CFI, 3rd chamber, extended composition, July 1, 2008, No T-266/02

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Third Chamber, Extended Composition),

German legal framework

1 The main provisions of the five German legislative or regulatory measures concerning postal delivery services adopted between 1989 and 1998 which are relevant in the context of the present case must be set out.

2 First, on 8 June 1989, the Postverfassungsgesetz (BGBl. 1989, part I, p. 1026, 'the Postal Organisation Act') was adopted. Pursuant to Article 1(2) of the Postal Organisation Act, the German postal administration, the Deutsche Bundespost, was divided into three distinct legal entities (Teilsondervermögen), namely Deutsche Bundespost Postdienst ('DB-Postdienst'), Deutsche Bundespost Telekom ('DB-Telekom') and Deutsche Bundespost Postbank ('DB-Postbank'). According to Article 65(2) of the Postal Organisation Act, those successor entities were to maintain the services previously offered by Deutsche Bundespost. That is how DB-Telekom came to take over the telecommunications activities of Deutsche Bundespost, while DB-Postdienst took over the activities of Deutsche Bundespost in the postal sector.

3 In addition, pursuant to Article 37(3) of the Postal Organisation Act, the three legal entities that emerged from the break-up of the Deutsche Bundespost had to pay financial compensation to each other where one of them found itself unable to cover its expenditure out of the revenue it achieved. Further, under Article 63(1) of the Postal Organisation Act, the Deutsche Bundespost, notwithstanding its break-up, was under an obligation, until 1995, to transfer a percentage of its operating income back to the State.

4 Finally, as regards, more specifically, the public service obligation with which DB-Postdienst had been entrusted, Article 25(2) of the Postal Organisation Act provided essentially that the German Government was entitled to lay down, by regulation, 'the infrastructure that undertakings [had to] provide (mandatory services) in special circumstances of public interest, in particular in order to provide the public service' and 'to put in place the essential structures for the mandatory services and the rules on tariffs'.

5 Second, on 8 July 1989, the Gesetz über das Postwesen (BGBl. 1989, part I, p. 1449, Law on the Postal System) was adopted. In accordance with Article 2(1) of the Gesetz über das Postwesen, DB-Postdienst enjoyed a monopoly position in the mail delivery sector.

6 Third, on 12 January 1994, the Postdienst-Pflichtleistungsverordnung (BGBl. 1994, part I, p. 86, 'the Postdienst Mandatory Services Ordinance') was adopted. According to Article 1(1) of the Postdienst Mandatory Services Ordinance, the DB-Postdienst had to provide its 'mandatory services' throughout Germany in accordance with the principle of nationwide tariff uniformity. As regards, more specifically, the forwarding of parcels, Article 2(1) of the Postdienst Mandatory Services Ordinance provided that DB-Postdienst had to guarantee the clearance, transport and delivery of parcels up to 20 kilograms not exceeding certain maximum dimensions throughout Germany. In addition, point 3 of Article 2(2) of the Postdienst Mandatory Services Ordinance authorised DB-Postdienst to set a lower tariff than the uniform tariff for customers who carried out certain pre-sorting operations or had certain minimum quantities of parcels delivered.

7 Fourth, on 14 September 1994, the Postumwandlungsgesetz (BGBl. 1994, part I, p. 2339, 'the Postal Reorganisation Act') was adopted. In accordance with Articles 1 and 2 of the Postal Reorganisation Act, the three legal entities mentioned in paragraph 2 above were converted into public limited companies as from 1 January 1995 and their activities were taken over, respectively, by Deutsche Post AG ('DPAG' or 'the applicant'), Deutsche Telekom AG and Deutsche Postbank AG.

8 Fifth, on 22 December 1997, the Postgesetz (BGBl. 1997, part I, p. 3294, 'the Postal Law') was adopted. It provided, in Article 4(1), that the conveyance of parcels of up to 20 kilograms constitutes a universal service.

Factual background

9 Apart from the mail delivery sector, in which it enjoys a monopoly ('the reserved sector'), DPAG also operates in two other postal sectors, namely, first, parcel delivery services and, second, delivery of newspapers and press products, both of which are open to competition ('competitive sectors').

10 In the parcel delivery sector, DPAG provides, first, services relating to the delivery of parcels handed in at post office counters and, second, services relating to the delivery of larger quantities of parcels not handled directly at post office counters ('the door-to-door parcel delivery sector').

11 With regard to the door-to-door parcel delivery sector at issue in the present proceedings, DPAG provides two main services, namely, first, door-to-door parcel services for business customers who do their own pre-sorting or have a minimum quantity of parcels delivered ('business-to-business service') and, second, delivery services for mail-order companies for goods ordered by catalogue or electronic commerce ('business-to-customer service').

12 The business-to-business service is different from the business-to-customer service, particularly by reason of the logistical operations required for collecting, sorting at the outward and inward freight centres and delivery, and the costs generated by those operations.

13 On 7 July 1994, the private parcel delivery company, UPS Europe NV/SA ('UPS') brought a complaint before the Commission against DB-Postdienst, based on Article 86 EC (now Article 82 EC) and Article 92 EC (now Article 87 EC). That complaint was followed by another complaint brought by the association of private providers of messenger services and express mail and parcel delivery services, the Bundesverband Internationaler Express- und Kurierdienste e.V. ('BIEK'). In essence, UPS and BIEK accused DB-Postdienst, first, of applying a policy of selling below cost in the door-to-door parcel delivery sector, which constituted an abuse of a dominant position within the meaning of Article 82 EC and, second, to cover its losses in that sector either through income generated in the reserved sector, or through public resources which were granted in breach of Article 87 EC.

14 By letter of 17 August 1999, published in the Official Journal of the EuropeanCommunities on 23 October 1999 (OJ 1999 C 306, p. 25), the Commission notified the Federal Republic of Germany of its decision to initiate the procedure laid down in Article 88(2) EC ('the decision to initiate the procedure'). In addition, on 7 July 2000, the Commission adopted a decision to initiate the procedure under Article 82 EC.

15 On 20 March 2001, the Commission adopted Decision 2001-354-EC relating to a proceeding under Article 82 of the EC Treaty (Case COMP/35.141 - Deutsche Post AG) (OJ 2001 L 125, p. 27). In that decision, the Commission concluded, essentially, that Deutsche Post infringed Article 82 EC in so far as it abused its dominant position only in the business-to-customer services sector, first, by making, from 1974 to 2000, the granting of fidelity rebates to its customers subject to those customers agreeing to send all or a majority of their parcels or catalogues of a certain weight through Deutsche Post's services and, second, by pursuing, from 1990 to 1995, a policy of selling below cost by offering prices below the additional costs of providing those services. Having regard to the practice of fidelity rebates, the Commission essentially imposed a fine of EUR 24 million on DPAG. As regards the practice of selling below cost, the Commission did not impose a fine on DPAG in so far as it found, essentially, that the criterion that it had used to establish that Deutsche Post sold below cost had not been used previously.

