CJEU, 10th chamber, May 16, 2013, No C-615/11 P

THE COURT (Tenth Chamber),

1 By its appeal, the European Commission seeks the partial setting-aside of the judgment of 29 September 2011 of the General Court of the European Union in Case T 442-07 Ryanair v Commission ('the judgment under appeal'), by which the General Court found that the Commission had failed to fulfil its obligations under the EC Treaty by failing to adopt a decision in respect of the transfer of the 100 employees of Alitalia - Linee Aeree Italiane SpA ('Alitalia') which was the subject of a complaint set out in a letter of 16 June 2006 sent to the Commission by Ryanair Ltd ('Ryanair').

Legal context

2 Under paragraphs 1 to 4 of Article 4 in Chapter II, entitled 'Procedure regarding notified aid', of Council Regulation (EC) N° 659-1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1) :

'1. The Commission shall examine the notification as soon as it is received. Without prejudice to Article 8, the Commission shall take a decision pursuant to paragraphs 2, 3 or 4.

2. Where the Commission, after a preliminary examination, finds that the notified measure does not constitute aid, it shall record that finding by way of a decision.

3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the common market of a notified measure, in so far as it falls within the scope of Article [87(1) EC], it shall decide that the measure is compatible with the common market (hereinafter referred to as a "decision not to raise objections"). The decision shall specify which exception under the Treaty has been applied.

4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the common market of a notified measure, it shall decide to initiate proceedings pursuant to Article [88(2) EC] (hereinafter referred to as a "decision to initiate the formal investigation procedure").'

3 Chapter III of that regulation governs the procedure regarding unlawful aid. In that chapter, Article 10(1) provides :

'Where the Commission has in its possession information from whatever source regarding alleged unlawful aid, it shall examine that information without delay.'

4 In Chapter III, paragraph 1 of Article 13, entitled 'Decisions of the Commission', provides :

'The examination of possible unlawful aid shall result in a decision pursuant to Article 4(2), (3) or (4). ...'

5 In Chapter VI of Regulation N° 659-1999, entitled 'Interested parties', Article 20(2) provides :

'Any interested party may inform the Commission of any alleged unlawful aid and any alleged misuse of aid. Where the Commission considers that on the basis of the information in its possession there are insufficient grounds for taking a view on the case, it shall inform the interested party thereof. Where the Commission takes a decision on a case concerning the subject-matter of the information supplied, it shall send a copy of that decision to the interested party.'

Background to the dispute

6 On 3 November 2005, Ryanair sent a letter to the Commission, the subject-matter of which was a complaint against the Italian Government in respect of State aid to Italian airlines.

7 On 16 June 2006, Ryanair sent an additional letter to the Commission addressed to the Director of Air Transport within the Directorate General for Energy and Transport, the subject-matter of which was 'Italian public service obligations'. In that letter, Ryanair criticised, in particular, the fact that it was clear from press cuttings that the airlines Air One SpA ('Air One') and Meridiana had taken on 100 Sardinian employees of Alitalia, and expressly requested that that issue be added to its previous complaint.

8 By letter of 26 July 2006, the Director of Air Transport within the Directorate-General for Energy and Transport informed Ryanair that a formal inquiry had been opened in connection with some of the operations mentioned. With regard to the question of the transfer of the 100 Sardinian employees of Alitalia, the Director requested Ryanair to provide further information, telling it that he would, in the meantime, ask his colleagues in Unit A 4, 'Internal Market and Competition', to raise the matter with the Italian authorities.

9 By letter of 14 August 2006, Ryanair acknowledged receipt of the letter of 26 July 2006 and stated that it did not have any more specific information regarding the transfer of the 100 Alitalia employees.

10 On 2 August 2007, having received no response to its complaint of 3 November 2005, Ryanair sent a letter of formal notice to the Commission in which it formally called on that institution to act under Article 232 EC. In that letter, Ryanair listed the letters which it had sent to the Commission and the measures of which it considered that it had complained as constituting State aid. In addition, Ryanair requested the Commission to follow the procedures concerning the review of its complaint under, inter alia, Regulation N° 659-1999.

