Keywords

Summary



Keywords

1. Preliminary rulings – Interpretation – Temporal effects of judgments by way of interpretation

(Arts 86(2) EC, 87(1) EC, 231 EC and 234 EC)

2. Competition – Undertakings entrusted with the operation of services of general economic interest – Definition of services of general economic interest – Member States’ discretion

(Arts 5 EC, 16 EC, 86(2) EC and 87(1) EC; Commission communication 2001/C 17/04, point 22)

3. Competition – Undertakings entrusted with the operation of services of general economic interest – Definition of services of general economic interest – Interpretation of the criterion of general interest

(Arts 86(1) and (2) EC and 87(1) EC; Commission communication 2001/C 17/04, points 14 and 15)

4. Competition – Undertakings entrusted with the operation of services of general economic interest – Definition of services of general economic interest – Universal and compulsory nature

(Arts 86(2) EC and 87(1) EC; Commission communication 2001/C 17/04, points 14 and 15)

5. Competition – Undertakings entrusted with the operation of services of general economic interest – Compensation for the costs generated by the public service mission – Member States’ discretion

(Arts 86(2) EC and 87(1) EC)

6. Competition – Undertakings entrusted with the operation of services of general economic interest – Compensation for the costs generated by the public service mission

(Arts 86(2) EC and 87(1) EC)

7. State aid – Commission decision adopted pursuant to Article 87 EC in conjunction with Article 86(2) EC

(Arts 86(2) EC and 87(1) EC)

8. State aid – Examination by the Commission – System of aid intended to ensure the provision of a mission of general economic interest

(Arts 86(2) EC and 87(1) EC)

9. Actions for annulment – Pleas in law – Pleas that may be raised against a Commission decision on State aid

(Arts 86 EC, 87 EC, 88 EC, 226 EC and 230 EC)

10. State aid – Examination by the Commission – Preliminary stage and inter partes stage

(Art. 88(2) and (3) EC; Council Regulation No 659/1999, Arts 4(4) and 13(1))

Summary

1. The interpretation which the Court of Justice gives, on a reference for a preliminary ruling, of a provision of Community law is limited to clarifying and defining the meaning and scope of that provision as it ought to have been understood and applied from the time of its entry into force. It follows that the provision as thus interpreted may, and must, be applied even to legal relationships which arose and were established before the judgment in question and it is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Community legal order, the Court may decide to restrict the right to rely upon a provision, which it has interpreted, with a view to calling in question legal relationships established in good faith. However, such a restriction may be allowed only in the actual judgment ruling upon the interpretation sought. Those considerations, which derive from case-law dealing, in particular, with the national courts’ duty to apply Community law, apply mutatis mutandis to the Community institutions when they, in turn, are required to implement the provisions of Community law which are subsequently interpreted by the Court of Justice.

It follows that, since the Court of Justice did not place any temporal limitation on the scope of its judgment of 24 July 2003 in Case C‑280/00 Altmark , the criteria for the interpretation of Article 87(1) EC laid down in that judgment, the scope of which to a large extent overlaps that of the criteria of Article 86(2) EC, are fully applicable, in accordance with the spirit and the purpose which prevailed when they were laid down, in a manner adapted to the particular facts of the present case, for the purpose of adjudicating on the validity of a Commission decision adopted before delivery of that judgment and declaring that a State measure necessary for the protection of a mission of general economic interest could not be characterised as State aid.

(see paras 158-160)

2. Member States have a wide discretion to define what they regard as services of general economic interest. That prerogative is confirmed by the absence of any competence specially attributed to the Community and by the absence of a precise and complete definition of the concept of service of general economic interest in Community law. The determination of the nature and scope of a mission involving the provision of a service of general economic interest in specific spheres of action which either do not fall within the powers of the Community, within the meaning of the first paragraph of Article 5 EC, or are based on only limited or shared Community competence, within the meaning of the second paragraph of that article, remains, in principle, within the competence of the Member States. That division of powers is also reflected, generally, in Article 16 EC, which provides that, given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion in the Union, the Community and the Member States, each within their respective powers and within the scope of application of the Treaty, are to take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions. The Member State’s power to define services of general economic interest is not, however, unlimited and cannot be exercised arbitrarily for the sole purpose of removing a particular sector from the application of the competition rules.

Consequently, the control which the Community institutions are authorised to exercise over the use of the discretion of the Member State in determining a service of general economic interest is limited to ascertaining whether there is a manifest error of assessment.