16 On 19 June 2002, the Commission adopted Decision 2002-753-EC on measures implemented by the Federal Republic of Germany for DPAG (OJ 2002 L 247, p. 27, 'the contested decision'). The reasoning in the contested decision is presented in four stages.

17 First, the Commission states, at recital 2 of the contested decision, that '[i]n initiating the procedure, the Commission expressed the belief that the amount of compensation DB-Postdienst and DPAG received from the State for the provision of services in the general interest exceeded the specific net additional costs that these services entailed for DPAG' and that '[i]n particular, [it] expressed its intention to investigate ... possible aid measures', which it lists at recitals 3 to 7 of the contested decision. Those aid measures are (i) the financing of the acquisition of Postbank AG in 1998, (ii) the financing of the Post-Unterstützungskasse (the postal pension fund), (iii) possible State guarantees covering liabilities of the Deutsche Bundespost, (iv) the circumstances surrounding the transformation of DB-Postdienst into a limited company, and (v) financial or administrative assistance granted to the applicant by the State.

18 Having described, at recitals 12 to 15 of the contested decision, the nature of each of the first four aid measures mentioned above, the Commission states, at recitals 16 to 20 of the contested decision, in relation to the fifth possible aid measure, that the applicant informed it that it had received, in accordance with Article 37(3) of the Postal Organisation Act, transfer payments from DB-Telekom to compensate it for the losses it incurred from 1990 to 1995 ('transfer payments made by DB-Telekom'). In this respect, the Commission states, in particular, at recital 20 of the contested decision, that, as confirmed by the Federal Republic of Germany in additional submissions of 25 April 2000 and 31 January 2002, DB-Telekom and/or Deutsche Telekom transferred a total of DEM 11 081 million in compensation payments to DB-Postdienst and/or DPAG between 1990 and 1995, that the German authorities do not contest that those transfer payments between two distinct entities are attributable to the State, since they were mandated by Article 37(3) of the Postal Organisation Act, and that the German Government submits nevertheless that the transfer payments made by DB-Telekom were indispensable to allow DPAG to fulfil its mandate of providing services of general economic interest in conditions of economic equilibrium.

19 Having set out, at recitals 21 to 39 of the contested decision, the infrastructure costs attributable to door-to-door parcel services, the Commission states, in particular, at recitals 40 to 45 of the contested decision, that the Federal Republic of Germany submitted to the Commission information concerning, first, the scope of DPAG's mandate to provide a service of general economic interest in the parcel delivery sector and, second, the net additional costs of providing services of general economic interest associated with the fifteen burdens of the past borne by the applicant as a former State-owned company. Finally, the Commission sets out, at recitals 46 to 63 of the contested decision, the comments it received from interested third parties during the course of the administrative procedure, in particular BIEK and UPS, according to which, in essence, DPAG was recording losses in the door-to-door parcel delivery sector that were not associated with the provision of a service of general economic interest, but resulted from a policy of selling below cost, and which DPAG was covering through public resources.

20 Second, the Commission sets out, at recitals 66 to 69 and in footnote No 107 of the contested decision, that the Federal Republic of Germany informed the Commission, in response to the latter's request, that DPAG, in the period from 1990 to 1998, on the one hand, earned profits in the reserved sector and, on the other hand, incurred losses in the competitive sectors, so that, in respect of all sectors of activity, the company recorded a total deficit of DEM 2 289 million during that period.

21 In that connection, the Commission states, at recital 68 of the contested decision, that '[r]esponding to a request by the Commission of 10 March 2000 concerning any profits DPAG may have earned between 1990 and 1998 in the area of [competitive sectors], the [German] Government, by letter of 24 March 2000 (p. 10), submitted data showing that competitive services yielded aggregate profits of DEM [confidential] (1) million in 1998.' The Commission continues by adding that, '[o]n the other hand, the German authorities submitted data according to which, in the period 1990 to 1998, the deficit in the [parcel delivery sector] as a whole amounted to DEM [confidential] million and the deficit in newspaper and press products amounted to a further DEM [confidential] million'. The Commission concludes from this that '[t]his amount[ed] to a total deficit for these two segments of DEM [confidential] million' and that '[r]evenue from competitive services was therefore insufficient to cover the deficit in the [parcel delivery sector]'.

22 Further, in footnote No 107 of the contested decision, the Commission states that '[a]ccording to the data supplied by the [Federal Republic of Germany] by letter of 2 June 2000 (corrected version submitted by letter of 12 January 2000), the reserved [sector], from 1990 to 1998, generated an aggregate profit of DEM [confidential] million', that, '[i]n the same period, competitive services contributed net revenue of DEM [confidential] million' and that this 'necessarily implies that an amount of at least DEM 2 289 million of the abovementioned total deficit of DEM [confidential] million was not covered either by revenue from the statutory monopoly or by revenue from competitive services'.

23 Third, the Commission states, at recital 72 of the contested decision, that, in the light of DPAG's losses of DEM [confidential] million solely in the parcel delivery sector in the period from 1990 to 1998, it needs to be assessed whether 'all the net additional costs that have been compensated for by the State are directly linked to the precisely defined mandate of DPAG' and that '[s]hould the flow of State resources enable the parcel [delivery] sector to cover also those net additional costs that have no causal link with the discharge of public service obligations, DPAG would derive an advantage within the meaning of Article 87(1) [EC]'.

24 In that respect, first, the Commission states, at recitals 75 to 79 of the contested decision, that, pursuant to Point 3 of Article 2(2) of the Postdienst Mandatory Services Ordinance, as of 1 January 1994, DPAG was given the opportunity - but was not placed under an obligation - to grant rebates to its customers in the door-to-door parcel delivery sector which resulted in the charging of prices below the uniform tariff laid down for the parcel delivery sector in Article 1(1) of the Postdienst Mandatory Services Ordinance.

25 Further, the Commission states, at recital 88 of the contested decision, that, taking into consideration DPAG's costs associated with the door-to-door parcel delivery sector and the tariffs that it offered, which were below the uniform tariff (recitals 21 to 39 and the table at recital 88 of the contested decision), the revenue achieved in the door-to-door parcel delivery sector was, from 1994 to 1999, at all times insufficient to cover the costs resulting from the operation solely of that sector. The Commission states that that situation, in which revenues were insufficient to cover DPAG's, came to an end in 1999.

