Case T-442/03

SIC — Sociedade Independente de Comunicação, SA

v

Commission of the European Communities

‛State aid — Measures taken by the Portuguese Republic for the public service broadcaster RTP in order to finance its public service remit — Decision declaring that certain measures do not constitute State aid and that the others are compatible with the common market — Classification as State aid — Compatibility with the common market — Obligation to undertake a diligent and impartial investigation’

Judgment of the Court of First Instance (Fifth Chamber), 26 June 2008   II - 1165

Summary of the Judgment

1. State aid — Definition — Selective nature of the measure

   (Art. 87(1) EC)

2. State aid — Definition — Aid granted to a public undertaking

   (Art. 87(1) EC)

3. Competition — Undertakings entrusted with the operation of services of general economic interest — Recourse to a tendering procedure not necessary to assign such a task to an undertaking

   (Art. 86(2) EC; Amsterdam Protocol)

4. Competition — Undertakings entrusted with the operation of services of general economic interest — Definition of services of general economic interest — Member States’ discretion

   (Art. 86(2) EC)

5. Competition — Undertakings entrusted with the operation of services of general economic interest — Compliance by the public service broadcaster with the quality standards defined in the public service remit — Exclusive competence of the Member State

   (Art. 86(2) EC)

6. State aid — Administrative procedure — Obligations of the Commission — Diligent and impartial examination

   (Art. 88(2) EC)

1.  A State measure which, despite conferring an advantage on a specific category of economic operators, instead of derogating from the normal application of a system becomes a part of it, constituting, in so doing, a measure inherent to that system, does not fall within the definition of a selective measure. Moreover, this is also the case where the differences of treatment arising from that measure can be justified by the nature or the logic of the system.

   With regard to a national law exempting public undertakings from the usual requirement of a notarial deed upon their transformation into public companies, the Commission is required to examine whether, despite its selective nature, the exemption from notarial charges arising from that exemption is not to be classified as State aid on the ground that the recourse to statute, which brings about that exemption, was not chosen with the aim of enabling public undertakings to escape those charges, but is merely part of the logic of the national legal system.

   (see paras 64-67)

2.  For advantages to be capable of being classified as State aid within the meaning of Article 87(1) EC, they must, first, be granted directly or indirectly through State resources and, second, be imputable to the State. The imputability of a measure to the State cannot be inferred from the mere fact that the measure at issue was taken by a public undertaking. Even if the State is in a position to control a public undertaking and to exercise a dominant influence over its operations, actual exercise of that control in a particular case cannot be automatically presumed. It is thus necessary to examine whether the public authorities must be regarded as having been involved, in one way or another, in the adoption of the measure.

   In that regard, the imputability to the State of an aid measure taken by a public undertaking may be inferred from a set of indicators such as, in particular, its integration into the structures of the public administration, the nature of its activities and the exercise of the latter on the market in normal conditions of competition with private operators, the legal status of the undertaking in the sense of its being subject to public law or ordinary company law, the intensity of the supervision exercised by the public authorities over the management of the undertaking, or any other indicator showing, in the particular case, an involvement by the public authorities in the adoption of a measure or the unlikelihood of their not being involved, having regard also to the compass of the measure, its content or the conditions which it contains.

   (see paras 93-95, 98, 99)

3.  It is not apparent either from the wording of Article 86(2) EC or from the case-law on that provision that a service of general economic interest may be entrusted to an operator only as a result of a tendering procedure.

   Although the public service of broadcasting is considered to be a service of general economic interest and not a service of general non-economic interest, it must none the less be pointed out that that classification is explained more by the de facto impact of public service broadcasting on the otherwise competitive and commercial broadcasting sector, than by an alleged commercial dimension to broadcasting. As is clear from the Amsterdam Protocol on the system of public broadcasting in the Member States, public service broadcasting ‘is directly related to the democratic, social and cultural needs of each society’.

   That specific status for public service broadcasting constitutes, moreover, the basis for the freedom accorded by the Amsterdam Protocol to Member States in the award of broadcasting a service of general economic interest. It explains and justifies the fact that a Member State cannot be required to have recourse to competitive tendering for the award of such a service, at least where it decides to ensure that public service itself through a public company.

   (see paras 145, 153, 154)

4.  Member States have a wide discretion to define what they regard as services of general economic interest. Hence, the definition of such services by a Member State can be questioned by the Commission only in the event of manifest error.

   In addition, Community law in no way precludes a Member State from defining broadcasting a service of general economic interest widely to include the broadcasting of full-spectrum programming. That possibility cannot be called into question by the fact that the public service broadcaster carries on, in addition, commercial activities, in particular the sale of advertising space. Calling such activities into question would be tantamount to making the very definition of the broadcasting of a service of general economic interest dependent on its method of financing. A service of general economic interest is defined, ex hypothesi, in relation to the general interest which it is designed to satisfy and not in relation to the means which will ensure its provision.

   (see paras 195, 201-203)

5.  Only the Member State is able to assess the public service broadcaster’s compliance with the quality standards defined in the public service remit. The Commission generally must confine itself to finding that there is a mechanism for the monitoring by an independent body of compliance by the broadcaster with its remit. It is only where the information sent to the Commission during the investigation contains serious evidence to the effect that, despite its existence, a monitoring mechanism was not used that the Commission can be required to examine whether it was actually used, whilst ensuring that it does not go beyond that examination and, in particular, that it does not replace the Member State in the specific assessment of compliance with the qualitative criteria.

   (see paras 212-214)

6.  In the context of the procedure for reviewing State aid, interested parties other than the Member State concerned have only the right to be involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case. An interested party which requests the Commission to exercise its powers in order to obtain from the Member State certain information has no right to Commission action in respect of its request. It is a matter for the Commission, where appropriate, to assess the usefulness of that request for the purposes of its monitoring of the measures at issue. In that assessment, the Commission may take account of the information already at its disposal. Nevertheless, the limited nature of the rights of the interested parties other than the Member State to participate and to be informed is in no way at variance with the obligation to undertake a diligent and impartial investigation to which the Commission is subject in the field of State aid. Thus, the Commission, although it enjoys a discretion, cannot, however, in view of its duty to undertake a diligent and impartial investigation, omit to require the disclosure of information which appears likely to confirm or to refute other information which is relevant for the examination of the measure at issue, but whose reliability cannot be considered to be sufficiently established.

   (see paras 222-225)