Lawfulness of a decision not to raise objections
In this appeal case , Belgium, supported by the European Commission, sought to have set aside the judgment of the Court of First Instance of the European Communities of 10 February 2009 in Case T-388/03 Deutsche Post and DHL International v Commission , annulling the Commission’s decision of 23 July 2003 not to raise objections, following the preliminary examination procedure provided for in Art. 88(3) EC, to several measures taken by the Belgian authorities in favour of La Poste SA, the Belgian public postal undertaking (C(2003) 2508 final).
La Poste SA (‘La Poste’) was converted to a share company governed by public law in 1992, but remained the operator of the universal postal service in Belgium and had to meet specific obligations in regard to services of general economic interest (‘SGEIs’). The detailed rules for compensating the additional net cost of SGEIs were determined in the management contract concluded with the Belgian State.
The express parcels sector accounts for 4% of the turnover of La Poste, which corresponded to an 18% market share in that sector. Deutsche Post AG (‘Deutsche Post’) and its Belgian subsidiary DHL International held a 35 to 45% share of that market.
After three meetings with the Belgian authorities as well as several exchanges of letters, the Commission found that the capital contribution notified by those authorities was compatible with the common market.
The contested decision hence was a decision not to raise objections, adopted under Art. 4(3) of Regulation 659/1999, the lawfulness of which depended on whether there were doubts as to the compatibility of the aid with the common market. Since such doubts must trigger the initiation of a formal investigation procedure in which the interested parties referred to in Art. 1(h) of Regulation 659/1999 could participate, it must be held that any interested party within the meaning of the latter provision was directly and individually concerned by such a decision.
The Court held that if the beneficiaries of the procedural guarantees provided for in Art. 88(2) EC and Art. 6(1) of Regulation 659/1999 were to be able to ensure that those guarantees were respected, it must be possible for them to challenge before the European Union judicature the decision not to raise objections (see Case C-83/09 P Commission v Kronoply and Krontex ).
The Court held that by seeking the annulment of a contested decision not to raise objections, an applicant essentially alleged that the Commission adopted the decision in relation to the aid at issue without initiating the formal investigation procedure, thereby acting in breach of the applicant’s procedural rights. In order to have its action for annulment upheld, the applicant might rely on any plea to show that the assessment of the information and evidence which the Commission had at its disposal during the preliminary examination phase of the measure notified should have raised doubts as to the compatibility of that measure with the common market. According to the Court, the use of such arguments could not, however, change the subject-matter of the action or the conditions for its admissibility. The Court held that the existence of doubts concerning that compatibility was precisely the evidence which must be adduced in order to show that the Commission was required to initiate the formal investigation procedure under Art. 88(2) EC and Art. 6(1) of Regulation 659/1999.
The Court held that it followed from Art. 4(4) of Regulation 659/1999 that if, following the preliminary examination, it found that the contested measure raises doubts as to its compatibility with the common market, the Commission was required to adopt a decision initiating the formal investigation procedure under Art. 88(2) EC and Art. 6(1) of that regulation.
The Court pointed out the lawfulness of a decision not to raise objections adopted under Art. 4(3) of Regulation 659/1999 depended on whether there were doubts as to the compatibility of the aid with the common market.
The Court held that the concept of “doubts” referred to in Art. 4(4) of Regulation 659/1999 was an objective one and their existence must be sought not only in the circumstances in which the contested measure was adopted but also in the assessments upon which the Commission relied (see, to that effect, Case C-431/07 Bouygues and Bouygues Télécom v Commission ).