JUDGMENT OF THE GENERAL COURT (Sixth Chamber)

1 March 2017 ( *1 )

‛State aid — Maritime cabotage — Aid awarded by France to Société nationale martime Corse Méditerranée (SNCM) and Compagnie méridionale de navigation — Service of general economic interest — Compensation for an additional service, on top of the basic service, covering peak periods during the tourist season — Decision declaring aid incompatible with the internal market — Concept of State aid — Advantage — Altmark judgment — Determination of the amount of aid’

In Case T‑454/13,

Société nationale maritime Corse Méditerranée (SNCM), established in Marseilles (France), represented initially by A. Winckler, F.-C. Laprévote, J.-P. Mignard and S. Mabile, subsequently by A. Winckler and F.-C. Laprévote, and lastly by F.-C. Laprévote and C. Froitzheim, lawyers,

applicant,

v

European Commission, represented by M. Afonso and B. Stromsky, acting as Agents,

defendant,

supported by

Corsica Ferries France SAS, established in Bastia (France), represented by S. Rodrigues and C. Bernard-Glanz, lawyers,

intervener,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision 2013/435/EU of 2 May 2013 on State aid SA.22843 (2012/C) (ex 2012/NN) implemented by France in favour of Société Nationale Maritime Corse-Méditerranée [and the Compagnie méridionale de navigation] (OJ 2013 L 220, p. 20).

THE GENERAL COURT (Sixth Chamber),

composed of S. Frimodt Nielsen, President, A.M. Collins (Rapporteur) and V. Valančius, Judges,

Registrar: G. Predonzani, Administrator,

having regard to the written part of the procedure and further to the hearing on 14 June 2016,

gives the following

Judgment

Background to the dispute

Principle actors

1 The applicant, Société nationale maritime Corse Méditerranée (SNCM), is a French shipping company which provides regular transport links to and from the ports of Marseilles (France) and Nice (France), linking them inter alia to the ports of Ajaccio, Bastia, Calvi, Île-Rousse, Porto-Vecchio and Propriano on the island of Corsica (France).

2 At the time relevant to the present case, SNCM operated a fleet of 10 vessels, including 6 ferries, namely the Danielle Casanova, the Napoléon Bonaparte, the Corse, the Méditerranée, the Île de Beauté and the Excelsior, and 4 passenger-cargo vessels transporting both passengers and cargo, namely the Jean Nicoli (which replaced the Monte Cinto in 2009 for the provision of the services in question), the Pascal Paoli, the Paglia Orba and the Monte d’Oro.

3 By judgment dated 28 November 2014, the Tribunal de commerce de Marseille (Marseilles Commercial Court, France) initiated a judicial reorganisation procedure in respect of SNCM. By judgment dated 20 November 2015, that court accepted one of the offers submitted to it for the takeover of SNCM. Consequently, it ordered that the judicial reorganisation procedure be converted into a compulsory liquidation of SNCM and fixed the date of transferal to the buyer at 45 days after that judgment was handed down.

4 The Compagnie méridionale de navigation (‘CMN’) is a French shipping company operating services to inter alia the ports of Bastia, Ajaccio and Propriano from Marseilles.

5 In order to provide the services in question, CMN used three passenger-cargo vessels, namely the Kalliste, the Girolata and the Scandola (subsequently replaced by the Piana).

6 Corsica Ferries France SAS (‘Corsica Ferries’) is a French shipping company which provides regular maritime transport links between, inter alia, mainland France and Corsica, namely the Nice-Ajaccio, Nice-Île-Rousse, Nice-Bastia, Nice-Calvi, Toulon-Ajaccio, Toulon-Bastia and Toulon-Île-Rousse.

7 The Corsican Regional Authority (‘CRA’) is a legal entity governed by French public law, comprising three entities, namely the Corsican Assembly, the Corsican Executive Council and the Economic, Social and Cultural Council of Corsica.

8 The Corsican Transport Board (‘CTB’) is a French industrial and commercial public company, set up by the CRA and responsible for the implementation of the air and maritime transport policy of Corsica. The tasks of the CTB include the management of the budget allocated by the CRA to ensure territorial continuity and the allocation of funds between air transport and maritime transport. As such, it concludes agreements with the transport companies, who are the public service concession holders, determining inter alia fare schedules, terms of performance and quality of service. The purpose of the principle of territorial continuity is to compensate for Corsica’s position as an island, ensure that the services to and from the island are on terms that resemble as closely as possible entirely mainland connections and implement, in respect of the maritime links between mainland France and Corsica, fares comparable to those for mainland transport.

Maritime transport services between mainland France and Corsica and public service delegation agreements

9 At the time relevant to the present case, the maritime transport service between mainland France and Corsica was provided by three shipping companies: SNCM, CMN and Corsica Ferries. A fourth company, Moby Lines, provided connections between Toulon and Corsica from April 2010 to February 2011.

10 Passenger traffic between the mainland and Corsica is highly seasonal, with the bulk of this traffic occurring during the summer months. During the 2000s, the main trend in the transport markets between Corsica and the French mainland was the development of the offer of crossings from Toulon, now the main port offering services to Corsica in terms of traffic. This trend towards increased traffic out of Toulon has been consistent with an increase in Corsica Ferries’ market share.

11 On 31 March 1976, SNCM and CMN, on the one hand, and the French Republic, on the other, signed a 25-year framework concession agreement for the operation of a public service maritime link to Corsica departing from mainland France.

12 When that public service concession ended on 31 December 2001, the Corsican authorities reviewed the operation of the island’s ferry services.

13 Thus, beginning on 1 January 2002, only routes departing from Marseilles operated under a public service delegation agreement, under which the concession holders received financial compensation. That agreement was entered into between SNCM and CMN, on the one hand, and the CRA and CTB, on the other, for a period of five years.

14 For the other routes departing from Nice and Toulon, a social assistance scheme was put in place by the Corsican authorities in parallel to the agreement referred to in paragraph 13 above for the benefit of the residents of the island as well as certain identified social categories. Thus, under a social assistance agreement, for each passenger eligible for a reduced fare, assistance would be paid that was pre-financed by those transport companies agreeing to observe public service obligations (‘PSOs’), with the individual assistance being reimbursed to them subsequently. The categories concerned accounted for almost two-thirds of the total traffic (Corsican residents, persons under 25 or over 60, students under 27 years of age, families and persons with disabilities or invalids). That assistance scheme was approved by the European Commission by Decision of 2 July 2002 (State aid N 781/2001 — Individual social assistance scheme for shipping services to Corsica). By Decision of 23 April 2007 (State aid N 13/2007 — Extension of the individual social assistance scheme for shipping services to Corsica N 781/2001), the Commission approved the renewal of the assistance scheme until 31 December 2013. The maritime links between the ports of Nice and Toulon and ports on Corsica are operated mainly by Corsica Ferries.

15 By resolution of 24 March 2006, the Corsican Assembly voted in principle to renew a public service delegation (‘PSD’) for maritime services to the ports of Ajaccio, Bastia, Calvi, Île-Rousse, Porto-Vecchio and Propriano from the port of Marseilles as from 1 January 2007. By the same resolution, it gave the President of the CTB a mandate to launch the associated tendering procedure on behalf of the CRA, carry out a technical examination of applications and assist the CRA in awarding the PSD.

16 A notice of call for tenders was published in the Official Journal of the European Union on 27 May 2006 and in the newspaper Les Échos on 9 June 2006. Four bids were submitted on 4 August 2006, the deadline for the submission of tenders: one from SNCM, one from Corsica Ferries, one from CMN and one from a temporary group formed by Corsica Ferries and CMN.

17 By decision of 15 December 2006, the Conseil d’État (Council of State, France) annulled the procedure to award the PSD.

18 By resolution of 22 December 2006, the Corsican Assembly decided to repeat in its entirety the procedure for the award of the PSD, extend the then-current PSD until 30 April 2007 and set 1 May 2007 as the implementation date of the new PSD.

19 A fresh notice of call for tenders was published in the Official Journal of the European Union on 30 December 2006, in Les Échos on 4 January 2007 and in the weekly magazine Le Journal de la Marine Marchande on 5 January 2007. On 9 February 2007, two bids were submitted: a joint bid by SNCM and CMN constituted as a temporary group (‘the SNCM-CMN group’) covering all routes, in the form of both an overall bid and route-by-route bids, and a bid by Corsica Ferries covering the Marseilles-Ajaccio, Marseilles-Porto-Vecchio and Marseilles-Propriano routes, in the form both of an overall bid for those three routes and route-by-route bids.

20 By order of 27 April 2007, the judge hearing the application brought by Corsica Ferries for interim measures of the tribunal administratif de Bastia (Administrative Court of Bastia, France) annulled the negotiation phase of the PSD procurement procedure and the decision of the President of the Executive Council of Corsica and the President of the CTB accepting the bid from the SNCM-CMN group and proposing that the Corsican Assembly award the PSD to that group, holding that it was for the CRA and the CTB to resume discussions with the bidding undertakings.

21 By resolution of 27 April 2007, the Corsican Assembly extended the duration of the then-current delegation by two months and set 1 July 2007 as the implementation date of the new PSD.

22 Following a new stage of negotiations with the SNCM-CMN group and Corsica Ferries, the CTB proposed rejecting the latter’s bid on the grounds that it was not able to set a firm and final date as from when it would be able to operate the PSD and could not comply with the maximum age requirement for vessels set out in the specific regulations of the call for tenders.

