‘State aid’ or can be justified by the development of certain economic activities; it is concerned with ascertaining whether the Commission, in the light of its preliminary examination, meets its obligations in the procedure for reviewing State aid.
199. It follows from the case-law that the Commission enjoys no discretion where it is decided to initiate the formal investigation procedure. Its powers are circumscribed. The Commission is therefore under an obligation to initiate the procedure under Article 88(3) EC where it has failed to overcome all the difficulties involved in determining whether the measure at issue is compatible, at the end of its preliminary examination. That obligation is expressly confirmed by Article 4(4) of Regulation No 659/1999, read in conjunction with Article 13(1) of that regulation. (65) The initiation of the formal investigation procedure is not, therefore, strictly involved with a complex economic or social assessment but with a legal obligation, the fulfilment of which must accordingly be subject to comprehensive judicial review.
200. In finding that the Commission should have applied Article 4(4) of that regulation and in consequently annulling the contested decision, the General Court reviewed the legality of that decision within the bounds of its jurisdiction under Article 230 EC.
201. In the light of those factors, I am calling on the Court of Justice to reject as unfounded the second ground of appeal, alleging failure by the General Court to observe the scope of its jurisdiction to review legality.
C – The third ground of appeal: breach of the duty to state reasons
202. By its third ground of appeal, the Commission complains that the General Court did not wait for the outcome of the formal investigation procedure before annulling the contested decision, which vitiated the judgment under appeal through failure to state reasons. According to the Commission, the Court should have considered whether the Commission’s assessment of the compatibility of the aid at issue would have been different once the formal investigation procedure had been initiated. It was clear to the Commission that the question called for a negative answer. The Commission further notes that the initiation of the formal investigation procedure leads to a delay in the processing of the case, which is incompatible with the obligations of diligence established in the judgment of 11 December 1973 in Lorenz. (66)
203. I suggest rejecting these arguments at the outset.
204. It cannot validly be maintained that the outcome of this action may depend on some form of expectation or extrapolation by the General Court of the outcome of the formal investigation procedure or, a fortiori, be considered that the judgment under appeal could as a result be vitiated by a failure to state reasons.
205. An argument of that kind is contrary to the principles governing the procedure for reviewing State aid. First, I note that the classification of the aid must be assessed on the basis of objective factors, not on the basis of hypotheses. (67) Furthermore, it cannot depend on an assessment made at the pre-litigation stage and on the basis of information available at that stage. (68) Secondly, I note that it was for the Commission as part of its exclusive jurisdiction under the Treaty, not for the General Court, as part of its review of legality, to assess the compatibility of the aid at issue with the common market. Moreover, I also note that the initiation of the formal investigation procedure is not optional but an obligation (69) on the part of the Commission where it is in a situation such as that at issue.
206. Lastly, I would stress that, although the Commission is in fact required to carry out a diligent examination of the complaint, that obligation required it very specifically to initiate the formal investigation procedure in circumstances such as those at issue here.
207. Having regard to those factors, I consider the third ground of appeal to be unfounded.
208. In the light of all those considerations, I call upon the Court of Justice to dismiss as unfounded the appeal lodged by the Commission.
VII – Costs
209. Under Article 69(2) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 118 of those rules, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party’s pleadings.
210. In this case, since the Republic of Austria and the Commission have been unsuccessful in all their pleas, they should be ordered to pay the costs.
VIII – Conclusion
211. In the light of the foregoing considerations, I propose that the Court should:
(1) Dismiss the appeals;
(2) Order the Republic of Austria and the European Commission to pay the costs.
(1) .
(2)  –	On this matter, see the judgment, delivered by the Court, sitting as the Grand Chamber, in Case C‑83/09 P Commission
v Kronoply and Kronotex
[2011] ECR I‑0000, to which I shall be returning.
(3)  – Case T‑375/04 [2009] ECR II‑4155; ‘the judgment under appeal’.
(4)  –	Tauernfleisch Vertriebs GmbH, Wech-Kärntner Truthahnverarbeitung GmbH, Wech-Geflügel GmbH and Johann Zsifkovics, all of which are undertakings governed by Austrian law and specialise in the slaughter and butchering of animals.
(5)  –	‘[T]he contested decision’.
(6)  –	Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty [now Article 88 EC] (OJ 1999 L 83, p. 1).
(7)  –	That stage is also governed by Articles 4 and 5 of Regulation No 659/1999.