Even though the Member State has a wide discretion when determining what it regards as services of general economic interest, that does not mean that it is not required, when it relies on the existence of and the need to protect a mission involving the provision of a service of general economic interest, to ensure that that mission satisfies certain minimum criteria common to every mission involving the provision of a service of general economic interest within the meaning of the Treaty, and to demonstrate that those criteria are indeed satisfied in the particular case. These are, notably, the presence of an act of the public authority entrusting the operators in question with such a mission and the universal and compulsory nature of that mission. Conversely, the lack of proof by the Member State that those criteria are satisfied, or failure on its part to observe them, may constitute a manifest error of assessment, in which case the Commission is required to make a finding to that effect, failing which the Commission itself makes a manifest error. Furthermore, the Member State must indicate the reasons why it considers that the service in question, because of its specific nature, deserves to be characterised as a service of general economic interest and to be distinguished from other economic activities. In the absence of such reasons, even a marginal review by the Community institutions with respect to the existence of a manifest error by the Member State in the context of its discretion would not be possible.

(see paras 166-169, 172)

3. The provision of a service of general economic interest must, by definition, assume a general or public interest. Thus, services of general economic interest are distinguished in particular from services in the private interest, even though that interest may be more or less collective or be recognised by the State as legitimate or beneficial. In addition, the general or public interest must not be reduced to the need to subject the market concerned to certain rules or the commercial activity of the operators concerned to authorisation by the State. The mere fact that the national legislature, acting in the general interest in the broad sense, imposes certain rules of authorisation, of functioning or of control on all the operators in a particular sector does not in principle mean that there is a mission involving the provision of a service of general economic interest.

On the other hand, the recognition of a mission involving the provision of a service of general economic interest does not necessarily presume that the operator entrusted with that mission will be given an exclusive or special right to carry it out. It follows from a reading of paragraph 1 together with paragraph 2 of Article 86 EC that a distinction must be drawn between a special or exclusive right conferred on an operator and the mission involving the provision of a service of general economic interest which, where appropriate, is attached to that right. The grant of a special or exclusive right to an operator is merely the instrument, possibly justified, which allows that operator to perform a mission involving the provision of a service of general economic interest. Therefore, the Commission’s finding, based on paragraphs 14 and 15 of the Commission communication on services of general interest, that the attribution of a mission involving the provision of a service of general economic interest may also consist in an obligation imposed on a large number of, or indeed on all, the operators active on the same market, is not vitiated by an error. In that case, there can be no requirement that each of the operators subject to that obligation be separately entrusted with that mission by an individual act or mandate.

(see paras 178-179, 183)

4. As regards the characterisation of a service of general economic interest, it does not follow from Community law that the service in question must constitute a universal service in the strict sense. In effect, the concept of universal service, within the meaning of Community law, does not mean that the service in question must respond to a need common to the whole population or be supplied throughout a territory. Although those characteristics correspond to the classical type of service of general economic interest, and the one most widely encountered in Member States, that does not preclude the existence of other, equally lawful, types of service of general economic interest which the Member States may validly choose to create in the exercise of their discretion. Accordingly, the fact that the obligations associated with the service of general economic interest in question have only a limited territorial or material application or that the services concerned are enjoyed by only a relatively limited group of users does not necessarily call in question the universal nature of a mission involving the provision of a service of general economic interest. Furthermore, the universality criterion does not require that the service in question be free of charge or that it be offered without consideration of economic profitability and the fact that the price of the service provided is neither regulated nor subject to a ceiling does not affect its universal nature. The fact that certain potential users do not have the necessary financial resources to take advantage of the service does not undermine its universal nature provided that the service in question is offered at uniform and non-discriminatory rates and on similar quality conditions for all customers.

The compulsory nature of the service in question is an essential condition of the existence of a mission involving the provision of a service of general economic interest within the meaning of Community law. That compulsory nature must be understood as meaning that the operators entrusted with the mission involving the provision of a service of general economic interest by an act of a public authority are, in principle, required to offer the service in question on the market in compliance with the obligations associated with the provision of a service of general economic interest which govern the supply of that service. From the point of view of the operator entrusted with such a mission, that compulsory nature – which in itself is contrary to business freedom and the principle of free competition – may consist, inter alia, particularly in the case of the grant of an exclusive or special right, in an obligation to exercise a certain commercial activity independently of the costs associated with that activity. In such a case, that obligation constitutes the counterpart of the protection of the mission involving the provision of a service of general economic interest and of the associated market position by the act which entrusted the mission. In the absence of an exclusive or special right, the compulsory nature of such a mission may lie in the obligation borne by the operator in question, and provided for by an act of a public authority, to offer certain services to every citizen requesting them.

