C-225/91

OPINION OF MR VAN GERVEN — CASE C-225/91

OPINION OF ADVOCATE GENERAL VAN GERVEN delivered on 28 April 1993 *

Mr President, total to a maximum of ESC 97 440 million, Members of the Court, or ECU 547 million, of which ECU 500 mil­ lion was to be paid as direct aid within the framework of the Sistema de Incentivos de Base Regionale (SIBR), an already existing 1. In this application Matra SA asks the regional aid programme established by Por­ Court, pursuant to Article 173 of the EEC 3 tugal in cooperation with the Commission. Treaty, to annul the Commission's decision The remaining ECU 47 million would be of 16 July 1991 (hereinafter 'the contested given to Newco by Portugal in the form of a decision'), relating to the grant by Portugal limited exemption from corporation tax for of State aid to a joint venture designated as five years. Newco set up by Ford of Europe Inc. (here­ inafter 'Ford') and Volkswagen AG (herein­ after 'VW') for the production of multi­ purpose vehicles 1 in Setúbal. In the The total cost of the project benefiting from contested decision, a copy of which was sent the aid was to be ESC 454 000 million or to Matra SA (hereinafter 'Matra') on 30 July ECU 2 550 million. Portugal also planned a 1991, the Commission stated that it raised no training programme at a total cost of ESC objections to the aid scheme proposed by 36 000 million (ECU 202 million). It Portugal. informed the Commission of the details of that training programme by letter of 31 May 1991.

Background to the case

4. By application lodged at the Court Regis­ On 3 July 1991 the Commission took the try on 6 September 1991, Matra brought the decision not to raise any objections to the present action for annulment. By order of aid proposed by Portugal. It informed the 4 December 1991 the President of the Court Portuguese Government of this by a letter of dismissed Matra's application for the suspen­ 16 July 1991. On 3 October 1991 a 'Summa­ sion of operation of the contested decision ry of the Commission decision not to raise and the adoption of a number of interim objections to the aid which the Portuguese measures. 6By orders of 8 April 1992 the Government plans to grant to the joint ven­ President of the Court gave Portugal, Ford ture of Ford and Volkswagen to establish a and VW leave to intervene in the proceed­ multi-purpose vehicle plant in the Setúbal ings in support of the Commission, in peninsula' was published in the Official Jour­ 4 accordance with Article 37 of the Protocol nal. on the Statute of the Court of Justice and Article 93 of the Rules of Procedure. 7

between Ford and VW to set up a joint ven­ 7. Matra is the only party to submit that the ture led to the Commission's decision of contested decision is addressed to it. In sup­ 23 December 1992. 8That decision declared, port of that submission, it relies on the fact in accordance with Article 85(3) of the EEC that the contested decision mentions it Treaty, the provisions of Article 85(1) inap­ expressly, that the competent Commissioner plicable in principle (Article 1). The exemp­ sent it a copy of the decision, and that the tion was, however, subject to a number of letter of 30 July 1991 which accompanied conditions and obligations (Article 2). that copy must be regarded as impliedly rejecting Matra's complaint of 26 June 1991.

8 — Commission Decision 93/49/EEC of 23 December In Cofaz the Court examined whether the 1992 relating to a proceeding pursuant to Article 85 of the EEC Treaty (IV/33.814 — Ford/Volkswagen) (OJ 1993 L 'parties concerned' within the meaning of 20, p. 14). See also Notice 91/C 182/07, cited in note 1 above. 9 — Case T-17/93, pending before the Court of First Instance. 10 — In the first case the act is addressed to the applicant as a result of its form, in the second case as a result of its nature. 11 — Case 169/84 Cofaz v Commission [1986] ECR 391.

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The same conclusions apply to undertakings which have played a comparable role in the 13 — The decision was communicated, as slated above (see points procedure in Article 93 of the EEC Treaty 1 and 3 above), by a letter dated 30 July 1991. Matra's provided, however, that their position on the application was lodged at the Court Registry on 6 Septem­ ber 1991. market is significantly affected by the aid 14 — In his Opinion in Case C-198/91 Cook v Commission, which is the subject of the contested Advocate General Tesauro adopts a position which I can only agree with. He states, correctly in my view, that even 12 decision.' persons who have suffered damage — such as the competi­ tors of die recipient undertaking — who have not inter­ vened during the informal procedure under Article 93(3), for example because they had no knowledge of the aid granted, must be entitled to bring proceedings against the Commission's decision not to initiate the procedure under 12 — Cofaz judgment, paragraphs 24 and 25. Article 93(2).

