Source: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62000CJ0280
Timestamp: 2018-12-11 03:01:45
Document Index: 75113750

Matched Legal Cases: ['Art. 1', 'Art. 92', 'Art. 87', 'Art. 77', 'Art. 73', 'art 1', 'art 2', 'art 2']

Judgment of the Court of 24 July 2003.
Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht.
Regulation (EEC) No 1191/69 - Operation of urban, suburban and regional scheduled transport services - Public subsidies - Concept of State aid - Compensation for discharging public service obligations.
Case C-280/00.
Opinion of Advocate General Léger delivered on 19 March 2002
Opinion of Advocate General Léger delivered on 14 January 2003
Judgment of the Court, 24 July 2003
Transport – Action by the Member States concerning public service obligations – Regulation No 1191/69 – Derogation authorised for undertakings operating urban, suburban or regional scheduled transport services – Extent of the option available to Member States – Obligation to delimit clearly the use made of that option – Observance of legal certainty
(Council Regulation No 1191/69, Art. 1(1), second subpara.)
State aid – Effect on trade between Member States – Adverse effect on competition – Exclusion by the Commission of the transport sector from the de minimis rule
(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC); Commission Regulation No 69/2001; Commission Notice 96/C 68/06)
State aid – Definition – Measures intended to offset the cost of public service tasks assumed by an undertaking – Not included – Conditions – Clearly defined public service obligations – Establishment in an objective and transparent manner of the parameters used to calculate the compensation – Compensation limited to covering costs – Determination of the compensation, where the undertaking is not chosen by a public procurement procedure, on the basis of an analysis of the costs of a typical undertaking in the sector concerned
Transport – Aid for transport – Application of Article 77 of the Treaty (now Article 73 EC) – Limitation to cases covered by secondary Community legislation
(EC Treaty, Art. 77 (now Art. 73 EC); Council Regulations Nos 1191/69 and 1107/70)
Regulation No 1191/69 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, and more particularly the second subparagraph of Article 1(1) thereof, must be interpreted as allowing a Member State not to apply that regulation to the operation of urban, suburban or regional scheduled transport services which necessarily depend on public subsidies, and to limit its application to cases where the provision of adequate transport is not otherwise possible, provided however that the principle of legal certainty is duly observed, which means that the national legislation must clearly delimit the use made of that option of derogation, so as to make it possible to determine the situations in which the derogation applies and those in which the regulation applies. see paras 58, 64, operative part 1
The condition for the application of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), namely that the aid must be capable of affecting trade between Member States, does not depend on the local or regional character of the transport services supplied or on the scale of the field of activity concerned. It is not impossible that a public subsidy granted to an undertaking which provides only local or regional transport services and does not provide any transport services outside its State of origin may none the less have an effect on trade between Member States, since, where a Member State grants a public subsidy to an undertaking, the supply of transport services by that undertaking may for that reason be maintained or increased with the result that undertakings established in other Member States have less chance of providing their transport services in the market in that Member State. Moreover, the Commission notice on de minimis aid, as its fourth paragraph states, does not concern transport. Similarly, Regulation No 69/2001 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid, in accordance with the third recital in the preamble and Article 1(a), does not apply to that sector. Finally, there is no threshold or percentage below which it may be considered that trade between Member States is not affected. The relatively small amount of aid or the relatively small size of the undertaking which receives it does not as such exclude the possibility that trade between Member States might be affected. see paras 77-78, 80-82, operative part 2
Where a State measure must be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings do not enjoy a real financial advantage and the measure thus does not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, such a measure is not caught by Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC). However, for such compensation to escape classification as State aid in a particular case, a number of conditions must be satisfied. First, the recipient undertaking must actually have public service obligations to discharge, and the obligations must be clearly defined. Second, the parameters on the basis of which the compensation will be calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favour the recipient undertaking over competing undertakings. Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations. Compliance with such a condition is essential to ensure that the recipient undertaking is not given any advantage which distorts or threatens to distort competition by strengthening that undertaking's competitive position. Fourth, where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure which would allow for the selection of the tenderer capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations. see paras 87-93, operative part 2
