98/513/EC: Commission Decision of 11 June 1998 relating to a proceeding under Article 86 of the EC Treaty (IV/35.613 - Alpha Flight Services/Aéroports de Paris) (notified under document number C(1998) 1417) (Only the French text is authentic)
Date: 1998-06-11
Institutions: European Commission
Subjects: France, airport, dominant position, freedom to provide services, quasi-fiscal charge, services company

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 11 June 1998

relating to a proceeding under Article 86 of the EC Treaty (IV/35.613 (cid:190) Alpha
Flight Services/A(cid:130)roports de Paris)

(notified under document number C(1998) 1417)

(Only the French text is authentic)

(98/513/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EEC) No 17/62 of
6 February 1962, first Regulation implementing Articles
85 and 86 of the Treaty (1), as last amended by the Act of
Accession of Austria, Finland and Sweden, and in partic-
ular Article 3 thereof,

Having regard to the complaint lodged by Alpha Flight
Services on 22 June 1995 alleging an infringement of
the Treaty by A(cid:130)roports de Paris and
Article 86 of
requesting the Commission to put an end to the infringe-
ment,

Having given the firms concerned the opportunity to
make known their views on the objections raised by the
Commission, in accordance with Article 19(1) of Regula-
tion No 17 and Commission Regulation No 99/63/EEC
of 25 July 1963 on the hearings provided for in Article
19(1) and (2) of Regulation No 17 (2),

I. THE FACTS

(a) Subject of the Decision

(1)

(2)

This Decision concerns the system of commercial
fees charged by Aeroports de Paris (‘ADP'), the
manager of the Paris airports, in exchange for the
operating licence issued to suppliers of certain cat-
egories of groundhandling services at Orly and
Roissy-Charles de Gaulle airports (‘CDG').

On 22 June 1995 Alpha Flight Services S(cid:133)rl (‘AFS'),
a supplier of airport catering services at Paris-Orly,
lodged a formal complaint against A(cid:130)roports de
Paris, alleging that the latter was imposing discrim-
inatory fees on the suppliers of catering services in
breach of Article 86 of the Treaty.

Having consulted the Advisory Committee on Restrictive
Practices and Dominant Positions,

(3)

(1) OJ 13, 21. 2. 1962, p. 204/62.
(2) OJ 127, 20. 8. 1963, p. 2268/63.

(b) The parties

ADP is a public corporation enjoying financial
independence and listed in the Paris register of
companies. It is engaged in the planning, adminis-
tration and development of all the civil air trans-
port installations which are centred in the Paris

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region and which seek to facilitate the arrival and
departure of aircraft, to control traffic and to load,
unload and groundhandle passengers, goods and
mail carried by air. ADP is thus the managing body
of Orly and Roissy-Charles de Gaulle (CDG)
airports.

a licence to supply catering services at Orly and a
licence to occupy property at
the airport. The
concession was amended on 12 April 1995 when
Forte Airport Services changed its business name to
AFS.

(4)

(5)

(6)

(7)

AFS is a subsidiary of the UK company Alpha
Airport Group and is a supplier of catering services
at Orly airport. Alpha Airport Group supplies
airlines at various Community airports, in partic-
ular London, Amsterdam and Orly. In 1995, AFS
achieved a turnover of some FRF 150 million in its
catering business at Orly.

groundhandling

The contractual relationships between ADP and
of
other
services,
suppliers
including some
airlines providing their own
handling services (self handling), were examined by
the Commission in connection with the present
case. The firms concerned are not involved in these
proceedings, although they will be referred to
below.

(c) The commercial agreements concluded by

ADP

AFS and ADP concluded a 25-year commercial
agreement, starting on 1 February 1990.

AFS has operated from Orly since 1974 although at
the time it was known as Forte Airport Services. In
1988, ADP issued an invitation to tender in order
to select one company to supply catering services
to third parties at Orly in addition to Air France.
The call for bids gave tenderers a choice between a
‘short' concession of some five years, not involving
any substantial investment and a ‘long' concession
involving investment in an airport site. In both
cases, the financial conditions imposed by ADP
called only for the payment of a fee based on the
supplier’s turnover (see Annex 2 of the comments
in particular
from ADP dated 25 August 1995,
Article 12 of the tender specifications).

(8)

On 17 March 1988 the ADP Board selected Forte
Airport Services. On 21 May 1992 ADP and Forte
Airport Services signed a 25-year concession, which
ran retroactively from 1 February 1990 and awarded

(9)

The AFS commercial agreement
following conditions:

includes

the

(cid:190) Article 17, subject of the agreement (cid:190) ADP
permits AFS to occupy a number of sites at
Orly airport designed for catering services and
to build and equip a building for the same
purpose,

(cid:190) Article 18, scope of the licence (cid:190) the licence is
limited to Orly Airport and AFS is permitted to
carry out a range of catering activities including
the preparation, packaging, placing on board
and removal of food, drinks and articles for
passengers and crew. AFS may also prepare and
clean aircraft cabins. It is also authorised to
engage in catering activities not involving in-
flight consumption and intended for customers
outside the airport. According to information
obtained at the hearing on 16 April 1997, AFS
does not apparently carry out any cabin pre-
Its outside
paration or cleaning activities.
catering activities also account for a very small
proportion of its business,

(cid:190) Articles 19 to 21, definition of sites and bus-
iness conditions (cid:190) these provisions concern
the licence to occupy property having a surface
area of some 8 000 m2 within Orly airport.
They also provide for an inspection by ADP of
new building work carried out by the supplier,

(cid:190) Article 22, operating conditions (cid:190) these provi-
sions require AFS to comply with service-
quality criteria as regards both the condition of
facilities and the satisfaction of airlines. The
the licensed services must always
quality of
match the need for efficient and rapid air trans-
port. The supplier undertakes to comply with a
list of specific criteria; failure to do so may

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result in ADP’s promoting the rapid introduc-
tion of one or more other concession-holders
capable of providing better quality services.
ADP is entitled to ask AFS customers for their
views and complaints, in particular by means of
quality surveys,

(cid:190) Article 23, financial conditions (cid:190) in exchange
for the accommodation and operation licence
granted by ADP, AFS undertakes to pay a fee
defined as follows:

(13) OAT is subsidiary of Groupe Air France whose
majority stake is held through its subsidiary Servair
which also provides groundhandling services at
CDG.
[ . . . ]. The arrangements governing the
operation of OAT were defined by letter dated
[ . . . ]. [ . . . ], ADP granted OAT a 25-year conces-
sion,
[ . . . ] to December 1992, which authorizes
OAT to supply catering services and occupy prop-
erty at Orly airport.

(i) no State fee is charged;

(14)

The agreement concerning OAT specifies
particular:

in

(ii) a commercial fee is calculated as a propor-
tion of turnover [ . . . ] achieved by AFS,
[ . . . ]. Turnover in preparations on prem-
ises at Rungis, supplied direct to any other
customers located at ADP airports, whether
to a fee (1).
airlines or not,
Initially, the rate of the commercial fee
varied [ . . . ], depending on turnover. The
rates were uniformly lowered to [ . . . ] on
26 February 1993;

subject

is

(iii) lastly, the supplier initially paid ADP the
sum of FRF [ . . . ] in addition to the fee.

(10) AFS also occupies premises at Rungis outside the
airport perimeter. These premises do not belong to
ADP (see letter from AFS dated 18 March 1996,
and Article 23(2) of the AFS agreement).