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10. I therefore conclude that, in the light of In the other two pleas, Matra submits that the decision in Cofaz, the action for annul­ the Commission infringed various provisions ment brought by Matra is admissible. of Community law. The fourth plea alleges an infringement of Article 92(3) of the Treaty, in that the Commission did not carry out an objective assessment of the Portu­ guese aid in the light of the exceptions set The Commission's substantive assessment of out in Article 92(3) of the Treaty, but the aid granted by Portugal restricted itself to analysing whether that aid was compatible with a general aid scheme for which Portugal had already received the Commission's approval (see point 30 et seq. below). I shall discuss that plea together with 11. In the second part of its application, the second plea, with which it is logically Matra puts forward five pleas in law on the linked. Finally, Matra complains of an abuse substance of the case. Like the Commission, of power by the Commission, in that, when I shall start by examining those pleas, as such adopting the contested decision, it prejudged an analysis should make it possible to form a the outcome of the procedure under Article

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States and the Community. Independent the part of the Commission. On the con­ market analysts predict that demand for trary, the fact that the Commission thus multi-purpose vehicles in western Europe allowed itself to be guided by an external will amount to approximately 300 000 units report confirms my opinion that when a year by the mid-1990s. Some manufactur­ assessing the development of the European ers are less optimistic. The parties to the market in multi-purpose vehicles, it was not project in question, Ford and Volkswagen, careless in exercising its discretion under expect demand to reach 300 000 units in Article 92(3). 1994 and 500 000 by the turn of the centu­ 19 ry.'

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relevant market in multi-purpose vehicles. justify the level and intensity of aid proposed Firstly, production by Newco will start com­ and do not give the promoters any unfair paratively slowly. Thus in 1996, if all goes as competitive advantage in the market segment 21 planned, the plant will still manufacture in question'. 'only' 68 000 units, whereas it is estimated that total demand should then already exceed 300 000 units. Secondly, there will still be competition between Ford and VW with respect to the sale of their respective multi­ In Matra's opinion, the choice of Setúbal as purpose vehicles, which will moreover differ the location for a motor vehicle factory is, on in their engines and internal and external fin­ the contrary, attractive even without the Por­ ish. Finally, the majority of European manu­ tuguese aid, in view of the low cost of the facturers, together with some of their Amer­ workforce and the presence in the region of ican and Japanese counterparts, will develop various other undertakings in the motor new multi-purpose vehicles, in cooperation vehicle sector. Moreover, the Commission with other manufacturers or independently, gave not the slightest indication of the crite­ which will obstruct the appearance of domi­ ria it used to evaluate the regional handicap nant positions. of the Setúbal area which is to be overcome by means of the aid. In any event, 'whatever the criterion chosen', the amount of aid approved by the Commission was grossly Those arguments put forward by the Com­ excessive, whatever the extent of the regional mission appear to me to be convincing handicap to be overcome. enough.