11 By letter of 7 August 2007, the Commission acknowledged receipt of the letter of formal notice and stated that that letter had been passed to the Directorate-General for Energy and Transport.

The action before the General Court and the judgment under appeal

12 By application lodged at the Registry of the General Court on 30 November 2007, Ryanair brought an action seeking a declaration that the Commission had failed to act in unlawfully failing to take a position on Ryanair's complaints, in particular the complaint concerning the transfer of the 100 Sardinian employees of Alitalia.

13 By order of 14 September 2009, Air One was granted leave to intervene in partial support of the form of order sought by the Commission.

14 In the judgment under appeal, with regard to the plea in law alleging that the Commission had failed to act with regard to the transfer of the Sardinian employees of Alitalia, the General Court, first, declared that that plea was admissible, as Ryanair's letter of 2 August 2007 met all the necessary requirements for it to be regarded as a letter of formal notice for the purposes of Article 232 EC.

15 Second, having recalled (i) its settled case-law pursuant to which 'in order to rule on the substance of a claim for a declaration that the Commission has failed to act, it is necessary to determine whether, at the time when the Commission was formally called upon to define its position within the meaning of Article 232 EC, it was under a duty to act' and (ii) paragraphs 37 to 40 of the judgment in Case C 521-06 P Athinaïki Techniki v Commission [2008] ECR I 5829, the General Court, starting at paragraph 31 of the judgment under appeal, examined whether the letter of 16 June 2006 had indeed presented the Commission with a complaint or provided it with information regarding alleged unlawful aid, a claim disputed by the Commission.

16 In that regard, paragraphs 33 to 38 of the judgment under appeal are worded as follows :

'33 ... it is to be noted at the outset that, unlike the competition rules laid down in Articles 81 EC and 82 EC, in relation to which the lodging of a complaint is regulated by [Council Regulation (EC) N° 1-2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 [EC] and 82 [EC] (OJ 2003 L 1, p. 1) and Commission Regulation (EC) N° 773-2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 [EC] and 82 [EC] (OJ 2004 L 123, p. 18)], in the case of State aid no specific formal requirement attaches to the lodging of a complaint.

34 Concerning the Commission's argument that the letter of 16 June 2006 is not a complaint because the applicant has not used the standard form, the Court considers it to be unfounded. As the applicant correctly maintains, use of that form is not required by any rule of European Union law and consequently cannot be set up as a condition of "admissibility" for lodging a complaint concerning State aid.

35 As to the Commission's argument that the letter of 16 June 2006 contained no indication that it was meant to constitute a complaint concerning the transfer of the 100 Alitalia employees, it must be rejected. Indeed, although that letter was headed ["Italian public service obligations"], the applicant clearly referred therein to that transfer as State aid and expressly requested that the Commission add that matter to its previous complaint. The applicant also specifically requested [the Directorate-General for Energy and Transport] to conduct an investigation in order to determine what advantages might have been granted to Air One and Meridiana to convince them to take on the Alitalia employees. It should also be noted that the applicant had reiterated, in its letter of 14 August 2006, that that transfer could be regarded as State aid because it saved "Alitalia from having to pay redundancy to these employees". Contrary to the Commission's contention, the purpose of the letter of 16 June 2006 was clearly to bring a complaint before the Commission concerning the transfer of the 100 Alitalia employees.