26 Finally, the Commission states, at recitals 82 to 86 of the contested decision, that there are three reasons why there is no causal link between the said additional costs generated by the policy of selling below cost and DPAG's mandate to provide a service of general economic interest. First, according to the Commission, DPAG was placed under no legal obligation to offer services to customers in the door-to-door parcel delivery sector at tariffs below the statutory uniform tariff. Second, the Commission states that DPAG's tariff policy, which consisted in offering tariffs which were below the uniform tariff, was attributable exclusively to DPAG's efforts to maintain or gain market share in the competitive sector of door-to-door parcel delivery. Third, the Commission states that the practice of charging prices below the uniform tariff entails net additional costs that are clearly identifiable, which cannot be attributed to DPAG's public service obligations.

27 Accordingly, the Commission states, at recital 88 of the contested decision, that, from 1994 until 1999, the applicant recorded net additional costs totalling DEM 1 118.7 million resulting from its policy of selling below cost.

28 Fourth, the Commission finds, at recital 87 of the contested decision, that 'in the medium term, a policy [of selling below cost] is in no undertaking's own economic interest' and that '[n]o private undertaking subject to market forces would continue to offer [services] in the door-to-door parcel [sector] under such conditions because a policy [of selling below cost] pursued accumulates annual deficits and leads in the medium term, in the absence of financial compensation, to over-indebtedness'. The Commission deduces from this, at recital 107 of the contested decision, that '[t]o the extent that it has the effect of reducing the costs normally inherent in the provision [of services] in the competitive door-to-door parcel [delivery sector], State compensation for the net additional costs of a policy [of selling below cost] constitutes an advantage within the meaning of Article 87(1) [EC]', that '[t]he provision of State resources to compensate for this part of the cost undercoverage in services open to competition constitutes a competitive advantage for DPAG' and that '[t]his advantage and the aid incompatible with the common market amounts to DEM 1 118.7 million'.

29 The operative part of the contested decision is worded as follows:

'Article 1

The State aid totalling EUR 572 million (DEM 1 118.7 million) which [the Federal Republic of Germany] has granted to [DPAG] is incompatible with the common market.

Article 2

1. [The Federal Republic of Germany] shall take the necessary steps to recover from [DPAG] the aid referred to in Article 1, which was granted unlawfully.

...'.

Procedure and forms of order sought

30 By application lodged at the Court Registry on 4 September 2002, the applicant brought this action.

31 By letters lodged at the Court Registry on 17 December 2002 and 19 December 2002, BIEK and UPS sought leave to intervene in support of the Commission.

32 By letter lodged at the Court Registry on 9 May 2003, the Federal Republic of Germany sought leave to intervene in support of the applicant.

33 By letters sent to the Court Registry on 11 March 2003, 14 April 2003, 26 September 2003 and 26 February 2004, the applicant requested that certain information in the documents in the case should not be disclosed to BIEK and UPS, in accordance with the second sentence of Article 116(2) of the Rules of Procedure of the Court of First Instance.

34 By order of 2 June 2003, the President of the Fourth Chamber, Extended Composition, of the Court of First Instance granted BIEK and UPS leave to intervene and reserved the decision on the merits of the request for confidentiality.

35 By order of 5 June 2003, the President of the Fourth Chamber, Extended Composition, of the Court of First Instance granted the Federal Republic of Germany leave to intervene. Given that the application to intervene was made after the expiry of the period of six weeks prescribed in Article 115(1) of the Rules of Procedure, the Federal Republic of Germany has the rights provided for in Article 116(6) of those rules.

36 By separate documents lodged at the Court Registry on 25 June 2003, 17 November 2003 and 23 April 2004, BIEK raised objections to the confidential treatment of certain information in the documents in the case which had been sent to it.

37 By separate documents lodged at the Court Registry on 17 November 2003 and 23 April 2004, UPS raised objections to the confidential treatment of certain information in the documents in the case which had been sent to it.

38 By letter sent to the Court of First Instance on 5 January 2004, the applicant submitted its observations on the objections raised by the interveners BIEK and UPS to the confidential treatment of certain information in the documents in the case.

39 Upon a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Third Chamber, Extended Composition, to which the present case was then allocated.

40 By order of 13 January 2005, the President of the Third Chamber, Extended Composition, of the Court of First Instance granted the request for confidentiality of certain facts and figures and certain documents with regard to BIEK and UPS and rejected the request for confidentiality for the remainder.

41 Upon hearing the Report of the Judge-Rapporteur, the Court of First Instance (Third Chamber, Extended Composition) decided to open the oral procedure and, by way of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure of the Court of First Instance, requested, by letter of 15 March 2007, the applicant, the Commission and the Federal Republic of Germany to lodge certain documents and to answer a number of questions in writing. The parties complied with those requests within the prescribed time-limits.

42 By letters lodged at the Court Registry on 13 April and 3 May 2007, the applicant requested that, by way of measures of organisation, certain facts and figures and certain documents provided by it, the Commission and the Federal Republic of Germany not be disclosed to BIEK and UPS, in accordance with the second sentence of Article 116(2) of the Rules of Procedure.

43 By letter of 24 May 2007, BIEK raised objections within the prescribed time-limits to the applicant's request for confidential treatment relating to the submissions of the Commission and the Federal Republic of Germany, respectively.

44 By order of 11 June 2007, the President of the Third Chamber, Extended Composition, of the Court of First Instance granted the request for confidentiality of certain facts and figures and certain documents with regard to BIEK and UPS and rejected the request for confidentiality for the remainder.

45 At the hearing on 13 June 2007, the oral arguments of the parties and their answers to the oral questions of the Court of First Instance were heard.

46 At the end of the hearing on 13 June 2007, the oral procedure was closed. In accordance with Article 32 of the Rules of Procedure, one member of the chamber being prevented from attending the deliberations, the most junior Judge within the meaning of Article 6 of the Rules of Procedure abstained from taking part in the deliberations and the deliberations of the Court of First Instance were conducted by the three Judges who signed this judgment.

47 The applicant claims that the Court of First Instance should:

- annul the contested decision;

- order the Commission to pay the costs.

48 The Commission claims that the Court of First Instance should:

- dismiss the application;

- order the applicant to pay the costs.

49 BIEK and UPS claim that the Court of First Instance should:

- dismiss the application as unfounded.