'result in Member States being permitted to investment, this size being expressed as a make payments which would improve the percentage.' financial situation of the recipient undertak­ ing although they were not necessary for the attainment of the objectives specified in Arti­ 22 cle 92(3)'. The Council and Commission subsequently developed a method which expresses the aid intensity ceilings in terms of 'gross grant equivalent' and 'net grant equivalent'. Those I shall take these two complaints together. 'grant equivalents', which are expressed as percentages, indicate the relationship between the aid to be granted and the planned investment relevant for that aid. The 17. The examination of the question whether difference between 'gross grant equivalent' regional aid is compatible with Article and 'net grant equivalent' depends on the 92(3)(a) of the Treaty must aim to ensure different levels of tax in the various Member that the percentage of the investment which States. The net grant equivalent corresponds is financed by the aid does not exceed the to the aid which the beneficiary is actually additional cost for the investor resulting left with 'after payment of taxes on profits, from the fact that he is investing in an area assuming that in its first year of operation suffering from a 'regional handicap', meaning the undertaking makes such profits that the that the area is less developed than other 24 maximum tax is chargeable'. areas of average development. The examina­ tion must therefore relate primarily not to the volume of regional aid but to its inten- sity. In other words, the question is not whether the amount of aid, in absolute fig­ 18. In any event, it follows from the forego­ ures, is too high, but whether that amount is ing that it can hardly be deduced, a priori excessive in relative terms, having regard to and 'whatever the criterion chosen', from the the regional imbalance to be compensated. mere fact that in the present case Portugal intends to grant a large amount of aid, that that aid is not compatible with Community law. When a common method of assessing regional aid was drawn up in 1971, those fac­ tors were taken into consideration by both the Commission and the Council: I also regard as unfounded Matra's assertion that the Commission gave no indication as to the criteria it applied for calculating the 'The method is based on a single measure­ ment criterion, namely the relative size of the aid in relation to the amount of the 23 — See point 5 ('the common method of assessing aid') of the Annex to the First Resolution of 20 October 1971 of the Representatives of the Governments of the Member States, meeting within the Council, on general systems of regional aid (OJ, English Special Edition, Second Series, IX, p . 57). The Resolution reproduces word for word the communi­ 22 — Judgment in Case 730/79 Philip Morris v Commission cation of the Commission and the Council on 'general [1980] ECR 2671, paragraph 17. That paragraph, inciden­ schemes of regional aid' (JO 1971 C 111, p. 7). tally, also rightly notes the discretion given to the Commis­ sion by Article 92(3). 24 — Ibid.

extent of the regional handicap of the Setúbal explains that, even compared with the rest of area which is to be overcome by means of the country, Setúbal is going through a par­ the aid. The Commission regularly publishes ticularly difficult period as regards the econ­ 26 in the Official Journal (most recently in omy. As to the presence in the region of 25 August 1988) communications describing other factories in the motor vehicle sector, in detail the criteria it applies for the assess­ Portugal states that these are production ment of regional aid. Matra could have found units on a very small scale originating in the the desired assessment criteria there. protectionist system adopted after the Revo­ lution which made the import of vehicles impossible. I would add that the argument that the location of a factory in Portugal, and more precisely in Setúbal, allows wage costs 19. Moreover, Annex I to the communi­ to be reduced is of little weight in itself, since cation of August 1988 to which I have just the choice of such a location also means that referred to contains a list drawn up by the the undertaking concerned has to cope with 27 Commission applying those criteria to the lower productivity, technological back­ various regions of the Community. It is wardness and a lower level of training. expressly stated there that the entire territory of Portugal falls within Article 92(3)(a) of the Treaty and that, in accordance with that article, that territory thus constitutes a region whose economic development must be facilitated, because living standards there are abnormally low and/or there is serious under-employment there. 20. Two conclusions can, in my opinion, be drawn from the foregoing. Firstly, Matra's assertion that even without State aid the Set­ úbal site is just as attractive economically as Furthermore, the Commission explains in other sites for the establishment of a motor detail in the contested decision why living vehicle factory would appear to be standards are so low and unemployment so unfounded. However, it also follows from high precisely in the area round Setúbal, why my analysis that, contrary to Matra's asser­ investment projects are especially welcome tion in its fourth plea in law, the Commis­ there, and what additional costs such sion did not restrict itself to ascertaining projects entail for potential investors. whether the Portuguese aid was compatible with the SIBR programme. On the contrary, the text of the contested decision itself shows that, separately from that investigation, the Commission examined whether the subsidy for a project to be carried out in Setúbal was Portugal unreservedly supports the Commis­ sion's view. In its written observations sub­ mitted to the Court, Portugal convincingly 26 — Thus the unemployment level there (20.6% of the working population) is twice as high as the national average. 27 — According to a report produced in 1989 by the Portuguese Ministry of Industry and Energy, quoted in Portugal's 25 — Commission communication on the method for the observations to the Court, productivity in that country is at application of Article 92(3)(a) and (c) to regional aid (OJ a level between one-third and one-quarter of the Commu­ 1988 C 212, p. 2). nity average.