36 In any event, irrespective of whether or not that complaint was founded, the Court considers that, when it received the letter of 16 June 2006, in which the transfer of the 100 Alitalia employees was clearly identified as State aid (an allegation repeated in the letter of 14 August 2006), the Commission was put in possession of "information ... regarding alleged unlawful aid" within the meaning of Article 10(1) of Regulation N° 659-1999. Contrary to the Commission's argument, that provision does not appear open to being interpreted as meaning that the Commission must receive detailed information in order to be regarded as having in its possession information regarding alleged unlawful aid - as is borne out by the wording of Article 20(2) of Regulation N° 659-1999. That provision states that "[a]ny interested party may inform the Commission of any alleged unlawful aid". Once it is in possession of the information, the Commission must, if it considers that there are "insufficient grounds for taking a view on the case", inform the interested party that that is the case. It is thus apparent that the European Union legislature does not require that interested parties provide the Commission with detailed information in order for the Commission to be regarded as having in its possession information giving grounds for an examination to be undertaken.

37 Having regard to the contents of the letter of 16 June 2006, the Court concludes that a complaint, or, at the very least, information regarding alleged unlawful aid, was brought before the Commission. Therefore, according to the judgment cited at paragraph 30 above, the Commission was required to act in accordance with Article 10(1) and the first sentence of Article 20(2) of Regulation N° 659-1999, by setting in motion the preliminary examination stage and examining the information without delay. That examination should have led the Commission, according to the same judgment, either to inform the applicant that there were insufficient grounds for taking a view on the case or, in any event, to adopt a decision under Article 4(2), (3) or (4) of Regulation N° 659-1999.

38 In this case, it is common ground that the Commission neither informed the applicant that there were insufficient grounds for taking a view on the case nor adopted a decision under Article 4(2), (3) or (4) of Regulation N° 659-1999, although it was required to do so. In the case of the transfer of the 100 Alitalia employees, the Commission had thus failed to act as of 2 October 2007, that date being two months after it was called on to act in that respect in the letter of formal notice.'

17 Accordingly, in paragraph 39 of the judgment under appeal, the General Court held that the plea alleging that the Commission had failed to act with regard to that transfer was well founded.

Procedure before the Court and forms of order sought

18 By its appeal, the Commission claims that the Court should :

- set aside the judgment under appeal in so far as it declares that the Commission failed to fulfil its obligations under the Treaty by failing to adopt a decision in respect of the transfer of the 100 Alitalia employees complained of in the letter of 16 June 2006 sent to the Commission by Ryanair ;

- reject the application for a declaration that the Commission failed to act in that it failed to adopt a decision in respect of that transfer ;

- order Ryanair to pay the costs ;

- or, in the alternative, refer the case back to the General Court ; and

- reserve the costs of the proceedings at first instance and on appeal.

19 Ryanair contends that the Court should :

- dismiss the appeal ; and

- order the Commission to pay the costs.

Appeal

20 In support of its appeal, the Commission puts forward three grounds of appeal, alleging, respectively :

- a misinterpretation of Articles 10(1) and 20(2) of Regulation N° 659-1999 ;

- an error in the legal qualification of the letter of 16 June 2006 as information or a complaint regarding alleged unlawful aid ; and

- an error of law regarding the Commission's duty to act, for the purposes of Article 232 EC, under Article 20(2) of Regulation N° 659-1999.

21 As the first two grounds of appeal are closely linked, it is appropriate to examine them together.

First and second grounds of appeal, alleging a breach of Articles 10(1) and 20(2) of Regulation N° 659-1999 and an error in the legal qualification of the letter of 16 June 2006

Arguments of the parties

22 The Commission claims that the General Court misinterpreted Articles 10(1) and 20(2) of Regulation N° 659-1999 by holding that the Commission had been put in possession of a complaint or provided with information regarding alleged unlawful aid and, consequently, that it was under an obligation to adopt a decision pursuant to Article 4 of that regulation or to send Ryanair a letter pursuant to Article 20 of that regulation. In that regard, the Commission complains that, for the purposes of assessing whether or not such a complaint had been made, the General Court based its reasoning, in paragraph 35 of the judgment under appeal, on the subjective intention of the interested party and not on the substance of that complaint.