(11) AFS has complained about the difference in the
commercial
fees which ADP charges AFS and
(OAT), a
those charged to Orly Air Traiteur
competitor for the supply of catering services at
Orly. On 6 July 1995 the Commission asked ADP
for information on the terms granted to OAT. The
reply and comments from ADP dated 27 July 1995
and 25 August 1995 provide the following informa-
tion.

(12)

[ . . . ], ADP’s management Board authorised La
Toque Dor(cid:130)e, to provide catering services at Orly.
On 17 July 1992, ADP sent a letter to the airlines
at Orly reminding them that, following the oper-
ating licence granted to La Toque Dor(cid:130)e, which
subsequently became OAT, only CARH (Air
France), Forte Airport Services and La Toque Dor(cid:130)e
were allowed to provide catering services to Orly
airlines.

(1) Certain information is not included in the published text for

reasons of confidentiality.

(a) Article 19, subject of the agreement (cid:190) ADP
authorises OAT on the one hand to occupy a
site referred to in Article 20 with a view to
building and developing catering services and,
on the other hand, to pursue at Orly airport the
activities set out in Article 24;

(b) Articles 20 to 23, description of property, extent
of work and various provisions (cid:190) OAT is
authorised to occupy a site [ . . . ] and build the
facilities and necessary equipment;

(c) Article 24, authorised activity (cid:190) the beneficiary
of the agreement is permitted to carry out a
range of catering activities including the prep-
aration, packaging and placing on board of
aircraft meals on trays, drinks and articles
intended for passengers or crew. OAT is author-
ised to provide catering services not intended
for consumption on board or
intended for
customers outside the airport;

(d) Article 25, operating arrangements (cid:190) control
by ADP of the quality of the services supplied
to airlines (see Article 22 of the AFS agree-
ment);

(e) Article 26, financial conditions (cid:190) the condi-
tions define the terms of remuneration for two
licences, as follows:

(cid:190) on the one hand, in exchange for a site-
occupancy licence, the beneficiary under-
takes to pay ADP an annual State fee in
proportion to the surface area occupied,

(cid:190) on the other hand, in exchange for a licence
to operate, the beneficiary undertakes to pay
ADP a commercial fee consisting of:

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(i)

[ . . . ] of total turnover achieved through
its business with Compagnie Nationale
Air France and the subsidiaries of Air
France, Air Charter, Air Inter
(OAT
services provided to subsidiaries or sub-
subsidiaries of Servair, the holders of a
commercial
from
ADP, being excluded from the turn-
over);

operating

licence

(ii)

[ . . . ] of total turnover resulting from
business with any other airline.

supply each category of groundhandling service.
The categories subject to a fee based on turnover
include catering, cleaning and cargo services.

(17)

Some carriers are authorised by ADP to perform
their own handling services. The carriers that have
a financial interest in developing their own services
are those with a sufficient volume of business in
the airport. A limited number of carriers therefore
perform their own handling services in each of the
three abovementioned categories. Some carriers
carry out such services through specialized sub-
sidiaries.

(15)

In paragraph 2.3 of its comments of 27 July 1995,
ADP stated that the structure of the financial terms
granted to providers is composed of a fixed part
corresponding to the occupancy of property and a
variable part corresponding to turnover achieved at
the airport and that in any case the tariff structure
was included in all ADP commercial agreements
and constituted an indivisible whole.

(18) Under

the system adopted by ADP, different
commercial rates are applied to service providers
on the basis of:

(cid:190) external turnover (outside the group), derived

from services for third parties,

(16) On 1 February 1996, a request for information
pursuant to Article 11 of Regulation No 17 was
sent to ADP in order to obtain details concerning
the identity of the groundhandling firms licensed
by ADP to operate at Orly and CDG and the fees
imposed on such firms. The reply from ADP
contained an exhaustive list of the firms licensed to

(cid:190) internal

turnover

(within the group),

from
services to airlines in the same group, namely
turnover in self handling, for which the cor-
responding fee is generally lower
than the
external rate and, in certain cases, is nil.

(19)

The external and internal rates vary according to
the identity of the supplier, as is shown in the
following table:

Company

External fee

Internal fee (1)

Catering services
AFS
OAT (Air France group)
Servair (Air France group)
Skychef
HRS (AOM subcontractor)

Cleaning services
ACNA (Air France group)
Euronetec
Servair (Air France group)
Skychef
SAP (AOM subcontractor)

Cargo services
Air France (2)
France Handling
SFS
Witra (Lufthansa subcontractor)
Trafic (TWA subcontractor)

Orly
Orly
CDG
CDG

Orly
Orly
CDG
CDG

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]
[. . .]

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Company

External fee

Internal fee (1)

Alitalia, Lufthansa, Swissair
Air Canada, JAL, TWA
Fedex, UPS
A(cid:130)ropostale

[. . .]
[. . .]
[. . .]
[. . .]

[. . .]
[. . .]
[. . .]
[. . .]

CDG
CDG
CDG
CDG

(1) Fee applied to self-handling activities.
(2) The ADP letter of 1 April 1996 stated that Air France performed very little groundhandling for third

parties.

(20)

In addition, the service suppliers referred to pay State fees to ADP, in proportion to
the surface area occupied within the airport. The rates vary according to the supplier.

(21) According to the details sent by ADP on 23 May 1997 in reply to a request for
information from the Commission, the variable commercial fees paid by certain
suppliers for 1996 were as follows (in millions of French francs):

Company

External
turnover

External fee

Internal
turnover (1)

Internal fee

Catering and cleaning
services (2)
AFS

OAT

Skychef

Servair

ACNA

Cargo services
Witra

Trafic (3)

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

[. . .]

(1) Turnover relating to selfhandling.
(2) A single rate is applied to one provider providing various categories of service.
(3) In the period 1 April 1996 to 31 March 1997.

(22)

In its comments of 28 February 1997 and at the
hearing on 16 April, ADP pointed out that it was
not asking for payment of the commercial fees
provided for in the cargo-handling agreements.
ADP justifies this temporary exemption on the
ground of
the
suppliers concerned.

financial
[ . . . ].

vulnerability of

the

(24)

In addition to the licence to provide services,
suppliers having access to aircraft are subject to an
approval procedure enabling ADP to prohibit
access to airport facilities and airline companies by
unauthorised external firms.

(d) Approval of groundhandling firms in the

Paris airports

(23)

The commercial agreements concluded by ADP
and each service supplier provide for two licences:
one to occupy public property managed by ADP
and one to provide airport catering, cleaning and
cargo services.

(25)

In 1993, AFS called for stricter controls to prevent
firms not permitted to supply catering services to
third parties at Orly from gaining access to the
reserved area of the airport. AFS complained about
the groundhandling services provided to third
parties by users authorised only to perform their
own handling services. AFS considered it could not
compete with regard to prices against a firm not
paying any airport fees and that access by unau-
thorised providers would entail losses for ADP in
terms of fees (Annexes 13, 14, 15 and 20 to the
AFS complaint).

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(26) On 31 May 1994, in reply to a request from AFS,
ADP stated that the approval procedure at Orly
reflected its desire to put an end to unauthorized
activities (Annex 23 of the AFS complaint). At the
hearing on 16 April 1997, ADP described the
approval procedure: a form provided by ADP is
needed in order to obtain access authorisation from
the police authorities responsible for controlling
access.