However, the binding nature of the mission involving the provision of a service of general economic interest does not presuppose that the public authorities impose on the operator concerned an obligation to provide a service having a clearly predetermined content. In effect, the compulsory nature of that mission does not preclude a certain latitude being left to the operator on the market, including in relation to the content and pricing of the services which it proposes to provide. In those circumstances, a minimum of freedom of action on the part of operators and, accordingly, of competition on the quality and content of the services in question is ensured, which is apt to limit, in the community interest, the scope of the restriction of competition which generally results from the attribution of a mission involving the provision of a service of general economic interest, without any effect on the objectives of that mission.

It follows that, in the absence of an exclusive or special right, it is sufficient, in order to conclude that a service is compulsory, that the operator entrusted with a particular mission is under an obligation to provide that service to any user requesting it. In other words, the compulsory nature of the service and, accordingly, the existence of a mission involving the provision of a service of general economic interest are established if the service-provider is obliged to contract, on consistent conditions, without being able to reject the other contracting party. That element makes it possible to distinguish a service forming part of a mission involving the provision of a service of general economic interest from any other service provided on the market and, accordingly, from any other activity carried out in complete freedom.

(see paras 186-190, 202-203)

5. The parameters on the basis of which the compensation for discharging a mission involving the provision of a service of general economic interest is calculated must be established in advance in an objective and transparent manner. However, that condition does not prevent the national legislature from allowing the national authorities a certain discretion. On the contrary, the Member State has a wide discretion not only when defining a mission involving the provision of a service of general economic interest but also when determining the compensation for the costs, which calls for an assessment of complex economic facts. It is precisely because the determination of the compensation is subject to only restricted control by the Community institutions that that condition requires that those institutions must be in a position to verify the existence of objective and transparent parameters, which must be defined in such a way as to preclude any abusive recourse to the concept of service of general economic interest on the part of the Member State. In that regard, the complexity of the economic and mathematical formulae which govern the calculations to be carried out does not by itself affect the precise and clearly-determined nature of the relevant parameters.

Control, by both the Commission and the Court, of the necessity and the proportionality of the compensation for discharging a mission involving the provision of a service of general economic interest is necessarily restricted. Given the discretion enjoyed by the Member State in defining such a mission and the conditions of its implementation, including the assessment of the additional costs incurred in discharging the mission, which depends on complex economic facts, the scope of the control which the Commission is entitled to exercise in that regard is limited to one of manifest error. Furthermore, it follows that the Court’s review of the Commission’s assessment in that regard must also observe the same limit and that, accordingly, its review must be confined to ascertaining whether the Commission properly found or rejected the existence of a manifest error by the Member State.

Furthermore, that review implies that the Community judicature determines whether the evidence adduced by the applicant is sufficient to render implausible the assessments of the complex economic facts made in the contested decision. Subject to that review of plausibility, it is not the Court’s role to substitute its assessment of the relevant complex economic facts for that made by the institution which adopted the decision. In such a context, review by the Court consists in ascertaining that the Commission complied with the rules of procedure and the rules relating to the duty to give reasons and also that the facts relied on were accurate and that there has been no error of law, manifest error of assessment or misuse of powers.

As regards, more particularly, review of the proportionality of the compensation for discharging a mission involving the provision of a service of general economic interest, as established by an act of general application, that review is limited to ascertaining whether the compensation provided for is necessary in order for that mission to be capable of being performed in economically acceptable conditions or, conversely, whether the measure in question is manifestly inappropriate by reference to the objective pursued.

(see paras 209, 214, 217, 220-222)

6. In the context of the necessarily restricted control, by both the Commission and the Court, of the necessity and the proportionality of the compensation for discharging a mission involving the provision of a service of general economic interest, there is no scope for calling in question either the validity of the objectives pursued or the lawfulness of the rules governing the functioning of a risk equalisation system on the private medical insurance system of a Member State where insurers, in discharging a mission involving the provision of a service of general economic interest, must comply with obligations relating to community rating, open enrolment, lifetime cover and minimum benefits for every insured person, irrespective of his age, sex or health status, and providing, in substance, for payment of a charge by insurers whose risk profile is healthier than the average market risk profile and for a corresponding payment of compensation to insurers whose risk profile is less healthy than the average market risk profile. Although the purpose of such compensation is not to compensate for any costs or additional costs associated with the supply of certain services, but only to equalise the additional burdens which are supposed to result from a negative risk profile differential by comparison with the average market risk profile, those burdens none the less represent the additional costs which the insurer must assume on a market subject to open enrolment and community rating as a consequence of its obligation to cover high-risk persons without fixing the amount of the premiums according to the risk insured.

