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Court of Justice of the European Communities (including Court of First Instance Decisions) |
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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Chronopost v Ufex & Ors (State aid) [2003] EUECJ C-83/01P (03 July 2003) URL: http://www.bailii.org/eu/cases/EUECJ/2003/C8301P.html Cite as: [2003] EUECJ C-83/1P, [2003] EUECJ C-83/01P |
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JUDGMENT OF THE COURT
3 July 2003(1)
(Appeal - State aid - Postal sector - Public undertaking entrusted with a service of general economic interest - Logistical and commercial assistance to a subsidiary not operating in a reserved sector - Concept of State aid - Criterion of private operator acting under normal market conditions)
In Joined Cases C-83/01 P, C-93/01 P and C-94/01 P,
Chronopost SA, established in Issy-les-Moulineaux (France), represented by V. Bouaziz Torron and D. Berlin, avocats, with an address for service in Luxembourg (C-83/01 P)
La Poste, established in Boulogne-Billancourt (France), represented by H. Lehman, avocat, with an address for service in Luxembourg (C-94/01 P),
French Republic, represented by G. de Bergues and F. Million, acting as Agents, with an address for service in Luxembourg (C-93/01 P),
appellants,
APPEALS against the judgment of the Court of First Instance of the European Communities (Fourth Chamber, Extended Composition) of 14 December 2000 in Case T-613/97 Ufex and Others v Commission [2000] ECR II-4055, seeking to have that judgment set aside,
the other parties to the proceedings being:
Union française de l'express (Ufex), established in Roissy-en-France (France),
DHL International, established in Roissy-en-France,
Federal express international (France) SNC, established in Gennevilliers (France),
CRIE SA, established in Asnières (France),
represented by E. Morgan de Rivery and J. Derenne, avocats,
applicants at first instance,
and
Commission of the European Communities,
defendant at first instance,
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, J.-P. Puissochet and M. Wathelet (Rapporteur) (Presidents of Chambers), C. Gulmann, D.A.O. Edward, P. Jann, V. Skouris, F. Macken, N. Colneric, S. von Bahr and A. Rosas, Judges,
Advocate General: A. Tizzano,
Registrar: M.-F. Contet, Principal Administrator,
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 28 May 2002,
after hearing the Opinion of the Advocate General at the sitting on 12 December 2002,
gives the following
Facts
1 Syndicat français de l'express international (hereinafter SFEI), now known as the Union française de l'express, of which [DHL International, Federal express international (France) SNC and CRIE SA] are members, is a trade association established under French law, grouping together almost all of the companies offering express courier services competing with Société française de messagerie internationale (hereinafter SFMI).
2 On 21 December 1990 SFEI lodged a complaint with the Commission alleging principally that the logistical and commercial assistance afforded by the French Post Office (hereinafter La Poste) to SFMI constituted State aid within the meaning of Article 92 of the EC Treaty (now, after amendment, Article 87 EC). In particular, SFEI complained that the remuneration paid by SFMI for the assistance provided by La Poste was not in accordance with normal market conditions. It alleged that the difference between the market price for the purchase of such services and the price actually paid by SFMI constituted State aid. An economic study carried out by Braxton, a consultancy firm, at SFEI's request, was appended to the complaint in order to demonstrate the value of the amount of aid during the period from 1986 to 1989.
3 La Poste, which operates as a legal monopoly in the ordinary mail sector, was an integral part of the French State administration until the end of 1990. Since 1 January 1991 it has been a legal entity governed by public law by virtue of Law 90-568 of 2 July 1990. That law authorises it to perform certain activities open to competition, and particularly express delivery services.
4 SFMI is a company incorporated under private law which has been entrusted with the management of La Poste's express delivery service since the end of 1985. SFMI was formed with a share capital of FRF 10 million held as to 66% by Sofipost, a holding company wholly owned by La Poste, and as to 34% by TAT Express, a subsidiary of the airline Transport aérien transrégional (hereinafter TAT).
5 The detailed conditions for the operation and marketing of the express delivery service provided by SFMI under the name of EMS/Chronopost were set out in an order from the Ministry for Posts and Telecommunications of 19 August 1986. According to that order, La Poste was to provide SFMI with logistical and commercial assistance. The contractual relations between La Poste and SFMI are governed by agreements, the first of which dates from 1986.
6 In 1992 the structure of the express delivery business carried out by SFMI changed. Sofipost and TAT set up a new company, Chronopost SA, in which their respective holdings were again 66% and 34%. Chronopost, which had exclusive access to La Poste's network until 1 January 1995, concentrated on domestic express deliveries. SFMI was acquired by GD Express Worldwide France, the subsidiary of an international common operator whose participants are the Australian company TNT and the post offices of five countries, a concentration which was authorised by a Commission Decision of 2 December 1991 (TNT/Canada Post, DBP Postdienst, La Poste, PTT Poste and Sweden Post, Case No IV/M.102, OJ 1991 C 322, p. 19). SFMI retained the international business, using Chronopost as an agent and service provider in the handling of its international dispatches in France (hereinafter SFMI-Chronopost).