December 1996 that the situation did not comply
with the operating licences in force and that the
necessary instructions had been given to ADP’s
officers to put an end to such practices as soon as
possible (see AFS’ comments of 21 February 1996).

(29) As a result, the authorisation procedures set up by
to exercise effective control over
ADP allow it
access to the groundhandling services market in
the Paris airports.

(27)

In addition, AFS asked ADP for permission to
operate at CDG. On 24 May 1995, ADP rejected
the request on the following grounds (Annex 26 of
the AFS complaint):

(e) The dispute

‘(cid:190) for reasons of security, access to restricted areas
must be strictly limited to groundhandling
requirements, taking account of the need for
effective controls on persons and goods. In
view of the very considerable resources already
deployed by the police in cooperation with our
establishment, we believe it would clearly be
unreasonable to increase the number of people
inside the restricted area without irreversibly
impairing the quality and effectiveness of the
abovementioned controls,

(cid:190) it

in view of

is also necessary to ensure the safety of
the large
persons and goods,
number of accidents occurring in spite of
stringent measures, by limiting the number of
vehicles within the restricted area. The arrival
of a new operator could significantly increase
the risk of all sorts of accidents. A(cid:130)roports de
Paris could not therefore grant such authorisa-
tion without incurring liability,

(cid:190) lastly, from a strictly commercial point of view,
there is no evidence that the catering market,
which is not in any way subject to a monopoly,
is ready for a new operator. No airline has to
date expressed dissatisfaction with the system
set up by ADP or requested an increase in the
number of providers in this area.'

(28) On 29 October 1996 AFS informed ADP that a
company operating from Orly had, following a call
for tenders, selected a supplier not approved by
ADP despite the self handling licence issued to the
company. In reply, ADP informed AFS on 24

(30) When OAT was set up, ADP suggested to its
management Board that
retain the financial
terms and conditions negotiated with the supplier.
[ . . . ]

it

(31)

(32)

(33)

(34)

In 1992 a disagreement arose between AFS and
ADP concerning the fact that the fee was calcu-
lated according to turnover and the quality of the
services provided by AFS. Following agreement on
payment of compensation by Forte Airport Services
and in view of the new situation created by the
arrival of OAT, ADP and AFS agreed on a [ . . . ]
reduction in the commercial fee charged to AFS.
The concession was amended accordingly on 26
February 1993.

From business correspondence with its customers,
AFS learnt of the amount of the commercial fee
paid by its competitor OAT to ADP (see Annex 20
to the AFS complaint). Some of the letters show
that certain companies quoted the commercial fees
imposed by ADP on competitors as a reason for
AFS to reduce its prices (Annexes 16 to 19 to the
AFS complaint).

For example, a carrier that had asked AFS for a
price quotation also asked it to ‘specify any fees
payable in respect of Orly airport'.

Following a quote from AFS, another customer
stated that ‘the ADP fee is a cause for concern [ . . . ]
owing to the distortion it causes in an otherwise
well-constructed bid'. In informing AFS of a more
attractive bid by a competitor, the carrier asked
AFS for a price reduction specifically aimed at
reducing the effect of the commercial fee.

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(35)

letters,

in particular a letter of 29
In several
December 1993 (Annex 20 to the complaint), AFS
informed ADP that it considered that the commer-
cial fees based on turnover paid by its competitors
at Orly were not equivalent, even allowing for any
differences in the State fee, and that such differ-
created distortions between competing
ences
suppliers. AFS pointed out
the
different rate was causing it to lose customers and
therefore requested that its fees be aligned on those
of its competitors.

to ADP that

(36) On 31 May 1994 ADP replied that the reduction
agreed on 26 February 1993 resulted, when regard
was had to property charges, in a rate equivalent to
that applied to other licensed suppliers.

(f) The main arguments of the parties

(37) On 22 June 1995 AFS lodged a formal complaint
with the Commission against ADF on the ground
that the latter was imposing unreasonable fees on
airline catering firms in breach of Article 86 of the
Treaty. AFS considers that if the commercial and
State fees were identical to those charged to OAT,
its annual fees would be reduced by some FRF 3,5
million.

(38) At the hearing on 16 April 1997, AFS also supplied
specific examples of negotiations with Community
customers. According to AFS, the examples high-
light the discriminatory effect of the commercial
fees on competing suppliers: on the one hand, high
prices could lead to AFS’ losing customers; on the
other, AFS could be compelled to align its prices
on those of its competitors and sacrifice a part of its
profit equal to the difference in the fees. The differ-
ence in the fees [ . . . ] would thus entail AFS’ losing
[ . . . ] of its profit maxgin.

(39)

[ . . . ]

(40) On 4 December 1996 the Commission adopted a
statement of objections concerning ADP, under
Article 86 of the Treaty. In its comments of 28
February 1997 on the statement of objections and

at the hearing on 16 April 1997, ADP made the
following claims:

(cid:190) it does not hold a dominant position with
regard to groundhandling companies in Paris
airports as its activities are limited to the provi-
sion of real estate,

(cid:190) its commercial agreements comply with French

law on occupancy of public property,

(cid:190) the commercial

terms enjoyed by AFS and
OAT are equivalent, once account is taken of
in the
their respective property charges and,
case of OAT, of the fact that the turnover real-
ised by members of the same group is excluded,

(cid:190) OAT and AFS are not in the same position,
the different airport sites

chiefly because of
occupied by those companies,

(cid:190) lastly,

firms providing their own handling
services could not be regarded as operating on
those
the same groundhandling market as
providing services for third parties.

II. LEGAL ASSESSMENT

(a) Laws applicable

(41)

The complaint by AFS concerns the system of fees
applied by the manager of the Paris airports to
airline catering activities at Orly and Charles de
Gaulle airports. However,
schemes are
applied by the same manager to other ground-
handling services: aircraft cleaning, cargo and mail
handling.

similar

(42) Article 59 of the EC Treaty is aimed at abolishing
restrictions on freedom to provide services in the
Community, and Article 61 stipulates that such an
objective must be attained within the framework of
the common transport policy.

(43)

Such is the aim of Council Directive 96/67/EEC
which provides, under certain conditions, for the
gradual opening-up, from 1 January 1998 until 31
December 2002, of access to the groundhandling
market in Community airports (1). The Directive
sets up a new legal framework within which the
competition rules continue to be applicable to
businesses.

(1) OJ L 272, 25. 10. 1996, p. 36.

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(44)

competition; however,

the Council
In adopting Directive 96/67/EEC,
considered that access to airport installations had to
be guaranteed to suppliers permitted to supply
groundhandling services
and to airport users
permitted to self handle, to the extent necessary for
them to exercise their rights and to permit fair and
genuine
should be
possible for such access to give rise to the collec-
tion of a fee. Article 16(3) of the Directive provides
that where access to airport installations gives rise
to the collection of a fee, the latter shall be deter-
mined according to relevant, objective, transparent
and non-discriminatory criteria. Directive 96/
67/EEC does not, however, affect the application of
the competition rules of the Treaty. The Commis-
sion is required to continue to ensure compliance
with those rules (see recital 28 of the Directive).

it

(45) As regards the application of Articles 85 and 86 of
the EC Treaty, the transport sector was removed
from the scope of Regulation No 17 by Council
Regulation No 141 (1), which was subsequently
replaced by three sectoral regulations relating to
transport by land, sea and air (judgment of the
Court of Justice of 11 March 1997 in Case C-264/
95 P, Commission v. UIC (2)).