23 By resolution of 7 June 2007, the Corsican Assembly awarded the SNCM-CMN group the PSD for the ferry service between the port of Marseilles and the Corsican ports between 1 July 2007 and 31 December 2013.

24 Article 1 of that resolution is worded as follows: ‘[The Corsican Assembly] approves the report of the President of the [Corsican] Executive Board, in which it is stated, first, that the SNCM-CMN group’s bid meets the requirements and criteria of the specific regulations of the call for tenders and the tender specifications for each of the five routes and, second, that Corsica Ferries is not able to set a firm and final date on which it would be able to operate the next [PSD] and, in this respect, the conditions which it sets out, relating to matters falling outside the [PSD]’s content, cannot be taken into consideration.’

25 By decision of the same day, the President of the Executive Council of Corsica was authorised to sign the public service delegation contract relating to that maritime service (‘the PSDC’).

26 The PSDC was concluded on 7 June 2007 for the period from 1 July 2007 to 31 December 2013.

27 By judgment of 24 January 2008, the tribunal administratif de Bastia (Administrative Court of Bastia) dismissed an application by Corsica Ferries for annulment of the resolution and the decision referred to in paragraphs 23 and 25 above. By judgment of 7 November 2011, the Cour administrative d’appel de Marseille (Marseilles Administrative Court of Appeal, France) set aside that judgment and annulled that resolution and the decision. By decision of 13 July 2012, the Conseil d’État (Council of State), on appeal by SNCM and CMN, set aside the judgment of the Cour administrative d’appel de Marseille (Marseilles Administrative Court of Appeal) and referred the case back to that court. By judgment of 6 April 2016, the Cour administrative d’appel de Marseille (Marseilles Administrative Court of Appeal) set aside the judgment of the tribunal administratif de Bastia (Administrative Court of Bastia) of 24 January 2008 and annulled that resolution and the decision.

28 Article 1 of that PSDC defines the purpose of the public service delegation contract as the provision of scheduled maritime transport services on all lines of the PSD between the port of Marseilles and the ports of Bastia, Ajaccio, Porto-Vecchio, Propriano and Balagne (Calvi and Île-Rousse).

29 The tender specifications contained in Annex 1 to the PSDC define the nature of those services. It provides in particular for: — a permanent ‘passenger and freight’ service to be provided throughout the year on all the routes concerned (‘the basic service’) and — an additional ‘passenger’ service to be provided during peak periods on the Marseilles-Ajaccio, Marseilles-Bastia and Marseilles-Propriano routes (‘the additional service’).

30 Article 2 of the PSDC sets out inter alia the reference financial compensation amounts to which concession holders commit for the duration of the PSD.

31 Article 3 of the PSDC states that the PSD does not confer exclusive use of the ferry routes in question, but allows other companies to operate regular services, although subject to certain obligations and without entitlement to financial compensation. Article 3 also states that the requests for financial compensation from concession holders were determined according to the social assistance scheme.

32 Article 5 of the PSDC, entitled ‘Conditions for the payment of financial compensation’, provides in the third subparagraph of paragraph 2 that the final financial compensation for each concession holder for each year is limited to the operating deficit resulting from its obligations stemming from the tender specifications, allowing for a reasonable return on the nautical capital employed in proportion to the days when it was actually used for crossings made in performance of those obligations. The percentage of 15% of its conventional value is considered as a reasonable return on the nautical capital employed. The conventional value is specified in Annex 3 to the PSDC.

33 Article 7 of the PSDC, entitled ‘Safeguard clause’, states in paragraph 1 that in the event of a substantial change in the technical, regulatory or economic conditions for the operation of the delegated services or to take account of external events having a significant impact on the financial commitments of the concession holder(s), the parties are to meet, at the initiative of the party raising the issue, to take steps to re-establish the initial financial equilibrium of the PSDC ‘with priority given to the maximum fares and the adaptation of the services’.

34 Article 7(2) of the PSDC recalls that the amounts of the annual reference financial compensation have been determined on the basis of the gross passenger and cargo revenue forecasts contained in the bids submitted by each concession holder. The same provision allows for the possibility in certain situations of adjusting the financial compensation upwards or downwards each year for each category of revenue and for each concession holder. This provision also stipulates that this adjustment mechanism is to apply only until the date of application of the adaptation clause provided for in Article 8 of the PSDC.

35 Article 8 of the PSDC, entitled ‘Adaptation clause’, reads as follows: ‘In view of the duration of the [PSDC], a progress report shall be drawn up during the third year, the purpose of which is to analyse, on the basis of an inter partes procedure and joint expert opinion, the financial equilibrium of the [PSDC] and, after consultation between the parties, adopt any measures necessary to correct services and adjust fares so as to ensure that the [CRA] is in control of its financial contribution, in particular, by reducing the compensation, and to preserve the general scheme of the [PSDC].’

36 Under that adaptation clause, the PSDC was amended by a supplementary contract at the end of 2009.

Procedure before the Commission and the contested decision

37 By letters of 27 September, 30 November and 20 December 2007, the Commission received a complaint from Corsica Ferries concerning unlawful State aid incompatible with the internal market, from which SNCM and CMN benefited as a result of the PSDC.

38 By letters dated 20 May 2010, 16 July 2010, 22 March 2011, 22 June 2011, 15 December 2011 and 10 January 2012, Corsica Ferries provided additional information to the Commission in support of its complaint.

39 By letters dated 13 March 2008, 12 November 2008, 13 October 2011 and 14 December 2011 the Commission requested information from the French authorities. The latter responded to those requests by letters dated 3 June 2008, 14 January 2009, 7 December 2011 and 20 January 2012 respectively.

40 By letter dated 27 June 2012, the Commission notified the French Republic of its decision to open the formal investigation procedure under Article 108(2) TFEU into potential aid granted to SNCM and CMN contained in the PSDC (OJ 2012 C 301, p. 1).

41 The French authorities submitted their observations on that decision and replied to the questions contained therein by letters dated 13 July and 7 September 2012. Corsica Ferries, SNCM and CMN also submitted observations on that decision, which were communicated to the French authorities, who in turn provided comments on those observations by letters dated 14 November 2012 and 3 January, 16 January and 12 February 2013.

42 Upon completion of that procedure, on 2 May 2013, the Commission adopted Decision 2013/435/EU on State aid SA.22843 (2012/C) (ex 2012/NN) implemented by France to [SNCM and CMN] (OJ 2013 L 220, p. 20) (‘the contested decision’).

43 The contested decision was notified to the French Republic on 3 May 2013 and communicated to SNCM by email from the Commission on 14 June 2013.

44 In the contested decision, in order to determine whether the compensation granted to SNCM and CMN within the framework of the PSDC constituted State aid and, in particular, conferred a selective advantage, the Commission examined whether the cumulative criteria laid down by the Court of Justice in the judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg (C‑280/00, EU:C:2003:415), were satisfied in this case (‘the Altmark criteria’). More specifically, it analysed the first and fourth of those criteria (see paragraphs 87 and 90 below).

45 As regards the first Altmark criterion, in the first place, the Commission defined the ‘analytical framework’ to be used in its assessment (recitals 132 to 136 of the contested decision). In particular, it considered that, in order to be acceptable under the State aid rules, the scope of the public service remit had to comply with Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) (OJ 1992 L 364, p. 7) (‘the Maritime Cabotage Regulation’), as interpreted by the case-law and, in particular, by the Court of Justice in its judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107). It concluded that ‘the scope of the public service remit as defined by a public service contract [had to be] necessary and proportionate to a real public service need, as demonstrated by the lack of regular transport services under normal market conditions’ (recital 136 of the contested decision).

46 In the second place, the Commission considered that the basic service and the additional service had to be analysed separately (recitals 137 to 144 of the contested decision). It noted that the tender specifications annexed to the PSDC made a clear distinction between the two types of service. It also considered that it would be legitimate to consider that the additional service may be justified by the real public service need met by the basic service only if it could be determined that its operation was essential to the basic service, ‘on the grounds of a set of technical and economic considerations’ (recital 139 of the contested decision). Yet in the present case no technical complementarity has been established between the two types of service, since they are subject to different obligations, particularly with regard to timetables and frequency, and since the basic service is provided by passenger-cargo vessels while the additional service is provided by ferries. In addition, SNCM’s cost accounts show a consistent operating deficit for the additional service, so that the French authorities’ argument that the inclusion of that service within the scope of the PSD was justified by a financial equalisation with the basic service cannot be upheld.

47 In the third place, the Commission analysed the basic service in the light of the first Altmark criterion (recitals 145 to 150 of the contested decision). In that regard, it found first of all that the provision of a minimum territorial continuity service between Marseilles and the five Corsican ports concerned met a clearly defined public service need (recital 145 of the contested decision). Second, as regards the shortage of private initiative, it observed that the other operators on the market had themselves recognised that they had been unable to provide the basic service (recital 146 of the contested decision). Furthermore, it considered that grouping of routes within a single service was not, in itself, contrary to the Maritime Cabotage Regulation. Instead, in the case at hand, grouping together those five routes made it possible to pool shipping resources to improve the quality of the service in question and reduce costs (recital 148 of the contested decision). Lastly, it pointed out that the PSDC and the annexes thereto set clear standards of continuity, regularity, capacity and pricing that concession holders had to fulfil to ensure the basic service (recital 149 of the contested decision). It concluded therefrom that the inclusion of the basic service within the scope of the PSDC was necessary and proportionate to the real public service need (recital 150 of the contested decision).

