Keywords

Summary



Keywords

1. Acts of the institutions – Statement of reasons – Obligation – Scope

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Arts 93 and 190 (now Arts 88 EC and 253 EC))

2. Acts of the institutions – Statement of reasons – Obligation – Scope

(EC Treaty, Art. 190 (now Art. 253 EC))

3. Acts of the institutions – Statement of reasons – Obligation – Scope

(EC Treaty, Art. 173 (now, after amendment, Art. 230 EC) and Art. 190 (now Art. 253 EC))

4. Acts of the institutions – Statement of reasons – Obligation – Scope

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Arts 93 and 190 (now Arts 88 EC and 253 EC))

5. State aid – Definition

(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))

6. State aid – Definition

(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC))

Summary

1. The statement of reasons required by Article 190 of the Treaty (now Article 253 EC) must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 190 of the Treaty must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

As regards, more particularly, a Commission decision finding that no State aid as alleged by a complainant exists, the Commission must at least provide the complainant with an adequate explanation of the reasons for which the facts and points of law put forward in the complaint have failed to demonstrate the existence of State aid. The Commission is not required, however, to define its position on matters which are manifestly irrelevant or insignificant or plainly of secondary importance.

(see paras 63-64)

2. Where the Commission has a power of assessment in order to carry out its duties, respect for the rights guaranteed by the Community legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case and to state sufficient reasons for its decisions.

(see para. 65)

3. Even if, in stating the reasons for the decisions which it takes to enforce the rules on competition, the Commission is not required to discuss all the issues of fact and law and the considerations which have led it to adopt its decision, it is none the less required under Article 190 of the Treaty (now Article 253 EC) to set out at least the facts and considerations having decisive importance in the context of the decision in order to make clear to the Court and the persons concerned the circumstances in which it has applied the Treaty.

Other than in exceptional circumstances, the statement of reasons must be contained in the decision itself, and it is not sufficient for it to be explained subsequently for the first time before the Court. The statement of reasons must in principle be notified to the person concerned at the same time as the decision adversely affecting him. A failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the decision during the proceedings before the Community judicature. Accordingly, when a Commission decision applying Article 92 of the Treaty (now, after amendment, Article 87 EC) suffers from serious omissions, the Commission may not remedy that defect by adducing for the first time before the Court figures and other analytical data from which it may be concluded that its application of Article 92 of the Treaty was correct, unless none of the parties had challenged the analytical data in question during the prior administrative procedure.

It follows that arguments presented by the Commission’s agents before the Court of First Instance cannot make good the insufficiency of a contested decision’s reasoning. The operative part and the grounds of a decision – which must state reasons under Article 190 of the Treaty – constitute an indivisible whole, with the result that it is for the College of Commissioners alone, in accordance with the principle of collegiate responsibility, to adopt both the one and the other, any alteration to the statement of reasons going beyond simple corrections of spelling or grammar being the exclusive province of that college.

In this respect, the Community judicature is required, in an action for annulment under Article 173 of the EC Treaty (now, after amendment, Article 230 EC), to confine itself to a review of the legality of the contested act. Consequently, it is not the task of the Court of First Instance to remedy any absence of reasoning or to supplement that reasoning of the Commission by adding to it or substituting for it elements which are not in the contested decision itself.

(see paras 66-70)

4. The scope of the obligation to provide a statement of reasons for a decision must be assessed by reference to the circumstances of each case which could, in an appropriate case, justify a more detailed statement of reasons.

Circumstances lying in the fact that the decision constitutes one of the first dealing with a complex economic question, in the context of the application of the provisions on State aid, such as that of the calculation of the costs of a parent company operating in the reserved market of ordinary mail and providing logistical and commercial assistance to a subsidiary which does not operate in a reserved market, justify a more detailed statement of reasons. Similarly, the fact that, in that context, complainants submitted several economic studies during the administrative procedure must also lead the Commission to prepare a thorough statement of reasons while responding to the essential arguments of those complainants, as substantiated by those economic studies.

In those circumstances, a statement of reasons for such a decision which is limited to a very general explanation of the method followed by the Commission for assessing the costs and of the final result obtained, without however allocating with the necessary precision the various costs of the parent company incurred in providing the logistical and commercial assistance to its subsidiary and the fixed costs arising from use of the postal network, and without specifying the return on the capital investment, fails to satisfy the requirements of Article 190 of the Treaty (now Article 253 EC).

(see paras 96-98)

5. The assessment by the Commission of the question how the costs of a parent company operating in a reserved market incurred in providing logistical and commercial assistance to its subsidiary which is not operating in a reserved market are calculated in the absence of analytical accounts involves a complex economic appraisal. When the Commission adopts a measure involving a complex economic appraisal it enjoys a wide discretion, and judicial review of that measure, even though it is in principle a ‘comprehensive’ review of whether a measure falls within the scope of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), is limited to verifying whether the Commission complied with the relevant rules governing procedure and the statement of reasons, whether the facts on which the contested finding was based have been accurately stated and whether there has been any manifest error of assessment of those facts or a misuse of powers. In particular, the Court is not entitled to substitute its own economic assessment for that of the author of the decision.

In this respect, since the parent company operates in the ordinary mail sector, the Commission does not commit a manifest error of assessment in its choice of the linear backward projection method. The argument that that method fails to take account of increasing returns of scale, since the total unit cost of production of express delivery activities should decrease significantly when the volume of production increases, refers to the case of a private undertaking commencing its business activities and, in particular, to the situation where that undertaking sets up its network ex novo. It does not apply to the setting up of a new activity which represents only a small part of a business activity which already exists and in respect of which most of the fixed costs have already been borne. In a sector such as that of ordinary mail, where the fixed costs are very significant but stem from the very existence of the network of the parent company operating in that reserved market and are independent of the business activity of the subsidiary, such an argument cannot be upheld.

(see paras 128, 130-131)

6. For the purposes of Article 92 of the Treaty (now, after amendment, Article 87 EC), the concept of State aid has a very wide scope. The aim of that provision is to prevent trade between Member States from being affected by advantages granted by public authorities which, in various forms, distort or threaten to distort competition by favouring certain undertakings or certain products. The concept of aid therefore covers not only positive benefits, such as subsidies, but also interventions which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict meaning of the word, are similar in character and have the same effect. The supply of goods or services on preferential terms is one of the indirect advantages which have the same effects as subsidies.

Furthermore, Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) does not distinguish between measures of State intervention by reference to their causes or their aims but defines them in relation to their effects.

The transfer, for no consideration, to a subsidiary governed by private law, of the client base of a service which does not belong to the reserved sector, created by its parent company operating in a reserved market with the resources of its legal monopoly therefore constitutes State aid. That transfer is a measure separate from logistical and commercial assistance from such an undertaking to its subsidiary. In addition, that client base amounts to an intangible asset which has an economic value. That finding cannot be invalidated by the fact that that client base has no value in accounting terms. Even if it is an element which is difficult to quantify, that does not mean that it has no value. In this respect, the creation and marketing of address lists for certain activities constitute, in themselves, economic activities.

(see paras 158-160, 163-169)