Following the adoption of Regulation No 1107/70 on the granting of aids for transport by rail, road and inland waterway, Member States are no longer authorised to rely on Article 77 of the Treaty (now Article 73 EC), which provides that aids which meet the needs of coordination of transport or represent reimbursement for the discharge of certain obligations inherent in the concept of a public service are compatible with the Treaty, outside the cases referred to in secondary Community legislation. So, to the extent that Regulation No 1191/69 on action by the Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway does not apply and the subsidies at issue fall within Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), Regulation No 1107/70 lists exhaustively the circumstances in which the authorities of the Member States may grant aids under Article 77 of the Treaty. see paras 101, 107-108
Nahverkehrsgesellschaft Altmark GmbH, third party: Oberbundesanwalt beim Bundesverwaltungsgericht,
Altmark Trans GmbH, by M. Ronellenfitsch, Rechtsanwalt,
Regierungspräsidium Magdeburg, by L.-H. Rode, acting as Agent,
Nahverkehrsgesellschaft Altmark GmbH, by C. Heinze, Rechtsanwalt,
the Commission of the European Communities, by M. Wolfcarius and D. Triantafyllou, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 19 March 2002,having regard to the order reopening the oral procedure of 18 June 2002,after hearing the oral observations of Altmark Trans GmbH, represented by M. Ronellenfitsch; Regierungspräsidium Magdeburg, represented by S. Karnop, acting as Agent; Nahverkehrsgesellschaft Altmark GmbH, represented by C. Heinze; the German Government, represented by M. Lumma, acting as Agent; the Danish Government, represented by J. Molde, acting as Agent; the Spanish Government, represented by R. Silva de Lapuerta, acting as Agent; the French Government, represented by F. Million, acting as Agent; the Netherlands Government, represented by N.A.J. Bel, acting as Agent; the United Kingdom Government, represented by J.E. Collins, acting as Agent, and E. Sharpston QC; and the Commission, represented by D. Triantafyllou, at the hearing on 15 October 2002,after hearing the Opinion of the Advocate General at the sitting on 14 January 2003,
The question arose in proceedings between Altmark Trans GmbH ( Altmark Trans) and Nahverkehrsgesellschaft Altmark GmbH ( Nahverkehrsgesellschaft) concerning the grant to the former by Regierungspräsidium Magdeburg (Magdeburg Regional Government, the Regierungspräsidium) of licences for scheduled bus transport services in the Landkreis of Stendal (Germany) and public subsidies for operating those services.
Article 92(1) of the EC Treaty provides: 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.
urban and suburban services means transport services meeting the needs of an urban centre or conurbation, and transport needs between it and surrounding areas,
regional services means transport services operated to meet the transport needs of a region.
The competent authorities of the Member States shall terminate all obligations inherent in the concept of a public service as defined in this Regulation imposed on transport by rail, road and inland waterway.
In order to ensure adequate transport services which in particular take into account social and environmental factors and town and country planning, or with a view to offering particular fares to certain categories of passenger, the competent authorities of the Member States may conclude public service contracts with a transport undertaking. The conditions and details of operation of such contracts are laid down in Section V.
However, the competent authorities of the Member States may maintain or impose the public service obligations referred to in Article 2 for urban, suburban and regional passenger transport services. The conditions and details of operation, including methods of compensation, are laid down in Sections II, III and IV.
Furthermore, the competent authorities of a Member State may decide not to apply paragraphs 3 and 4 in the field of passenger transport to the transport rates and conditions imposed in the interests of one or more particular categories of person.
Article 6(2) of Regulation No 1191/69 reads as follows: Decisions to maintain a public service obligation or part thereof, or to terminate it at the end of a specified period, shall provide for compensation to be granted in respect of the financial burdens resulting therefrom; the amount of such compensation shall be determined in accordance with the common procedures laid down in Articles 10 to 13.
Article 9(1) of that regulation provides: The amount of compensation in respect of financial burdens devolving upon undertakings by reason of the application to passenger transport of transport rates and conditions imposed in the interests of one or more particular categories of person shall be determined in accordance with the common procedures laid down in Articles 11 to 13.