(46) Article 1 of Council Regulation (EEC) No 3975/
87 (3), as last amended by Regulation (EEC) No
2410/92 (4), provides that ‘this Regulation lays down
detailed rules for the application of Articles 85 and
86 of the Treaty to air transport services' between
two airports of the Community.

(47)

The activities of the body managing the airport and
the handling services provided in those airports are
transport services between two
not part of air
Community airports. These activities are therefore
not covered by the rules of procedure specific to
the transport sector but are covered instead by
Regulation No 17 for the purposes of Articles 85
and 86 of the Treaty.

(48) As a result, the Commission considers that the
rules of procedure applicable to the present case are
those provided for in Regulation No 17.

[1997] ECR I-1287, at paragraph 44.

(1) OJ 124, 28. 11. 1962, p. 2751/62.
(2)
(3) OJ L 374, 31. 12. 1987, p. 1.
(4) OJ L 240, 24. 8. 1992, p. 18.

(b) Concept of an undertaking

(49)

The Court of Justice has consistently held that the
concept of an undertaking encompasses every
entity engaged in an economic activity, regardless
of the legal status of the entity and the way in
which it is financed (see in particular the judgment
in Case C-41/90, H(cid:148)fner and Elser v. Macroton (5)).

(50) Articles 85 and 86 of the Treaty apply to the behav-
iour of a public entity when it is established that,
through that entity, the State carries on economic
activities of an industrial or commercial nature by
offering goods and services on the market. It is of
no importance that the State carries out the acti-
vities directly through a body forming part of the
State administration or through a body to which it
has granted special or exclusive rights. It is there-
fore necessary to examine the nature of the acti-
vities carried out by the public undertaking or
entity granted special or exclusive rights by the
State (see the judgment of 16 June 1987 in Case
118/85, Commission v. Italy (6) and judgment of
18 March 1997 in Case C-343/95 (7)).

(51) ADP is a governmental corporation registered in
the Paris register of companies; it is engaged in the
planning, administration and development of all
civil air transport installations in the Paris region
that are designed to facilitate the arrival and de-
parture of aircraft, and it
supervises air-traffic
control, and the embarkation, disembarkation and
moving on land of passengers, cargo and air mail.

that

(52) Article R.252-12 of the French civil aviation code
the ADP Management Board is
provides
responsible for defining general policy at the Paris
airports, for taking the necessary measures to create
the resources to cover the costs of managing, main-
taining, operating and improving the airports and
for deciding on the allocation to users, under the
arrangements for temporary occupation of public
property, of airport land, works and installations
and ancillary facilities.

(53) According to its 1996 annual report, ADP’s turn-

over stemmed in particular from:

(cid:190) commercial revenue (commercial concessions,
fuel and other revenue): FRF 1 054 million, or
15 % of total turnover,

(5)
(6)
(7)

[1991] ECR I-1979, at paragraph 21.
[1987] ECR 2599, at paragraphs 7 and 8.
[1997] ECR I-1547, at paragraphs 16, 17 and 18.

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(cid:190) use of installations and equipment (hardstand-
ings, transport, boarding bridges, shuttles): FRF
866 million, or 12,5 % of total turnover,

(cid:190) groundhandling (technical assistance for aircraft
on the ground, checking-in of passengers): FRF
1 253 million, or 18 % of total turnover,

(cid:190) State fees (land, buildings): FRF 720 million, or

10 % of total turnover.

(54) According to the file, ADP’s airport management
activities include: authorizing suppliers to provide a
specific category of assistance (see in particular
paragraphs 9, 14 and 23 to 29), supervision of
vehicle and staff movements and organization of
activities in shared-use facilities (see paragraphs 12
and 26-27) and monitoring the quality of ground-
handling services supplied to airlines (see para-
graphs 9, 14 and 30). In its capacity as manager of
the Paris airports, ADP negotiates its own commer-
cial agreements with the service suppliers (see para-
graphs 7, 8 and 9, 12, 13 and 14, and 18 to 22).

the

foregoing,

the Commission
In view of
that ADP lays down the conditions
considers
governing the activities of
the groundhandling
service suppliers it authorizes and that these con-
stitute the activities of an undertaking within the
meaning of Article 86 of the Treaty.

(58)

(c) Relevant market

Airport management
managing body

services provided by the

This case concerns the management and operation
of the Paris airports. One of the principal tasks of
an airport operator is to manage airport infrastruc-
tures and ensure their smooth operation by super-
vising and coordinating the activities pursued there.

Thus the Commission has already drawn a distinc-
tion (1) between the groundhandling market and
the activities of
the airport operator relating to
management and organisation of the use of infra-
structures as follows:

A key characteristic of the groundhandling market
is that often only the airport itself or the national
carrier are entitled to supply groundhandling

(1) COM(94) 590 final, paragraphs 12, 13 and 14.

(55)

(56)

(57)

services. In addition self-handling is not always
allowed or is reserved to certain carriers, often
selected on the basis of criteria which are not trans-
parent.

In such a situation, there is a risk that prices are
fixed in a discretionary and not genuinely trans-
parent manner. Also, carriers may not always have
the means to improve the quality of the services or
have them tailored to the specific needs of their
customers.
In addition, a groundhandler may
favour certain carriers to the detriment of others.
The risk is even greater where the monopoly is
held by the national carrier in direct competition
with the airlines which are compelled to use its
services.

The role of the airports is to manage and maintain
as well as sometimes even build airport infrastruc-
ture. Airports must make this infrastructure avail-
able to users and ensure that it functions efficiently,
in particular by organising and coordinating all the
activities which take place on the airport premises.
Access to the groundhandling market for suppliers
other than the airport would thus not affect the
efficient operation of the airport.

of

the

include

approval

The airport management services provided by ADP
to groundhandling suppliers and users in the Paris
airports
authorised
suppliers, supervision and organisation of activities
in airport installations in common use and control
of the quality of groundhandling services supplied
in the Paris airports (see paragraph 54). In exchange
for such services, especially the operating licences,
ADP may collect a fee which is defined in the
commercial agreements.

Substitutability of airports

(59)

There is a specific market for the management and
coordination of the activities authorized in Paris
airports as the carriers using the airports, and the
supplies of groundhandling services that are essen-
tial to the functioning of the transport services
concerned, have no choice other than to use the
Orly and CDG airports.

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(60) Domestic or

airlines

international

leaving or
arriving in the Paris region use the Orly and CDG
airports. Other airports capable of providing such a
wide range of air services to the same destinations
are several hundred kilometres away and generally
situated in other Member States. Orly and CDG
also play a special role as hubs enabling passengers
on a very large number of domestic airlines to
transfer to other domestic,
intra-Community or
international services.

(61)

Therefore, for many passengers leaving or arriving
in the Paris region or other French regions, the
domestic or intra-Community air transport services
using Orly and CDG are not interchangeable with
the services offered in other Community airports.
These, on the whole, are passengers who for busi-
ness reasons make use of the specifically adapted
timetables offering a large number of daily flights,
since the flight times and quality of services offered
are decisive factors in satisfying their professional
requirements.

total

(62) Competition between airports is important only in
so far as an airport forms a ‘pivot' or transit point.
In that context, several major airports compete for a
share of
traffic, which means the indirect
traffic using an airport as a transit point. However,
transit passengers are not the only ones using an
airport, a majority of which are those using an
airport
a departure or destination point.
According to an IATA 1996 Analysis contained in
the magazine ‘Airline Business', of December 1996,
transfer traffic accounts for less than 5 % of total
traffic at Orly and about 7 % at CDG.

as

(63) Airlines providing domestic or intra-Community
flights to or from the Paris region thus have no
choice but to use Orly or CDG airports and the
groundhandling services provided at those airports.
The question whether the Paris airports are inter-
changeable is irrelevant in this case as ADP is the
operator of the airports in the Paris region.