23 The Commission also complains that, in the first sentence of paragraph 36 of the judgment under appeal, the General Court held that, in order for the Commission to be under a duty to act, it was sufficient for the complainants to identify a measure as State aid. In that regard, the Commission submits that, on the contrary, it is placed under such a duty only when : firstly, the information or the complaint refers to the State-aid provisions of the Treaty, or, at the very least, to the alleged granting of an advantage to one or more undertakings through State resources ; secondly, the information or the complaint alleges that the rules regarding State aid have been violated ; thirdly, the information or the complaint contains, as a minimum, elements of fact capable of supporting the view that there is unlawful State aid ; and, fourthly, the interested party places those factual assertions within the framework of Article 107(1) TFEU.

24 The Commission is of the view that, even if the General Court has not erred in law in its interpretation of Articles 10(1) and 20(2) of Regulation N° 659-1999, it has done so in paragraph 37 of the judgment under appeal by qualifying the letter of 16 June 2006 as a complaint or, at the very least, as information concerning alleged unlawful State aid, inasmuch as the Commission does not see how the hiring of staff by a private company could amount to granting State aid to another competing company, even if it took place after a public authority had intervened. The Commission also takes the view that, even though it is alleged that the disputed transfer saved Alitalia from paying redundancy costs, that allegation is pure speculation, as it is not accompanied by any indication of what those costs might have been.

25 By contrast, Ryanair contends that the minimum requirements mentioned by the Commission are not only not based on any provision of EU law or case-law of the Court of Justice but also create many uncertainties. It also submits that the literal meaning of Article 10(1) of Regulation N° 659-1999 and the use of the word 'regarding' require only that the information referred to in that provision should imply the existence of potential unlawful aid, as was the case with its letter of 16 June 2006. Lastly, it adds that it is difficult to reconcile the minimum requirements envisaged by the Commission with the often concealed nature of unlawful State aid.

Findings of the Court

26 In its first and second grounds of appeal, the Commission seeks to establish, essentially, that the General Court erred in law in holding that the Commission had obtained, through the letter of 16 June 2006, information regarding alleged unlawful aid within the meaning of Articles 10(1) and 20(2) of Regulation N° 659-1999 which obliged it to act and that, as a result, the finding of failure to act so made by the General Court is unfounded.

27 As a preliminary point, it should be borne in mind that, under Article 20(2) of Regulation N° 659-1999, any interested party may inform the Commission of any alleged unlawful aid and of any alleged misuse of aid.

28 Where it has in its possession information, from whatever source, regarding alleged unlawful aid, the Commission is required, under Article 10(1) of Regulation N° 659-1999, immediately to examine the possible existence of aid and its compatibility with the internal market. The examination of such information, on the basis of that provision, gives rise to the initiation of the preliminary examination stage under Article 108(3) TFEU (see, to that effect, Case C 322-09 P NDSHT v Commission [2010] ECR I 11911, paragraph 49 and the case-law cited).

29 At that stage, and where it considers that there are insufficient grounds for taking a view on the case, the Commission, in accordance with the second sentence of Article 20(2) of Regulation N° 659-1999, must communicate that finding to the interested parties which have sent it the information in question and must also allow those parties to submit additional comments within a reasonable period (see, to that effect, Athinaïki Techniki v Commission, paragraph 39).

30 Article 13(1) of Regulation N° 659-1999, which is applicable in the context of an examination of alleged unlawful aid, obliges the Commission to close that preliminary examination stage by adopting a decision pursuant to Article 4(2), (3) or (4) of that regulation, that is to say, a decision finding that aid does not exist, raising no objections or initiating the formal investigation procedure, since that institution is not authorised to persist in its failure to act during the preliminary examination stage (Athinaïki Techniki vCommission, paragraph 40).

31 It follows from paragraphs 27 to 30 of the present judgment that the preliminary examination stage, which ultimately obliges the Commission to take a position, requires that, where that examination is carried out on the initiative of an interested party, information concerning alleged unlawful aid be sent to the Commission by that party.

32 The General Court did not err in its interpretation of Articles 10(1) and 20(2) of Regulation N° 659-1999 or in the legal qualification of the letter of 16 June 2006.

