Keywords
Summary

Keywords

1 Competition - Public undertakings and undertakings to which Member States grant special or exclusive rights - Powers of the Commission - Adoption of directives or decisions addressed to Member States - Position of an undertaking vis-à-vis a procedure leading to the adoption of a decision

(EC Treaty, Arts 85, 86 and 90(1) and (3) (now Arts 81 EC, 82 EC and 86(1) and (3) EC))

2 Competition - Public undertakings and undertakings to which Member States grant special or exclusive rights - Monitoring of the conduct of Member States - Rights of defence for Member States and undertakings - Scope

(EC Treaty, Arts 85, 86 and 90(1) and (3) (now Arts 81 EC, 82 EC and 86(1) and (3) EC))

3 Commission - Principle of collegiality - Implications - Expression of an opinion by a Commissioner

(EC Treaty, Art. 90(3) (now Art. 86(3) EC) and Art. 163 (now, after amendment, Art. 219 EC))

4 Competition - Public undertakings and undertakings to which Member States grant special or exclusive rights - Powers of the Commission in its capacity as custodian of the Treaty - Discretion - Decision concerning legislation in respect of which several procedures have been initiated

(EC Treaty, Art. 90(1) and (3) (now Art. 86(1) and (3) EC))

5 Competition - Public undertakings and undertakings to which Member States grant special or exclusive rights - Whether such rights are compatible with the Treaty - Not necessarily compatible - Where such a right constitutes a restriction on the freedom of establishment

(EC Treaty, Art. 52, first para. (now, after amendment, Art. 43, first para., EC), and Art. 90(1) and (2) (now Art. 86(1) and (2) EC))

6 Freedom of movement for persons - Freedom of establishment - Scope - Establishment - Meaning

(EC Treaty, Art. 52 (now, after amendment, Art. 43 EC))

7 Actions for annulment - Pleas in law - Misuse of powers - Meaning

(EC Treaty, Art. 173 (now, after amendment, Art. 230 EC))

8 Acts of the institutions - Statement of reasons - Obligation - Scope - Plea alleging the absence or inadequacy of a statement of reasons - Plea alleging that the grounds of a decision are unsound - Distinction

(EC Treaty, Art. 190 (now Art. 253 EC))

Summary

1 Article 90(3) of the Treaty (now Article 86(3) EC) empowers the Commission to determine, by a decision, that a given State measure is incompatible with the rules of the Treaty and to indicate what measures the State to which the decision is addressed must adopt in order to comply with its obligations under Community law. It follows that a procedure leading to the adoption of a decision pursuant to Article 90(3) of the Treaty is a procedure initiated against the Member State concerned and that, consequently, any undertaking to which Article 90(1) of the Treaty (now Article 86(1) EC) relates is a third party to that procedure. An undertaking benefiting from the contested State measure is not, in a procedure pursuant to Article 90(3) of the Treaty, by that mere fact placed in a position similar to that of an undertaking which is the subject of a procedure to establish whether or not Article 85 or 86 of the Treaty (now Articles 81 and 82 EC) have been infringed.

2 Observance of the rights of the defence in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person is a fundamental principle of Community law which must be guaranteed even in the absence of any rules governing the procedure in question. It follows from that principle that the Member State concerned must receive, before the decision to be notified to it is adopted pursuant to Article 90(3) of the Treaty, an exact and complete statement of the objections which the Commission intends to raise against it and must be placed in a position in which it may effectively make known its views on the observations submitted by interested third parties.

An undertaking to which Article 90(1) of the Treaty (now Article 86(1) EC) relates, which is the direct beneficiary of the State measure at issue and is expressly named in the applicable law, to which the contested decision relates directly and which is directly affected by the economic consequences of that decision is entitled to be heard by the Commission during that procedure.

Observance of the right to be heard requires the Commission to communicate formally to the undertaking benefiting from the contested State measure the specific objections which it raises against that measure as set out in the letter of formal notice addressed to the Member State and, where appropriate, in any subsequent correspondence, and to grant it an opportunity effectively to make known its views on those objections. However, it does not require the Commission to afford that undertaking an opportunity to make known its views on the observations submitted by the Member State against which the procedure has been initiated in response to objections that have been addressed to it or in response to observations submitted by interested third parties, or formally to transmit to it a copy of any complaint which may have given rise to the procedure.