(65) Groundhandling services are defined in the Annex
to Directive 96/67/EC which classifies them in
eleven categories. The different
types of service
have very different characteristics (1), in particular:

(cid:190) the services do not all require the same type or

degree of technical skill,

(cid:190) some services, such as baggage sorting, require
major equipment or sophisticated systems,

(cid:190) others, such as ramp handling, take up consid-
erable space or, as in the case of passenger
service
require numerous customer
services,
desks in the terminal; others, such as catering,
can to a large extent take place off the airport
premises,

(cid:190) some,

in particular ramp handling, cleaning
and catering, entail staff and vehicle move-
ments in the restricted areas of
the airport,
requiring a high degree of safety and security,
the main
the provision of which is one of
responsibilities of the managing body.

(66)

This case concerns in particular the following three
categories of groundhandling service: freight and
mail handling (category No 4 in the Annex to
Directive 96/67/EC), aircraft cleaning and servicing
(category No 6 in the Annex to the Directive) and
catering (category No 11 in the Annex). Catering
services as defined in the ADP agreements (Article
18(1) of the AFS agreement and Article 24(1) of the
OAT agreement) also provide for
some ramp
handling within the meaning of Directive 96/
67/EC, in particular ‘the transport, loading on to
and unloading from the aircraft of food and bever-
ages' (category No 5.7 of the Annex to Directive
96/67/EC).

(67) Groundhandling accounts for a fairly large propor-
tion of a Community airline’s operating costs. The
costs are similar to the airport access fees paid by
the airlines. Community carriers have a direct
interest in reducing their groundhandling costs. In
addition, groundhandling is an important factor in
an airline’s strategy of differentiating the quality of
the transport service it offers, the aim being to
adjust its services to customer requirements.

Groundhandling services in the airports

(64) Groundhandling services at Orly and CDG are
essential to the smooth running of air transport
services to and from the Paris region. They make
an essential contribution to the efficient utilisation
of the airport infrastructures concerned.

(68)

Some carriers are licensed to provide some of their
own groundhandling services. Others make use of
suppliers of groundhandling services
third
parties. Self-handling means that a user is author-
ized to provide a category of groundhandling

for

(1) COM(94) 590, point 11.

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18. 8. 98

(69)

itself. Carriers providing their own
service for
handling frequently decide to entrust the task to a
specialised subsidiary. Some self-handling users are
authorised to supply services to other airlines.
Other self-handling users, however, are not author-
ised to supply their services to third parties (see
paragraphs 16 to 19, 25, 26 and 28).

Self-handling is one of the ways in which ground-
handling services are supplied. The documents in
the file show that the members of a given group do
not always necessarily delegate their handling
requirements to specialised subsidiaries within the
group (see paragraph 28). In addition, some users
with a limited self-handling licence would like to
extend their activities to third parties, subject to the
approval of the managing body (see paragraph 25).
Subject
issued by an airport
managing body, a carrier’s choice is nevertheless
dependent on considerations of cost and profit-
ability of the handling activity in question. A user
opting for self-handling must nevertheless have a
sufficient volume of activity to cover the cost of its
investments.

to the licences

(70)

The self-handling services provided by a carrier for
its own air transport operations benefit from the
services of the airport manager in the same way as
groundhandling services for third parties.

(71)

(72)

Conclusion

the market

In view of the foregoing, account should be taken
for airport management services
of
provided to suppliers of groundhandling services or
self-handling users in the Paris airports (hereinafter
referred to as ‘the market for airport management
services'). Anti-competitive behaviour on that
market also affects the market for groundhandling
services in the Paris airports and, indirectly, the
market for air transport services to and from such
airports.

(d) Dominant position

The Court of Justice has consistently held that an
undertaking benefiting from a legal monopoly may
be regarded as holding a dominant position within
the meaning of Article 86 of the Treaty. A domi-
nant position is characterised by a position of
economic strength enjoyed by an undertaking
which enables it
to hinder the maintenance of
effective competition on the relevant market by
allowing it to behave to an appreciable extent inde-
its competitors and its customers
pendently of
(Case C-322/81 Michelin (1)). It also follows from

the case-law of the Court that the application of
Article 86 is not precluded by the fact that the
absence or restriction of competition is facilitated
by rules and regulations (Case C-30/87 Bodson (2)).

(73) ADP holds the legal monopoly for the operation of
Orly and CDG airports. It supplies certain ground-
handling services directly in those airports and also
holds the power to grant to other undertakings
licences to supply groundhandling services.

(74) As a result, ADP determines the number and iden-
tity of groundhandling suppliers or self handling
users which it licences (see paragraph 54). Refusal
to authorise a supplier to operate may be based on
reasons of safety and security of goods and persons
as much as on commercial considerations relating
to the groundhandling market (see paragraph 27).

(75) ADP alone decides on the terms granted to
licensed suppliers in commercial agreements. Each
agreement specifies, on the one hand, the airport
real estate that is made available to the beneficiary
and, on the other hand,
the licensed ground-
handling activities. ADP is also responsible for
controlling the quality of the services supplied to
third parties. Licensed suppliers pay State fees for
the use of property within the airport and commer-
cial fees in exchange for the licence to carry out
groundhandling activities within the airport.

(76) ADP has the power to authorise and determine the
conditions under which groundhandling suppliers
operate in the Paris airports. The suppliers of
groundhandling services
to third parties, users
wishing to provide their own handling services and,
more generally,
the carriers for which ground-
handling services are essential, are therefore placed
in a position of considerable dependency on ADP.

(1)

[1983] ECR 3461.

(2)

[1988] ECR 2479, at paragraph 26.

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As a result, the Commission considers that ADP
holds a dominant position on the market
for
airport management services, which is the relevant
market in this case.

at ensuring effective use of infrastructure. The turn-
over generated by the activities of ADP concerning
commercial concessions, use of
and
groundhandling totalled some FRF 3,2 billion in
1996, and accounted for more than 45 % of ADP’s
total turnover (see paragraph 53).

facilities

(82)

In view of the foregoing, it must be concluded that
ADP holds a dominant position on a substantial
part of the common market.

(e) Substantial part of the common market

(77)

The market for airport management services taken
into account in this case concerns the international
airports of Orly and CDG. In terms of domestic
and international traffic, they are the largest French
airports.

(83)

(f) Abuse of a dominant position

In its judgment of 19 March 1991 (Case C-202/88,
France v. Commission (1)), the Court of Justice
observed that a system of undistorted competition,
as laid down in the Treaty, can be guaranteed only
if equality of opportunity is secured between the
various economic operators. The Court has also
held that an undertaking may not apply artificial
price differences such as to place its customers at a
disadvantage and to distort competition (Case T-
83/91, Tetra Pak v. Commission (2) and the Deut-
sche Bahn judgment of 21 October 1997 (3), not
yet reported).

(84) Article 86 concerns anti-competitive behaviour
pursued by undertakings. It provides that an under-
taking holding a dominant position in a substantial
part of the common market may not apply dissim-
ilar conditions to equivalent transactions with other
trading parties, thereby placing them at a competi-
tive disadvantage.