(8)  –	Case C‑521/06 P Athinaïki Techniki
v Commission
[2008] ECR I‑5829, paragraph 33 and the case-law cited.
(9)  –	That stage is also governed by Articles 6 and 7 of Regulation No 659/1999.
(10)  –	Case C‑431/07 P Bouygues and Bouygues Télécom
v Commission
[2009] ECR I‑2665, paragraph 61 and the case-law cited.
(11)  –	Second recital in the preamble to that regulation.
(12)  –	Case 323/82 [1984] ECR 3809. According to the Court, the ‘parties concerned’ are the persons, undertakings or associations whose interests might be affected by the grant of the aid, that is to say, in particular competing undertakings and trade associations (paragraph 16).
(13)  –	See Case C‑198/91 Cook
v Commission [1993] ECR I‑2487, paragraph 24; Case C‑225/91 Matra
v Commission
[1993] ECR I‑3203, paragraph 18; and Case C‑78/03 P Commission
v Aktionsgemeinschaft Recht und Eigentum [2005] ECR I‑10737, paragraph 36.
(14)  –	OJ 2001 C 252, p. 5; ‘the Guidelines for State aid for advertising’.
(15)  –	Paragraph 1.
(16)  –	BGBl. 376/1992; ‘the AMA-Gesetz 1992’.
(17)  –	OJ 2000 C 28, p. 2.
(18)  –	By the second part of the first plea in law, Scheucher-Fleisch and Others maintained, expressly, that the Commission should have initiated the formal investigation procedure in accordance with Article 4(4) of Regulation No 659/1999, because there were doubts as to the compatibility of the measures in question with the common market.
(19)  –	In that regard, Scheucher-Fleisch and Others maintained, in particular, that the guarantee of quality, as required for entitlement to the AMA labels, is not a matter of ‘development’ within the meaning of that provision.
(20)  –	Case C‑413/06 P Bertelsmann and Sony Corporation of America
v Impala
[2008] ECR I‑4951, paragraphs 184 to 188.
(21)  –	Joined Cases C‑75/05 P and C‑80/05 P [2008] ECR I‑6619.
(22)  –	Case C‑487/06 P [2008] ECR I‑10515.
(23)  –	Joined Cases 19/60, 21/60, 2/61 and 3/61 [1961] ECR English Special Edition p. 281.
(24)  –	Case 25/62 [1963] ECR English Special Edition p. 95.
(25)  –	Case C‑367/95 P Commission
v Sytraval et Brink’s France
[1998] ECR I‑1719, paragraph 45.
(26)  –	Commission
v Kronoply and Kronotex, paragraphs 47 and 48 and the case-law cited.
(27)  –	Commission
v Aktionsgemeinschaft Recht und Eigentum, paragraph 34 and the case-law cited.
(28)  –	See Germany and Others
v Kronofrance, paragraph 38 and the case-law cited.
(29)  –	In the case which gave rise to the judgment in Cook
v Commission, the Court thus held that William Cook plc was a ‘party concerned’ within the meaning of Article 88(2) EC inasmuch as it produced parts identical to those produced by the undertaking in receipt of the aid. In that capacity, William Cook plc therefore had to be regarded as directly and individually concerned by the decision at issue and was consequently entitled to seek the annulment of that decision on the basis of the fourth paragraph of Article 230 EC (paragraphs 23, 25 and 26). Similarly, the Court held, in the case which gave rise to the judgment in Matra
v Commission, that the status of party concerned could be attributed to Matra SA in so far as its interests were affected by the grant of the aid at issue in its capacity as ‘the leading Community producer of multi-purpose vehicles and a future competitor of [the undertaking in receipt of the aid]’. The Court took the view that the action for annulment of the Commission decision was therefore admissible (paragraphs 17, 19 and 20).
(30)  –	Commission
v Aktionsgemeinschaft Recht und Eigentum, paragraph 37 and the case-law cited.
(31)  –	Ibid.
(32)  –	My italics.
(33)  –	Idem.
(34)  –	See, in this regard, the Opinion of Advocate General Jacobs in the case which gave rise to the judgment in Commission
v Aktionsgemeinschaft Recht und Eigentum, the Opinion of Advocate General Mengozzi in the case which gave rise to the judgment in British Aggregates
v Commission, and, lastly, the Opinion of Advocate General Jääskinen in the case that gave rise to the judgment in Commission
v Kronoply and Kronotex, as well as in Case C‑148/09 P Belgium
v Deutsche Post and Others, currently pending before the Court.