48 In the fourth place, the Commission analysed the additional service provided by SNCM alone, using two ferries, in the light of the first Altmark criterion (recitals 151 to 167 of the contested decision). It considered that its inclusion within the scope of the public service remit did not correspond to a real public service need and that the French Republic had therefore committed a manifest error of assessment by classifying it as a service of general economic interest (‘SGEI’) (recital 167 of the contested decision).

49 In that connection, the Commission began by making the case that there was a high degree of substitutability in terms of passenger demand between the additional service from Marseilles and the passenger transport services from Toulon to Bastia and Ajaccio at the time of conclusion of the PSDC (recitals 154 to 160 of the contested decision). In that regard, it observed inter alia that the evolution of traffic on routes between mainland France and Corsica during the period 2002-2009 showed a clear trend of rapidly developing competition for the services offered by the two concession holders. The distribution of traffic between the ports served showed very strong growth in traffic departing from Toulon and a concomitant decrease in traffic departing from Marseilles. Thus the overall growth in traffic was absorbed mainly by the service providers operating out of Toulon, to the detriment of the concession holders operating out of Marseilles. It also referred to the short distance between Marseilles and Toulon, the fact that the journey time by road between the two cities was considerably less than the journey time at sea and the fact that vessels departing from Toulon could reach Corsica in less time than those departing from Marseilles.

50 The Commission further found that the French authorities had provided no evidence of a shortage of private initiative for the additional service (recital 161 of the contested decision). It noted inter alia that for the ports of Bastia and Ajaccio, which represented 90% of the capacity required by the additional service, the combination of capacities offered by the basic service of the PSD from Marseilles and the private initiative service available provided by Corsica Ferries from Toulon was sufficient to meet the real demand observed, both for the spring-autumn period and for the summer period, for each of the two ports for each year between 2004 and 2006 (recital 162 of the contested decision). The Commission accordingly considered that bringing the additional service within the scope of the PSD was neither necessary nor proportionate to meeting demand for transport observed for the Marseilles-Bastia and Marseilles-Ajaccio lines. As regards the Marseilles-Propriano line, the Commission considered that the small proportion of traffic represented by that line did not mean that a shortage of private initiative on that one line invalidated the conclusion concerning the additional service as a whole (recital 164 of the contested decision). It also noted that the service provided by Corsica Ferries did meet the standards of PSOs applicable to all connections between the French mainland and Corsica, and showed no qualitative difference with the service provided as part of the additional service (recital 165 of the contested decision).

51 The Commission concluded therefrom that the first Altmark criterion was not fulfilled as regards the compensation awarded in respect of the additional service (recital 167 of the contested decision).

52 Regarding the fourth Altmark criterion, the Commission considered that it was not fulfilled for either of the two types of service at issue (recital 183 of the contested decision).

53 In the first place, the Commission concluded, on the basis of a number of factors, that the terms of the call for tenders had failed to enable a candidate to be selected who was capable of providing the services in question at the least cost to the community (recitals 169 to 178 of the contested decision).

54 In arriving at that conclusion the Commission based itself, in essence, on the following factors: — the PSD was awarded following a negotiated procedure after publication of a notice of call for tenders, which procedure confers broad discretion on the contracting authority and may restrict the participation of the operators concerned; — the only bid competing with that of the two concession holders, namely that of Corsica Ferries, was not assessed on the basis of its own merits (award criteria) but on the basis of a single selection criterion, namely the tenderer’s ability to commence operations on 1 July 2007; — the procedure thus did not allow the CTB to compare several bids in order to select the most economically advantageous one; — the fact that two bids were actually submitted was not sufficient to guarantee effective competition, inasmuch as the competing bid from Corsica Ferries, which gave 12 November 2007 as a start date for operations, was not able to provide a credible alternative; — the multiple sets of legal proceedings brought in the present case is not evidence in favour of the effectiveness of competition in the procurement procedure for the PSDC; — the SNCM-CMN group had a significant competitive advantage as the incumbent operator that already had vessels adapted to the requirements of the PSDC’s tender specifications; — the very short time set between the date of awarding the PSD (ultimately awarded on 7 June 2007) and the date of commencement of services (1 July 2007) was likely to constitute a significant barrier to entry for new entrants; — combined with the technical requirements related to the specific conditions of the ports involved, the condition concerning the age of the fleet and the unit capacities required by the PSDC’s tender specifications, this very short time frame was likely to limit participation in the call for tenders; — the existence of numerous clauses providing for meetings associated with the freedom given to the CTB to decide upon exemptions to rules may also have helped to dissuade tenderers from taking part in the call for tenders by raising doubts about some technical and economic parameters that were critical to the preparation of a bid.

55 In the second place, the Commission noted that the French authorities had failed to provide any information capable of demonstrating that the compensation had been calculated by reference to a medium-sized, well-run and adequately equipped undertaking (recitals 179 and 180 of the contested decision). It added that the compensation had not been defined by reference to a base cost established in advance or by comparison with the cost structure of other comparable shipping companies, but by reference to forecast revenue and fuel costs, which referred only to a portion of the income and expenses of the service (recital 180 of the contested decision). Moreover, the forecast compensation of the PSD was significantly higher than that forecast for the period 2002-2006 for similar obligations, or in fact slightly less demanding ones in terms of available capacity (recital 181 of the contested decision). Lastly, it considered that a comparison with the costs incurred by a well-run undertaking was all the more necessary, since there were certain elements to suggest that SNCM itself, which was emerging from a period of intense restructuring at that time, did not meet such requirements (recital 182 of the contested decision).

56 In the light of all those considerations, the Commission concluded that there was a selective economic advantage granted to the concession holders (recital 184 of the contested decision).

57 Having found that the compensation in question might distort competition and affect trade between Member States, the Commission concluded that it constituted State aid and was unlawful because it had been granted without prior notification (recitals 185 to 187 and Article 1 of the contested decision).

58 In recitals 188 to 212 of the contested decision, the Commission assessed the compatibility of that State aid with the internal market.

59 In the first place the Commission pointed out that, in accordance with paragraph 11 of its Communication — European Union framework for State aid in the form of public service compensation (2011) (OJ 2012 C 8, p. 15) (‘the SGEI Framework’), State aid falling outside the scope of Commission Decision 2012/21/EU of 20 December 2011 on the application of Article 106(2) TFEU to State aid in the form of public-service compensation granted to certain undertakings entrusted with the operation of [SGEI] (OJ 2012 L 7, p. 3) could be declared compatible with Article 106(2) TFEU if it was necessary for the operation of the SGEI concerned and did not affect the development of trade to such an extent as to be contrary to the interests of the European Union, which balance could be struck only if the conditions set out in Sections 2.2 to 2.10 of the SGEI Framework were met (recital 190 of the contested decision).

60 In the second place, the Commission observed that the basic service constituted an SGEI, but the additional service did not, so that the compensation paid for the latter service could not be declared compatible with Article 106(2) TFEU (recitals 192 and 193 of the contested decision).

61 In the third place, the Commission considered that the other conditions laid down in the SGEI Framework were met for the basic service (recitals 194 to 212 of the contested decision).

62 The Commission concluded therefrom that the compensation paid to SNCM and CMN for the basic service was State aid that was unlawful but nevertheless compatible with the internal market (recital 213, Article 1 and Article 2(2) of the contested decision), whereas the aid paid to SNCM alone for the additional service was State aid that was unlawful and incompatible with the internal market (recital 214, Article 1 and Article 2(1) of the contested decision).

63 Consequently, the Commission ordered the immediate cessation of payments of compensation for the additional service and the recovery from the recipient of any aid already paid for that purpose, it being understood that the sums to be recovered were interest-bearing as from the date on which they were made available to the recipient until their actual recovery (recitals 215 to 218 and 220 and Article 3 of the contested decision). The Commission specified that recovery was to be immediate and effective and that the French authorities were to ensure that the contested decision was implemented within four months of the date of its notification (recital 219 and Article 4 of the contested decision), that is to say, by 3 September 2013. Furthermore, the French authorities were required to inform the Commission of the following within two months of notification of the contested decision: the total amount (principal and interest) to be recovered from the recipient; a detailed description of the measures already adopted and planned for the purpose of complying with the contested decision; and the documents proving that the recipient had been ordered to repay the aid (Article 5 of the contested decision).

Procedure and forms of order sought

64 By application lodged at the Registry of the General Court on 26 August 2013, SNCM brought the present action.

65 The contested decision was also the subject of an action for annulment by the French Republic, lodged at the Court Registry on 12 July 2013 and registered as Case T‑366/13.

66 By document lodged at the Court Registry on 11 December 2013, Corsica Ferries sought leave to intervene in the present proceedings in support of the Commission.

67 By documents lodged at the Court Registry on 9 January and 10 February 2014, SNCM requested confidential treatment, with regard to Corsica Ferries, if it were granted leave to intervene, in respect of certain information in the application and the reply, respectively. It attached to those requests a non-confidential version of those pleadings.

68 By order of 21 February 2014, the President of the Sixth Chamber of the General Court granted Corsica Ferries leave to intervene. The decision on the merits of the requests for confidentiality was reserved.

69 By document lodged at the Court Registry on 6 March 2014, Corsica Ferries raised objections to the requests for confidential treatment in respect of a large part of the information covered by those requests.