Law

Pleas in law supporting the claim for annulment

50 In support of its action, the applicant raises nine pleas, which can be divided into groups.

51 In the first group of pleas, the applicant essentially alleges that the Commission infringed Article 87(1) EC and Article 86(2) EC, in so far as it did not demonstrate that DPAG enjoyed an advantage. First, the applicant submits that three of the public resources mentioned in the contested decision did not confer any advantage on it. Second, the applicant submits that the Commission failed to fulfil its obligation to determine whether the total amount of the transfer payments made by DB-Telekom was higher than the total amount of net additional costs associated with fulfilling its mandate to provide a service of general economic interest. Third, the applicant submits that the Commission was wrong to find that the transfer payments made by DB-Telekom conferred an advantage on it that allowed it to cover the alleged additional costs associated with its policy of selling below cost.

52 In the second group of pleas, the complaint against the Commission is that it committed several manifest errors of assessment. First, the applicant claims that the Commission used the wrong method to calculate the costs incurred by the applicant in the door-to-door parcel delivery sector and, consequently, that it was wrong to find that the applicant had applied a policy of selling below cost. Second, the applicant submits that the Commission was wrong to find that the applicant's tariff policy in the door-to-door parcel delivery sector, which consisted in offering prices below the statutory uniform tariff, was the reason for the losses recorded in the parcel delivery sector and that that practice was not connected to the provision of a service of general economic interest. Third, the applicant complains that the Commission found that the applicant did not have own resources that would have allowed it to finance its alleged policy of selling below cost.

53 In the third group of pleas, the applicant claims that the Commission (i) misconstrued the notion of imputability of resources to the State, (ii) breached its obligation to state reasons by not explaining which public resources allegedly conferred an advantage, (iii) exceeded its powers by examining the efficiency of its transport services in the door-to-door parcel delivery sector, (iv) infringed the private investor principle, and (v) breached its rights to a fair hearing.

The first group of pleas in law supporting the claim for annulment, concerning the advantage enjoyed by DPAG

Arguments of the parties

54 As a first argument, the applicant submits, in the application for annulment, that the budgetary resources used to finance the Post-Unterstützungskasse, the guarantees provided by the Deutsche Bundespost and the measures taken to transform DB-Postdienst into a limited company, referred to in the contested decision, did not confer any advantage on it. In that regard, the applicant submits, in the reply and in response to the questions raised by the Court of First Instance during the oral hearing, that it took formal notice of the Commission's claim that it had taken the view, for the purpose of the contested decision, that only the transfer payments made by DB-Telekom had conferred an advantage on it.

55 As a second argument, as regards the transfer payments made by DB-Telekom, first, the applicant submits that, by not calculating the amount of net additional costs incurred by DPAG in the course of fulfilling a public service mandate, the Commission infringed Article 87(1) EC and Article 86(2) EC and the case-law as set out in the judgments in Case C-53-00 Ferring [2001] ECR I-9067, paragraph 33; Case T-106-95 FFSA and Others v Commission [1997] ECR II-229, paragraph 101; 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 84, according to which the Commission is not entitled to find that State aid has been granted unless it has previously established that the amount of public resources paid to an undertaking entrusted with providing a service of general economic interest exceeds the amount of net additional costs incurred from the provision of that service of general economic interest. In that regard, the applicant, supported by the Federal Republic of Germany, submits that if, in the present case, the Commission had carried out such an analysis, it would have found, as is clear from the information provided to the Commission in response to its request, that the total amount of net additional costs incurred by DPAG in the course of fulfilling its public service mandate by far exceeded the amount of public resources received by the company.

56 First of all, the applicant submits that, contrary to the Commission's claim, for the purpose of applying Article 87(1) EC and Article 86(2) EC, the Commission has no discretion in determining whether a measure involves State aid, in contrast to the wide discretion that it does have for the purpose of applying Article 87(3) EC, which concerns the assessment whether State aid is compatible with the common market.

57 Moreover, the applicant submits that BIEK and UPS are wrong to claim that the conditions laid down by the Court of Justice in Ferring and in Case C-280-00 Altmark Transand Regierungspräsidium Magdeburg [2003] ECR I-7747 ('the Altmark judgment') are not fulfilled in the present case, given that the transfer payments made by DB-Telekom did not confer any advantage on the applicant, in so far as the applicant had fully repaid those sums to the State by 1995, by making repayments in the amount of DEM 11 481 million, which Deutsche Bundespost owed to the State under Article 63(1) of the Postal Organisation Act ('the repayments').

58 Second, the applicant points out that, on the one hand, by not stating, in the contested decision, the amount of net additional costs associated with the applicant fulfilling its public service mandate, even though it had been given that figure, and, on the other hand, by not making the calculation that would have allowed it to determine whether the total amount of the transfer payments made by DB-Telekom exceeded the total amount of the said additional costs, the Commission did not put the Court of First Instance in a position to check the legality of the contested decision. In that respect, the applicant submits that the Commission does not provide any proper explanation as to why it was not in a position to take into consideration the net additional costs associated with the applicant fulfilling its public service mandate, even though the Commission had all the information it would have needed to do so, which it had been given by the Federal Republic of Germany.

59 Third, the applicant pleads that there has been an infringement of the principle of legal certainty, resulting from the fact that, by not calculating whether the amount of public resources which it had received exceeded the amount of the net additional costs associated with the applicant fulfilling its public service mandate, the Commission failed to follow its own decision-making practice.

60 As a third argument, the applicant, supported by the Federal Republic of Germany, submits that, even assuming that the transfer payments made by DB-Telekom had conferred an advantage on it, the Commission manifestly erred in its assessment when it found that those transfer payments had automatically allowed the applicant to cover the alleged additional costs generated by the policy of selling below cost which it applied from 1995 to 1999. In that respect, the applicant submits that, since the transfer payments made by DB-Telekom were used entirely to cover the losses it made between 1990 and 1995, it is 'mathematically' impossible that the applicant used those same transfer payments to cover the alleged net additional costs generated by the policy of selling below cost which it applied from 1994 to 1999.

61 The Commission contends, as a first argument, that, since it found, for the purposes of the contested decision, that only the transfer payments made by DB-Telekom were relevant, it is not possible to understand the applicant's argument that the other public resources mentioned in the contested decision did not confer an advantage on it.

62 As a second argument, the Commission contends, in essence, that it was not under an obligation to make a calculation in an effort to determine whether the amount of the transfer payments made by DB-Telekom exceeded the total amount of DPAG's additional costs associated with fulfilling its public service mandate, or whether it did not. First, the Commission submits that, even though that calculation is appropriate when it comes to determining whether an undertaking entrusted with the provision of a service of general economic interest has received overcompensation, on the one hand, it would have been inappropriate in the present case, taking into account the complaints alleging a distortion of competition that BIEK and UPS had lodged and the suspicion that the Commission might have, on the grounds of those complaints, that DPAG could be overestimating the net additional costs associated with fulfilling its public service mandate. On the other hand, the Commission submits that that calculation would not have allowed it to determine whether a causal link existed between the provision of a service of general economic interest and the net additional costs generated by DPAG's policy of selling below cost, nor whether the State had exempted the applicant from the burden of the said additional costs, thus bringing about a distortion of competition.

