Opinion of Advocate General Lenz delivered on 17 September 1992

1 Original language: German.

2 In the remainder of this Opinion, I shall not distinguish between those two companies, to which I shall refer simply as Allied Signal.

3 Commission Decision 85/18/EEC of 10 October 1984 on the French regional planning grant scheme (Prime d'aménagement du territoire) (OJ 1985 L 11, p. 28).

4 Belgium, France, Luxembourg.

5 Annex 8 to the defence.

6 See OJ 1985 C 171, p. 2, OJ 1987 C 183, p. 4, OJ 1989 C 173, p. 5, OJ 1991 C 186, p. 11, and OJ 1992 C 179, p. 3.

7 Annex 12 to the application.

8 Annex 14 to the application.

9 Annex 13 to the application.

10 In the reply, they further claimed that the Commission should be ordered to pay the costs (see section 133 below).

11 Judgments in Case 120/73 Lorenz v Germany [1973] ECR 1471, paragraph 3, in Joined Cases 91 and 127/83 Heineken Brouwerijen v Inspecteurs der Vennootschapsbelasting Amsterdam en Utrecht [1984] ECR 3435, paragraph 14, and in Case C-301/87 France v Commission [1990] ECR I-307, paragraph 17.

12 Judgment in Case 173/73 Italy v Commission [1974] ECR 709, paragraph 16; judgment in France v Commission, cited in footnote 10, paragraph 22.

13 Judgment in Case 310/85 Deufil v Commission [1987] ECR 901.

14 At the hearing, the Commission described the discipline as a proposal within the meaning of the second sentence of Article 93(1) (by referring to the adoption of appropriate measures). This does not seem to be to as straightforward as the Commission would have it be. According to its wording, the discipline does not cover only existing aid, but also new aid, and existing aid also encompasses cases in which the domestic aid system has been declared to be compatible with the common market and adopted after the discipline was adopted or extended. However, this question does not have to be explored in this case; see section 35 et seq. below.

15 Commission Decision 90/381/EEC of 21 February 1990 amending German aid schemes for the motor vehicle industry (OJ 1990 L 188, p. 55).

16 OJ 1989 C 123, p. 3.

17 See the communications published in the C series of the Official Journal cited in footnote 5.

18 Judgment in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1, at 18.

19 Judgment in Joined Cases 42 and 49/59 SNUPAT v High Authority [1961] ECR 53, at 75.

20 Opinion of Advocate General Lagrange in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 34, at 36.

21 As the Court has consistendy held: see, most recendy, the judgments in Case C-312/90 Spain v Commission [1992] ECR I-4117 and in Case C-47/91 Italy v Commission [1992] ECR I-4145.

22 The question of what the content of the discipline was at the time when the aid was granted should be left for the Court's decision on whether the application is well-founded.

23 See, in particular, the judgments in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority, cited in footnote 19, in Case 42/71 Noragetreüle v Commission [1972] ECR 105 and in Joined Cases 97, 193, 99 and 215/86 Asteris v Commission [1988] ECR 2181.

24 Judgment in Case 48/65 LUtticke and Others v Commission [1966] ECR 19.

25 The judgment in Case C-87/90 Sonito v Commission [1990] ECR I-1981 also relates to this eventuality. However, the considerations set out in that judgment are not concerned with the principle at issue in this case, but with the parallels between an action for annulment and an action for failure to act; I shall be returning to this later (section 108, footnote 81).

26 At 27.

27 Judgment in Joined Cases 166 and 220/86 Irish Cement v Commission [1988] ECR 6473.

28 It should also be observed that the Court did not reject the Advocate General's view that the aid was existing aid. However, the Commission's action against existing aid is confined to the future, a restriction which can have no application, if only conceptually, to new aid. It should therefore be considered that the legal effects produced by a refusal to initiate a procedure (in so far as it precludes other measures on the part of the Commission) are even more marked in the case of new aid than they are in the case of existing aid. The solution adopted in Irish Cement should apply — with even greater reason, one might say — in this case.

29 Pages 11 and 12 (section 19) of the statement in intervention.

30 It is that distinction between the addressee of the actual measure and the addressee of the tetter expressing that measure from which the whole of the case-law on third undertakings' right to bring proceedings in the field of competition law tacitly proceeds (see footnotes 48, 50 and 54 below (judgment in Metro II); only the judgment in Joined Cases 142 and 156/84 BAT II [1987] ECR 4487, paragraph 12, seems to constitute an exception); this is also true in the field of antidumping and anti-subsidy law (see footnote 49, below, and the judgment in Timex Corporation v Council and Commission, cited in section 80).

31 Citing the judgment in Case 169/84 Cofaz and Others v Commission [1986] ECR 391, Allied Signal refers in particular in this connection to rights relating to participation in the procedure which, according to Allied Signal, do not exist until the procedure has been initiated.

