II - 4503Case T-156/04
Électricité de France (EDF)
v
European Commission
(State aid — Aid granted by the French Authorities to EDF — Decision declaring the 
aid incompatible with the common market and ordering its recovery — Procedural 
rights of the recipient of the aid — Effect on trade between Member States — 
Private investor test)
Judgment of the General Court (Third Chamber), 15 December 2009            II - 4508
Summary of the Judgment
1. State aid — Examination by the Commission — Administrative procedure — Obligation on 
the Commission to put the parties concerned on notice to submit their observations — Right 
of the a
id beneficiary to be sufficiently associated with the proceedings
(
Art. 88(2) EC; Council Regulation No 659/1999, Art. 6)
2. State aid — Commission decision — Assessment of the legality by reference to the informa -
tion ava
ilable at the time the decision was adopted
(
Art. 87 EC)
3. State aid — Effect on trade between Member States — Adverse effect on competition — 
Criteria for assessment
(
Art. 87(1) EC)
SUMMARY — CASE T-156/04
II - 45044. State aid — Concept — Application to public investors of the prudent private investor test
(Art. 87(1) EC)
5. State aid — Concept — Granting Member State having the capacity both of tax creditor 
and sole shareholder of a public undertaking benefiting from an increase of capital through 
wa
iver of a tax debt — Applicability of the private investor test
(
Art. 87(1) EC)
1  During the investigation phase under 
Article 88(2) EC, the Commission has a duty  
t
o put the interested parties on formal 
notice to put forward their comments   If 
those interested parties do not enjoy the r
ights to a fair hearing, they nevertheless 
have the right to be involved in the ad -
ministrative procedure conducted by the Commission to the extent appropriate in 
the light of the circumstances of the case
  
Furthermore, the Commission must ini -
ti
ate a formal investigation procedure, 
informing the interested parties, when, 
following a preliminary investigation, it has serious doubts as to the compatibility 
of the financial measure in question with 
the common market
  It follows that, in its  
notice of intention to initiate that pro -
cedure, the Commission cannot be required  
t
o present a complete analysis on the aid 
in question, but it is sufficient for it to de -
fine sufficiently the framework of its in -
vestigation so as not to render meaning -
less the right of interested parties to put forward their comments
  Furthermore, 
according to Article  6(1) of Regulation No 
659/1999, laying down detailed rules 
for the application of Article [88 EC], where the Commission decides to initi-ate the formal investigation 
 procedure, it 
is permissible for its decision merely to summar
ise the relevant issues of fact and 
law, include a preliminary  assessment as 
to the aid character of the State mea s-
ur
e in question and set out its doubts as 
to the measure’s  compatibility with the 
common market  
The decision to initiate the procedure must give interested parties the oppor -
tunity effectively to participate in the formal investigation procedure, during which they will have the opportunity to 
put forward their arguments
  For that 
purpose, it is sufficient for the parties 
c
oncerned to be aware of the reasoning 
which has led the Commission to con -
clude provisionally that the measure in issue might constitute new aid incompa t-
ible with the common market
 
(see paras 106-110)
II - 4505EDF v COMMISSION
2  In an action for annulment, the legality 
of a Community measure must be a s-
s
essed on the basis of the information 
existing at the time when the measure 
was adopted   In particular, the complex 
assessments made by the Commission m
ust be examined solely on the basis 
of the information available to it at the time when the assessments were made
  
In this respect, it cannot be complained 
that the  Commission failed to take into 
account information which could have 
b
een submitted to it during the admin -
istrative procedure but which was not,  
since it is under no obligation to con -
sider, of its own motion and on the basis of 
 prediction, what  information might have 
been submitted to it  
(see paras 125-126)
3  For the purposes of categorising a na -
tional me
asure as State aid, it is necessary 
not to establish that the aid has a real ef -
fect on trade between Member States and that competition is actually being 
distorted, but only to examine whether 
that aid is liable to affect such trade and 
distort competition
  The Commission is 
not required to carry out an economic  
analy
sis of the actual situation on the 
relevant market, of the market share of the  
under
takings in receipt of the aid, of the 
position of competing undertakings and 
of the trade flows in question between 
Member States  When aid granted by a Member State strengthens the position of an undertak -
ing compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected 
by that aid
  In that regard, the fact that 
an economic sector has been liberalised 
a
t Community level may serve to deter -
mine that the aid has a real or potential effect on competition and affects trade between Member States
 
In addition, it is not necessary that the beneficiary undertaking itself be in -
volved in intra-Community trade
  Aid 
granted by a Member State to an under -
t
aking may help to maintain or increase  
dome
stic activity, with the result that 
undertakings established in other Member  
S
tates have less chance of penetrating 
the market of the Member State con -
cerned   Furthermore, the strengthening 
of an undertaking which, until then, was not in
volved in intra-Community trade 
may place that undertaking in a position which enables it to penetrate the market of another Member State
 
