Italian Republic v Commission of the European Communities.
Date: 2004-04-29
43. It should be borne in mind that, according to settled case-law, the Commission, in the application of Article 87(3)(c) EC, has a wide discretion, the exercise of which involves complex economic and social assessments which must be made in a Community context (see, inter alia, Case 310/85 Deufil  v Commission  [1987] ECR 901, paragraph 18). Judicial review of the manner in which that discretion is exercised is confined to establishing that the rules of procedure and the rules relating to the duty to give reasons have been complied with and to verifying the accuracy of the facts relied on and that there has been no error of law, manifest error of assessment in regard to the facts or misuse of powers (Case C-351/98 Spain  v Commission  [2002] ECR I-8031, paragraph 74, and Case C-409/00 Spain  v Commission  [2003] ECR I-1487, paragraph 93).
44. Articles 87(3)(c) and 88 EC expressly state that the Commission ‘may’ consider aid covered by the first of those two provisions to be compatible with the common market. Accordingly, whilst the Commission must always determine whether State aid subject to review by it is compatible with the common market, even if that aid has not been notified to it (see Case C-301/87 France  v Commission  (the ‘ Boussac Saint Frères ’ case) [1990] ECR I-307, paragraphs 15 to 24), it is not bound to declare such aid compatible with the common market (see Case C-409/00 Spain  v Commission , cited above, paragraph 94).
45. However, as was rightly pointed out by the Italian Republic, the Commission is bound, first, by the guidelines and notices that it issues in the area of supervision of State aid where they do not depart from the rules in the Treaty and are accepted by the Member States (see, in particular, Case C-409/00 Spain  v Commission , cited above, paragraph 95).
46. Point 1.2 of the SME Guidelines states that the favourable consideration given by the Commission to State aid to SMEs is justified by the imperfections in the market which lead to their having to suffer a number of handicaps and which thus limit the socially and economically desirable development of such enterprises.
47. Point 3.2 of the SME Guidelines states that, in order to qualify as an SME under those guidelines, an enterprise must satisfy three tests: number of persons employed, the financial test and the independence test.
49. The Court observes, however, that, contrary to the argument put forward by the Italian Republic, the operative part of an act is indissociably linked to the statement of reasons for it, so that, when it has to be interpreted, account must be taken of the reasons which led to its adoption (see Case C-355/95 P TWD  v Commission  [1997] ECR I-2549, paragraph 21).
50. The 18th, 19th and 22nd recitals of the SME Recommendation, as well as point 3.2 of the SME Guidelines, make it clear that the purpose of the independence criterion is to ensure that the measures intended for SMEs genuinely benefit the enterprises for which size represents a handicap and not enterprises belonging to a large group which have access to funds and assistance not available to competitors of equal size. It also follows that, in order to ensure that only genuinely independent SMEs are included, there has to be a way of eliminating legal arrangements in which SMEs form an economic group much stronger than such an SME. It must also be ensured that the definition is not circumvented on formal grounds.
51. Accordingly, the independence criterion must be interpreted in the light of that purpose, as stated by the Advocate General in point 33 of his Opinion, so that an enterprise which is owned as to less than 25% by a large enterprise and thus formally meets the criterion, but in reality belongs to a large group of enterprises, may not nevertheless be regarded as meeting the criterion.
65. In any event, in view of the mandatory nature of the supervision of State aid by the Commission under Article 88 EC, undertakings to which aid has been granted cannot, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article (see Case C-169/95 Spain  v Commission  [1997] ECR I-135, paragraph 51).
66. It follows that, so long as the Commission has not taken a decision approving aid and also so long as the period for bringing an action against such a decision has not expired, the recipient cannot be certain as to the lawfulness of the proposed aid which alone is capable of giving rise to a legitimate expectation on his part (see, to that effect, Case C-169/95 Spain  v Commission , cited above, paragraph 53, and Case T-126/99 Graphischer Maschinenbau  v Commission  [2002] ECR II‑2427, paragraph 42).
67. It follows that the Commission did not infringe the principles of protection of legitimate expectations and legal certainty and that the third branch of the sole plea in law relied on by the Italian Republic in support of its action must also be dismissed.