7 By letter of 10 March 1992 the Commission notified SFEI of its decision to take no action on the complaint under Article 92 of the Treaty. On 16 May 1992 SFEI together with other undertakings lodged an action with the Court of Justice for annulment of that decision. The Court ruled that it was not necessary to proceed to judgment (order of 18 November 1992 in Case C-222/92 SFEI and Others v Commission, not published in the ECR) in the light of the Commission Decision of 9 July 1992 to withdraw the decision of 10 March 1992.
...
9 On 16 June 1993 SFEI and other undertakings brought an action before the Tribunal de commerce de Paris (Paris Commercial Court) against SFMI, Chronopost, La Poste and others. A second study by Braxton was attached to the application, updating the information contained in the first study and evaluating the amount of the aid up to the end of 1991. In a judgment of 5 January 1994, the Tribunal de commerce de Paris referred several questions to the Court of Justice for a preliminary ruling on the interpretation of Articles 92 and 93 of the EC Treaty (now Article 88 EC), one of which sought clarification of the concept of State aid in the circumstances of the present case. The French Government lodged, as an annex to its observations of 10 May 1994, an economic study by Ernst & Young. In Case C-39/94 SFEI and Others v La Poste and Others [1996] ECR I-3547 (hereinafter the SFEI judgment), the Court ruled that 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 EC Treaty if the remuneration received in return is less than that which would have been demanded under normal market conditions.
10 In the meantime, by a letter from the Commission dated 20 March 1996, France was notified of the initiation of the procedure under Article 93(2) of the EC Treaty. On 30 May 1996 France sent the Commission its comments in this regard.
11 On 17 July 1996 the Commission published in the Official Journal of the European Communities a notice on the initiation of the procedure under Article 93(2) of the EC Treaty regarding aid allegedly granted by France to SFMI-Chronopost (OJ 1996 C 206, p. 3).
12 On 17 August 1996 SFEI submitted its observations to the Commission in response to that notice. It attached to its observations another economic study by Bain & Company. In addition, SFEI extended its complaint of December 1990 to cover a number of additional points, including the use of La Poste's brand image, privileged access to the air waves of Radio France, customs and tax privileges and La Poste's investment in dispatching platforms.
The decision at issue
17 On 1 October 1997 the Commission adopted [the decision at issue], which was notified to SFEI by letter dated 22 October 1997.
18 In the decision [at issue], the Commission stated that it was necessary to distinguish between two sets of measures. The first set is the provision by La Poste of (i) logistical assistance, which consists in making available to SFMI-Chronopost the use of the postal infrastructure for the collection, sorting, transport and delivery of its dispatches, and (ii) commercial assistance, which consists in SFMI-Chronopost's access to La Poste's customers and enjoyment of its goodwill. The second set is made up of individual measures, such as privileged access to Radio France and tax and customs privileges.
19 According to the Commission, SFEI misconstrued the SFEI judgment by maintaining that the Commission should disregard the group's strategic interests and the economies of scale arising from the privileged access of SFMI-Chronopost to [La Poste's] network and infrastructure ... because [La Poste] has a monopoly. By contrast, the Commission contended, the Court of Justice has never suggested that the Commission must apply a different approach if one of the parties to the transaction has a monopoly. Thus, in order to determine whether State aid was involved in the first set of measures, the Commission was not required to take account of the fact that the transactions took place between a parent company operating in a reserved market and its subsidiary operating in a market open to competition.
20 Accordingly, the Commission considered that the relevant question was whether the terms of the transaction between [La Poste] and SFMI-Chronopost [were] comparable to those of an equivalent transaction between a private parent company, which may very well be a monopoly (for instance, because of the ownership of exclusive rights), and its subsidiary. According to the Commission, there was no financial advantage if the internal prices at which products and services were provided between companies belonging to the same group were full-cost prices (total costs plus a mark-up to remunerate equity capital investment).
21 In this regard, the Commission noted that the payments made by SFMI-Chronopost did not cover total costs over the first two years of operation, but covered all costs other than central and local offices' overheads. It considered, first, that it was not abnormal that payments made by a new undertaking, that is to say, SFMI-Chronopost, covered only variable costs in the start-up period. Secondly, in the Commission's opinion, France had been able to show that as from 1988 the remuneration paid by SFMI-Chronopost covered all the costs incurred by La Poste, plus a return on the equity capital invested by the latter. Furthermore, the Commission calculated that the internal rate of return (IRR) of La Poste's investment as a shareholder was well in excess of the cost of the company's equity in 1986, that is to say, the normal rate of return that a private investor would require under similar circumstances. Consequently, La Poste provided logistical and commercial assistance to its subsidiary under normal business conditions and that assistance therefore did not constitute State aid.