70 By order of 3 October 2014, SNCM v Commission (T‑454/13, EU:T:2014:898), the President of the Sixth Chamber of the General Court allowed in part the requests for confidential treatment.

71 Corsica Ferries lodged its statement in intervention at the Court Registry on 9 January 2015. SNCM submitted its observations on that statement by document lodged at the Court Registry on 9 March 2015. By letter of the same date, the Commission stated that it had no observations to make on that statement.

72 Acting upon a proposal of the Judge-Rapporteur, the Court (Sixth Chamber) decided to open the oral part of the procedure.

73 By way of measures of organisation of procedure as provided for in Article 89 of its Rules of Procedure, the Court invited the Commission to answer certain questions in writing, which it did within the prescribed period.

74 By document lodged at the Court Registry on 6 June 2016, SNCM requested confidential treatment of certain parts of the Commission’s reply to those questions in respect of Corsica Ferries. Corsica Ferries received only a non-confidential version of that response and raised no objection to the applications for confidential treatment made with regard to it.

75 The parties presented oral argument and answered the questions put to them by the Court at the hearing on 14 June 2016.

76 SNCM claims that the Court should: — principally, annul the contested decision; — in the alternative, partially annul the contested decision in so far as it provides that the amount of the aid must include the items referred to in recital 218; — order the Commission to pay the costs.

77 The Commission contends that the Court should: — dismiss the action as unfounded; — order SNCM to pay the costs.

78 Corsica Ferries contends that the Court should: — dismiss the main action; — order SNCM to pay the costs.

Law

79 In support of the action, SNCM puts forward a series of arguments which can be grouped into five pleas in law, namely: — a first plea, alleging that the Commission erred in finding that the additional service did not constitute an SGEI; — a second plea, alleging that the Commission erred in finding that the PSDC did not satisfy the fourth Altmark criterion; — a third plea, alleging that the Commission erred in calculating the amount of aid to be recovered; — a fourth plea, alleging infringement of the principle of protection of legitimate expectations; — a fifth plea, alleging infringement of the principle of equal treatment.

Preliminary observations

80 It is appropriate to begin by highlighting certain principles from the case-law relating to inter alia the classification of State aid as a compensation for public service, in the light of which principles the present action must be examined.

81 Under Article 107(1) TFEU, save as otherwise provided for in the treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is, in so far as it affects trade between Member States, incompatible with the internal market.

82 It is settled case-law that classification as State aid for the purposes of Article 107(1) TFEU requires that all the conditions set out are fulfilled. Accordingly, first, there must be an intervention by the State or through State resources; second, that intervention must be liable to affect trade between Member States; third, it must confer a selective advantage on the recipient; fourth, it must distort or threaten to distort competition (see judgment of 8 May 2013, Libert and Others, C‑197/11 and C‑203/11, EU:C:2013:288, paragraph 74 and the case-law cited).

83 The first two pleas in the present action concern predominantly the third of those conditions, namely that the measure at issue must be viewed as having conferred an advantage on its recipient.

84 In that regard, it must be recalled that, according to settled case-law, measures which, whatever their form, are likely directly or indirectly to favour certain undertakings or are to be regarded as an economic advantage which the recipient undertaking would not have obtained under normal market conditions are regarded as aid (see judgment of 2 September 2010, Commission v Deutsche Post, C‑399/08 P, EU:C:2010:481, paragraph 40 and the case-law cited).

85 However, a State measure regarded as compensation for the services provided by the recipient undertakings in order to discharge PSOs, so that those undertakings do not enjoy a real financial advantage and the measure thus does not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, is not caught by Article 107(1) TFEU (judgments of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraph 87, and of 8 May 2013, Libert and Others, C‑197/11 and C‑203/11, EU:C:2013:288, paragraph 84).

86 However, for such compensation to escape classification as State aid in a particular case, four cumulative conditions must be satisfied (judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraphs 87 and 88).

87 First, the recipient undertaking must actually have PSOs to discharge, and those obligations must be clearly defined (judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraph 89). The concept of PSOs within the meaning of this first criterion accords with that of SGEI referred to in Article 106(2) TFEU (see, to that effect, judgment of 12 February 2008, BUPA and Others v Commission, T‑289/03, EU:T:2008:29, paragraph 162).

88 Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner (judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraph 90).

89 Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of PSOs, taking into account the relevant receipts and a reasonable profit for discharging those obligations (judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraph 92).

90 Fourth, where the undertaking which is to discharge PSOs, in a specific case, is not chosen pursuant to a public procurement procedure making it possible to select the candidate capable of providing the services in question at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations (judgment of 24 July 2003, Altmark Trans and Regierungspräsidium Magdeburg, C‑280/00, EU:C:2003:415, paragraph 93).

91 In the contested decision the Commission considered that the first Altmark criterion was not fulfilled as regards the additional service and that the fourth of those criteria was not fulfilled as regards either of the two types of service in question.

The first plea: the Commission erred in finding that the additional service did not constitute an SGEI

92 By its first plea, which is subdivided into four parts, SNCM submits that the Commission erred in finding that the additional service did not constitute an SGEI.

93 It should be noted as a preliminary point that, according to settled case-law, given that the Member State enjoys wide discretion in defining an SGEI mission and the conditions for its implementation and also that the scope of the review that the Commission may carry out in that regard is limited to manifest error (see paragraph 111 below), the Court’s review of the Commission’s assessment in the matter may not go beyond those same parameters; accordingly, its review must be restricted to ascertaining whether the Commission properly found or rejected the existence of a manifest error by the Member State (see, to that effect, judgment of 16 September 2013, Iliad and Others v Commission, T‑325/10, not published, EU:T:2013:472, paragraph 121 and the case-law cited).

The first part: the Commission erred in law by carrying out a detailed examination of the need for the service in the light of a real public service need

94 In the first part of the first plea, SNCM disputes the validity of the test used by the Commission in the contested decision to verify compliance with the first Altmark criterion (see paragraph 45 above). It submits that the Commission erred in law in carrying out in the present case a detailed review of the classification as an SGEI and of the need for the additional service in the light of a real public service need.

95 This first part may be divided into four subsidiary parts. The Court should examine, first, the first subsidiary part, then the second and fourth subsidiary parts and, lastly, the third subsidiary part.

– The first subsidiary part: the Commission disregarded its previous decision-making practice and the case-law

96 SNCM submits that the PSDC, the primary objective of which was the implementation of the principle of territorial continuity, as a whole fulfilled a clear public service need. In finding that it did not in the contested decision, the Commission departed from its previous decision-making practice on previous PSDs for ferry services to and from Corsica which gave rise to the judgments of 19 May 1993, Corbeau (C‑320/91, EU:C:1993:198), and of 11 September 2012, Corsica Ferries France v Commission (T‑565/08, EU:T:2012:415). In the reply, SNCM adds that the Commission may not adopt a diametrically opposite position to what it hitherto held on the same subject matter without a proper statement of reasons.

97 The Commission contests the arguments put forward by SNCM.

98 First of all, the Court does not accept SNCM’s claim that the Commission acted in an ‘obviously contradictory’ manner in that it had already found in earlier decisions on previous PSDs that provision of additional passenger capacity during peak periods met a public service need. It follows from settled case-law that the concept of State aid is an objective concept, the sole test being whether a State measure confers an advantage on one or more particular undertakings. The Commission’s decision-making practice in the area cannot, therefore, be a decisive factor (see judgment of 4 March 2009, Associazione italiana del risparmio gestito and Fineco Asset Management v Commission, T‑445/05, EU:T:2009:50, paragraph 145 and the case-law cited). The same approach must also be taken with the question of assessing the compatibility of aid with the internal market (judgments of 20 May 2010, Todaro Nunziatina & C., C‑138/09, EU:C:2010:291, paragraph 21, and of 15 June 2005, Regione autonoma della Sardegna v Commission, T‑171/02, EU:T:2005:219, paragraph 177).

99 In any event, the mere fact that the contested decision differs from the Commission’s earlier decisions on the matter does not mean that it is inconsistent with those previous decisions. As rightly pointed out by the Commission, the assessment of whether there is a real public service need may evolve over time in the light of the development of market forces. It should also be noted that, already in Decision 2002/149/EC of 30 October 2001 on the State aid awarded by France to [SNCM] (OJ 2002 L 50, p. 66), relied on several times by SNCM in its written pleadings, the Commission observed that, ‘as far as services from the French mainland ports are concerned, the market [had] evolved significantly in recent years, to the extent that the need for [PSO] for all the lines throughout the whole year [had] been questioned’ (recital 78) and that ‘the Commission’s conclusion regarding the real need for a public service resulting from the service system provided for by the framework agreement signed between the State and SNCM in 1976 and, within the framework of this agreement, by the five-year agreements concluded between the [CTB] and SNCM in 1991 and 1996, [could not] be extrapolated beyond the deadline of 31 December 2001, the date on which the framework agreement expires’ (recital 80).

100 Next, for the same reasons as set out in paragraph 99 above, SNCM cannot successfully rely on the judgment of 11 September 2012, Corsica Ferries France v Commission, T‑565/08, EU:T:2012:415), in support of its assertion. The two passages of that judgment referred to by SNCM in fact relate to the PSD for the period 1996-2001.