63 In this connection, the Commission submits that the only relevant question for the purpose of the contested decision was whether the applicant had covered the additional costs generated by its policy of selling below cost in the specific sector of door-to-door parcel delivery through its own resources or whether it had to call for public resources. According to the Commission, given that the applicant did not deny that it covered all the deficits recorded in the parcel delivery sector between 1994 and 1998 through public resources and that the Commission has established that the applicant did not have sufficient resources of its own to cover the net additional costs generated by its policy of selling below cost, it is proven that the transfer payments made by DB-Telekom were used to cover the net additional costs that DPAG recorded from 1994 to 1999, which are not linked to the provision of a service of general economic interest.

64 Second, the Commission submits that, when faced with complex economic facts, it has, for the purpose of applying Article 87(1) EC, the same wide discretion to determine whether a measure involves State aid as it has in the context of applying Article 87(3) EC and Article 86(2) EC. In those circumstances, the Community judicature's only mandate is to examine whether the contested decision is vitiated by one of the grounds of annulment provided for in Article 230 EC; it cannot replace the assessment by the author of the decision with its own. In the present case, the applicant merely states that another method exists for assessing the facts; however, the applicant does not prove that the Commission exceeded the bounds of its discretion.

65 Third, the Commission, supported by BIEK and UPS, submits that the calculation seeking to determine whether the total amount of public resources exceeds the total amount of net additional costs associated with providing a service of general economic interest presupposes, in particular, that State resources are used for the purposes for which they were allocated. As it is, none of the conditions laid down by the Court in Ferring, paragraph 55 above, and Altmark, paragraph 57 above, is fulfilled in the present case. In addition, it is clear from the judgment in FFSA and Others v Commission, paragraph 55 above (paragraphs 185 to 189), that the Court of First Instance did not consider that calculation to be compulsory, even though it might be sufficient.

66 Fourth, the Commission submits, in response to the applicant's argument that the Commission did not follow its own decision-making practice, that the method it used complies with the Communication from the Commission on the application of State aid rules to public service broadcasting (OJ 2001 C 320, p. 5, paragraph 58) and with paragraph 80 of the Commission's 'non-paper' of 12 November 2002 on services of general economic interest and State aid, according to which the Commission retained the possibility of examining the causal link between the provision of a service of general economic interest and certain distortions of competition where the tariff policy of a service provider benefiting from public resources in a market that is open to competition threatens to distort competition.

67 As a third argument, the Commission takes issue with the applicant's argument that the Commission did not establish that the transfer payments made by DB-Telekom were sufficient, taking into consideration the losses incurred by the applicant from 1990 to 1995, to finance its policy of selling below cost from 1994 to 1999. The Commission, supported by BIEK and UPS, submits that, in addition to the fact that it is impossible, from an accounting point of view, to determine which resources were used to cover certain costs, the repayments which the applicant had to make did not constitute net additional costs of providing a service of general economic interest. The Commission also submits that, to the extent that the applicant did not provide evidence that it covered the alleged net additional costs generated by its policy of selling below cost through its own resources, the Commission was entitled to assume that those additional costs had been covered through public resources.

Findings of the Court

68 Article 87(1) EC provides that '[s]ave as otherwise provided in th[e] Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market'.

69 In addition, Article 86(2) EC provides that undertakings entrusted with the operation of services of general economic interest shall be subject to the rules contained in the Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.

70 According to consistent case-law, classification as State aid requires that all the conditions set out in Article 87(1) EC are fulfilled. Article 87(1) EC lays down the following conditions. First, there must be an intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must confer an advantage on the recipient. Fourth, it must distort or threaten to distort competition (see Altmark, paragraph 57 above, paragraphs 74 and 75, and the case-law cited there).

71 As regards the third condition set out in the preceding paragraph, it is clear from the case-law that the concept of aid is objective, the test being whether a measure confers an advantage on one or more particular undertakings (Ladbroke Racing v Commission, paragraph 55 above, paragraph 52).

72 In this respect, it is relevant that the Court has held that, where a State measure must be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings do not enjoy a real financial advantage and the measure thus does not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, such a measure is not caught by Article 87(1) EC (Altmark, paragraph 57 above, paragraph 87, and Joined Cases C-34-01 to C-38-01 Enirisorse [2003] ECR I-14243, paragraph 31).

73 For such compensation to escape classification as State aid in a particular case, a number of conditions must be satisfied (Altmark, paragraph 57 above, paragraph 88, and Enirisorse, paragraph 72 above, paragraph 31). First, the recipient undertaking must actually have public service obligations to discharge, and the obligations must be clearly defined. Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favour the recipient undertaking over competing undertakings. Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations. Fourth, where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately equipped so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations (Altmark, paragraph 57 above, paragraphs 89 to 93).

74 Il follows that, where State resources were granted as compensation for additional costs associated with the provision of a service of general economic interest under the conditions set out in paragraphs 72 and 73 above, the Commission, if it is not to render Article 86(2) EC entirely ineffective, cannot classify as State aid all or part of the public resources granted, as long as the total amount of those resources remains below the additional costs generated by carrying out the public service mission (see, to that effect, FFSA and Others v Commission, paragraph 55 above, paragraph 188).

75 Finally, it is settled case-law that the Commission is empowered to adopt a decision on the basis of available information when it is faced with a Member State which fails to comply with its obligation of cooperation and refuses to provide information the Commission has requested from it for the purpose of assessing the compatibility of aid with the common market (Case C-301-87 France v Commission [1990] ECR I-307, paragraph 22, and Joined Cases C-324-90 and C-342-90 Germany and Pleuger Worthington v Commission [1994] ECR I-1173, paragraph 26). However, before taking such a decision, the Commission must comply with certain procedural requirements. In particular, it must order the Member State to provide it, within a time-limit it lays down, with all the documentation, information and data necessary for the purpose of assessing the compatibility of aid with the common market. It is only where the Member State, notwithstanding the Commission's order, fails to provide the information requested that the Commission is empowered to terminate the procedure and make its decision, on the basis of the information available to it, on the question of whether or not the aid is compatible with the common market (France v Commission, paragraphs 19 and 22). These criteria have been incorporated and delineated in Articles 5(2), 10(3) and 13(1) of Council Regulation (EC) No 659-1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1) (Case T-318-00 Freistaat Thüringen v Commission [2005] ECR II-4179, paragraph 73).