As the operation of such a system is radically different from that of the compensation that formed the subject-matter of the judgment of 24 July 2003 in Case C-280/00 Altmark , it cannot strictly fulfil the third condition laid down in that judgment, which requires that it be possible to determine the costs occasioned by the performance of the mission involving the provision of a service of general economic interest. None the less, the quantification of the additional costs incurred by the insurers benefiting from that compensation, in the form of a comparison between their actual risk profile and an average market risk profile in light of the amounts paid by all insurers is consistent with the purpose and the spirit of the condition concerned in so far as the compensation is calculated on the basis of elements which are specific, clearly identifiable and capable of being controlled. Nor, since such compensation does not aim to compensate for the costs directly linked to the supply of the mission involving the provision of a service of general economic interest, which would correspond to the situation specifically envisaged by the third condition laid down in Altmark , is there any need to take into consideration the receipts obtained for those services in order to establish any actual additional costs incurred in making that supply, since a strict application of the condition concerned, which is aimed at a different form of compensation, would not take account of the particular nature of the functioning of the risk equalisation system in question. Neither the purpose nor the spirit of that condition requires that receipts be taken into account in a system of compensation which operates independently of receipts.

Last, regard being had to the neutrality of the compensation system concerned by reference to the receipts and profits of the insurers, and to the particular nature of the additional costs linked with a negative risk profile, the fourth condition laid down in Altmark , in that, in the absence of a mission of general interest being entrusted to an undertaking on the basis of a public tendering procedure, it requires a comparison of the costs and receipts directly linked to the supply of the service, cannot be applied strictly either, although the Commission is none the less required to satisfy itself that the compensation provided for does not entail the possibility of offsetting any costs that might result from inefficiency on the part of the insurers.

(see paras 229, 235-238, 241, 246, 249)

7. It does not follow either from the relevant legislation or from the case-law that the formulation of the operative part of decisions adopted pursuant to Article 87 EC in conjunction with Article 86(2) EC must of necessity meet specific requirements. It is also necessary, in order to assess the actual legal scope of an act, the operative part of which is indissolubly linked to the statement of reasons for it, that, when it has to be interpreted, account must be taken of the reasons which led to its adoption. Accordingly, although it might appear desirable, in the interest of clarity and legal certainty, that the Commission should expressly mention in the operative part of the act the Treaty provisions which it is applying, the failure to do so does not constitute an error of law provided that it is quite clear upon reading the statement of reasons in conjunction with the operative part of the act precisely what those provisions are.

(see para. 260)

8. As regards a general system of aid, that is to say, a system based on a number of provisions of general application, the implementation of which is indeed predetermined, to a certain extent, by objective and transparent criteria, but not predictable in every detail, and having as its object the protection of a mission of general economic interest, the Commission’s review in that regard, which has the joint basis of Article 87 EC and Article 86(2) and (3) EC, in particular its review of the necessity of the notified system, is necessarily limited to ascertaining whether, first, the system in question is founded on economic and factual premisses which are manifestly erroneous and whether, second, the system is manifestly inappropriate for achieving the objectives pursued.

It is in that context that the Court, for its part, must examine whether the Commission’s assessment in that regard is sufficiently plausible to support the necessity for the system in question. Within the framework of that review, it is appropriate first of all to examine whether the market dysfunctions on which the Member State relies in order to justify the establishment and protection of the mission involving the provision of a service of general economic interest in question were sufficiently plausible and also to assess whether the Commission could reasonably consider that such a system was by nature necessary and appropriate in order to resolve the problems referred to. It is then for the Court to ascertain whether, in this case, the Commission’s assessment on those points is well founded by reference to current conditions and probable developments in the market concerned as they appeared at the time of adoption of the contested decision in the light of all the information which the Commission had, or ought reasonably to have had, at its disposal.

As regards, in particular, the extent of the Commission’s review, the Commission cannot take the place of the Member State in the exercise of the wide discretion which the latter enjoys. Thus, in assessing whether the measure in question is necessary, the Commission has no power to ascertain, on the basis of the available data, whether the market might actually develop in a certain way and whether the application of the regulatory instruments envisaged by the notified system will thereby become indispensable, at a given moment, to ensure the achievement of the mission involving the provision of a service of general economic interest in question. In effect, the review of necessity does not require that the Commission be convinced that the Member State, in the light of present or future market conditions, cannot abandon the notified measures, but is limited to ascertaining whether there has been a manifest error in the exercise of the wide discretion of the Member State as regards the way of ensuring that the mission involving the provision of a service of general economic interest may be achieved under economically acceptable conditions.