3 The expression of an opinion by the Commissioner responsible for competition matters on a procedure in progress pursuant to Article 90(3) of the EC Treaty (now Article 86(3) EC), is, in so far as it is strictly personal and without prejudice, attributable to that Commissioner alone and does not predetermine the position that the College of Members of the Commission will adopt at the end of the procedure. Under Article 163 of the EC Treaty (now, after amendment, Article 219 EC), the operation of the Commission is governed by the principle of collegiality. That principle is based on the equal participation of the Commissioners in the adoption of decisions, from which it follows that decisions should be the subject of collective deliberation.

4 It follows from the wording of Article 90(3) of the Treaty (now Article 86(3) EC) and from the scheme of Article 90 as a whole that the Commission enjoys a wide discretion in the field covered by paragraphs 1 and 3, both in relation to the action which it considers necessary to be taken and in relation to the means appropriate for that purpose.

If the Commission finds that a Member State has infringed Article 90 of the Treaty, it may - even though the presumed incompatibility of the national rules with Community law has already justified the initiation of several procedures - address an appropriate decision to that Member State in order to ensure application of that article.

5 Even though Article 90(1) of the Treaty (now Article 86(1) EC) presupposes the existence of undertakings which have certain special or exclusive rights, it does not follow that all the special or exclusive rights are necessarily compatible with the Treaty. That depends on different rules, to which Article 90(1) refers.

It follows that measures taken by Member States in respect of undertakings referred to in Article 90(1) of the Treaty must, without prejudice to the application of Article 90(2), be consistent with the rules contained in the Treaty, and in particular with the first paragraph of Article 52 thereof (now, after amendment, Article 43, first paragraph, EC).

Article 90(1) of the Treaty, read in conjunction with Article 52 thereof, must be applied where a measure adopted by a Member State constitutes a restriction on the freedom of establishment of nationals of another Member State in its territory and, at the same time, gives an undertaking advantages by granting it an exclusive right, unless that State measure is pursuing a legitimate objective compatible with the Treaty and is permanently justified by overriding reasons relating to the public interest, such as cultural policy and the maintenance of pluralism in the press. In such a case it is still necessary for the State measure in question to be appropriate for ensuring attainment of the objective it pursues and not to go beyond what is necessary for that purpose.

It is not sufficient, therefore, for acceptable reasons to have led to the grant of an exclusive right for it always to be justified since otherwise it would be impossible to contest any State measure granting an exclusive right to an undertaking if the grant of that right were initially justified; it would also be impossible to apply the rules on the fundamental freedoms contained in the Treaty to a State measure granting an exclusive right to an undertaking even though the impediments created by that right were no longer justified by overriding interests relating to the public interest.

6 The right of establishment, provided for in Article 52 of the Treaty (now, after amendment, Article 43 EC), allows - subject to the exceptions and conditions laid down - all types of self-employed activity to be taken up and pursued in the territory of any Member State, undertakings to be formed and operated, and agencies, branches or subsidiaries to be set up. The concept of establishment within the meaning of the Treaty is therefore a very broad one, allowing a Community national to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the Community in the sphere of activities as self-employed persons. Article 52 of the Treaty precludes any national measure which, although applicable without discrimination on grounds of nationality, is liable to hamper or to render less attractive the exercise by Community nationals of fundamental freedoms guaranteed by the Treaty.

7 A decision may be vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent factors, to have been taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than that stated or of evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case.

8 The statement of reasons required by Article 190 of the Treaty (now Article 253 EC) must clearly and unequivocally show the reasoning of the institution which adopted the measure, so as to enable the Community judicature to exercise its power of review and the persons concerned to know the grounds on which the measure was adopted.

The absence or inadequacy of a statement of reasons constitutes a plea going to infringement of essential procedural requirements and, as such, is distinct from a plea going to the incorrectness of the grounds of the decision, which, by contrast, is reviewed in the context of the question whether a decision is well founded.