... Whilst all 92(3)(a) regions have severe regional problems relative to a Community When the Commission approved the SIBR standard, significant disparities in living stan­ programme, it agreed that for the Setúbal dards and underemployment may exist region the aid intensity could reach a maxi- between regions inside the same Member mum of 75% gross grant equivalent or 60% State. net grant equivalent. The fact that in the present case the aid notified by Portugal amounted to only 33.5% gross grant equiva­ lent and 27.1% net grant equivalent con­ firmed the Commission's view that the Consequently, the Commission will use its regional handicap of the Setúbal area had not discretionary power to require a regional dif­ been overcompensated. ferentiation in aid intensity below 75% NGE . As such the relevant ceiling of aid intensity for a regional aid system will be the maximum notified by the Member State to the Commission in accordance with Article Nevertheless, Matra persists in claiming that 93(3) and approved by the Commission the Commission is unable to give even an when making its subsequent decision under Articles 92 and 93.'

28 — See the analysis in point 16 et seq., from which it can also been seen that the Commission's decision is based on a study of the extent of the regional handicap and the suit­ 29 — Reply, p. 2. ability of the planned aid for overcoming that handicap. 30 — See note 25 above.

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Entirely in line with that communication, the process (276), giving a total of ECU net grant equivalent was fixed in the SIBR 1 668 million, a figure which is not disputed programme agreed with Portugal at less than by Matra. 75%, more precisely, as stated above (point 21), at 60%.

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rejoinder that the Commission carefully required thoroughness and in line with the checked whether Portugal had granted Ford general approach followed by the Commu­ and VW, in addition to the aid notified, indi­ nity in such matters, whether the aid notified rect aid in some other shape. It found — and by Portugal was necessary for overcoming this is not disputed by Matra — that Ford the regional handicap of the area in question, and VW had acquired the land for the fac­ and that, consequently, it did not misuse its tory at the current market price of ECU discretion under Article 92(3). On the con­ 3.5 per square metre. It also established that, trary, the Commission complied with the for the reasons explained below (point 27 et general principle that aid can be regarded as seq.), the financing of the infrastructure falling within the exceptions laid down in works and training programme by Portugal Article 92(3) only if the Commission is in a did not constitute aid. Those factors led it to position to establish that without that aid the conclusion that the aid for the Newco market forces would not on their own scheme represented — in relation to the induce the recipient undertakings to conduct maximum amount of ECU 1 660 million eli­ themselves in such a way as so contribute to gible for the grant of aid — a gross grant attaining one of the objects specified in that 34 equivalent of 33.5% and a net grant equiv­ provision. It was precisely in the Philip Mor- alent of 27.1%, well below the limits pro­ ris judgment, cited by Matra, that the Court 36 vided for in the SIBR of 75% and 60% approved the use of that general principle. 35 respectively. I would add that even if, as Matra claims (see point 27 below), the financing by Portugal of the infrastructure work and training programme (in the amount of ECU 9 million and ECU 202 mil­ lion respectively) should be regarded as aid, the total amount of aid granted would then increase from ECU 547 million to ECU 758 million. Even in that case the limits of 26. I therefore conclude that these two pleas 75% and 60% determined by the SIBR put forward by Matra are also unfounded. would be far from being exceeded.

28. In the contested decision, the Commis­ 'The measures in question are intensive sion explained why it had reached the con­ courses of preparation for production, clusion that the infrastructure work planned intended to allow the future employees to by Portugal did not constitute aid. It estab­ acquire the various basic technical qualifica­ lished that all the work to be carried out on tions required for this type of project; many the site of the factory would be financed by of these courses do not yet exist in Portugal. Ford and VW and that the work to be car­ Their aim is to improve considerably the ried out away from that site would be acces­ level of qualification of the workforce and to 3 sible to all users to the same extent. Services develop new employment possibilities.' 8 normally paid for, for example, water supply, would continue in future to be supplied to Newco, just as to other users, under normal market conditions. Moreover, it is apparent from the contested decision that training is to take place at the I adopt the Commission's view that the car­ actual Newco site (but in a separate building, rying out of infrastructure work cannot be whose construction costs will be borne regarded as aid if the infrastructure provided jointly by the Portuguese Government and is available to all and, if it is normally paid Newco). for, its use is charged to the users at normal market prices. In that case there is no 'bene­ fit' for the potential users. It is inevitable that to begin with the infrastructure will essen­ 30. In the contested decision the Commis­ sion summarizes the factors which neverthe­ less prompted its decision not to classify as 37 — Case 61/79 Amministrazione delle Finanze dello Stato v Denkavit Italiana [1980] ECR 1205, paragraph 31. On the basis oí the definition it applied, the Court held that the duty of the fiscal authorities of a Member State to repay taxes which were incompatible with Community law Jul not constitute aid. 38 — Contested decision, p. 8.