22 With regard to the second category, that is to say, the various individual measures, the Commission considered that SFMI-Chronopost derived no advantage from the customs clearance procedure, stamp duty, payroll tax or the periods allowed for payment. The use of La Poste's vehicles as advertising media should, in the opinion of the Commission, be regarded as normal commercial assistance between a parent company and its subsidiary, and SFMI-Chronopost enjoyed no preferential treatment for advertising on Radio France. The Commission also maintained that it had been able to establish that the commitments made by La Poste when the common operator was authorised by the Commission Decision of 2 December 1991 did not constitute State aid.
23 In Article 1 of the decision [at issue] the Commission states: The logistical and commercial assistance provided by [La Poste] to its subsidiary SFMI-Chronopost, the other financial transactions between those two companies, the relationship between SFMI-Chronopost and Radio France, the customs arrangements applicable to [La Poste] and SFMI-Chronopost, the system of payroll tax and stamp duty applicable to [La Poste] and its [business secret] investment in the dispatching platforms do not constitute State aid to SFMI-Chronopost. Article 2 states that the decision [at issue] is addressed to France.
Procedure before the Court of First Instance and the judgment under appeal
64 The aim of Article 92(1) of the Treaty is to prevent trade between Member States from being affected by advantages granted by public authorities which, in various forms, distort or threaten to distort competition by favouring certain undertakings or certain products (Case C-387/92 Banco Exterior de España v Ayuntamiento de Valencia [1994] ECR I-877, paragraph 12, Case 173/73 Italy v Commission [1974] ECR 709, paragraph 26, and SFEI, paragraph 58).
65 The concept of aid thus encompasses not only positive benefits, such as subsidies, but also interventions which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict sense of the word, are of the same character and have the same effect (SFEI, paragraph 58, Banco Exterior de España, cited above, paragraph 13, and Case C-200/97 Ecotrade v Altiforni e Ferriere di Servola [1998] ECR I-7907, paragraph 34). In Case T-358/94 Air France v Commission [1996] ECR II-2109, paragraph 67, the Court of First Instance stated, with regard to Article 92 of the EC Treaty:
That provision therefore covers all the financial means by which the public sector may actually support undertakings, irrespective of whether or not those means are permanent assets of the public sector.
66 Furthermore, as the Court of Justice held in Case 78/76 Steinike & Weinlig v Germany [1977] ECR 595, paragraph 21, regard must primarily be had to the effects of the aid on the favoured undertakings or producers and not the status of the institutions distributing or administering the aid.
67 It follows that the concept of aid is an objective one, the test being whether a State measure confers an advantage on one or more particular undertakings (Case T-67/94 Ladbroke Racing v Commission [1998] ECR II-1, paragraph 52, and Case T-46/97 SIC v Commission [2000] ECR II-2125, paragraph 83).
68 The interpretation of the concept of State aid in the circumstances of the present case was given by the Court of Justice in the SFEI judgment, namely that 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 EC Treaty if the remuneration received in return is less than that which would have been demanded under normal market conditions.
69 It follows from the above considerations that 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, in this case SFMI-Chronopost, 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 (SFEI judgment, paragraph 60, SIC v Commission, paragraph 78, Case C-342/96 Spain v Commission [1999] ECR I-2459, paragraph 41, and Case C-256/97 DM Transport [1999] ECR I-3913, paragraph 22).
70 In the SFEI judgment the Court of Justice found that 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 (paragraph 61).
71 In the present case, the Commission observes in the [decision at issue] that the fact that the transaction takes place between an undertaking operating in a reserved market and its subsidiary operating in a competitive market is of no relevance to this case. The Court of Justice has never suggested that in determining whether State aid is involved the Commission must apply a different approach if one of the parties to the transaction has a monopoly.
72 Consequently, the Commission considered that the internal prices at which products and services are provided between companies belonging to the same group do not involve any financial advantage whatsoever if they are full-cost prices (total costs plus a mark-up to remunerate equity capital investment).
73 It is evident from these statements that the Commission did not base its decision on an economic analysis of the kind required by the SFEI judgment in order to show that the transaction in question would be comparable to a transaction between undertakings operating in normal market conditions. On the contrary, in the [decision at issue] the Commission merely verified the costs incurred by La Poste in providing logistical and commercial assistance and the extent to which those costs were reimbursed by SFMI-Chronopost.