Article 17(2) of the regulation provides: Compensation paid pursuant to this Regulation shall be exempt from the preliminary information procedure laid down in Article 93(3) of the Treaty establishing the European Economic Community.Member States shall promptly forward to the Commission details, classified by category of obligation, of compensation payments made in respect of financial burdens devolving upon transport undertakings by reason of the maintenance of the public service obligations set out in Article 2 or by reason of the application to passenger transport of transport rates and conditions imposed in the interests of one or more particular categories of person.
The provisions of Paragraph 2(1) in conjunction with Paragraph 1(1) of the Personenbeförderungsgesetz (Law on passenger transport, the PBefG) provide that the transport of passengers by road vehicles on scheduled services is subject in Germany to the grant of a licence. That licence requires the operator to charge only the fares authorised by the authority which issues the licence, to comply with the timetable which has been approved, and to observe his statutory obligations in respect of operation and transport.
Altmark Trans appealed on a point of law ( Revision ) to the Bundesverwaltungsgericht against the decision of the Oberverwaltungsgericht. The Bundesverwaltungsgericht considers that the provisions of Paragraph 8(4) of the PBefG raise the question whether the operation of urban, suburban or regional scheduled transport services which cannot be operated profitably on the basis of operating income and therefore necessarily depend on public subsidies may, in national law, be regarded as commercial, or whether it must be regarded as operation in the public interest.
In this respect, the Bundesverwaltungsgericht considers that the public subsidies in question may be covered by the expression other income of the undertaking as defined in commercial law in the second sentence of Paragraph 8(4) of the PBefG. Having recourse to the normal methods of interpreting national law, it reaches the conclusion that the fact that public subsidies are necessary does not exclude the possibility that the transport services are provided commercially.
Since it considered that, in the case before it, the extent of the Community rules was uncertain and that a preliminary ruling was needed for it to give judgment in the main proceedings, the Bundesverwaltungsgericht decided to stay the proceedings and refer the following question to the Court for a preliminary ruling: Do Articles [77 and 92 of the EC Treaty], read in conjunction with Regulation (EEC) No 1191/69, as amended by Regulation (EEC) No 1893/91, preclude the application of a national provision which permits licences for scheduled services in local public transport to be granted in respect of services which are necessarily dependent on public subsidies without regard being had to Sections II, III and IV of that regulation?
Are subsidies to compensate for deficits in local public transport subject at all to the prohibition on aid contained in Article [92(1) of the EC Treaty] or are they incapable from the outset of affecting trade between Member States on account of their regional significance? Does this possibly depend on the specific location and significance of the relevant local transport area?
Does Article [77 of the EC Treaty] generally enable the national legislature to permit public subsidies to compensate for deficits in local public transport without regard being had to Regulation (EEC) No 1191/69?
Does Regulation (EEC) No 1191/69 enable the national legislature to permit the operation of a scheduled service in local public transport which is necessarily dependent on public subsidies without regard being had to Sections II, III and IV of that regulation, and to require application of those provisions only where adequate transport provision is otherwise impossible? Does the ability of the national legislature to do so derive in particular from the fact that under the second subparagraph of Article 1(1) of Regulation (EEC) No 1191/69, as amended in 1991, it has the right to exclude local public transport undertakings completely from the scope of the regulation?
Although since 1 January 1996 the German legislature no longer makes general use of the power to derogate provided for in the second subparagraph of Article 1(1) of Regulation No 1191/69, it has indirectly made an exception to the application of that regulation for the benefit of urban, suburban and regional transport services which are provided commercially. Since that regulation authorises a general derogation, it was also open to the legislature to provide for a partial derogation. The principle that he who can do more, can do less applies in this case.
It must be examined whether the fact that Regulation No 1191/69 does not apply to commercially operated services ─ assuming that to be the case ─ is contrary to that regulation.
Thus according to the order for reference, first, the commercial system of operation may apply also to undertakings which need public subsidies to operate licensed transport services. The national court stated, second, that this right to choose, which was conferred on the operator by the legislature, [is] removed in practice in the case of scheduled services in local public transport which are largely in deficit, the need for public subsidies automatically resulting in such services being classified as in the public interest.