aid the sums invested by Portugal in training Commission and the advantages and disad­ activities. The management of the 'training vantages properly balanced. The Commis­ centre for the motor vehicle sector' to be sion's approach does not therefore appear to established is to be completely independent be vitiated, on this point either, by a manifest of that of the factory, and the centre is to be error of assessment, and in my opinion the open to other motor vehicle manufacturers. Commission remained within the bounds of Moreover, the Portuguese authorities stated its discretion under Article 92(3). that after 1993 the training programme would not be adapted in any way to the spe­ cific needs of Newco, so that Ford and VW would not be privileged compared with other manufacturers and would moreover The procedure followed by the Commission themselves have to provide for supplemen­ 39 tary technical training. Finally, again according to the contested decision, similar training centres co-financed by the private sector also exist in other important sectors of 32. In the first part of its application, Matra the Portuguese economy. raises five pleas in law relating to the pro­ cedure followed by the Commission. Firstly, the Commission is said to have infringed Article 93 of the Treaty by deciding that there was no need to open the formal 31. The Commission took its decision after inquiry procedure provided for in Article weighing the arguments for and against. 93(2), even though there were serious diffi­ Especially in a field such as professional culties in assessing whether the Portuguese training, where the human and qualitative aid was compatible with Community law aspects are at least as important as the econ­ (see point 33 et seq. below). Secondly, the omic and financial aspects and where, Commission infringed the Treaty be severing because of the usual turnover of employees, its examination of whether the Newco the training provided will not benefit Newco project was compatible with the Treaty rules exclusively, the Court's review must be 'mar­ on State aid from its examination of whether ginal' (see point 12 above). On this point, that plan was compatible with the rules on even more so than in the matter of the competition in Article 85 et seq. of the financing of the infrastructure work, it is not Treaty (see point 48 et seq. below). for the Court to assess the actual expediency of the Commission's decision.

33. First plea in law: failure to initiate the notification is complete. After that period, formal inquiry procedure. Between the infor­ the Member State can pay the aid, after giv­ mal inquiry procedure under Article 93(3) of ing prior notice to the Commission. the Treaty and the formal procedure under Article 93(2) of the Treaty there are funda­ mental differences. Advocate General Tesauro has recently made a detailed analysis of those differences in his Opinion in Will- 40 35. If the Commission finds, during the iam Cook v Commission, an analysis with informal procedure, that the aid notified is which I entirely agree. prima facie (that is to say, without a more detailed examination being necessary) com­ patible with Community law, it must inform 45 the Member State concerned of this. A summary of the decision to 'raise no objec­ tions' to the aid is published, albeit often 46 belatedly, in the C Series of the Official Journal. As a result of the lack of transpar­ ency of the informal procedure, parties who are liable to suffer damage as a result of the aid may learn about it for the first time from 34. The informal procedure under Article that publication. 93(3) is intended, the Court has held, to 'allow the Commission to form a prima facie opinion on the partial or complete confor­ mity with the Treaty of the aid schemes noti­ 41 fied to it'. That procedure is characterized to begin with by its lack of transparency. It 36. If, on the other hand, following the does not require the Commission to make informal investigation it has carried out, the 42 Commission is not convinced that the aid public the aid schemes notified to it or to give notice to the parties concerned to sub­ notified is compatible with the common 43 market, it must, in accordance with Article mit their comments. A second characteris­ tic, the limited opportunity for third parties 93(3) of the Treaty, 'without delay' initiate to intervene, follows logically from that lack the formal procedure provided for in Article of transparency. Only third parties who, like 93(2). Compared with the informal pro­ Matra, have been informed of the notifica­ cedure described above, the formal pro­ tion of aid schemes by an unofficial channel cedure, which is meant to enable the Com­ are in a position to submit observations. mission to clarify cases which do not prima Finally, the informal procedure is character­ facie appear clear to it, is more transparent ized by its short duration. The Court has and more thorough and gives third parties a held that it cannot in principle last for more greater opportunity to intervene. As a result, than two months from the time when the it also generally takes longer than the infor­ mal procedure.

