Keywords

Summary



Keywords

1. Actions for annulment –Grounds – Pleas that may be raised against a Commission decision on State aid

(Arts 88(2) EC and 230 EC)

2. State aid – Definition

(Art. 87(1) EC)

3. State aid – Prejudicial to competition

4. State aid – Effect on trade between Member States

(Council Regulation No 659/1999, Art. 14)

5. State aid – Examination by the Commission

6. State aid – Commission decision finding aid incompatible with the common market – Obligation to state reasons – Scope

(Arts 87(1) EC and 253 EC)

Summary

1. In an action for annulment brought under Article 230 EC, the legality of a Community measure must be assessed on the basis of the information existing at the time when the measure was adopted. In particular, the complex assessments made by the Commission must be examined solely on the basis of the information available to it at the time when the assessments were made.

In that respect, it cannot be complained that the Commission failed to take into account information which could have been submitted to it during the administrative procedure but which was not, since it is under no obligation to consider, of its own motion and on the basis of prediction, what information might have been submitted to it.

It follows that where an applicant has participated in the formal investigation procedure provided for in Article 88(2) EC, it may not rely on factual arguments which are unknown to the Commission and which it has not notified to the latter during the formal investigation procedure. On the other hand, there is nothing to prevent the interested party from raising against the final decision a plea in law not raised at the stage of the administrative procedure.

That solution can be extended, save in entirely exceptional cases, to the situation in which an undertaking did not participate in the investigation procedure provided for in Article 88(2) EC.

It also applies to an applicant which, although perfectly aware of the initiation of a formal investigation procedure concerning in particular a debt waiver from which it benefited and of the need and importance for it to supply certain information because of the doubts already expressed by the Commission as regards the compatibility of that debt waiver with Community law, decided not to participate in the formal investigation procedure and did not even claim that the reasons given in the decision to initiate the formal investigation procedure were insufficient to allow it properly to exercise its rights.

(see paras 82-85, 90, 104)

2. Where a public body, which had a definite fixed claim against an undertaking, waived that debt in exchange for shares in the capital of a company the value of which was nil at the time of the transaction and that undertaking has not demonstrated that, following that debt waiver, it had transferred that sum into the capital of another company which was therefore the recipient of it, it must be held that that undertaking, which kept that sum amongst its assets, has received a transfer of public resources within the meaning of Article 87(1) EC.

(see paras 169-170)

3. Aid which is intended to relieve an undertaking of the expenses which it would normally have had to bear in its day-to-day management or its usual activities in principle distorts competition.

Where a public authority favours an undertaking operating in a sector characterised by intense competition by granting it a benefit, there is a distortion of competition or a risk of such distortion.

That is the case, for example, where a public body waives without genuine consideration a debt which it held against an undertaking which pursues its activity in a sector which is entirely open to competition.

(see paras 177-180)

4. When financial aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, that trade must be regarded as affected by that aid.

Thus, where a holding company receives aid, that aid results in a financial advantage in the market in which the companies it controls operate, reinforcing its position in relation to other undertakings and allowing it to increase its exports.

A demand for recovery of the value of such aid cannot therefore be regarded as an infringement the principle of proportionality and Article 14 of Regulation No 659/1999 laying down detailed rules for the application of Article [88 EC].

(see paras 181, 184, 198-199)

5. The Commission cannot be accused of discrimination arising from different treatment applied to comparable situations by reason of the fact that, on the occasion when the amount of a State aid was determined, it assessed by different methods the value to be taken for securities which a company successively acquired and transferred, since that assessment referred to values at different dates and in different contexts, the one characterised by the existence of a price fixed by a State regulation and the other by determination of value by reference to economic reality.

(see paras 201, 207-211, 218)

6. The obligation to provide a statement of reasons laid down in Article 253 EC is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. Accordingly, the statement of reasons required by Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure at issue in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review.

Furthermore, that requirement must be appraised by reference to the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

When applied to decisions finding that measures constitute State aid, this principle requires that the reasons for which the Commission considers that the aid measure in question falls within the scope of Article 87(1) EC should be indicated.

Assuming that aid was granted, the Commission must also set out sufficiently clearly the facts and legal considerations of essential importance in the scheme of the decision, such as, for example, those allowing the applicants and the Court to ascertain the reasons for the Commission’s view that the transaction at issue led to a distortion of competition and affected trade within the Union.

(see paras 234-236, 246)