74 Even supposing that SFMI-Chronopost paid La Poste'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 EC Treaty was granted. Given that La Poste 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.
75 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 La Poste 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 to this effect Case C-305/89 Italy v Commission [1991] ECR I-1603, paragraph 20).
76 It follows from the foregoing that, in the [decision at issue], by ruling out the very existence of State aid without checking whether the remuneration received by La Poste for the provision of commercial and logistical assistance to SFMI-Chronopost corresponded to the price that would have been asked under normal market conditions, the Commission based its decision on an incorrect interpretation of Article 92 of the Treaty.
77 This interpretation is not invalidated by the Commission's submission that Article 222 of the EC Treaty (now Article 295 EC) provides that the Treaty in no way prejudges the system of property ownership in Member States. To require that the remuneration which a public undertaking with a monopoly receives in return for the provision of commercial and logistical assistance to its subsidiary should correspond to the payment which would have been demanded under normal market conditions, does not prohibit such a public undertaking from entering an open market but subjects it to the rules of competition, as the fundamental principles of Community law require. Such a requirement does not adversely affect the system of public ownership and merely ensures that public and private ownership are treated equally.
78 It follows that the first part of the fourth plea is well founded.
79 The first article of the [decision at issue] must therefore be annulled in so far as it finds that the logistical and commercial assistance provided by La Poste to its subsidiary SFMI-Chronopost does not constitute State aid to SFMI-Chronopost, and it is not necessary to examine the second part of this plea or the other pleas in so far as they relate to the logistical and commercial assistance provided by La Poste to SFMI-Chronopost. In particular, it is not necessary to examine the second plea, in which [Ufex and Others] allege that the statement of reasons for the [decision at issue] regarding logistical and commercial assistance is inadequate.
The appeals
- set aside the judgment under appeal in so far as it annuls Article 1 of the decision at issue;
- give final judgment in the matter and declare that the application of Ufex and Others for annulment of the decision at issue was unfounded;
- order Ufex and Others to bear the costs;
- in the alternative, refer the case back to the Court of First Instance for judgment and order Ufex and Others to pay the costs incurred by Chronopost before the Court of First Instance and the Court of Justice.
- set aside the judgment under appeal in so far as it annuls Article 1 of the decision at issue;
- order Ufex and Others to pay the costs incurred by La Poste before the Court of First Instance and the Court of Justice.
- set aside the judgment under appeal;
- order Ufex and Others to pay the costs before the Court of Justice and make a new order on the costs of the proceedings at first instance.
- dismiss the appeals as in part inadmissible and unfounded;
- order the appellants to pay the entirety of the costs.
- infringement of Article 92(1) of the Treaty, arising from an incorrect interpretation of the concept of normal market conditions used in the SFEI judgment;
- breach of the procedure set out in Article 93(2) of the Treaty and an abuse of process;
- breach of the broad discretion accorded to the Commission in assessing an economically complex measure;
- infringement of Article 92(1) of the Treaty, arising from an incorrect interpretation of the constituent elements of the concept of State aid, in particular the grant of an advantage to the recipient undertaking and the transfer of public resources;
- breach of the obligation to provide a statement of reasons.
The first plea
Arguments of the parties
59 ... the supply of goods or services on preferential terms is capable of constituting State aid (see Joined Cases 67/85, 68/85 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219, paragraph 28, and Case C-56/93 Belgium v Commission [1996] ECR I-723, paragraph 10).
60 Accordingly, in order to determine whether a State measure constitutes aid, it is necessary to establish whether the recipient undertaking receives an economic advantage which it would not have obtained under normal market conditions.
61 In examining that question, it is for the national court to determine what is normal remuneration for the services in question. 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.
62 In the light of the foregoing considerations, the answer ... must be that 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 if the remuneration received in return is less than that which would have been demanded under normal market conditions.
Findings of the Court
The second to fourth pleas
Referral of the case back to the Court of First Instance
45. Since the Court of First Instance did not assess the extent to which the payment made by SFMI-Chronopost covered La Poste's full costs (see paragraph 74 of the judgment under appeal), the state of the proceedings does not permit the Court of Justice to give final judgment in the matter. The case must therefore be referred back to the Court of First Instance and costs must be reserved.
On those grounds,
THE COURT,
hereby:
1. Sets aside the judgment of the Court of First Instance of the European Communities of 14 December 2000 in Case T-613/97 Ufex and Others v Commission;
2. Refers the case back to the Court of First Instance;
3. Reserves the costs.
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Rodríguez Iglesias
Gulmann
Skouris
von BahrRosas
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Delivered in open court in Luxembourg on 3 July 2003.
R. Grass G.C. Rodríguez Iglesias
Registrar President
1: Language of the case: French.