The formal procedure starts with a com­ If, on the other hand, the Commission munication published in the Official Journal decides to initiate the formal procedure giving notice to the parties concerned to although, as subsequently appears, that 48 submit their comments. In this way the decision is not justified, the position is not rights of the defence are respected and the satisfactory either. Given that no aid can be Commission — which does not have powers paid until the formal investigation is con­ of investigation of its own in matters of State cluded, the resulting delay adversely affects aid — has as much relevant information as the interests of the recipient undertaking possible: and/or the Member State which intends to grant the aid. In this respect, the Court, in two judgments of 30 June 1992, held applica­ tions for annulment, brought against a Com­ mission decision to initiate the procedure '... the other Member States and the sectors under Article 93(2), to be admissible. The concerned [are guaranteed] an opportunity Court stated inter alia that: to make their views known and ... the Com­ mission [is allowed] to be fully informed of all the facts of the case before taking its 49 decision ...'.

'a decision finding that the aid is compatible with the Treaty or proceedings brought against a Commission decision finding it 37. Since the informal procedure under Arti­ incompatible would not make it possible to cle 93(3) and the formal procedure under remove the irreversible consequences of a Article 93(2) each have their own purpose delay in paying the aid as a result of compli­ and specific features, it is of the greatest ance with the prohibition in the last sentence 5 importance that the two procedures are not of Article 93(3)' (emphasis added). 0 misused.

It did so in particular in the Germany v amendments to the plan notified. Further­ Commission judgment of 20 March 1984. more, precisely because of those negotia­ That judgment concerned an application tions, 16 months had elapsed between the brought by Germany for annulment of a notification and the favourable decision, a decision by the Commission not to raise any period which 'well exceed [ed] the period objections — and hence not to initiate the normally required for a preliminary exami­ formal procedure under Article 93(2) of the nation under Article 93(3)' (paragraph 15). Treaty — to an aid scheme for the restructur­ Finally, it was apparent that the Commission ing of the Belgian textile industry. The Court had declared the amended aid programme laid down the following principle (para­ compatible with the common market only graph 13): subject to compliance with certain condi­ tions, since it remained 'very concerned about the effects which application of the plan [might] have on competition within the Community' (paragraph 16). '[The formal procedure under Article 93(2)] is essential whenever the Commission has serious difficulties in determining whether a plan to grant aid is compatible with the com­ mon market. It follows that the Commission The Court held that in those circumstances may restrict itself to the preliminary exami­ the Commission should have initiated the nation under Article 93(3) when taking a formal procedure under Article 93(2). decision in favour of a plan to grant aid only if it is convinced after the preliminary exam­ ination that the plan is compatible with the Treaty. If, on the other hand, the initial examination leads the Commission to the 40. Matra submits that the factors on the opposite conclusion or if it does not enable it basis of which the Court reached its decision to overcome all the difficulties involved in in that case are also present in this case. I determining whether the plan is compatible now propose (point 41 et seq. below) to with the common market, the Commission is examine whether that is indeed the case. I under a duty to obtain all the requisite opin­ shall then consider (point 46 et seq. below) ions and for that purpose to initiate the pro­ whether there may perhaps be other factors cedure provided for in Article 93(2).' in the present case which might lead the Court to decide that the Commission should have initiated the formal procedure under Article 93(2).

original plans. In his letter to Matra, Com­ and the Commission took place from missioner Bangemann referred to 'substantial November 1990. Firstly, notification of an improvements' (see point 3 above). Finally, aid scheme is preceded, by definition, by a the Commission had authorized the Portu­ draft scheme and, secondly, Matra has not guese aid only subject to conditions and with produced any evidence which could disprove reluctance. That the contested decision gave the assertion by both the Commission and only conditional approval follows, according Portugal that mutual contact before notifica­ to Matra, from the conditions attached to it tion was restricted to with respect to the availability to third par­ ties of the infrastructure and training. The Commission's misgivings are apparent from the obligation imposed on Newco to submit an annual report to the Commission. 'an oral request by the Portuguese authori­ ties to be informed of the assessment criteria applied by the Commission to aid of this type and on the information which the Commission required in order to make a Matra's argument that the facts of Germany decision with respect to Article 92'. 53

v Commission are analogous to those of the present case fails to convince me, for the fol­ lowing reasons.

