Cases T‑425/04 RENV and T‑444/04 RENV

French Republic

and

Orange

v

European Commission

‛State Aid — Financial measures in favour of France Télécom — Shareholder loan offer — Public declarations by the French State — Decision declaring the aid incompatible with the common market — Absence of extension of the formal investigation procedure — Rights of the defence — Prudent private investor criterion — Normal market conditions — Errors of law — Manifest errors of assessment’

Summary — Judgment of the General Court (Sixth Chamber, Extended Composition), 2 July 2015

State aid — Concept — Assessment according to the criterion of the private investor — Account taken of the context and the information available at the time support measures were adopted

State aid — Concept — Grant attributable to the State of an advantage by means of State resources — Public declarations of the government of a Member State showing its willingness to take appropriate measures to resolve the financial difficulties of an undertaking — Advantage granted without transferring public resources — Not included

State aid — Concept — Assessment according to the criterion of the private investor — State shareholder of an undertaking — State acting as a public authority — Distinction as regards application of the private investor criterion — Information needed for an assessment

State aid — Administrative procedure — Obligation of the Commission to give notice to the interested parties to submit their comments — Exclusion of those parties from rights of defence — Right of the aid beneficiary to be sufficiently associated with the procedure — Limits

Actions for annulment — Interest in bringing proceedings — Action capable of procuring a benefit for the party bringing it — Interest in bringing an action maintained until the delivery of the court decision — Scope — Interest in avoiding repetition of the alleged illegality — Finding of illegality of a measure concerning the applicant capable of serving as a basis for an action for compensation — Inclusion

See the text of the decision. (see paras 116-119)

The Commission’s decision to initiate the formal investigation procedure of a measure as State aid contains the essential elements enabling the Member State and the undertaking concerned to be sufficiently aware of the relevant investigation framework and the reasoning which led the Commission to take the view that the measures at issue might constitute aid incompatible with the internal market and contains full references as to the existence of an advantage which the undertaking concerned would not have obtained under normal market conditions where, in that decision, the Commission makes the general statement that an announcement made by the Member State concerned of its intention to commit itself with a view to overcoming the financial difficulties of an undertaking of which it holds 55% of the capital might — provided that that commitment is irrevocable and thereby breeds an expectation and a feeling of confidence on the part of the market as reflected in an increase in the share price of the undertaking concerned and in the positive reaction of the rating agencies — already involve the commitment of state resources, and where the Commission further states that the aid might be considered as having been granted even before the signature of an agreement between that undertaking and a public industrial and commercial establishment belonging to that Member State for the provision of the credit line. (see paras 4, 138, 140-142)

See the text of the decision. (see paras 150, 152)

The Commission cannot be required to submit to the Member State concerned or to the other interested parties, before adopting its final decision, the legal assessment which it intends to make in that decision, innovative as that assessment may be. In that regard, neither the provisions on State aid nor the case-law require the Commission to hear the views of the recipient of the aid on its legal assessment of the measure in question or to inform the Member State concerned — or, a fortiori, the recipient of the aid — of its position before adopting its decision, where the interested parties and the Member State concerned have been given notice to submit their comments. (see para. 159)

See the text of the decision. (see paras 161, 162)

See the text of the decision. (see paras 185-191)

See the text of the decision. (see paras 192-196, 220)

See the text of the decision. (see paras 201, 202)

The application of the prudent private investor criterion, in essence, solely to the declarations of the government of a Member State in order to find the existence of State aid incompatible with the internal market is erroneous, especially where the Commission does not have sufficient evidence to take a position as to whether those declarations are, in themselves, likely to constitute State aid. In that regard, even if the Commission demonstrates to the required legal standard that those declarations, in particular, allowed the rating of the undertaking concerned to be maintained at investment grade, enabled the financial markets to regain confidence, made it possible, easier and cheaper for the undertaking to gain access to new loans necessary in order to refinance its short-term debts and, in the final analysis, helped to stabilise its very fragile financial situation which, at the time of those declarations, was on the point of deteriorating substantially, for the purposes of establishing the existence of State aid, the Commission must establish a sufficiently direct link between, on the one hand, the advantage given to the beneficiary and, on the other, a reduction of the State budget or a sufficiently concrete economic risk of burdens on that budget. Furthermore, the assumption that the declarations by the public authorities might simply be perceived by the market as revealing a firm commitment on their part is not sufficient for a conclusion that those declarations are likely to have harmful economic or legal consequences. A finding of the existence of aid must be based on objective findings and not on the perception of market operators alone. Therefore, such declarations cannot have created any legal obligation on the Member State, in particular that of financially supporting the undertaking concerned. (see paras 212, 214, 216, 218, 235, 245, 246)

In order to determine whether an intervention by the public authorities in the capital of an undertaking has the character of State aid, it is necessary to determine whether, in similar circumstances, a private investor of a comparable dimension could have been prevailed upon to make capital contributions of the same size, having regard in particular to the information available and foreseeable developments at the date of those contributions. The comparison of the State’s behaviour with that of a private investor must be made in the light of the information available and the developments foreseeable at the time of the financial contributions at issue. That means that no account can be taken of events and information subsequent to the granting of the aid, but in no way prevents the Commission from taking account of earlier events forming part of the context of the aid at issue and of their effects. However, although the information available may relate to events and objective factors from the past, those earlier events and factors cannot be regarded as decisively constituting, in themselves, the relevant reference framework for applying the prudent private investor criterion. On the contrary, given the necessity of a forward-looking analysis based on the information available, the fact that events and factors from the past are taken into account does not mean that more recent events and objective factors cannot be taken into account, if they may be decisive for that forward-looking analysis, either because they invalidate the earlier facts or because they determine the future development of the beneficiary’s economic situation and of its position on the market. Thus, even if the earlier events are objective facts having determined, at least in part, the origin of the more recent events, they cannot render those more recent events insignificant if it appears that the latter, such as restructuring measures, had a real effect on that development. (see paras 220, 227, 229)