76 As a first main point, it must be held that the complaint raised by the applicant in the application for annulment, according to which the Commission found, incorrectly, that the public measures other than the transfer payments made by DB-Telekom conferred an advantage on it, is irrelevant, since the Commission expressly states in its defence that it only took into consideration the transfer payments made by DB-Telekom for the purposes of finding that DPAG enjoyed an advantage through public resources.

77 Consequently, this complaint must be dismissed.

78 As a second main point, as regards the applicant's complaint that the Commission did not establish that it enjoyed an advantage through the transfer payments made by DB-Telekom, taking into account its net additional costs associated with the provision of a service of general economic interest, it must be held, by way of a preliminary point, and as is clear from the description of the contested decision in paragraphs 16 to 29 above, that the Commission's claim that DPAG enjoyed an advantage was based on the following findings. First, the Commission found that the applicant had received transfer payments from DB-Telekom in the amount of DEM 11 081 million from 1990 to 1995 - and it is those transfer payments which the Commission considered to be the only public resources relevant for the purposes of the contested decision. Second, the Commission pointed out, on the one hand, that the applicant recorded net additional costs in the amount of DEM 1 118.7 million generated by its policy of selling below cost, applied from 1994 to 1999 and, on the other hand, that those net additional costs were not associated with the provision of a service of general economic interest. Third, the Commission found that the applicant was not able to cover those net additional costs of DEM 1 118.7 million through its own resources, since, from 1990 to 1998, taking into account all sectors of activity, the company recorded an overall deficit of DEM 2 289 million. Those three findings led the Commission to conclude that the net additional costs generated by DPAG's policy of selling below cost in the period from 1994 to 1999 could only have been covered through the transfer payments made by DB-Telekom in the period from 1990 to 1995, so that DPAG benefited from State aid in the amount of DEM 1 118.7 million. In that respect, it must be held that, in the answers given to the questions raised by the Court of First Instance during the oral hearing, the Commission stated, in essence, that it considered that, since the applicant had not provided evidence to show that it covered the alleged net additional costs generated by its policy of selling below cost through resources other than the transfer payments made by DB-Telekom, the Commission was entitled to assume that DPAG had benefited from State aid amounting to DEM 1 118.7 million.

79 Consequently, it must be examined whether, by proceeding in the manner in which it did in the contested decision, the Commission has established to the requisite legal standard that the applicant enjoyed an advantage through the transfer payments made by DB-Telekom.

80 In that regard, first, it must be held that, notwithstanding the information that the Federal Republic of Germany provided to the Commission, which led the Commission to state, at recital 41 of the contested decision, that the Federal Republic of Germany claimed that business users were not excluded from the universal service, the Commission did not take a view, in the contested decision, on whether the door-to-door parcel delivery service constituted a service of general economic interest. In that regard, it must be held, as is clear from paragraph 26 above, that the Commission only stated in the contested decision that DPAG's tariff policy, which consisted in offering tariffs that were below the uniform tariff, gave rise to net additional costs not associated with the provision of a service of general economic interest.

81 In addition, it must be held that the Commission stated, on the one hand, at recital 74 of the contested decision, that '[t]here [was] ... no causal link between these net additional costs [associated with the policy of selling below cost] and DPAG's public service obligations' and, on the other hand, at recital 73 of the contested decision, that '[t]here was therefore a minimum amount of DPAG's net additional costs which [was] in no way linked to the discharge of [an obligation to provide a service of general economic interest]'.

82 Therefore, it must be held, as the Commission moreover confirmed in one of its submissions, that, on the one hand, the Commission did not state in the contested decision that the information made available to it by the Federal Republic of Germany, according to which the door-to-door parcel delivery sector constituted a service of general economic interest, was not valid and that, on the other hand, it acknowledged, at least implicitly, that DPAG had also recorded, apart from the net additional costs generated by its policy of selling below cost, net additional costs that, according to DPAG, were associated with the provision of a service of general economic interest ('the uncontested net additional costs').

83 Second, it must be held that the Commission stated, on the one hand, at recital 43 of the contested decision, that the Federal Republic of Germany informed it that DPAG had to bear 'fifteen burdens of the past' constituting the net additional costs of providing a service of general economic interest and, on the other hand, in footnote No 94 of the contested decision, that '[a]ccording to the German authorities (letter of 16 September 1999, p. 18), the term "burdens of the past" is supposed to designate the atypical cost of DPAG compared with the costs of an undertaking operating under normal market conditions', given that '[a]ccording to the German authorities, it is precisely these "burdens of the past" which produce the deficit in the parcel freight operations that have been identified in the decision to initiate proceedings'. At recital 43 of the contested decision, the Commission lists the fifteen burdens of the past which the Federal Republic of Germany refers to. In that respect, the Commission notes, in particular, at recital 45 of the contested decision, that '[a]ccording to the German authorities, even if the Commission were not to deem all parcel [delivery] services provided on this infrastructure as still being provided in the public interest, the "burdens of the past" had to be considered 'stranded costs' of providing parcel services that were undeniably deemed to be in the public interest when the current infrastructure was planned in 1990 [Annex 1 to the letter of the German Government of 21 June 2000]'.

84 In this respect, it must be held that, as is clear from paragraphs 41 to 52 of the decision to initiate the procedure, the Federal Republic of Germany provided the Commission, upon request, with a detailed list of the fifteen burdens of the past in relation to which, on the one hand, it provided the reasons for which, according to the Federal Republic of Germany, those burdens constituted net additional costs associated with providing a service of general economic interest and an estimate of how much each burden cost from 1990 to 1996 and, on the other hand, it stated that the total amount of those burdens of the past, which it claims are associated with the provision of a service of general economic interest, amounted to DEM 20 426 million, in other words, an amount that was much higher than the DEM 11 081 million in transfer payments made by DB-Telekom. In that respect, it must be held that the Commission stated, in paragraph 72 of the decision to initiate the procedure, that even though it '[had] doubted that all the cost elements mentioned in this regard [could] actually be considered to be relating to a [service of general economic interest]', it was nevertheless of the opinion that 'some elements (such as, for example, Saturday delivery) could, theoretically, constitute services of general economic interest, provided they were properly defined and allocated'.

85 Third, it must be held that, on the one hand, by not checking and not taking a position, in the contested decision, on the information provided by the Federal Republic of Germany, according to which the uncontested net additional costs were associated with fulfilling a public service mandate and, on the other hand, by not making the calculation that would have allowed the Commission to determine whether the amount of those additional costs exceeded the amount of transfer payments made by DB-Telekom, the Commission failed to check whether the total amount of transfer payments made by DB-Telekom was lower than the total amount of the net additional costs of providing a service of general economic interest, in which case those transfer payments would not have conferred any advantage on the applicant.