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the aid scheme eventually approved shows That passage demonstrates, on the contrary, that the total amount of aid to be granted that the Commission does not have any remained unchanged since notification. doubts as to the compatibility of the Portu­ Matra's assertion that that amount was guese aid with Community law. By request­ reduced by 'over ECU 100 million' follow­ ing Portugal to draw up a report each year, ing negotiations is not supported by the doc­ the Commission merely indicates that — as uments before the Court. it confirmed at the hearing — it will con­ tinue to ensure that Portugal complies strictly with the agreed conditions for grant of the aid. The Commission is not only enti­ tled, but obliged to have 'doubts' of that Matra is likewise unable to substantiate its sort. It must continue to pay attention to the assertion that in the contested decision the manner in which an aid scheme it has Commission imposed conditions on Portu­ approved is implemented. gal relating to the use of the infrastructure by, and the availability of the training pro­ grammes to, third parties. No such condition appears in the contested decision. It is merely stated there that 'the Portuguese 56 46. I therefore conclude that the factors authorities have undertaken' to guarantee which led the Court to annul the Commis­ that the infrastructure works will be accessi­ sion's decision at issue in Germany v Com- ble unreservedly, which is self-evident. mission are not present in this case.

compatibility of the aid with Community- an extension of the first plea, Matra raises the law, if only because of the large amount of question of the connection between two that aid. I cannot agree with that point of branches of European competition law in the view. broad sense, namely the law on State aid (Article 92 et seq. of the Treaty) and the law on agreements, decisions and restrictive prac­ tices (Article 85 et seq. of the Treaty). While it may be assumed that large-scale aid Although Matra acknowledges that the projects must be the subject of particularly Court has not yet specifically dealt with this 57 detailed examination by the Commission, problem, it nevertheless considers that it fol­ the size of the planned aid or of a recipient lows from the Court's case-law that in a undertaking is not necessarily decisive for case, some aspects of which concern State aid the assessment of whether that aid is permis­ and other competition, the Commission sible. What is important is not so much the must ensure that there is some connection amount of aid in itself, but its impact on between those two branches of the law. intra-Community trade. That impact, how­ More precisely, Matra considers that the ever, is not determined by the amount of aid Commission could not dissociate the pro­ alone, but also by factors such as the scale of cedure under Article 93 of the Treaty and the the market in question and the number of 60 procedure under Regulation No 17. 58 undertakings present on that market.

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must at the same time verify whether that aid programme. Finally, the inconsistent way in entails a breach of Article 85 et seq. If we which the Commission dealt with this case depart from that overall approach, there is a as a whole allowed Ford and VW to present danger of inconsistency. the facts in different, sometimes even contra­ dictory terms, depending on whether the aid procedure or the competition procedure was being followed. 51. In Matra's view, by declaring the Portu­ guese aid to be compatible with Community law without having first also analysed the competition law aspects of that aid, the Commission ipso facto prejudged its assess­ ment of the question whether those aspects 52. Although, as I have said, I agree with the had been complied with: principle advocated by Matra, namely that the review of State aid with reference to the provisions on aid and with reference to the provisions on competition must be coordi­ 'In the light of the Court's case-law referred nated, I cannot agree with the way in which to above ... it was necessary for the Commis­ Matra applies that principle to the present sion in each case to examine all the economic case. It appears to me that in the present case and legal factors ... before reaching a conclu­ the Commission adequately coordinated its sion relating to either provision. The chro­ investigation under Article 85(3) and that nology of the procedure and the very word­ under Article 93. ing of the decision show that that was not the case ... a mere reading of the decision demonstrates sufficiently that ... the "pri­ vate" competition law aspect was completely 62 ignored by the Commission.'