32 It is certainly no accident that the wording employed by the Court in paragraph 9 of the judgment in Case 60/81 IBM v Commission [1981] ECR 2639, according to which the measure must have legal effects ... which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position, has not been taken up in the more recent case-law; see the judgments cited in footnote 20, Spain v Commission, paragraph 11, and Italy v Commission, paragraph 19.

33 See the judgment in Lorenz v Germany, cited in footnote 10, paragraph 4.

34 Cf., as regards that aspect, the judgments in Spain v Commission and Italy v Commission, cited in footnote 20.

35 Judgments in Spain v Commission and Italy v Commission, cited in footnote 20.

36 The judgment in Joined Cases C-133/87 and C-150/87 Nashua Corporation and Others v Commission and Council [1990] ECR I-719, paragraph 9, refers to an intermediate measure whose purpose is to prepare for the final decision as does the judgment of the Court of First Instance in Case T-64/89 Automec v Commission [1990] ECR II-367.

37 Judgments in IBM v Commission, cited in footnote 31, paragraph 11, and in Case 182/80 Gauff v Commission [1982] ECR 799, paragraph 18.

38 Judgment in Case 53/85 AKZO Chemie v Commission [1986] ECR 1965, paragraph 19, and judgments in Spain v Commission and Italy v Commission, cited in footnote 20.

39 OJ, English Special Edition 1959-62, p. 57.

40 See, by way of illustration, the judgment in Joined Cases 8 to 11/66 Cimenteries and Others v Commission [1967] ECR 75, in particular at 92; this case-law has been followed by the Court of First Instance, see the judgment in Case T-19/91 Vichy v Commission [1992] ECR II-415, paragraph 38.

41 In the final analysis, similar reasoning justifies holding an application brought against the initiation of a procedure under Regulation No 17 as inadmissible, as the Court did in the IBM case (see footnote 36).

42 Judgment cited in footnote 26, paragraph 11, which refers to definitive legal effects.

43 See, for example, the judgment in Cofaz and Others v Commission, cited in footnote 30, paragraph 22.

44 Judgment in Joined Case 16 and 17/62 Confédération nationale des producteurs de fruits et légumes [1962] ECR 471, at 479 and 480.

45 See, to the same effect, the judgment in Case 72/74 Union Syndicale v Council [1975] ECR 401, the order in Case 60/79 Fédération nationale des producteurs de vins de table et vins de pays v Commission [1979] ECR 2429, the judgment in Case 282/85 DEFI v Commission [1986] ECR 2469 and the order in Case 117/86 UFADE v Council [1986] ECR 3255. The judgment in Case 135/81 Groupement des agences de voyages v Commission [1982] ECR 3799, dealing with the question of being directly concerned, has remained an isolated case.

46 Cf. the judgment in Case 191/82 Fediol v Commission [1983] ECR 2913.

47 As regards Articles 85 and 86, reference should be made for the sake of completeness to the judgment in Case 283/83 CICCE v Commission [1985] ECR 1105. Since the Commission did not contest the admissibility of the application from the point of view of the locus standi of the applicant association, that issue was not tackled either in the judgment or in the Opinion. See, in that connection, (the German version of) Article 3(2)(b) of Regulation No 17, cited in footnote 38, which recognizes the right to bring proceedings of associations.

48 Cited in footnote 30.

49 Case 26/76 Metro v Commission [1977] ECR 1875.

50 Case 191/82 Fediol v Commission [1983] ECR 2913.

51 Case 210/81 Demo-Studio Schmidt v Commission [1983] ECR 3045.

52 Judgment in Case 84/82 Germany v Commission [1984] ECR 1451; judgment in Heineken Brouwerijen, cited in footnote 10.

53 Judgment in Cofaz v Commission, cited in footnote 30, paragraph 23.

54 See footnote 48.

55 See the preceding footnote and the judgment in Demo-Studio Schmidt v Commission, cited in footnote 50; according to the judgment in Cofaz: judgment in Case 75/84 Metro v Commission [1986] ECR 3021 (Metro II).

56 See the judgment in Timex Corporation v Commission and Council, cited in section 80 in the passage from the judgment in Cofaz.

57 Judgment in Fediol v Commission, cited in footnote 45.

58 Judgment in Cofaz and Others v Commission, cited in footnote 30.

59 Paragraph 25 of the judgment in conjunction with the Opinion of Advocate General Rozès [1983] ECR 2937, at 2949, right-hand column.

60 Judgments in Metro I and Metro II, cited in footnotes 48 and 53, respectively, and in Demo-Studio Schmidt, cited in footnote 50.

