Keywords
Summary

Keywords

1. State aid - Definition - Logistical and commercial assistance provided by a public undertaking operating in a reserved market to its subsidiaries which are governed by private law and carry on an activity open to free competition - Included - Condition - Remuneration less than that demanded under normal conditions by a private holding company or a private group of undertakings not operating in a reserved sector

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC))

2. State aid - Examination by the Commission - Inter partes procedure - Interested parties' right to participate and to information - Limited nature - Obligation to state reasons

(EC Treaty, Arts 93(2) and 190 (now Arts 88(2) EC and 253 EC))

Summary

1. The provision of logistical and commercial assistance by a public undertaking to its subsidiaries, which are governed by private law and carry on an activity open to free competition, is capable of constituting State aid within the meaning of Article 92 of the Treaty (now, after amendment, Article 87 EC) if the remuneration received in return is less than that which would have been demanded under normal market conditions.

In order to determine whether the measures in question constitute State aid, it is necessary to examine the situation from the point of view of the recipient undertaking and to establish whether it received the logistical and commercial assistance in question at a price which it would not have obtained under normal market conditions. Such a determination presupposes an economic analysis taking into account all the factors which an undertaking acting under normal market conditions should have taken into consideration when fixing the remuneration for the services provided.

Even supposing that the recipient undertaking paid the public undertaking's full costs for the provision of logistical and commercial assistance, that would not be sufficient in itself to show that no aid within the meaning of Article 92 of the Treaty was granted. Given that the public undertaking might, by virtue of its position as the sole public undertaking in a reserved sector, have been able to provide some of the logistical and commercial assistance at lower cost than a private undertaking not enjoying the same rights, an analysis taking account solely of that public undertaking's costs cannot, in the absence of other evidence, preclude classification of the measures in question as State aid. On the contrary, it is precisely a relationship in which the parent company operates in a reserved market and its subsidiary carries out its activities in a market open to competition that creates a situation in which State aid is likely to exist.

The Commission should thus have examined whether those full costs took account of the factors which an undertaking acting under normal market conditions should have taken into consideration when fixing the remuneration for the services provided. Hence, the Commission should at least have checked that the payment received in return by the undertaking was comparable to that demanded by a private holding company or a private group of undertakings not operating in a reserved sector, pursuing a structural policy - whether general or sectorial - and guided by long-term prospects.

( see paras 68-70, 74-75 )

2. Respect for the right to be heard is, in all proceedings initiated against a person which may lead to a measure adversely affecting that person, a fundamental principle of Community law which must be guaranteed even in the absence of specific rules. That principle requires that the undertaking concerned be afforded the opportunity during the administrative procedure to make known its views on the truth and relevance of the facts, charges and circumstances relied on by the Commission. The administrative procedure regarding aid is initiated only against the Member State concerned. The competitors of the recipient of the aid, such as the applicants, are only regarded as parties concerned in this procedure. Moreover, during an examination under Article 93(2) of the Treaty (now Article 88(2) EC), the Commission is required to give notice to the parties concerned to submit their comments.

With regard more specifically to the Commission's duty to inform the parties concerned in the context of the administrative procedure under Article 93(2) of the Treaty, the publication of a notice in the Official Journal is an appropriate means of informing all the parties concerned that a procedure has been initiated. The sole aim of this communication is to obtain from persons concerned all information required for the guidance of the Commission with regard to its future action. This case-law confers on the parties concerned the role of information sources for the Commission in the administrative procedure instituted under Article 93(2) of the Treaty. It follows that, far from enjoying the same rights to a fair hearing as those which individuals against whom a procedure has been instituted are recognised as having, the parties 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.

However, the limited nature of the rights of parties concerned does not affect the Commission's duty under Article 190 of the Treaty (now Article 253 EC) to provide an adequate statement of reasons for its final decision.

( see paras 85-90 )