(85) ADP imposes different levels of fees on competing
suppliers of certain categories of groundhandling
services within the same airport. In view of the
it is therefore
dominant position held by ADP,
necessary to decide whether, within one of the
airports, differences in the fees collected by ADP
from the suppliers of one category of ground-
handling services creates dissimilar conditions for
distorting
equivalent
competition.

transactions,

thereby

Licences issued by ADP

(86) ADP set up a procedure for approving the access of
to Paris
suppliers of groundhandling services
airports, thus determining their number in order to
ensure the smooth operation of the airport and
protect its commercial interests (see paragraphs 23
to 29). On 1 April 1996 ADP sent a list of licensed

(1)
(2)
(3)

[1991] ECR I-1223, at paragraph 51.
[1994] ECR II-0755, at paragraph 160.
[1997] ECR II-1689.

(78) According to the ADP annual report for 1996, with
its 59,1 million passengers and 1 244 000 tonnes of
cargo and mail, ADP ranked second in the Euro-
pean air industry and second in the world market
for international passengers, holding third place for
in Europe. The distribution of
cargo and mail
passenger traffic at
the two airports was 31,76
million for CDG and 27,37 million for Orly.

(79)

Passengers and goods leaving or arriving in the
Paris region, which is one of the largest economic
areas in the Community, use air transport services
to and from Orly and CDG which serve all the
main domestic and Community airports. In addi-
tion, Orly and CDG act as efficient hubs for the
transfer of many passengers wishing to go from one
French region to a region in another Member State
or vice versa. Lastly, the major international airports
outside the Community are served by air transport
services from the two Paris airports.

(80) As regards intra-Community traffic in particular,
total passengers using the two Paris
63 % of
airports
stemmed in 1996 from domestic and
Community air services. In the same year, domestic
and Community cargo traffic, measured in tonnes,
accounted for some 19 % of goods traffic in the
two airports.

(81)

The management of the Paris airports is essential
to the proper operation of national and inter-
national air transport services to and from the Paris
region. The management activities are also aimed

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18. 8. 98

suppliers and a description of the financial condi-
tions contained in their respective agreements (see
paragraphs 16 to 22). ADP indicated that the same
tariff structure was applied in all its commercial
the ADP
(see paragraph 2.3 of
agreements
comments dated 27 July 1995).

Fees for occupying public places or land

(87)

(88)

In principle, ADP distinguishes in its commercial
agreements between the authorisation to supply a
certain category of groundhandling service within
the airport and authorisation to occupy sites within
the same airport.

clearly

the OAT
For example, Articles 19 and 24 of
commercial
distinguished
agreement
between two licences: on the one hand, the licence
to occupy property and, on the other, the licence to
supply groundhandling services (see paragraph 14).
The AFS agreement also concerns two different
licences: Articles 17 and 18 provide, on the one
hand, a licence to occupy property and on the
other a licence to supply catering services only at
Orly airport (see paragraph 9).

(89)

The ADP agreements clearly define the extent of
the handling activities they authorise. They provide
for surveys by ADP on customer satisfaction and
on the quality of services supplied. ADP may
impose penalties in the event of failure to comply
with certain service quality criteria.

(90) At the hearing on 16 April 1997 it emerged that
ADP was not asking for the payment of a commer-
cial fee based on the turnover achieved by catering
suppliers where such suppliers provided catering
services for customers outside the airport [ . . . ], as
ADP considers that
is not opening up any
markets at
the airports with regard to services
supplied to railways.

it

(91)

In view of the foregoing, it must be concluded that
the commercial agreements concluded between
ADP and the groundhandling suppliers concern
the granting of two separate licences, one for the
occupation of sites at the Paris airports and the
other authorising and defining the conditions in
which groundhandling activities will be carried out
by approved suppliers at the Paris airports.

(92)

(93)

(94)

(95)

The occupation of a site within the perimeter of an
airport managed by ADP entails the payment of
fees by the beneficiary. As the Paris airports are on
public land, the fee is termed a State fee or fee for
occupying public places or land. Under French law,
the fee must be calculated on the basis of the rental
value of private property similar to the public prop-
erty that
is being let. The fee is calculated
according to the specific characteristics of each site,
the equipment made available and the location
within the airport, which may lead to considerable
disparities between fees based on surface area paid
by various licensees (see paragraphs 9, 14 and 20).
For the same surface area, the type of area (office,
building or hangar) and its location within the
airport gives rise to different fees.

the products
It should be noted that some of
required for groundhandling services provided at
the airports may be partially or totally prepared
outside the airport. The suppliers of such services
have the choice of premises partly inside and partly
outside the airport. For example, AFS has installa-
tions outside the airport perimeter in the munici-
pality of Rungis (see paragraphs 10 and 65).

In this case, two suppliers competing for a single
type of groundhandling service within the same
airport may thus occupy different surface areas and
installations, depending on whether they decide to
take a site partially or completely inside the airport.
That choice can lead to some disparities in the
calculation of their respective State fees. A supplier
paying a lower fee to ADP may therefore find
himself paying higher rents and property charges
outside the airport.

It may be concluded from the foregoing that the
activity of allocating sites within the airports, which
justifies the collection by ADP of a fee, is a separate
activity from that of authorising and controlling
activities taking place in the airport infrastructures.
In respect of this activity, ADP competes with the
owners of commercial and industrial property over
a wide geographic
airports
area
concerned.

around the

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(96) According to the conditions laid down by ADP in
the tender procedure resulting in the acceptance of
AFS’ bid, no fee is imposed. However, under the
financial terms of the agreement, AFS agrees to pay
ADP the sum [ . . . ] in addition to the commercial
fee. Even in this particular case,
the financial
conditions clearly distinguish between the fee and
the commercial fee (see paragraph 9).

‘while the fixed portion is the fee for the right to
occupy the licensed premises, irrespective of actual
occupation, the second portion of the fee, or the
second component of the overall fee, corresponds
to actual utilization of the property, in so far as the
utilisation generates profits or appreciable benefits
in cash, so that the overall fee represents a fair price
for the service rendered.

(97) According to the information sent by ADP on 1
April 1996,
the relevant
the other suppliers of
handling services to third parties all pay fees in
proportion to the surface area occupied. The fact
that AFS does not have to pay the annual fee in
consideration for its occupancy of property appears
to be an exception to the fee scheme applied by
ADP.

(98)

The Commission considers that it is not required,
in this case, to decide on the levels of fees charged
to the service suppliers in question.

Commercial fees

(99) ADP stated that

the structure of

the financial
conditions agreed with AFS and OAT, composed of
a fixed part corresponding to occupation of prop-
erty and a variable part corresponding to turnover
at the airport, was applied in all ADP commercial
agreements and forms an indivisible whole (see
paragraph 2.3 of ADP’s comments of 27 July 1995).
ADP refers to the recommendations issued by the
in particular the
public authorities in this area,
recommendations of the French tax departments
(Annex 3 of the comments sent by ADP on 28
February 1997).

(100) The documents drawn up by the tax authorities
concern fees paid to the Treasury, calculated as
follows: rates fixed by law or according to scales
established by the national, regional or local tax
authorities, or by the head of the tax authorities in
other cases. These procedure do not
therefore
concern the fees determined by ADP itself. It
should nevertheless be pointed out that the recom-
mendations of the tax authorities concerning the
breakdown of fees for occupying public property
stipulate as follows:

It is therefore normal that the second part or the
second component of the fee varies according to
degree of utilisation of the premises. In this respect,
recourse must not be had to any process consisting
in determining the second component as a percen-
tage of the fixed component.