101 Nor can SNCM rely on the judgment of 19 May 1993, Corbeau (C‑320/91, EU:C:1993:198), and thus the requirement to avoid the practice of ‘skimming’, that is to say, the practice by which the competitors of the public service concession holder concentrate on the profitable activities of the PSD and leave the unprofitable activities to the public service concession holder, thereby not allowing it to offset losses incurred in unprofitable sectors against profits made in more profitable sectors. As will be explained in more detail in paragraph 155 below, the material in the case file shows that both the basic service and the additional service had a large operating deficit, which precluded any possibility of financial equalisation between them (see, inter alia, recitals 47 and 143 of the contested decision).

102 Lastly, the complaint that the Commission failed to fulfil its obligation to provide a statement of reasons must be dismissed as completely unfounded. Not only can it not be criticised for adopting a ‘diametrically opposed’ approach in the present case as compared to its earlier decisions in this area (see paragraph 99 above), it is clear that, in the contested decision, it states clearly and precisely why it considers that the existence of a real public service need has not been established for the additional service. Thus, after defining the ‘analytical framework’ it was to use to determine whether the first Altmark criterion was satisfied in the present case (recitals 132 to 136 of the contested decision), the Commission set out, inter alia by refuting the arguments relied on by the French Republic, SNCM and CMN, the reasons why it considered that the basic service and the additional service constituted two distinct types of service and had to be examined separately (recitals 137 to 144 of the contested decision) before analysing the second of those services in the light of that criterion (recitals 151 to 167 of the contested decision). With regard to the latter point, the Commission found that the inclusion of the additional service within the scope of the public service remit did not meet a real public service need after having found in essence, on the basis of a set of factors, first, that there was a high degree of substitutability for that service out of Marseilles, from the point of view of passenger demand, that could be met by passenger services from Toulon to Bastia and Ajaccio at the time the PSDC was concluded (recitals 154 to 160 of the contested decision) and, second, that no evidence had been provided of a shortage of private initiative for the additional service (recitals 161 to 166 of the contested decision).

103 It follows from the foregoing that this first subsidiary part must be rejected as unfounded.

– The second and fourth subsidiary parts: the Commission disregarded the Member States’ wide discretion and the scope of the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) and of the Maritime Cabotage Regulation

104 First, SNCM submits that in the present case the Commission exceeded the wide discretion enjoyed by the Member States in defining what SGEIs are. Far from limiting itself to merely ascertaining whether there had been a manifest error of assessment, it carried out a particularly detailed examination of the definition of the SGEI in question and of the need for the service. SNCM further argues that the Commission cannot rely on the judgment of 16 September 2013, Colt Télécommunications France v Commission (T‑79/10, not published, EU:T:2013:463) given that, in the case giving rise to that judgment, there were guidelines expressly providing for the need to prove market failure, in that case the Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks (OJ 2009 C 235, p. 7).

105 Second, SNCM submits that the Commission disregarded the scope of the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) and of the Maritime Cabotage Regulation. It affirms that neither that judgment nor the regulation pertains to State aid control; in fact, they confirm the validity of the PSDC. It adds that they relate to obligations which may be imposed in connection with public services and are capable of providing justification for a prior authorisation scheme or a public service contract, not to the range of the services that may be covered by compensation as contemplated in Altmark or the amount of such compensation. It observes in particular that, contrary to the situation which gave rise to the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107), the provision of ferry services between mainland France and Corsica is not subject to a requirement of prior authorisation being obtained. It further disputes that the scope of the public service remit as defined by a public service contract must be necessary and proportionate to a real public service need, as demonstrated by there being insufficient regular transport services under normal market conditions. Lastly, it challenges the Commission’s finding in recital 135 of the contested decision that ‘the compensation of specific obligations under a public service contract, subsidising a range of services, clearly constitutes an obstacle to the free movement of services’. Neither the purpose nor the effect of the public service compensation in the present case is to hamper the freedom to provide services and none of the judgments referred to by the Commission in footnote 63 of the contested decision establish otherwise.

106 At the hearing, in response to a question from the Court seeking clarification as to which criteria should serve as the basis for determining the merits and scope of the SGEI, SNCM stated that it was sufficient for the Member State to ‘identify a general interest in the very broad sense which may relate to what [was] generally in the public interest’. It added that it considered that the criteria of necessity and proportionality, at the very least as set out in the Maritime Cabotage Regulation and the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) should not have been relied on in this exercise as they were derived from concepts associated with the freedom to provide services.

107 The Commission, supported by Corsica Ferries, disputes SNCM’s arguments.

108 First, referring to paragraph 154 of the judgment of 16 September 2013, Colt Télécommunications France v Commission (T‑79/10, not published, EU:T:2013:463), the Commission and Corsica Ferries contend that, irrespective of the sector concerned, the determination of the existence of a market failure is a prerequisite for the classification of an activity as an SGEI and that, consequently, the requirement that there be an insufficiency or shortage of private initiative is inherent in the first Altmark criterion and presupposes careful examination.

109 The Commission and Corsica Ferries further argue that the Member States’ discretion in defining SGEIs is limited by the Maritime Cabotage Regulation, as interpreted by the Court of Justice in, inter alia, the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107). By implication, the service in question must meet a real public service need due to the insufficiency of regular transport services in a situation of free competition and the scope of the SGEI must be necessary and proportionate to that need. At the hearing, the Commission stated that it considered that proving the existence of a real public service need was more a burdensome requirement than demonstrating the existence of a market failure as contemplated in the judgment of 16 September 2013, Colt Télécommunications France v Commission (T‑79/10, not published, EU:T:2013:463).

110 Second, the Commission and Corsica Ferries consider that SNCM is wrong to dispute the existence of a link between the Maritime Cabotage Regulation and State aid control. It would also be clearly inaccurate to claim that that regulation concerns only situations where the provision of services is subject to a requirement of prior authorisation. The judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) does not concern solely the question whether it is possible to make a maritime transport activity subject to a requirement of prior authorisation; it also contains very clear reasoning on how the provisions of the Maritime Cabotage Regulation should be interpreted in the light of its objective of ensuring freedom to provide maritime cabotage services and allowing infringements of that freedom only where they are justified by a real public service need and are necessary and proportionate to the fulfilment thereof. It is also obvious that subsidising a supply of services by entering into a public service contract with a particular operator covered by that regulation may result in an obstacle to the freedom to provide services.

111 It must be remembered that, according to consistent case-law, Member States have wide discretion to define what they regard as an SGEI and, consequently, the definition of such services by a Member State can be questioned by the Commission only in the event of manifest error (see judgments of 15 June 2005, Olsen v Commission, T‑17/02, EU:T:2005:218, paragraph 216 and the case-law cited, and of 22 October 2008, TV2/Danmark and Others v Commission, T‑309/04, T‑317/04, T‑329/04 and T‑336/04, EU:T:2008:457, paragraph 101 and the case-law cited).

112 However, the Member State’s power to define SGEIs is not unlimited and may not be exercised arbitrarily for the sole purpose of allowing a particular sector to circumvent the application of the competition rules (judgment of 12 February 2008, BUPA and Others v Commission, T‑289/03, EU:T:2008:29, paragraph 168).

113 In particular, where there are specific rules of EU law governing the definition of the content and scope of the SGEI, they are binding on the Member States’ discretion, as provided for in paragraph 46 of the Communication from the Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest (OJ 2012 C 8, p. 4) (‘the SGEI Communication’). As rightly pointed out by the Commission, those rules are generally aimed at the harmonisation of legislation in order to remove obstacles to freedom of movement and freedom to provide services; the fact that they are adopted on the basis of provisions of the Treaty different from those concerning State aid control and have as their primary purpose the achievement of the internal market does not in any way diminish their relevance under the first Altmark criterion.

114 In the present case, as the Commission and Corsica Ferries correctly stated, there were such rules, in this case the provisions of the Maritime Cabotage Regulation. In that regard, Article 1 thereof enshrines the principle of freedom to provide maritime cabotage services in the European Union. In the same vein, the third recital thereof states that it seeks to abolish the restrictions on the freedom to provide services.

115 Article 4 of the Maritime Cabotage Regulation provides for possible exceptions to that guiding principle, in the form of the possibility for Member States to conclude public service contracts with shipping companies involved in regular services to, from and between islands or to impose PSOs on them as a condition for the provision of cabotage services. In that respect, it should be noted that — as acknowledged by SNCM — the PSDC unquestionably constitutes such a public service contract, which is defined by Article 2(3) of that regulation as a contract concluded between the competent authorities of a Member State and a Union shipowner in order to provide the public with adequate transport services. Article 4(2) of that regulation further stipulates that, in imposing PSOs, Member States are to abide by requirements relating to ports to be served, regularity, continuity, frequency, capacity to provide the service, rates charged and crew and that, where applicable, any compensation for PSOs must be available to all Union shipowners.

116 Accordingly, the Commission’s submission that in the present case the French authorities’ discretion was limited by the provisions of the Maritime Cabotage Regulation must be upheld.

117 Furthermore, it is right to state that the contested decision also took account of the interpretation given to those provisions by the Court of Justice in the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107). In the case giving rise to that judgment, the Court of Justice was, inter alia, called upon to interpret Articles 1 and 4 of the Maritime Cabotage Regulation and to specify the conditions under which the supply of maritime cabotage services could be subject to a requirement of prior administrative authorisation.