86 In that respect, it must be held that the Commission does not allege or establish in the contested decision that the Federal Republic of Germany or the applicant failed to provide it with the information it would have needed to check that the amount of transfer payments made by DB-Telekom did not exceed the uncontested net additional costs, or that it had no choice, taking into account the information available to it, but to assume that the amount of the transfer payments made by DB-Telekom exceeded the amount of the said uncontested additional costs, so that the transfer payments made by DB-Telekom did confer an advantage on the applicant.

87 In addition, it must also be held that the Commission did not put forward, either in its submissions or during the oral hearing, any objective reason to explain why it would have been impossible, taking into account the information it had been given by the Federal Republic of Germany, for the Commission to examine this. It must be held that the Commission merely explains, in essence, that the extent of the special costs put forward by the applicant made it difficult to carry out such an examination, but not that the Federal Republic of Germany had not provided it with the information that would have been necessary to carry out such an examination, so that the Commission could not have undertaken it.

88 In the light of the above, it must be held that by not checking whether the transfer payments made by DB-Telekom exceeded the amount of DPAG's uncontested net additional costs, the Commission has not shown to the requisite legal standard that, for the purposes of Article 87(1) EC, the transfer payments made by DB-Telekom conferred an advantage on DPAG.

89 This finding cannot be invalidated by the arguments submitted by the Commission seeking, in essence, to claim, on the one hand, that the Commission was not under an obligation to determine that the amount of uncontested net additional costs did not exceed the amount of transfer payments made by DB-Telekom and, on the other hand, that in order to find that State aid had been granted in the present case, the method it used was more appropriate than the method of checking whether DPAG received overcompensation.

90 First, as regards the Commission's argument that it has discretion in choosing the most appropriate method for determining whether a measure involves State aid, it must be recalled that the characterisation of a measure as State aid, which, according to the Treaty, is the responsibility of both the Commission and the national courts, cannot in principle justify the attribution of a broad discretion to the Commission, save for particular circumstances owing to the complex nature of the State intervention in question. The relevance of the causes or aims of State measures falls to be appraised only in the context of determining - pursuant to Article 87(3) of the Treaty - whether such measures are compatible with the common market (Ladbroke Racing v Commission, paragraph 55 above, paragraph 52).

91 However, in this respect, it must also be found that, even though the Court of First Instance has allowed the Commission a certain discretion in deciding on the most appropriate method for making sure that the competitive activities do not receive any cross-subsidy (FFSA and Others v Commission, paragraph 55 above, paragraph 187), the fact remains that, according to the Altmark judgment, paragraph 57 above (paragraph 87), the Commission cannot classify as State aid State resources granted as compensation for additional costs associated with the provision of a service of general economic interest. In the present case, failing to check whether the total amount of the transfer payments made by DB-Telekom exceeded the total amount of the uncontested net additional costs meant that the Commission was not entitled to assume, as the analysis of the contested decision in paragraph 78 above shows, that those transfer payments conferred an advantage on the applicant even though the Federal Republic of Germany had provided the Commission with information showing that it was plausible that the total amount of those transfers did not exceed the total amount of the uncontested net additional costs.

92 In addition, as regards the Commission's argument that it was only required to check whether the complaints of BIEK and UPS, according to which DPAG financed a policy of selling below cost through public resources, was well founded, it must be noted in this respect that, according to the case-law, the Commission is required, in the interests of sound administration of the fundamental rules of the Treaty relating to State aid, to conduct a diligent and impartial examination of a complaint, which may make it necessary for it to examine matters not expressly raised by the complainant (Case C-367-95 P Commission v Sytraval and Brink's France [1998] ECR 1998 I-1719, paragraph 62). Moreover, the Commission must check whether the beneficiary of aid has received an actual advantage. Therefore, in the present case, while the Commission was required to examine, diligently and impartially, the complaints lodged by BIEK and UPS, that does not, however, in any way imply that, on the one hand, it could overlook the information provided to it by the Federal Republic of Germany in an attempt to show that the applicant had not enjoyed any advantage through public resources and, on the other hand, that it could rightly conclude that State aid had been granted without having first checked whether the public resources that DPAG had received had bestowed an advantage on the company.

93 Finally, it is also appropriate to reject the Commission's arguments, as well as those of BIEK and UPS, that the Commission was not required to check whether the total amount of transfer payments made by DB-Telekom exceeded the total amount of net additional costs associated with the provision of a service of general economic interest borne by the applicant, in so far as the conditions laid down by the Court in Ferring, paragraph 55 above, and Altmark, paragraph 57, were not fulfilled in the present case.

94 As set out in paragraph 81 above, where it was noted that the Commission merely found in the contested decision that the net additional costs generated by DPAG's policy of selling below cost could not be the subject of compensation, the Commission did not check or determine whether the applicant had recorded other net additional costs associated with the provision of a service of general economic interest for which, in accordance with the conditions laid down in the Altmark judgment, paragraph 57 above (paragraphs 89 to 95), the company had the right to claim compensation out of the total amount of transfer payments made by DB-Telekom.

95 In so far as the Commission carried out no examination or assessment in this respect, it is not for the Community judicature to replace the Commission by carrying out in its stead an examination it never carried out and substituting the conclusions to which it then arrives (see, to that effect, Case T-274-01 Valmont v Commission [2004] ECR II-3145, paragraph 136).

96 It follows from the foregoing that the applicant's complaint that the Commission infringed Article 87(1) EC in finding that the transfer payments made by DB-Telekom had conferred an advantage on it must be upheld.

97 However, for the sake of completeness, the Court of First Instance also considers it appropriate to examine the applicant's complaint that, irrespective of whether the amount of transfer payments made by DB-Telekom exceeded the amount of its uncontested net additional costs, the Commission was, in any event, wrong to find that the transfer payments made by DB-Telekom in the amount of DEM 11 081 million had allowed the applicant, taking into account the losses it had recorded from 1990 to 1995, to cover the alleged net additional costs of DEM 1 118.7 million generated by its policy of selling below cost from 1994 to 1999.

98 In this regard, it must be held by way of a preliminary point that, in accordance with Article 63(1) of the Postal Organisation Act, the Deutsche Bundespost had to make repayments to the German State amounting to a diminishing percentage of its operating income. While the parties disagree as to whether those repayments constitute the net additional costs of providing a service of general economic interest, the Commission does not deny that those repayments were made by the companies that emerged from the break-up of the Deutsche Bundespost and that, in that context, the applicant had to pay the amount of DEM 11 418 million from 1990 to 1995.

