Kingdom of Spain v Commission of the European Communities.
Date: 2002-09-26
42 It is true that the concept of aid has been interpreted by the Court as not encompassing differential treatment of undertakings in the application of charges, where that differential treatment flows from the nature and general scheme of the system of charges in question (see, to that effect, Case 173/73 Italy v Commission [1974] ECR 709, paragraph 15; Joined Cases C-72/91 and C-73/91 Sloman Neptun [1993] ECR I-887, paragraph 21; and Case C-390/98 Banks [2001] ECR I-6117, paragraph 33).
43 However, in the present case the charges in question arise as a result of the undertakings' need to replace their commercial vehicles and normally come out of those undertakings' budgets.  Accordingly, the support given to certain undertakings in funding part of those charges is not a consequence of the nature or general scheme of the system of charges in question and must be considered to favour those undertakings.  In those circumstances the reasons cited by the Spanish Government to explain why large undertakings are ineligible under the Plan can only be viewed as justifying the way in which the measure is targeted, not as enabling the measure to escape classification as aid.
44 Finally, the fact that the contested aid would not be considered to be a `specific subsidy' under the Agreement on Subsidies cannot reduce the scope of the definition of aid under Article 92(1) of the Treaty.
48 However, the differences between the position of professional transport companies and companies which carry out transport only to meet their own needs are such that the latter cannot be considered to operate on the transport market or to form part of the transport sector.  In particular, non-transport companies do not have customers to whom they supply transport services or seek such customers, and the transport services which they undertake and are interchangeable with those offered by professional transport companies are confined to those that meet their own needs. The situation of professional transport companies and companies which carry out transport only on their own account are therefore not sufficiently homogeneous in order for both categories to belong to the same sector and be operational on the same market.
49 Therefore, whilst the Commission was entitled to examine the effect on the transport sector of the grant of the contested aid to non-transport companies, it could not simply treat those companies as if they were operators in the transport sector.
50 The Commission was therefore not entitled to refuse to examine whether, as the Spanish authorities claimed, the assistance given to non-transport companies could fall within the de minimis rule, the application of which, according to notices issued by the Commission itself, is excluded only in certain sectors and for export aid.
51 In that connection, whilst the Court has held that 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 intra-Community trade might be affected (see, in particular, Case C-142/87 Belgium v Commission (the `Tubemeuse' case) [1990] ECR I-959, paragraph 43), a small amount of aid to an undertaking over a given period does not affect trade between Member States in particular economic sectors.
52 The Commission was therefore entitled to reach the view, in the exercise of its discretion to assess the possible economic effects of aid, that, other than in certain sectors where competitive conditions are of a particular kind and except in respect of export aid, aid in amounts falling below those laid down in the Community guidelines on State aid for SMEs, and subsequently in its Notice on the de minimis rule for State aid (OJ 1996 C 68, p. 9), does not affect trade and is therefore not caught by Articles 92 and 93 of the Treaty.  The amounts laid down by the Commission have not hitherto been challenged.
53 The Commission is, however, bound 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 (Case 310/85 Deufil v Commission [1987] ECR 901, paragraph 22; Case C-313/90 CIRFS and Others v Commission [1993] ECR I-1125, paragraph 36; and Case C-311/94 IJssel-Vliet [1996] ECR I-5023, paragraph 43).  The Commission may not therefore refuse to apply the de minimis rule to aid granted to undertakings in sectors which the various applicable provisions do not exclude from application of the rule.
57 It must first of all be pointed out that the Commission's argument that the Plan is discriminatory is without foundation.  It is settled case-law that discrimination consists in particular in treating like cases differently, involving a disadvantage for some operators in relation to others, without that difference in treatment being justified by the existence of substantial objective differences (see, in particular, Joined Cases 17/61 and 20/61 Klöckner-Werke and Hoesch v High Authority [1962] ECR 325, at p. 345; Case 250/83 Finsider v Commission [1985] ECR 131, paragraph 8; and Banks, cited above, paragraph 35).  A measure to support investment adopted by a public authority can by definition apply only in respect of the territory for which it is responsible and the authority cannot be criticised for not extending the benefit of the measure to undertakings not established in its territory, since such undertakings are in a wholly different position vis-à-vis the authority from undertakings established within the territory.  That statement does not, however, mean that such a measure of support cannot be classified as `aid' within the meaning of Article 92(1) of the Treaty if it fulfils the conditions laid down by that provision.