(see paras 144-148)
4  In the case of an undertaking whose 
share capital is owned by the public a u-
t
horities it must be considered whether,  
in simil
ar circumstances, a private inve s-
tor of a stature comparable to that of the 
SUMMARY — CASE T-156/04
II - 4506bodies administering the public sector 
would 
have provided contributions of 
capital of the same size, having regard to the foreseeability of obtaining a return  
and leaving aside all social, regional-pol -
icy and sectoral considerations  
The fact that the actions of the State as shareholder are assessed by the yardstick 
of a prudent private investor, whereas the 
actions of any normal private investor are not, does not constitute a failure to 
treat the State and such a private investor 
equally, since the State as shareholder is not in the same situation as a private in -
vestor
  Unlike a private investor, who can  
count only on his own resources in  
order to finance his investments, the State  
ha
s access to financial resources flow -
ing from the exercise of public power, in 
particular from taxation   Consequently, 
the mere fact that the State has access 
t
o financial resources accrued through 
the exercise of State authority is not in itself sufficient justification for regar d-
ing the State’s actions as attributable to 
the exercise of State authority
  If it were, 
application of the prudent private inve s-
t
or test to the conduct of a State which 
is a shareholder could well be futile or, at 
least, of disproportionately limited value, since, as a State, it inevitably has recourse 
to financial resources accrued through t
he exercise of public power, in particular 
from taxation  
(see paras 230-232)
5  In the field of State aid, a distinction must 
be drawn between two categories of sit u-
a
tion: those where the intervention of the 
State is of an economic nature and those 
where it forms part of the exercise of public powers
  If the State’s intervention, 
having regard to its nature and object and t
aking into account the objective pur -
sued, is not an investment which may be made by a private investor, that interven -
tion may constitute intervention by the 
State as a public authority, thus preclud -
ing application of the prudent private 
investor test
  By contrast, if the State’s 
intervention, having regard to its nature and obj
ect and taking into account the 
objective pursued, is an investment com -
parable to that which a private investor would make, that intervention must be 
examined by applying the prudent pr i-
vate investor test
  The purpose of that e x-
amina
tion is to ascertain whether such an 
investor would, in similar circumstances 
and having regard to the foreseeability of obtaining a return, have provided contr i-
butions of capital of the same size, irr e-
spective of the form taken by that State intervention and of the fact that the State 
has access to resources flowing from the 
exercise of public power, such as those from taxation, which could not be ac -
cessed by a private investor
 
II - 4507EDF v COMMISSION
In other words, the measure must be 
examined not solely according to its form, 
but on the basis of its nature, its object 
and its objectives, which presupposes that all aspects of it are examined and  
that its context is taken into conside -
ration   Furthermore, it follows that the fact  
t
hat the intervention by the State takes 
the form of legislation is not, in itself, suf -
ficient to rule out the possibility that the intervention by the State in the capital of 
an undertaking pursues an economic ob -
jective which could also be pursued by a 
private investor
 
It is thus necessary to establish, taking into account the circumstances of each 
individual case, whether the public par -
ticipation or intervention in the capital 
of the beneficiary undertaking has an 
economic objective that might also be 
pursued by a private investor and is thus undertaken by the State in its role as an 
economic operator in the same way as 
a private operator, or whether, on the other hand, it is justified by the pursuit of a public interest objective and must be 
regarded as action taken by the State in 
the exercise of its authority as a State, in which case, the actions of a State are not 
comparable with those of an economic 
operator or a private investor in a market economy
 It is therefore necessary to examine whether a Member State which is both 
the tax creditor of a public undertaking 
and its sole shareholder can reasonably rely on the application of the private in -
vestor test where it increases the capital of that undertaking by waiving that tax claim, or whether it is necessary to con -
sider that, in the light of the fiscal nature of the claim and the fact that the State used its prerogatives as a public author -
ity when waiving that claim, the Com -
mission was entitled not to apply that test in connection with the capital increase at issue
 
Thus, where a Member State, being the sole shareholder of an undertaking, in -
jects capital into that undertaking with a view, inter alia, to correcting the imbal -
ances affecting that undertaking’s bal-
ance sheet, the inevitable conclusion is 
that it is acting as a private investor could 
 
act and that it cannot be ruled out a pri -
ori that it may be acting with an aim com  -
parable to that of such an investor   It is 
with a view to establishing whether that w
as indeed the case, which would mean 
that the classification of the contested measure as aid could be ruled out, that it is necessary to determine whether or not 
the private investor test is satisfied
 
(see paras 223, 233-237, 246, 258)