(35)  –	I refer you to points 103 to 113 of that Opinion.
(36)  –	Case T‑388/02 [2008] ECR II‑305.
(37)  –	Case C‑399/08 P Commission
v Deutsche Post
[2010] ECR I‑7831, paragraphs 63 and 64 and the case-law cited.
(38)  –	See also Case C‑322/09 P NDSHT
v Commission
[2010] ECR I‑11911, paragraph 59 and the case-law cited.
(39)  –	My italics.
(40)  –	See, in particular, Commission
v Kronoply and Kronotex, paragraphs 47 and 48 and the case-law cited.
(41)  –	Commission
v Sytraval and Brink’s France, paragraph 64.
(42)  –	Case 6/64 Costa
[1964] ECR English Special Edition, p. 585, and Joined Cases C‑182/03 and C‑217/03 Belgium and Forum 187 v Commission
[2006] ECR I‑5479, paragraphs 73 and 74.
(43)  –	Commission
v Sytraval and Brink’s France, paragraph 62.
(44)  –	Ibid., paragraph 64.
(45)  –	My italics.
(46)  –	See Bouygues and Bouygues Télécom v Commission, paragraph 61 and the case-law cited.
(47)  –	Athinaïki Techniki v Commission, paragraph 35 and the case-law cited.
(48)  –	British Aggregates v Commission .
(49)  –	See, in particular, Case C‑204/97 Portugal
v Commission
[2001] ECR I‑3175.
(50)  –	Bouygues and Bouygues Télécom v Commission, paragraph 63, and Case T‑49/93 SIDE v Commission [1995] ECR II‑2501, paragraph 60.
(51)  –	My italics.
(52)  –	In this regard, it must be stated that it is clear from the general scheme of the Treaty that the procedure under Article 88 EC must never produce a result which is contrary to the specific provisions of the Treaty. Accordingly, State aid, certain conditions of which contravene other provisions of the Treaty, cannot be declared by the Commission to be compatible with the common market (Case C‑390/06 Nuova Agricast
[2008] ECR I‑2577, paragraph 50 and the case-law cited).
(53)  –	In principle, the mere fact that discussions took place between the Commission and the Member State concerned during the preliminary examination stage, and that, in that context, the Commission asked for additional information about the measures submitted for its review, cannot of itself be regarded as evidence that the Commission was confronted with serious difficulties of assessment requiring that the procedure under Article 108(2) EC be initiated. That does not, however, in accordance with the case-law, exclude the possibility that the content of the discussions between the Commission and the Member State concerned during that preliminary stage of the procedure may, in certain circumstances, be capable of revealing the existence of such difficulties (see Case T‑46/97 SIC
v Commission
[2000] ECR II‑2125, paragraph 89 and the case-law cited).
(54)  –	Commission
v Sytraval and Brink’s France, paragraph 62.
(55)  –	SIC
v Commission, paragraph 102 and the case-law cited.
(56)  –	Ibid., paragraph 105 and the case-law cited.
(57)  –	Ibid., paragraph 107 and the case-law cited.
(58)  –	Bouygues and Bouygues Télécom v Commission, paragraph 42 and the case-law cited.
(59)  –	See, inter alia, Case C‑315/99 P Ismeri Europa v Court of Auditors [2001] ECR I‑5281, paragraph 19, and Joined Cases C‑57/00 P and C‑61/00 P Freistaat Sachsen and Others v Commission
[2003] ECR I‑9975, paragraph 47.
(60)  –	See Articles 10(1) and 20(2), first sentence, of Regulation No 659/1999.
(61)  –	The relevant complaint form is available at the following Internet address: http://ec.europa.eu/eu_law/state_aids/state_aids_complaints_fr.htm.
(62)  –	Commission
v Sytraval and Brink’s France, paragraph 62.
(63)  –	See Athinaïki Techniki v Commission, and Case C‑362/09 P Athinaïki Techniki v Commission
[2010] ECR I‑0000.
(64)  –	See, inter alia, British Aggregates
v Commission, paragraph 114 and the case-law cited, and Commission
v Deutsche Post, paragraphs 93 to 98.
(65)  –	British Aggregates v Commission, paragraph 113 and the case-law cited.
(66)  –	Case 120/73 [1973] ECR p. 1471.
(67)  –	British Aggregates v Commission, paragraph 111 and the case-law cited.
(68)  –	Case C‑400/99 Italy
v Commission
[2001] ECR I‑7303, paragraph 58.
(69)  –	My italics.