33 It should be noted that the sending of information, within the meaning of Article 20(2) of Regulation N° 659-1999, is not subject to any formal requirements, such as using the standard form made available to interested parties for reporting alleged unlawful State aid.

34 In addition, the obligation to carry out an examination under Article 10(1) of that regulation is triggered as soon as the Commission is in possession of information regarding alleged unlawful aid.

35 It follows that a preliminary examination under Articles 10(1) and 20(2) of Regulation N° 659-1999 must lead to a decision adopting a position on the information provided (see, to that effect, NDSHT v Commission, paragraph 55 in fine).

36 That finding cannot be undermined by the Commission's argument that in paragraphs 35 and 36 of the judgment under appeal the General Court relied on the subjective intention of the interested party and, in addition, confined itself to requiring that, in its letter, the complainant should identify a measure as constituting State aid. Notwithstanding its brevity, such a letter, by the nature and the wording of the information transmitted, must be regarded as enabling the Commission to identify, with sufficient precision, inter alia, the presumed beneficiary of the alleged unlawful aid, the nature of the advantage at issue and the mechanism by means of which that advantage has been granted.

37 That being the case, such a letter cannot be regarded as failing to satisfy the requirements laid down in Articles 10(1) and 20(2) of Regulation N° 659-1999, given that those provisions cannot be construed as making the Commission's duty to act conditional on the inclusion of a greater level of detail in the complaint or information sent to the Commission.

38 Moreover, the Commission cannot require interested parties to comply with predetermined formal conditions which the General Court has rightly stated, in paragraph 34 of the judgment under appeal, have no basis in EU law.

39 The General Court therefore acted correctly in holding that the letter of 16 June 2006 sent by Ryanair to the Commission contained information, within the meaning of Articles 10(1) and 20(2) of Regulation N° 659-1999, which placed an obligation on the Commission to examine it and to inform Ryanair that there were insufficient grounds for taking a view on the case, and in inferring from this that the Commission, as a result of its inactivity, had failed to fulfil its obligation to adopt a position and was thus in a situation of having failed to act within the meaning of Article 232 EC.

40 Accordingly, the first and second grounds of appeal must be rejected.

Third ground of appeal, alleging that the Commission was not under a duty to act, for the purposes of Article 232 EC, under Article 20(2) of Regulation N° 659-1999

Arguments of the parties

41 The Commission submits that, in any event, the General Court could not rely, in proceedings for failure to act under Article 232 EC, on an alleged duty of the Commission to act arising from Article 20(2) of Regulation N° 659-1999. In that regard, the Commission argues that an Article 20(2) letter is merely an intermediate step in the procedural path leading from a complaint to a decision adopted under Article 4 of that regulation. It cannot therefore be classified as a challengeable act in respect of which the non-adoption of a position is capable of giving rise to an action for a failure to act.

42 Ryanair, by contrast, contends that such a letter can form the basis of an action under Article 232 EC, given that that letter is compulsory and in so far as paragraph 68 of the judgment in Case C 362-09 P Athinaïki Techniki v Commission [2010] ECR I 13275 precludes the Commission from perpetuating a state of inaction during the preliminary examination stage.

Findings of the Court

43 By its third ground of appeal, the Commission contests the finding of a failure to act made under Article 232 EC by the General Court in so far as that finding is based on Article 20(2) of Regulation N° 659-1999.

44 Given that the Commission has been unsuccessful in its first and second grounds of appeal inasmuch as those grounds were based on Articles 10(1) and 20(2) of Regulation N° 659-1999, there is no longer any need to give a ruling on the present ground of appeal.

45 Since none of the grounds of appeal raised by the appellant has been upheld, the appeal must be dismissed.

Costs

46 Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of those Rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since Ryanair has applied for costs and the Commission has been unsuccessful, the Commission must be ordered to pay the costs.

On those grounds, the Court (Tenth Chamber) hereby :

1. Dismisses the appeal ;

2. Orders the European Commission to pay the costs.