To answer the first part of the question, the various elements of the concept of State aid in Article 92(1) of the Treaty must be considered. It is settled case-law that classification as aid requires that all the conditions set out in that provision are fulfilled (see Case C-142/87 Belgium v Commission ( Tubemeuse ) [1990] ECR I-959, paragraph 25; Joined Cases C-278/92 to C-280/92 Spain v Commission [1994] ECR I-4103, paragraph 20; and Case C-482/99 France v Commission [2002] ECR I-4397, paragraph 68).
Where a Member State grants a public subsidy to an undertaking, the supply of transport services by that undertaking may for that reason be maintained or increased with the result that undertakings established in other Member States have less chance of providing their transport services in the market in that Member State (see, to that effect, Case 102/87 France v Commission [1988] ECR 4067, paragraph 19; Case C-305/89 Italy v Commission [1991] ECR I-1603, paragraph 26; and Spain v Commission , paragraph 40).
Finally, according to the Court's case-law, there is no threshold or percentage below which it may be considered that trade between Member States is not affected. The relatively small amount of aid or the relatively small size of the undertaking which receives it does not as such exclude the possibility that trade between Member States might be affected (see Tubemeuse , paragraph 43, and Spain v Commission , paragraph 42).
Similarly, the Court has held that, provided that a tax on direct sales imposed on pharmaceutical laboratories corresponds to the additional costs actually incurred by wholesale distributors in discharging their public service obligations, not assessing wholesale distributors to the tax may be regarded as compensation for the services they provide and hence not State aid within the meaning of Article 92 of the Treaty. The Court said that, provided there was the necessary equivalence between the exemption and the additional costs incurred, wholesale distributors would not be enjoying any real advantage for the purposes of Article 92(1) of the Treaty, because the only effect of the tax would be to put distributors and laboratories on an equal competitive footing ( Ferring , paragraph 27).
The answer to the first part of the question referred for a preliminary ruling must therefore be that the condition for the application of Article 92(1) of the Treaty that the aid must be such as to affect trade between Member States does not depend on the local or regional character of the transport services supplied or on the scale of the field of activity concerned. However, public subsidies intended to enable the operation of urban, suburban or regional scheduled transport services are not caught by that provision where such subsidies are to be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations. For the purpose of applying that criterion, it is for the national court to ascertain that the following conditions are satisfied:
On 4 June 1970 the Council adopted Regulation (EEC) No 1107/70 on the granting of aids for transport by rail, road and inland waterway (OJ, English Special Edition 1970 (II), p. 360). Article 3 of that regulation provides that [w]ithout prejudice to the provisions of ... Regulation (EEC) No 1192/69 ... and of ... Regulation (EEC) No 1191/69 ... Member States shall neither take coordination measures nor impose obligations inherent in the concept of a public service which involve the granting of aids pursuant to Article 77 of the Treaty except in the following cases or circumstances. It follows that Member States are no longer authorised to rely on Article 77 of the Treaty outside the cases referred to in secondary Community legislation.
Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as amended by Council Regulation (EEC) No 1893/91 of 20 June 1991, and more particularly the second subparagraph of Article 1(1) thereof, must be interpreted as allowing a Member State not to apply the regulation to the operation of urban, suburban or regional scheduled transport services which necessarily depend on public subsidies, and to limit its application to cases where the provision of an adequate transport service is not otherwise possible, provided however that the principle of legal certainty is duly observed.
The condition for the application of Article 92(1) of the EC Treaty (now, after amendment, Article 87(1) EC) that the aid must be such as to affect trade between Member States does not depend on the local or regional character of the transport services supplied or on the scale of the field of activity concerned. However, public subsidies intended to enable the operation of urban, suburban or regional scheduled transport services are not caught by that provision where such subsidies are to be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations. For the purpose of applying that criterion, it is for the national court to ascertain that the following conditions are satisfied:
Article 77 of the EC Treaty (now Article 73 EC) cannot be applied to public subsidies which compensate for the additional costs incurred in discharging public service obligations without taking into account Regulation No 1191/69, as amended by Regulation No 1893/91.