The benefits to the licensee using the public prop-
erty may for example be assessed on the basis of
the savings made by using that property rather than
private property. Turnover or profits of the enter-
prise may be used as factors in the assessment,
whilst endeavouring to ensure, when other data
may be obtained, that they are not the sole basis for
calculating the second part or second component
of the fee. In practice, the problem may be resolved
satisfactorily by basing the calculation of
the
second part or component of the fee on a material
fact which can easily be verified, in direct relation
to exercise of the right arising out of the conces-
sion, and the variations in which give a sufficiently
precise idea of the amount of use made of the
licensed property.'

(101)

In the case in hand, the Commission notes that the
turnover of the service suppliers in question is not
related to the extent to which the premises within
the airport are used. In particular, cleaning of the
aircraft, loading and unloading of cargo, beverages
and food, and moving, delivering and storing goods
in a restricted area are not activities linked to the
use of property allocated by ADP to service
suppliers. Furthermore, it emerged at the hearing
on 16 April 1997 that ADP does not collect a
commercial fee from catering suppliers on the basis
firms outside the
of
airport. For these reasons, the fees charged by ADP
do not meet
the internal
the requirements of
recommendations referred to above.

turnover with [ . . . ]

their

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18. 8. 98

(102)

In addition, the abovementioned recommendations
do not cause ADP to infringe the Community
competition rules. In any event, the competition
rules of the Treaty would not allow the national
authorities to lay down rules causing ADP to
infringe the Treaty.

(107) As regards the catering, aircraft cleaning and cargo
services, each of the suppliers licensed to supply a
given category of service benefits from equivalent
services provided by the airport manager in propor-
tion to the activity of the supplier.

(103) The commercial agreements distinguish clearly
between the various remunerations received by
ADP. For example, the financial terms of the OAT
concession distinguish between the remuneration
for each of the two licences (see paragraph 14):

(108) Because of the dominant position held by ADP,
the payment of a commercial fee must not create
dissimilar conditions for equivalent
transactions,
thus placing suppliers or users engaged in the same
groundhandling activity at a competitive disadvan-
tage.

(cid:190) the State fee (Article 26(1) ) is paid to ADP in
exchange for the licence to occupy the licensed
premises, and

(cid:190) the commercial fee (Article 26(2) ) is paid to
ADP in exchange for an operating licence.

(104) With regard to AFS, the agreement distinguishes
between the commercial fee and the State fee, even
if the amount of the latter is zero (see paragraph 9).

(105) ADP stated that

the same tariff structure was
the commercial agreements
applied to each of
concluded with the
approved suppliers. The
Commission therefore considers that the variable
commercial fee constitutes an access charge paid in
exchange for a licence to operate within the airport.
The fee, based on the supplier’s turnover, remun-
erates services provided by the airport manager
which bear no relation to the allocation of business
the services provided by the airport
premises;
manager include the supervision and organisation
of groundhandling activities and the making avail-
able of facilities shared by users and suppliers oper-
ating at the airport.

(106) The management of shared infrastructures makes it
necessary to organize and coordinate all the activi-
ties that take place there, efficiently and safely. In
particular, catering, aircraft cleaning and cargo and
mail services involve the movement of people and
vehicles in restricted areas of the airport requiring a
high level of safety and security (see paragraphs 27
and 65).

Commercial fee applied to groundhandling for
third parties

(109) The commercial

fee is an important part of a
suppliers’ cost structure. In this case, it is added to
the unit cost of the services in question. According
to documents in the file concerning commercial
negotiations between airlines and service suppliers,
an unfair difference in the level of the commercial
fee has a significant effect on competition between
suppliers to third parties (see paragraphs 30, 31 and
32 and 38).

(110)

It is clear from the foregoing that a supplier paying
the highest rate cannot offer competitive prices
whilst maintaining the same profit margin. As a
result, the supplier will either lose customers or
to quote a
reduce its profit margin in order
competitive price which compensates
the
for
difference in commercial fee.

(111)

(see ADP correspondence

In 1995 on the basis of comparable turnovers of
[ . . . ], the commercial fee paid by AFS was consid-
erably higher than the amount paid by OAT. AFS
paid some [ . . . ], whilst OAT paid only [ . . . ] in
commercial fees, including intra-group and non-
group fees
9
November 1995 and ADP’s comments of 28
February 1997, p. 12). In 1996, AFS achieved a
turnover of about [ . . . ] and paid some [ . . . ] in
[ . . . ]. By
fees, or an average of
commercial
comparison, OAT paid [ . . . ] in annual fees on an
overall turnover of [ . . . ], giving an average rate of
[ . . . ]

(see paragraph 21).

of

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(112) AFS enjoys special

financial conditions as the
commercial agreement signed with ADP does not
provide for collection of the State fee. However, on
the basis of equivalent turnovers, even including
the State fee paid by OAT, the total fee paid in
1995 was [ . . . ] as against
[ . . . ] paid by AFS,
although OAT occupies a much larger surface area
in the airport than AFS (see paragraphs 9 and 14).
Furthermore, AFS originally paid ADP [ . . . ]
in
addition to the fee. The difference in the commer-
cial fees paid [ . . . ] respectively is thus appreciably
greater than would be warranted by incorporating a
State element in the commercial fee paid annually
by AFS.

Commercial fees applicable to self-handling activ-
ities

(116) ADP requires certain companies, or their special-
ised subsidiaries, to pay a self-handling fee. This is
referred to as an internal fee (see paragraphs 17 to
19 [ . . . ]). The existence of different rates for the
services for third parties (external fee) and for self-
handling (internal fee) may determine whether a
user opts for a third-party service supplier or for
self-handling (see paragraph 69).

(113)

[ . . . ]

suppliers of

(114) A comparison of the commercial fees paid in 1996
by suppliers shows that the differences, at first sight
relatively small,
leads to large variations in the
amounts actually paid. Apart from the example of
AFS and OAT, variations in the commercial fees
affect all
the three categories of
groundhandling services concerned in this case (see
paragraphs 19 and 21). On the basis of the turnover
achieved by caterers and cleaners within the same
airport, a rate that is lower by only a few percent
leads to annual
fees that are lower by several
million French francs. The average external fees
paid by the suppliers of catering and cleaning
services to third parties referred to in paragraph 21
is [ . . . ] (1), but the levels of the external commer-
cial fees paid individually by the suppliers vary
from [ . . . ].

the

commercial

the payment of

(115) With regard to cargo services, ADP does not
fee
require
in the agreements with certain
provided for
suppliers of groundhandling services
to third
parties. Commercial fees are nevertheless provided
for in the agreements. One third-party supplier
benefits from a zero rate whilst others pay [ . . . ].
Only two suppliers whose activities are limited to
subcontracting work for other companies actually
pay commercial fees and are therefore at a disad-
vantage (see paragraphs 19, 21 and 22).

(1) The sum of the external fees paid by the suppliers of catering
and cleaning services referred to in paragraph 21, in relation
to the sum of the external turnovers achieved by the same
suppliers.