99 In the present case, the applicant claims that the Commission committed a manifest error of assessment in finding that the transfer payments made by DB-Telekom from 1990 to 1995 in the amount of DEM 11 418 million had allowed it to cover the alleged net additional costs of DEM 1 118.7 million generated by its policy of selling below cost, even though those transfer payments had been used in their entirety to compensate for the losses it incurred from 1990 to 1995, which resulted, in particular, from its obligation to make repayments.

100 The Commission responds essentially that, in so far as the applicant did not provide evidence that the net additional costs associated with its policy of selling below cost had been financed through its own resources, it could reasonably assume that the transfer payments made by DB-Telekom had allowed the applicant to finance the said additional costs.

101 In this regard, it must be noted that all the parties are in agreement that, from an accounting point of view, any resource can be used to finance any cost. However, even though the task of the Commission is to establish that public resources have conferred an advantage on the beneficiary, as is clear from the Altmark judgment, paragraph 57 above (paragraph 75), it makes no difference in that respect that the Commission identifies the costs to which it has allocated the public resources granted to the applicant.

102 However, in so far as, in the present case, as paragraph 78 above shows, the Commission made its argument that DPAG received an advantage through public resources conditional on the fact that the alleged net additional costs of DPAG's policy of selling below cost could only have been covered, to the tune of DEM 1 118.7 million, through the transfer payments made by DB-Telekom, it must be checked whether, taking into account DPAG's losses from 1990 to 1994 and from 1990 to 1995, those transfer payments made during that period can be shown to have been sufficient to also cover the net additional costs of its policy of selling below cost recorded from 1994 to 1999.

103 The Commission took the view, at recital 88 of the contested decision, that the alleged net additional costs of the policy of selling below cost recorded by DPAG amounted to the following sums:

<table>

104 In addition, as is shown by the information provided by the Federal Republic of Germany, which the Commission does not contest, DPAG recorded, in the periods from 1990 to 1994 and from 1990 to 1995, the following operating results (excluding transfer payments made by DB-Telekom and repayments made) and final results (including transfer payments made by DB-Telekom and repayments made) (letter from the Federal Republic of Germany of 31 January 2002 and Annex 11 A to the letter of the Federal Republic of Germany of 10 March 2000):

<table>

105 In the light of the table shown in paragraph 104 above, first, it must be held that, even if it is true that, from 1990 to 1994, the applicant received the sum of DEM 5 562 million in transfer payments made by DB-Telekom and that, in 1994, it recorded additional costs associated with its policy of selling below cost of DEM [confidential] million (table shown in paragraph 103 above), the final deficit that it recorded from 1990 to 1994, in respect of all sectors of activity, was DEM 8 883 million. That final deficit for the period from 1990 to 1994 in fact corresponded to DPAG's operating losses in the amount of DEM 4 331 million, which were inflated by the repayments in the amount of DEM 10 104 million, and which were compensated in part by the transfer payments made by DB-Telekom in the amount of DEM 5 562 million.

106 In those circumstances, it must be held that the granting of transfer payments made by DB-Telekom of DEM 5 562 million between 1990 and 1994 did not allow the applicant, taking into account the operating losses it incurred from 1990 to 1994 in the amount of DEM 4 331 million and the repayments which it had to make during that period in the amount of DEM 10 104 million, in other words, total losses of DEM 14 435 million, to cover the alleged net additional costs generated by its policy of selling below cost from 1994 to 1999 in the amount of DEM 1 118.7 million.

107 Further, in so far as the applicant received the transfer payments made by DB-Telekom until 1995, it must also be held that, even if it is true that the applicant received, from 1990 to 1995, DEM 11 081 million in transfer payments made by DB-Telekom, it recorded, during the same period, in respect of all sectors of activity, a final deficit of DEM 5 282 million. That final deficit for the period from 1990 to 1995 in fact corresponds to DPAG's operating losses in the amount of DEM 4 945 million, inflated by the repayments in the amount of DEM 11 418 million, which were in part compensated by the transfer payments made by DB-Telekom in the amount of DEM 11 081 million.

108 In those circumstances, it must be held that the granting of the transfer payments made by DB-Telekom between 1990 and 1995 in the amount of DEM 11 081 million did not allow DPAG - taking into account the operating losses the company incurred from 1990 to 1995 in the amount of DEM 4 945 million and the repayments which it had to make, in the amount of DEM 11 418 million, in other words, total losses of DEM 16 363 million - to cover the alleged additional costs generated by its policy of selling below cost recorded from 1994 to 1999 in the amount of DEM 1 118.7 million.

109 Therefore, it must be held that the Commission's argument, according to which the applicant benefited from an advantage of DEM 1 118.7 million in so far as only the transfer payments made by DB-Telekom could have financed the alleged additional costs generated by its policy of selling below cost, is rendered invalid by the finding that the final losses that DPAG incurred from 1990 to 1994 or from 1990 to 1995 were of such an amount that the transfer payments made by DB-Telekom proved insufficient to cover the alleged net additional costs generated by its policy of selling below cost from 1994 to 1999.

110 Therefore, the applicant's complaint must be upheld.

111 Consequently, the contested decision must be annulled without it being necessary to check whether the present complaint implies that the contested decision is also vitiated by a failure to state reasons within the meaning of Article 253 EC (see paragraph 58 above), or to examine the other complaints and pleas submitted by the applicant.

Costs

112 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.

113 In accordance with the first subparagraph of Article 87(4) of the Rules of Procedure, the Member States and institutions which intervened in the proceedings are to bear their own costs. The Federal Republic of Germany, which did not submit a statement in intervention, will bear its own costs, in accordance with the first subparagraph of Article 87(4) of those Rules.

114 In accordance with the third subparagraph of Article 87(4) of the Rules of Procedure, the Court of First Instance may order an intervener, other than the Member States, the States which are parties to the Agreement on the European Economic Area (EEA), the institutions and the Surveillance Authority of the European Free Trade Association (EFTA), to bear its own costs. BIEK and UPS, as interveners, will bear their own costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber, Extended Composition)

hereby:

1. Annuls Commission Decision 2002-753-EC of 19 June 2002 on measures implemented by the Federal Republic of Germany for Deutsche Post AG;

2. Orders the Commission to bear its own costs and to pay those incurred by Deutsche Post;

3. Orders the Federal Republic of Germany, the Bundesverband Internationaler Express- und Kurierdienste eV (BIEK) and UPS Europe NV/SA to bear their own costs.