Last, if that review on the part of the Commission is restricted, that circumstance must also be taken into account in the context of the review of the legality of the Commission’s assessment carried out by the Community judicature. That review by the Court must be even more restricted because the Commission’s assessment relates to complex economic facts. That applies especially to the review based on the principle of proportionality, in particular where the contested act concerns State measures of general scope. In effect, such review by the Court must be limited to determining whether those measures are manifestly inappropriate by reference to the objective pursued.

(see paras 265-269)

9. In the context of an action for annulment of a Commission decision on State aid, the applicant has no standing to raise pleas alleging infringement of provisions of Community law distinct from those coming under Articles 87 EC and 88 EC, read together, where appropriate, with Article 86 EC. Any requirement that the Commission should adopt a definitive position, in proceedings relating to aid, on the existence or non-existence of an infringement of those other provisions would run counter to, first, the procedural rules and guarantees – which in part differ significantly and imply distinct legal consequences – specific to the procedures specially established for control of the application of those provisions and, second, the principle of autonomy of administrative procedures and remedies. Furthermore, even in the guise of an action for annulment of a decision on State aid, an individual lacks standing to act, in view of the discretionary power of the Commission in that context, against the Commission’s failure to initiate infringement proceedings under Article 226 EC or to adopt a position in respect of a possible infringement by a Member State of the provisions of the Treaty.

As against that finding, no valid reliance can be placed on the case-law to the effect that it follows from the general scheme of the Treaty that the procedure under Article 88 EC must never produce a result which is contrary to the specific provisions of the Treaty, since the Commission is required to make an assessment by reference to the relevant provisions which are not, strictly speaking, covered by the law on aid only where certain aspects of the aid in issue are so closely linked to its object that any failure on their part to comply with those provisions would necessarily affect the compatibility of the aid with the common market.

Furthermore, the discretion which Article 88 EC confers on the Commission in relation to aid does not permit it to authorise Member States to derogate from provisions of Community law other than those relating to the application of Article 87(1) EC. It follows, first, that the Commission cannot adopt a definitive position in a procedure relating to aid as to compliance with other provisions of Community law where such compliance must be controlled under a different procedural regime and, second, that, as the adoption of a definitive and legally binding Commission decision must be limited to the aid aspects, only those aspects, and not the aspects relating to other provisions of Community law which do not constitute the necessary support for the operative part of its decision, are capable of having adverse effects. It follows, a fortiori , that the complete failure to mention provisions other than those relating to State aid both in the operative part and in the grounds of a decision adopted pursuant to Articles 87 EC and 88 EC and, where appropriate, Article 86(2) EC, is not capable of adversely affecting an individual and of conferring on him an interest in bringing an action.

Last, the wording of Article 86(2) EC in fine does not invalidate that assessment. The criterion of an effect on trade to such an extent as would be contrary to the interests of the Community does not mean that the Commission is under an obligation to ascertain, definitively and comprehensively, whether the notified State measures infringe other provisions of Community law, which, moreover would deprive Article 86(2) EC of any practical effect as a derogation from the rules of the Treaty. Such a derogation could never be effective if its application were at the same required time to ensure full compliance with the rules from which it is supposed to derogate.

(see paras 313-316, 318-319)

10. The procedure under Article 88(2) EC is obligatory where the Commission experiences serious difficulties in establishing whether or not aid is compatible with the common market. The Commission cannot therefore limit itself to the preliminary procedure under Article 88(3) EC and take a favourable decision on a State measure unless it is in a position to reach the firm view, following an initial examination, that the measure cannot be classified as aid within the meaning of Article 87(1) EC or that the measure, while constituting aid, is compatible with the common market. On the other hand, if the initial examination results in the Commission taking the contrary view to the aid’s compatibility with the common market, or if it does not put the Commission in a position to overcome all the problems raised by its assessment of the compatibility of the measure in question with the common market, the Commission has a duty to obtain all the necessary views and, to that end, to initiate the procedure under Article 88(2) EC.

That duty to initiate the formal investigation procedure applies in particular when the Commission, having analysed to the appropriate standard, on the basis of the information provided by the Member State concerned, the State measure in issue, entertains doubts as to the existence of aid elements for the purposes of Article 87(1) EC and as to their compatibility with the common market.

(see paras 329-330)