(117) When an airline or one of its specialised subsid-
iaries is authorised by ADP to self-handle a specific
category of services and is also authorised to supply
the same services to third parties, ADP provides it
with exactly the same airport management services
as
its handling activities.
However, a lower internal commercial fee based on
self-handling turnover than the rate based on turn-
over from third-party business favours the self-
handling activities of airlines in the same group.

it provides

for

all

(118) On the basis of the figures given in paragraph 21,
in 1996 the total commercial fees paid by suppliers
providing their own handling and paying an
internal fee totalled some [ . . . ] (2) of the aggregate
turnover of
the suppliers concerned. If account
were taken of the turnover of self-handlers not
paying a commercial fee, the corresponding rate
would be below [ . . . ]. On the other hand, total
external commercial
fees paid by suppliers for
third-party handling amounted to some [ . . . ] of
the total external turnover of the suppliers in ques-
tion (see paragraph 114).

(119) Thus self-handling airlines benefit, for no objective
reason, from cheaper assistance. However, account
should be taken of the special situation of airlines
licensed under ADP agreements only to self-
handle.

(120) Any ban on the supply of services to third parties
can entail financial disadvantages. This would be
the case if such suppliers with limited rights were
unable to expand their handling activities suffi-
ciently to obtain a similar return on their invest-
ments as the suppliers of services to third parties.

(2) Total

internal

fees paid by the suppliers of catering and
cleaning services referred to in paragraph 21 in relation to
total internal turnover of the same suppliers.

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18. 8. 98

Since, however, ADP provides all groundhandlers
with the same airport management services, any
difference in the terms accorded to suppliers with a
limited operating licence must be justified on
objective, non-discriminatory grounds. In this case,
the Commission considers that the non-imposition
of a fee on users licensed only to self-handle gives
them a discriminatory advantage in terms of costs
with regard to their self-handling activities and,
therefore, with regard to air transport (see para-
graph 19).

(121)

the commercial

It is possible that the turnover of a supplier of
certain handling services cannot be determined as
precisely or as reliably as that of other suppliers. In
that case,
fees collected from
suppliers and users may be calculated as a direct
proportion of a supplier’s volume of activity, in
particular: for catering, the number of passengers
served; for cleaning, the number of aircraft cleaned;
for mail and cargo, the number of tonnes of cargo
and mail handled.

(122) For these reasons, the Commission considers that
the zero or very low rates applied by ADP to self-
handling by airlines result in the cost of ADP’s
management
supplied to all ground-
handlers, including self-handlers, being passed on
to suppliers of services for third parties. Ground-
handling services for third parties are therefore
more expensive than self-handling services.

services

(125)

(126)

form of groundhandling service,
handling.

including self-

the airport management

In the present case, ADP does not apply any
commercial fee system which fixes in advance the
rates for the commercial fee based on turnover. In
services
exchange for
provided by ADP, the commercial fees vary indi-
vidually according to supplier or user engaged in
the same groundhandling activity (see paragraphs
16 to 22). The fee charged within the same airport
thus varies from one supplier to another and from
one user to another, thus having an appreciable
effect on the cost of the services concerned and on
the structure of the costs borne by the carriers.
Such discrimination has anti-competitive effects on
the market for air transport services.

foregoing,

the
the commercial

the Commission
In view of
considers that
fees in question
constitute, with regard to the groundhandling
suppliers concerned, the application by ADP of
dissimilar conditions to equivalent
transactions.
The difference in fees charged distort competition
between suppliers or users of groundhandling
services in the Paris airports and also between users
providing competing air transport services from
Paris. They constitute an abuse of the dominant
position held by ADP on the market for manage-
ment services at the Paris airports.

(123) The Commission notes

that

the self-handling
airlines are those with the largest volume of air
transport operations in the Paris airports, chiefly
the larger national airlines. A number of carriers
from other Member States, however, do not have a
sufficient volume of business
self-
handling. They are therefore compelled to use
more expensive third-party groundhandlers and
the
thus
commercial fees charged by ADP.

the discriminatory

to warrant

effect of

suffer

(127) With regard to AFS in particular, the Commission
is not opposed, however, to the incorporation of a
State component in the overall fee imposed. The
State component does not, however,
justify the
differences in the commercial fees identified in the
case in question (see paragraph 112).

Conclusion concerning the commercial fees

(g) Effect on trade between Member States

(124)

It is therefore necessary, in order to prevent distor-
tion between suppliers and users, to introduce a
system of non-discriminatory commercial fees for
all undertakings licensed in an airport to supply a

(128) The preceding appraisal shows that the commercial
fees
in question affected competition between
domestic and Community flights to and from the
Paris airports (see paragraphs 71 and 126).

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Official Journal of the European Communities

L 230/27

(129)

(130)

(131)

(132)

(133)

In view of the size of the fee in question, ground-
handling is a relatively large component of an
airline’s operating costs. It also determines the
quality of the transport services available to passen-
in
gers. The terms offered by groundhandlers
airports thus have a considerable effect on the
structure of operating costs and the quality of air
transport services to and from the Paris airports.

In particular, if a user licensed to self-handle is, for
no objective reason charged a lower commercial fee
than its self-handling competitors or those using
the services of third-party suppliers, the difference
affects air transport through its effect on the net
costs of that transport service.

In addition, discriminatory differences
in the
commercial fees paid by suppliers influence the
choice made by carriers through their effect on
prices, without the difference in price reflecting the
relative efficiency of competing suppliers (see para-
graphs 30 to 33 and 38). The quality and efficiency
of the services concerned are liable to be consider-
ably
of
to
competition between suppliers.

distortions

affected

owing

the

It must be stressed that the level of quality of
groundhandling services is an important aspect of
airlines’ strategies to differentiate their transport
services and match the quality of their services to
the requirements of their customers (see Annexes
Nos 4 to 6 of the ADP comments of 25 August
1995). As a result, the supply of intra-Community
air services to and from the Paris airports is affected
by the distortions of competition between ground-
handling suppliers.

In view of the flows of passenger or cargo traffic on
domestic and intra-Community flights to and from
the Paris airports concerned (see paragraphs 77 to
80), it must be concluded that the abuse of a domi-
nant position identified in the case under exam-
ination is liable to affect trade between Member
States.

(h) Conclusion

(134) The

foregoing

the
commercial fees charged by ADP for certain types
of groundhandling service at Orly and CDG

establishes

analysis

that

airports, in particular catering, aircraft cleaning and
cargo services, are applied at discriminatory rates
affecting competition between the suppliers of the
handling
indirectly,
concerned
between Community airlines using Orly and CDG
airports.

services

and,

(135) As a result, the Commission considers that the fee
system in question distorts competition on the
relevant market and is contrary to Article 86 of the
Treaty,

HAS ADOPTED THIS DECISION:

Article 1

A(cid:130)roports de Paris has infringed Article 86 of the EC
Treaty by using its dominant position as manager of the
Paris airports to impose discriminatory commercial fees
in the Paris airports of Orly and Roissy-Charles de Gaulle
on suppliers or users engaged in groundhandling or self-
handling activities relating to catering (including the
loading and unloading of food and beverages on aircraft),
to the cleaning of aircraft and to the handling of cargo.

Article 2

A(cid:130)roports de Paris shall put an end to the infringement
referred to in Article 1 by applying to the suppliers of
groundhandling services concerned a non-discriminatory
scheme of commercial fees within two months of the date
of notification of this Decision.

Article 3

This Decision is addressed to A(cid:130)roports de Paris, 291 bd
Raspail, F-75675 Paris Cedex 14.

Done at Brussels, 11 June 1998.

For the Commission

Karel VAN MIERT

Member of the Commission