58 In that connection, in certain cases the very circumstances in which the aid has been granted show that it is liable to affect trade between Member States and to distort or threaten to distort competition.  In such cases, the Commission must set out those circumstances in the statement of reasons for its decision (see Netherlands and Leeuwarder Papierwarenfabriek v Commission, cited above, paragraph 24; Germany and Others v Commission, cited above, paragraph 52; and Joined Cases C-15/98 and C-105/99 Italy and Sardegna Lines v Commission [2000] ECR I-8855, paragraph 66).  Contrary to what the Spanish Government claims, the statement of reasons in the contested decision, as set out in the first sentence of paragraph 56 above, is sufficient to explain the effect of the Plan on competition and trade between Member States since the Plan applies to an indeterminate number of beneficiaries above the de minimis threshold, it relates to services the supply of which is liberalised between the Member States and those services are by nature liable to be the subject of inter-State supplies.  The fact that only a small number of professional transport companies from other Member States actually engage in cabotage in Spain is irrelevant precisely because the Plan could have the effect of hampering growth in the supply of such services.
63 It must be recalled that aid of a relatively low amount is liable to affect competition and trade between Member States where there is strong competition in the sector in which undertakings receiving that aid operate (Case 259/85 France v Commission [1987] ECR 4393, paragraph 24, and Case C-303/88 Italy v Commission [1991] ECR I-1433, paragraph 27).
64 Except where operators on the market in question engage in anti-competitive conduct, a sector characterised by overcapacity, which is how the Commission classifies the road transport sector, and the Spanish Government has not challenged it on that point, must necessarily be one with strong competition.  It is, moreover, true, as the Commission states in Part V of the grounds for the contested decision that, where a sector has a large number of small companies, aid potentially available to all or a very large number of undertakings in that sector can, even if individual amounts are small, have an impact on competition and trade between Member States.  In that connection, the figures provided by the Spanish Government confirm that the vast majority of recipients of the contested aid are small companies.
74 In the application of Article 92(3) of the Treaty, the Commission has a wide discretion the exercise of which involves economic and social assessments which must be made in a Community context (see, for example, Deufil v Commission, cited above, 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.
75 It is clear from the very wording of Articles 92(3)(c) and 93 of the Treaty that the Commission `may' consider aid covered by the first of those provisions compatible with the common market.  Accordingly, although the Commission always has to rule on the compatibility with the common market of State aid subject to review by it, 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.
76 None the less, as stated at paragraph 53 above, the Commission is bound 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.  Secondly, under Article 190 of the EC Treaty (now Article 253 EC), the Commission must give reasons for its decisions, including decisions refusing to declare aid compatible with the common market under Article 92(3)(c) of the Treaty.  Infringement of Article 190 of the Treaty may be raised by the Court of its own motion.
77 It is clear from the Environmental Guidelines that it is essential that aid be classified as aid for investment or operating aid in order to determine whether it may be authorised under those Guidelines.
78 Paragraph 3.2 of the Guidelines, which relates to aid for investment, states first of all at paragraph 3.2.1 that such aid, including aid for equipment intended to reduce pollution or nuisances, may be authorised within the limits laid down in the Guidelines.  The Guidelines state that eligible costs must be strictly confined to the extra investment costs necessary to meet environmental objectives and that costs not attributable to environmental protection must be excluded.  Thus, in the case of replacement plant, the cost of the basic investment involved merely to replace production capacity without improving environmental performance is not eligible. In any case, aid ostensibly intended for environmental protection measures but which is in fact for general investment is not covered by the Guidelines.
79 Paragraph 3.2.3 of the Environmental Guidelines goes on to provide that aid for environmental investment can be authorised up to certain levels.  It distinguishes between: (A) aid to help firms adapt to new mandatory standards, which is further subdivided into (A1) aid to assist with adaptation of existing plant and equipment and (A2) aid towards the replacement of plant; and (B) aid to encourage firms to improve on mandatory environmental standards.
80 On the other hand, paragraph 3.4 of the Guidelines makes it clear that the Commission will not approve operating aid, even where it is intended to meet environmental protection objectives, other than in very specific cases relating to waste management and temporary relief from environmental taxes.
82 The statement of reasons required by Article 190 of the Treaty must explain clearly and unambiguously the reasoning followed by the Community institution which has adopted the contested act, so as to enable interested parties to take cognisance of the justifications for the measure for the purpose of defending their rights and to enable the courts to exercise their powers of review.
84 It is true that the Commission argued before the Court that the aid constituted operating aid.  However, the statement of reasons must, unless there are exceptional circumstances, be notified to the person concerned at the same time as the decision adversely affecting him, and an infringement of Article 190 of the Treaty cannot be remedied before the Court of Justice (see, in particular, Case 195/80 Michel v Parliament [1981] ECR 2861, at p. 2876).