THIS CASE IS IN BREACH OF THE ABOVE-MENTIONED PROVISIONS OF THE TREATY AND OF THE ABOVE-MENTIONED PRINCIPLES OF COMMUNITY LAW .
FIRST SUBMISSION
8 ARTICLE 92 ( 1 ) OF THE TREATY OF ROME PROVIDES THAT :
' ' SAVE AS OTHERWISE PROVIDED IN THIS TREATY , ANY AID GRANTED BY A MEMBER STATE OR THROUGH STATE RESOURCES IN ANY FORM WHATSOEVER WHICH DISTORTS OR THREATENS TO DISTORT COMPETITION BY FAVOURING CERTAIN UNDERTAKINGS OR THE PRODUCTION OF CERTAIN GOODS SHALL , IN SO FAR AS IT AFFECTS TRADE BETWEEN MEMBER STATES , BE INCOMPATIBLE WITH THE COMMON MARKET . ' '
9 THE APPLICANT MAINTAINS THAT , IN ORDER TO DECIDE TO WHAT EXTENT SPECIFIC AID IS INCOMPATIBLE WITH THE COMMON MARKET , IT IS APPROPRIATE TO APPLY FIRST OF ALL THE CRITERIA FOR DECIDING WHETHER THERE ARE ANY RESTRICTIONS ON COMPETITION UNDER ARTICLES 85 AND 86 OF THE TREATY . THE COMMISSION MUST THEREFORE FIRST DETERMINE THE ' ' RELEVANT MARKET ' ' AND IN ORDER TO DO SO MUST TAKE ACCOUNT OF THE PRODUCT , THE TERRITORY AND THE PERIOD OF TIME IN QUESTION . IT MUST THEN CONSIDER THE PATTERN OF THE MARKET IN QUESTION IN ORDER TO BE ABLE TO ASSESS HOW FAR THE AID IN QUESTION IN A GIVEN CASE AFFECTS RELATIONS BETWEEN COMPETITORS . BUT THESE ESSENTIAL ASPECTS OF THE MATTER ARE NOT FOUND IN THE DISPUTED DECISION . THE DECISION DOES NOT DEFINE THE RELEVANT MARKET EITHER FROM THE STANDPOINT OF THE PRODUCT OR IN POINT OF TIME . THE MARKET PATTERN AND MOREOVER FOR THAT MATTER , THE RELATIONS BETWEEN COMPETITORS RESULTING THEREFROM WHICH MIGHT IN A GIVEN CASE BE DISTORTED BY THE DISPUTED AID , HAVE NOT BEEN SPECIFIED AT ALL .
10 IT IS COMMON GROUND THAT WHEN THE APPLICANT HAS COMPLETED ITS PLANNED INVESTMENT IT WILL ACCOUNT FOR NEARLY 50% OF CIGARETTE PRODUCTION IN THE NETHERLANDS AND THAT IT EXPECTS TO EXPORT OVER 80% OF ITS PRODUCTION TO OTHER MEMBER STATES . THE ' ' ADDITIONAL PREMIUM FOR MAJOR SCHEMES ' ' WHICH THE NETHERLANDS GOVERNMENT PROPOSED TO GRANT THE APPLICANT AMOUNTED TO HFL 6.2 MILLION ( 2.3 MILLION EUA ) WHICH IS 3.8% OF THE CAPITAL INVESTED .
11 WHEN STATE FINANCIAL AID STRENGTHENS THE POSITION OF AN UNDERTAKING COMPARED WITH OTHER UNDERTAKINGS COMPETING IN INTRA-COMMUNITY TRADE THE LATTER MUST BE REGARDED AS AFFECTED BY THAT AID . IN THIS CASE THE AID WHICH THE NETHERLANDS GOVERNMENT PROPOSED TO GRANT WAS FOR AN UNDERTAKING ORGANIZED FOR INTERNATIONAL TRADE AND THIS IS PROVED BY THE HIGH PERCENTAGE OF ITS PRODUCTION WHICH IT INTENDS TO EXPORT TO OTHER MEMBER STATES . THE AID IN QUESTION WAS TO HELP TO ENLARGE ITS PRODUCTION CAPACITY AND CONSEQUENTLY TO INCREASE ITS CAPACITY TO MAINTAIN THE FLOW OF TRADE INCLUDING THAT BETWEEN MEMBER STATES . ON THE OTHER HAND THE AID IS SAID TO HAVE REDUCED THE COST OF CONVERTING THE PRODUCTION FACILITIES AND HAS THEREBY GIVEN THE APPLICANT A COMPETITIVE ADVANTAGE OVER MANUFACTURERS