118 In interpreting the relevant provisions of the Maritime Cabotage Regulation, the Court of Justice has stated inter alia the following: ‘34. The application of a prior administrative authorisation scheme as a means of imposing [PSOs] presupposes that the competent national authorities have first been able to determine, for specific routes, that the regular transport services would be inadequate if their provision were left to market forces alone. In other words, it must be possible to demonstrate that there is a real public service need. 35. Second, for a prior administrative authorisation scheme to be justified, it must also be demonstrated that such a scheme is necessary in order to be able to impose [PSOs] and that it is proportionate to the aim pursued, inasmuch as the same objective could not be attained by measures less restrictive of the freedom to provide services, inter alia a system of declarations ex post facto … 36. It is possible that prior administrative authorisation is a sufficient and appropriate means of enabling the content of the [PSOs] to be imposed on an individual shipowner to be specified, taking account of his particular circumstances, or of enabling a prior check to be made on his ability to fulfil such obligations. 37. However, such a scheme cannot render legitimate discretionary conduct on the part of the national authorities which is liable to negate the effectiveness of provisions of Community law, in particular those relating to a fundamental freedom such as that at issue in the main proceedings …’

119 Although what was at issue in the case giving rise to the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) was a system of prior administrative authorisation and not, as in the present case, a PSD accompanied by the granting of compensation, the reasoning developed by the Court of Justice in that judgment, which is based on an interpretation of the Maritime Cabotage Regulation in accordance with its fundamental objective, which is to ensure the freedom to provide maritime cabotage services and, consequently, to accept restrictions of that freedom only under very strict conditions, is fully transposable to the present case.

120 In that regard, it must be borne in mind that it is settled case-law that Article 56 TFEU requires not only the elimination of all discrimination against providers of services on grounds of nationality or the fact that they are established in a Member State other than that where the services are to be provided, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of a provider of services established in another Member State where he lawfully provides similar services (in addition to the judgments cited in footnote 63 of the contested decision, see judgment of 7 October 2010, dos Santos Palhota and Others, C‑515/08, EU:C:2010:589, paragraph 29 and the case-law cited; judgment of 19 December 2012, Commission v Belgium, C‑577/10, EU:C:2012:814, paragraph 38; see, also, judgment of 11 September 2014, Essent Energie Productie, C‑91/13, EU:C:2014:2206, paragraph 44 and the case-law cited). It cannot be disputed that the granting of financial compensation to a particular service provider, that is, the public service concession holder, is liable to impede or render less advantageous the provision of those same services by operators not benefiting from the same compensation. The amount of the compensation allows its recipient to enjoy a decisive advantage over its competitors and, consequently, to dissuade them from offering the services concerned.

121 In the present case, the PSD was all the more likely to impede the freedom to provide maritime cabotage services, as is clear from the findings made by the Commission at paragraph 44 of its decision to open the formal investigation procedure, since the second paragraph of Article 3 of the PSDC imposed particularly restrictive conditions on potential new entrants on the routes departing from Marseilles for Corsica. That provision reads as follows: ‘Competition may be exercised in the following manner: for each of these routes, any company may, without financial compensation, provide a regular service, all year round, with at least two round trips per week, under such conditions that it will not be able to adversely affect the economic conditions of the public service operator and that consequently the choice of departure and arrival days will be determined by the [CTB] after agreement of the Corsican Assembly. This condition will be the subject of a firm commitment. In the event of non-compliance with all or part of this commitment, a penalty of EUR 2 million will be applied to the company, the payment of which will be assured by a bank guarantee of an equivalent amount. This bank guarantee will have to be provided by a bank established in the European Union, with a long-term rating of “Standard and Poors A+” (or equivalent).’

122 In that context, SNCM’s observation that the existence of the PSD did not prevent Corsica Ferries from entering the market and rapidly acquiring a ‘dominant position’ on it must be rejected. It cannot be ruled out that, in the absence of the PSD, Corsica Ferries’ entry into the market and the development of its activities on the market would have been even faster or that other operators would have also entered the market.

123 Moreover, contrary to what SNCM claims, the fact that the PSD was awarded in the context of a call for tenders in which Corsica Ferries participated does not mean that the interference with the freedom to provide services resulting from the payment of financial compensation to the sole public service concession holder has been eliminated. The extent of that interference may be lessened when a PSD is awarded following a truly open, transparent and non-discriminatory tendering procedure, but the fact remains that it persists throughout the period of provision of the public service in question.

124 In view of the foregoing and, in particular, the Court of Justice’s interpretation of the Maritime Cabotage Regulation in the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) (see paragraph 118 above), it must be concluded that, in the contested decision, in order to verify compliance with the first Altmark criterion, the Commission was correct in finding that ‘the scope of the public service remit as defined by a public service contract [had to be] necessary and proportionate to a real public service need, as demonstrated by the lack of regular transport services under normal market conditions’ (recital 136 of the contested decision).

125 In those circumstances, there is no need to rule further on the parties’ considerations concerning the relevance to the present case of the judgment of 16 September 2013, Colt Télécommunications France v Commission (T‑79/10, not published, EU:T:2013:463). It should be noted, however, that in a case such as the present one, the national authorities cannot dispense with the requirement to demonstrate the existence of a shortage of private initiative. It is clear from paragraph 34 of the judgment of 20 February 2001, Analir and Others (C‑205/99, EU:C:2001:107) that the demonstration of the existence of a real public service need is linked to the existence of such a shortage of private initiative. In other words, it is on the basis of a finding of shortage of private initiative that the real public service need is determined.

126 It follows from all the foregoing considerations that the second and fourth subsidiary parts of the first part of the first plea must be rejected as unfounded.

– The third subsidiary part: the Commission misapplied the rules governing the burden of proof

127 SNCM submits that the Commission misapplied the rules on the burden of proof in its analysis of the first Altmark criterion. In that regard, first, it maintains that the Commission systematically imposed on the French Republic the burden of demonstrating the public service need and the shortage of private initiative. Second, citing two of the Commission’s findings in recitals 165 and 166 of the contested decision, it submits that, conversely, the Commission itself has exempted itself from any burden of proof in respect of several essential aspects of its analysis of that criterion.

128 In the reply, SNCM adds that the ‘three-stage … test’ invoked by the Commission (see paragraph 130 below) is unprecedented, is not referred to in the decision to open the formal investigation procedure or in the contested decision, and is not grounded on any previously established legal basis. Moreover, this test would be particularly difficult, if not impossible, to satisfy.

129 The Commission, supported by Corsica Ferries, disputes that it misapplied the rules on the burden of proof.

130 First, the Commission submits that it is for the Member State concerned to justify the restriction of the freedom to provide services and to establish the need for and proportionality thereof. More specifically, in the present case, in order to establish the existence of a real public service need justifying the award of a PSD, the French authorities should have demonstrated the following: first, that there was user demand; second, that that demand was not capable of being satisfied by the market operators in the absence of an obligation imposed by the public authorities to that end; and, third, that simply having recourse to PSOs was insufficient to remedy that shortage. It states that it is not thereby setting out an entirely new test but merely summarising the lacunae in the French authorities’ and SNCM’s approach with regard to the existence of a real public service need. It adds that making out proof of these three aspects is neither novel nor particularly difficult to do.

131 Second, the Commission rejects SNCM’s claim that certain of its assessments in recitals 165 and 166 of the contested decision are not based on any evidence.

132 The Court considers that the Commission cannot be criticised for having infringed the rules on the burden of proof in its analysis of the first Altmark criterion.

133 First, it is clear from the considerations set out in the examination of the second and fourth subsidiary parts of the first part of the first plea (see paragraphs 111 to 126 above) that, for a maritime cabotage service to be classifiable as an SGEI, it must meet a real public service need, demonstrated by the insufficient regular transport services in a situation of free competition, and that the scope of the SGEI is necessary and proportionate to that need. It is unquestionably the responsibility of the Member State concerned, and not the Commission, to make out proof of this by adducing sufficiently convincing evidence. It should be noted in that regard that, contrary SNCM’s assertions at the hearing (see paragraph 106 above), the Member State cannot merely rely on the existence of a ‘general interest in the broadest sense’. The absence of any evidence provided by the Member State establishing that the abovementioned criteria have been met or disregarded is liable to constitute a manifest error of assessment which the Commission is required to take into consideration.

134 As regards the three-stage test set out by the Commission to prove the existence of a real public service need (see paragraph 130 above), it should be noted that, contrary to what SNCM claims, it does not in any way constitute an additional requirement of proof not provided for in the contested decision. This test is merely an alternative presentation of the test used by the Commission in the contested decision in order to verify compliance with the first Altmark criterion (see paragraph 45 above), the merits of which were upheld during the examination of the second and fourth subsidiary parts of the first part of the first plea (see paragraphs 111 to 126 above). Thus, first of all, if there is no demand from users for all or part of the services falling within the scope of the public service remit, as defined by the national authorities, that public service or its scope clearly cannot be considered necessary and proportionate in relation to a real public service need. Next, nor can there be such a need if the user demand is already capable of being met by the market operators in the absence of an obligation laid down by the public authorities to that end. In other words, as has already been pointed out in paragraph 125 above, in the absence of a shortage of private initiative, there can be no real public service need. Lastly, if there is a user demand and if that demand is not capable of being met by the interplay of market forces alone, the national authorities should still give preference to the approach which is least harmful to the essential freedoms for the proper functioning of the internal market. As rightly pointed out by the Commission in its reply to one of the written questions put by the Court, in the case of the maritime cabotage sector, the imposition of PSOs applicable to all carriers wishing to offer their services on a given route and which do not necessarily give rise to financial compensation (see Article 4(2) of the Maritime Cabotage Regulation) entails less burdensome restrictions on the freedom to provide services than the granting of financial compensation to a particular carrier or to a limited number of carriers in the context of a PSD.