61 Judgment in Timex Corporation v Council and Commission, cited in section 80.

62 Judgment in Fediol, cited in footnote 45.

63 Judgment in Cofaz and Others v Commission, cited in footnote 30.

64 See the judgments in Metro I and Demo-Studio Schmidt, where the applicants' situation was distinguished by the fact that the refusal of admission to a selective distribution system was directly precisely against it (see, to that effect, paragraph 21 of the judgment m Metro II). In the judgment in FEDIOL v Commission, the Court did not have to consider the effects of the contested subsidies which had been granted to the soya industry in a third country, since the applicant represented the whole of the Community's seedcrushing sector and was therefore entitled to invoke the aggregate effects of the subsidies on the competitive position of its member undertakings (see also section 79 above).

65 See the judgment in Timex Corporation v Commission, in which the Court investigated only the applicant's position on the market.

66 The judgment in Case 358/89 Extramet Industrie v Counci [1991] ECR I-2501 is an exception in this regard. Despite appearances, what was involved in a certain way in that case was an action brought by a third undertaking. The applicant complained that the imports on which its business largely depended had been made more expensive by an antidumping duty justified by damage caused to one of the applicant s competitors, on the ground that, in its view, the damage was caused by the competitor itself. In the applicant's view, the antidumping duty had the effect of an — unjustified — aid to its competitor. In the view of the specific features of the case, the Court held that the applicant was individually concerned solely on the basis of the economic effects of the antidumping duty on its undertaking.

67 See a similar consideration (relating to an aid of the Community) in the judgment in Joined Cases 10 and 18/68 Edidania v Commission [1969] ECR 459, paragraph 7.

68 See the judgment in Case 290/83 Commission v France [1985] ECR 439.

69 Judgment in Case 246/81 Lord Bethell v Commission [1982] ECR 2277.

70 See section 87 above.

71 Regulation No 141 of the Council of 26 November 1962 exempting transport from the application of Council Regulation No 17, OJ, English Special Edition 1959-62, p. 291.

72 Council Regulation (EEC) No 3975/87 of 14 December 1987 laying down the procedure for the application of the rules on competition to undertakings in the air transport sector (OJ 1987 L 374, p. 1), as most recently amended by Council Regulation (EEC) No 2410/92 of 23 July 1992 (OJ 1992 L 240, p. 18).

73 Judgment in Joined Cases 67, 68 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219.

74 Opinion of 2 April 1987, [1988] ECR 240, at 246.

75 See, in this connection, the judgment in Joined Cases 62 and 72/87 Exécutif regional wallon v Commission [1988] ECR 1573.

76 See Annex 13 to Allied Signal's statement in intervention and Annex 10 to the applicants' reply to the statements in intervention.

77 Annex 13 to Allied Signal's statement in intervention.

78 Allied Signal's statement in intervention, section 63; section 47 of the applicant's response thereto.

79 I am assuming here in the Commission's favour that the initiation of a procedure pursuant to Article 93(2) is a matter for its discretion. As far as this question is concerned, to date it has merely been established that a legal obligation to initiate a procedure exists where the Commission in fact has serious difficulties in determining whether an aid is compatible with the common market (cf. the judgment in Germany v Commission, cited in footnote 51). Since that was not the case here, the only question liable to arise is whether the Commission has a discretion when it has to assess whether such difficulties exist. That question is irrelevant here, however, as the contested decision results in an incorrect application of Community law and should therefore be annulled irrespective as to whether or not the Commission has a discretion: see section 132 above.

80 Cf. the judgment in Joined Cases 56 and 58/64 Consten and Grundig v Commission [1966] ECR 299, at 347.

81 Admittedly, it is stated at the end of the application that the Commission was bound to initiate a procedure, but the gravamen of the application is that the Commission wrongly assumed that the discipline did not preclude the contested aid (cf. section 24 of the application).

82 I am not disregarding the fact that a problem of the consistency between Article 173 and Article 175 arises here. According to its wording, Article 175 does not enable the discretion to be reviewed in the event of a mere failure to act in the absence of a refusal to act, but applies only where there is a legal duty to act. In order to resolve that contradiction in the course of the development of Community law, it seems to me to be more appropriate, as a general guideline, to apply the third paragraph of Article 175 in the light of the second paragraph of Article 173, rather than the other way around (see, to this effect, inter alia the Opinion of Advocate General Gulman of 8 July 1992 in Joined Cases C-15/91 and C-108/91 Buckl and Others v Commission [1992] ECR I-6061, section 19; aliter, the judgment in Sonito v Commission, cited in footnote 24, paragraphs 6 and 7).

83 Since the application is admissible only in the case of AKZO, I shall use the singular in the remainder of this Opinion.

84 See section 23 et seq. above.

85 Annex 5 to the application.

86 My emphasis.

87 Annex 11 to the defence.

88 Especially since the Commission thereby concedes that a consistent practice referred to in the contested letter of 4 October 1990 did not exist

89 See Annexes 14 and 15 to the defence.

90 Annex 14 to the defence.

91 My emphasis.

92 Judgment in Case 84/82 Germany v Commission, cited in footnote 51, and see footnote 78.