135 It must be added that the test thus criticised by SNCM is not particularly difficult to satisfy, since public service needs can be easily assessed through, inter alia, market research, public consultations or calls for projects, none of which were done in this case by the French authorities before approving the principle of renewal of a PSD for ferry services to and from Corsica.

136 Second, SNCM is wrong to claim that the Commission’s two findings set out in recitals 165 and 166 of the contested decision are not based on any evidence. Those findings in fact are the result of the Commission’s examination of the material in the file.

137 Thus, as regards the first finding criticised in recital 165 of the contested decision, it is noteworthy that the sentence on which it is based begins by finding that ‘the service provided by Corsica Ferries did meet the standards of [PSOs] applicable to all connections between the French mainland and Corsica’ and that that finding cannot be called into question. Hence, companies which, like Corsica Ferries, offered maritime transport services on, inter alia, the Toulon-Corsica route were subject to PSOs in terms of regularity, continuity, frequency of crossings, capacity to provide the service, rates charged and crewing of vessels, within the framework of the social assistance scheme as described in paragraph 14 above. Those companies were required to provide any justification for their ability to provide service, be in good standing with regard to tax and social obligations, communicate their operating programme to the CTB beforehand and ensure at least two round trips per week throughout the year between Toulon and Corsica. The crews of their vessels were subject to the rules laid down by French law. In addition, maximum social fares were set for each of the categories concerned.

138 The Commission could legitimately rely on a comparison between the requirements relating to those PSOs with the obligations laid down in the PSDC’s tender specifications for the additional service, which were less onerous than those applicable to the basic service (see recital 141 of the contested decision and paragraph 151 below), the assessment criticised by SNCM that the service provided by Corsica Ferries ‘showed no qualitative difference with the service provided as part of the additional service’.

139 As regards the second finding criticised in recital 166 of the contested decision, it follows from an overall reading of that recital that what the Commission means thereby, in essence, is that the services provided by Corsica Ferries out of Toulon are satisfactory and offer terms (price, objective quality characteristics, continuity and access to the service) that are compatible with the general interest. That assessment appears to be based not only on the developments referred to in paragraph 137 above but also, and more generally, to take account of the fact — as quite rightly observed by the Commission — that the conditions relating to the PSOs applicable to maritime routes between mainland France and Corsica have been defined by the CTB pursuant to the Maritime Cabotage Regulation. Those PSOs must therefore be viewed as being obligations to ensure that maritime cabotage services are provided under conditions that are compatible with the general interest which a Union shipowner, if he were considering his own commercial interest, would not assume or would not assume to the same extent (see, in this connection, Article 2(4) of the Maritime Cabotage Regulation and paragraphs 47 and 48 of the SGEI Communication). Accordingly, it could legitimately be considered that any provision of maritime cabotage service falling within those PSOs was being made in accordance with the public interest in terms of the qualitative parameters governed by the PSOs and listed in Article 4(2) of the Maritime Cabotage Regulation, including those set out in recital 166 of the contested decision.

140 It must be concluded from all of the foregoing that the third subsidiary part of the first part of the first plea and, consequently, that first part in its entirety must be rejected as unfounded.

The second part: the Commission committed an error of law, an error of fact and a manifest error of assessment in treating the additional capacity to be provided during peak periods in the same way as an additional service and evaluating that service separately from the basic service under the first Altmark criterion

141 In the second part of the first plea, SNCM submits that the Commission committed an error of law, an error of fact and a manifest error of assessment in treating the additional capacity to be provided during peak periods in the same way as an additional service and evaluating that service separately from the basic service under the first Altmark criterion.

142 The second part is subdivided into three subsidiary parts, the last one being invoked in the alternative.

– The first subsidiary part: the PSDC does not make a distinction between the basic service and the additional service

143 SNCM submits that the PSDC does not distinguish between the basic service and the additional service, contrary to what is stated in recital 137 of the contested decision, which is the basis of the Commission’s entire reasoning. The content of this supposed additional service is not defined in specific and fully identifiable provisions of the tender specifications. By providing additional minimum capacities for certain periods of the year, the parties to the PSDC had no intention of creating two services that could be supplied independently of one another. The fact that the new PSD for the period 2014-2023 would no longer cover the additional service but would be limited to the basic service is not relevant, since that exclusion was due to budgetary reasons. Moreover, the inclusion within the scope of the public service remit of services relating to peak periods in order to avoid any risk of skimming is the only solution compatible with the case-law arising from the judgment of 19 May 1993, Corbeau (C‑320/91, EU:C:1993:198). Lastly, the public service compensation provided for by the PSDC is paid each year and calculated on a flat-rate basis for all the services provided by the concession holders.

144 The Commission, supported by Corsica Ferries, disputes the arguments put forward by SNCM.

145 It is clear that the Commission was correct in stating, in recital 137 of the contested decision, that the distinction between the transport services to be provided throughout the year as part of the basic service and the additional capacities to be provided during peak periods — the additional service — was clearly reflected in the PSDC’s tender specifications.

146 In the first place, it should be noted in that regard that the additional service, which concerns only three out of the five routes covered by the PSD, is the subject of specific provisions in the PSDC’s tender specifications, namely point I(a)(2) (Marseilles-Bastia route), point I(b)(2) (Marseilles-Ajaccio route) and point I(d)(1.4) (Marseilles-Propriano route).

147 SNCM’s claim that in that context the PSDC does not ‘at any time refer’ to the term ‘additional service’ as such is therefore irrelevant. In any event, this claim is unfounded since, on page 1 of the tender specifications annexed to the PSDC, it is specified that the services concerned ‘comprise, on each route, a permanent passenger and freight service and, on certain routes, an additional passenger service for peak traffic’. It should also be noted that, as rightly pointed out by Corsica Ferries, SNCM itself explicitly distinguishes between permanent and additional services in some of the PSD implementation reports it is required to draw up each year.

148 In the second place, contrary to SNCM’s claim, the Commission’s finding that the basic service and the additional service constitute two distinct types of service is not based in its ‘entirety’ on the criticised statement in recital 137 of the contested decision which, in footnote 64, refers to the specific provisions cited in paragraph 146 above. That finding is also based on a number of other factors, set out in the following paragraphs.

149 First, it must be remembered that the basic service concerns maritime transport of passengers and freight, while the additional service concerns only passenger transport.

150 Second, for the basic service, the PSDC tender specifications specify daily, journey-by-journey minimum capacities for each of the routes concerned, whereas for the additional service it specifies only overall journey-by-journey minimum capacities for each of the routes concerned.

151 Third, the two types of service are subject to certain distinct obligations, in particular in terms of timetables and frequency of crossings, with those applicable to the basic service being more restrictive than those applicable to the additional service. Thus, whilst the PSDC’s tender specifications provide for strict departure and arrival times for the basic service, it does not impose any particular schedule for the additional service. Similarly, while the tender specifications stipulate that under the basic service passengers must be transported in each direction on a daily basis (but only three times a week in the case of the Marseilles-Propriano route) throughout the year, it places no restrictions on the frequency of crossings under the additional service. Although those same tender specifications provide that under the additional service travel days and schedules must be the subject of an ‘explicit and prior’ memorandum of understanding with the CTB, this is principally down to the contractual nature of the PSDC, and SNCM nevertheless retains greater flexibility than with the basic service. Moreover, under the basic service, journeys must be made without a stopover whereas there is no such requirement for the additional service.

152 Fourth, as is apparent from Annex 2 to the PSDC and will be explained in more detail in paragraphs 160 and 161 below, the basic service is carried out by passenger-cargo vessels, which can carry both passengers and freight, while the additional service uses ferries, which carry only passengers (and their vehicles).

153 Fifth, it is also apparent from Annex 2 to the PSDC that the operation of the additional service was to be the sole responsibility of SNCM. Provision is made therein for the Danielle Casanova and Napoléon Bonaparte vessels to be used to ‘ensure the additional capacity of the passenger service of the Ajaccio, Bastia and Propriano routes’. Those two vessels are part of the SNCM fleet and not the CMN fleet. Thus, in practice, only SNCM has provided the additional service.

154 In the third place, SNCM’s claim, to the effect that no argument can be made based on the fact that the new PSD for the period 2014-2023 no longer covers the additional service but is limited to the basic service since that exclusion is in essence due to budgetary reasons, must be rejected as ineffective. This argument, based on the new PSD, is one that was relied on by Corsica Ferries during the administrative procedure but was not incorporated as such by the Commission in the contested decision as the basis for its reasoning. In any event, the fact that the new PSD no longer covers the additional service in fact shows that the latter service is not indispensable to the proper performance of the basic service either for technical reasons or due to economic considerations, and that those two types of service are separable.

155 In the fourth place, SNCM is wrong to rely on the case-law arising from the judgment of 19 May 1993, Corbeau (C‑320/91, EU:C:1993:198). As has already been pointed out in paragraph 101 above, it is apparent from the case file that both the basic service and the additional service had a large operating deficit, which ruled out any possibility of financial equalisation between them. This is shown more specifically by SNCM’s cost accounting, annexed to the observations of 5 November 2012 submitted by it in the administrative procedure, which show that for each year of the period 2007-2011 and in the case of both ferries and passenger-cargo vessels, the direct costs (maritime, crew and supply costs) were higher than the net revenues.

156 In the fifth place, while it is true that, as argued by SNCM and as also stated in recital 47 of the contested decision, the compensation owing to SNCM was set out in aggregate in Article 2 of the PSDC, it is nevertheless clear from the cost accounting referred to in paragraph 155 above that in practice they were apportioned between the basic service, carried out by passenger-cargo vessels, and the additional service, carried out by ferries. In any event, the fact that that article provides for an overall compensation amount for both types of service does not indicate whether or not they are separable.

157 It follows that the first subsidiary part of the second part of the first plea must be rejected as unfounded.

– The second subsidiary part: the Commission erred in equating the basic service with the services offered by cargo vessels and the additional service with the services offered by the ferries

158 SNCM argues that the Commission erred in equating the basic service with the services offered by the cargo vessels and the additional service with the services offered by the ferries. It submits that the PSDC’s tender specifications do not require the use of different vessels for each of those types of service. On the contrary, in practice, part of the additional service is provided using cargo vessels, whilst ferries can be used to provide the basic service, especially during the off-peak periods during the cargo vessels’ technical stops. SNCM refers to tables annexed to the application in support of its assertions.

159 The Commission and Corsica Ferries reject SNCM’s claims.

160 It is clear that, as noted above in paragraph 152 and as is apparent from Annex 2 to the PSDC, the basic service is performed using passenger-cargo vessels whereas the additional service is carried out using ferries. As rightly pointed out by Corsica Ferries, this finding is further confirmed by SNCM’s implementation reports for the PSD. Thus, for example, the implementation report for 2010 shows that the basic service is provided through ‘passenger-cargo vessels’ and that it is the ‘car ferries Napoléon Bonaparte and Danielle Casanova [which] provided additional passenger capacity during the peak periods on the ports of Bastia, Ajaccio and Propriano’, giving a total of 251932 passengers transported, ‘being 47% of the traffic of SNCM’s PSD’.

161 SNCM’s claim that, in fact, passenger-cargo vessels were used for the additional service whilst ferries were used for the basic service has not been demonstrated to the requisite legal standard. More specifically, the tables provided by SNCM to try to corroborate that claim are inconclusive. First of all, one of those tables, entitled ‘Additional service provided by cargo vessels’, contains errors in calculation. Next and more importantly, as rightly observed by the Commission, the tables contain an artificial allocation of the overcapacity (in number of seats on board) of the various vessels which is irrelevant to the manner in which the two types of service were provided in practice. For the Marseilles-Bastia and Marseilles-Ajaccio routes, the table entitled ‘Additional service provided by cargo vessels’ shows, for the second half of 2007 and each of the years in the period 2008-2013, the difference between the capacities offered by the concession holders’ cargo vessels for those routes under the basic service (table entitled ‘Permanent service provided by cargo vessels’) and the capacities required by the PSDC’s tender specifications for those services and routes (table entitled ‘Tender specifications — permanent service’). In other words, that table represents merely a simple inventory of the overcapacity of the vessels providing the basic service in relation to the requirements of the tender specifications, overcapacities that SNCM arbitrarily allocates to an alleged provision of the additional service using cargo vessels. Similarly, the table entitled ‘Additional service provided by ferries’ arbitrarily fixes the capacity offered by SNCM ferries within the framework of the additional service as resulting from the difference between the capacities required by the PSDC’s tender specifications for that service (table entitled ‘Tender specifications — additional service’) and the overcapacity included in the table entitled ‘Additional service provided by cargo vessels’. Yet it is clear from the case file that the capacity offered by those ferries was considerably higher than those referred to in the table entitled ‘Additional service provided by ferries’, so that, save in exceptional circumstances, there was no need to have recourse to cargo vessels to provide the additional service. As for the table entitled ‘Permanent service provided by ferries’, it merely asserts, without any justification, that each year the ferries have contributed a certain number of places on the Marseilles-Ajaccio and Marseilles-Bastia routes to the basic service (in particular 13000 places for the second half of 2007 and 26000 places in 2008). Lastly, it should be noted that the fact that there may have been isolated cases in which a vessel usually assigned to the basic service has been assigned to the additional service and vice versa is not in itself sufficient to call into question the finding in principle that the cargo vessels were assigned to the basic service and the ferries to the additional service.

162 It follows from the foregoing that the second subsidiary part of the second part of the first plea must be rejected as unfounded.

– The third subsidiary part, put forward in the alternative: the additional service is justified by the real public service need which is met by the basic service

163 SNCM argues, in the alternative, that the additional service is justified by the real public service need which is met by the basic service. In its submission, even if there is an additional service which is distinguishable from the basic service, quod non, those two types of service cannot be assessed independently of each other for the purpose of analysing the first Altmark criterion.

164 In support of this third subsidiary part, SNCM puts forward two sets of arguments. By the first, it seeks to establish, in essence, that an overall analysis of the basic service and the additional service was required on the basis of certain considerations other than technical and economic considerations. By the second, it seeks to demonstrate that there is a technical and economic complementarity between those two types of service.

165 The Commission, supported by Corsica Ferries, contends that the third subsidiary part should be rejected.

166 As regards the first set of arguments, it is clear that none of them provides grounds for concluding that the Commission erred in law by failing to conduct an overall analysis of the additional service and the basic service in the present case.

167 In the first place, it must be pointed out that SNCM is incorrect to call into question the Commission’s assessment, set out in recital 139 of the contested decision, according to which ‘it would only be legitimate to consider that the additional service may be justified by the real public service need met by the basic service if it can be determined … that its operation is essential to the basic service, on the grounds of a set of technical and economic considerations’. If the additional service, which is clearly a separate service from the basic service (see paragraphs 145 to 154 above), were to be included within the scope of the public service remit without being justified by the existence of technical complementarities between the two types of service or by considerations of economic efficiency, the requirements of necessity and proportionality would obviously not be satisfied (as regards those requirements, see paragraph 124 above).

168 In the second place, SNCM is also incorrect in claiming that there is no difference in nature between the basic service and the additional service. It is apparent from the evidence set out in paragraphs 145 to 154 above that these two types of service in fact display significant differences.

169 In the third place, even if SNCM’s argument as set out in paragraph 168 above must also be understood as being based on the fact that the two types of service share a common objective of guaranteeing territorial continuity, it cannot be upheld.

170 First of all, as a general proposition, just because both types of service share the same objective does not mean they automatically must be regarded as constituting in reality only one and the same type of service.

171 Furthermore, the fact that the basic service and the additional service are allegedly both aimed at ensuring territorial continuity does not necessarily imply that they must be examined together as forming an inseparable whole, particularly as regards the question of the existence of a real public service need.

172 As rightly pointed out by the Commission, an objective of territorial continuity may very well be achieved through both market forces and public services. It must be borne in mind in that regard, first, that although the Member State enjoys wide discretion in this area, it can only establish an SGEI in so far as it satisfies a real public service need and, second, that if the demand is already met by market forces, such a need cannot exist (see paragraphs 111 to 124 above). Thus, in order to be able to establish an SGEI in the maritime cabotage sector, it is not sufficient for the Member State to invoke the pursuit of an objective of territorial continuity. It is also necessary that that objective is not already being met simply through the interplay of market forces. If that interplay makes it possible to achieve a part of that objective, the creation of such an SGEI is justified only in so far as it makes up for the corresponding market shortcoming.

173 In the present case, as will be explained below in connection with the examination of the third part of the first plea, the Commission found correctly that the territorial continuity between Corsica and the French mainland was already ensured through the basic service supplemented by market forces, subject to PSOs. Consequently, apart from the fact that the additional service clearly did not meet a real public service need, it was not even indispensable for the achievement of the hypothetical objective of territorial continuity which had been assigned to it by the French authorities.

174 In the fourth place, SNCM claims, unsuccessfully, that the Commission’s approach renders the proper operation of the public service impossible in practice in that it amounts to reserving only unprofitable activities for public service, thereby precluding any financial equalisation mechanism and dissuading any prudent and informed economic operator from providing a public service. As pointed out in paragraphs 101 and 155 above, both the basic service and the additional service had a large and recurring operating deficit, which precluded any possibility of financial equalisation between them.

175 In the fifth place, SNCM states that the need for an overall analysis of the basic service and the additional service can also be inferred from paragraph 6 of the Conseil d’État (Council of State) decision of 13 July 2012 and from the Commission’s earlier decision-making practice relating to previous PSDs for maritime services to Corsica.

176 SNCM cannot rely on the passage it cites from paragraph 6 of the Conseil d’État (Council of State) decision of 13 July 2012. Neither the Commission nor the Courts of the European Union is bound by the interpretation of the Conseil d’État (Council of State) of the provisions of the Maritime Cabotage Regulation. In the present case, SNCM is even less entitled to rely on that passage given that, on the date on which the Conseil d’État (Council of State) gave its decision, the formal investigation procedure leading to the adoption of the contested decision had already been opened by the Commission.

177 Nor can SNCM rely on the Commission’s earlier decision-making practice relating to the previous PSDs for maritime services to Corsica, for the reasons already set out in paragraphs 98 and 99 above.

178 As regards the second set of arguments, it must first be noted that the Commission was correct in pointing out in recital 141 of the contested decision that no technical complementarity between the basic service and the additional service had been demonstrated.

179 It must be borne in mind in that regard that, apart from the fact that those services are subject to different obligations, in particular in terms of timetables and frequency of crossin