Community interest are taken into consider­ duration of the exemption granted under ation' (emphasis added). Article 85(3) for the agreement by Ford and V\V to set up a joint venture was limited to ten years, such a restriction was not expressly provided for in the case of the approval of the Portuguese aid programme. The chronology of events also shows that The last instalment of that aid is in fact to be the Commission carried out a coordinated paid on 30 December 1994, after which the investigation. The communication made in programme will end. accordance with Article 19(3) of Regulation No 17 (see note 1 above), where the Com­ mission states that it intends to grant an exemption under Article 85(3), was pub­ lished as early as 13 July 1991, in other words, before the contested decision was adopted. Moreover, both in its letter to Matra of 30 July 1991 (see point 3 above) and in the summary of its decision not to object to the Portuguese aid (see point 2 and The assertion that Ford and VW presented note 4 above), the Commission expressly the facts in different, even contradictory indicated its intention to apply Article 85(3). manner in the procedures under competition law and State aid law is also unfounded. A mere comparison of the contested decision with both the communication under Regu­ lation No 17 and the decision of 23 Decem­ Finally, I would note that I have already ber 1992 granting an exemption under Arti­ concluded above (points 13-15) that when it cle 85(3) is enough to demonstrate that the drew up the contested decision, the Com­ Commission based itself on identical facts mission carried out a sufficiently thorough for the assessment of both the State aid analysis with respect to the risk of distortion aspects and the competition law aspects of of competition within the common market. the case. There is nothing in the file to indi­ The examination of the question whether the cate that Ford and VW might have given Portuguese aid was compatible with Com­ contradictory accounts of the facts; in any munity law on State aid was thus, in my event, even if they did do so, that had no dis­ view, not dissociated from the examination cernible effect. of the question whether that aid was com­ patible with the rules on competition.

'inconsistency' cannot, however, be attrib­ Commission must expressly make the first uted to the Commission, but follows from decision dependent on the decision still to be the fundamental procedural differences taken. In the present case, however, that has between State aid cases and competition no consequences. As the Commission rightly cases. If the Commission, following an infor­ observes, an aid scheme is approved only for mal preliminary inquiry under Article 93(3), the implementation of a clearly defined decides that an aid is compatible with Com­ investment programme. If it subsequently munity law, it is not obliged to initiate the turns out that that programme is (wholly or formal procedure under Article 93(2). partly) incapable of being carried out, for Indeed, it cannot initiate it without good rea­ example because of an adverse final decision son (point 37 above). In accordance with as regards exemption under Article 85(3), the Article 19(3) of Regulation No 17, on the aid becomes devoid of purpose to that other hand, the Commission must formally extent. As Matra itself points out, moreover, invite third parties to submit their observa­ in such a case any aid paid out must be reim­ tions if, following an informal preliminary bursed. In other words, recipient undertak­ inquiry, it concludes that an exemption ings who apply the aid they have received under Article 85(3) is justified. The Commis­ before the exemption is granted do so at sion cannot be criticized for the fact that two their own risk. similar decisions, taken following an infor­ mal preliminary investigation, give rise to such divergent consequences from a proce­ dural point of view.

From the earlier part of this Opinion (points vehicle segment' on the other hand. Matra 13 et seq. above) it can be seen clearly too, in its written and oral observations to enough that the contested decision did in the Court, has always proceeded from the fact contain a detailed analysis of the compo­ assumption that the multi-purpose vehicle nents and impact of the Portuguese aid and market, as a segment of the motor vehicle also of the planned investments and the market as a whole, is the relevant market in 6 regional handicap. In refuting Matra's argu­ this case. 7 Matra was thus evidently ments on this point, I constantly referred to scarcely troubled by the 'confusing' termi­ and quoted from the contested decision to nology the Commission is said to have used. demonstrate that the latter does indeed allow the Court to review the Commission's exer­ cise of its discretion. In my view, the Com­ mission thus complied with the conditions, Matra's third plea relating to the procedure laid down by the Court and cited by Matra, thus also appears to me to be unfounded. for a proper statement of reasons:

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judgment the Court referred, in connection However, it follows from this Opinion that with a conditional exemption under Article there are sufficient reasons for assuming that 85(3), to in the present case the Commission did not, in the exercise of its wide discretion, wrongly decide to refrain from initiating the 'the general rule that a person whose inter­ formal procedure under Article 93(2). ests are perceptibly affected by a decision taken by a public authority must be given the opportunity to make his point of view 69 known'.

69 — Case 17/74 Transocean Marine Paint v Commission [1974] The contested decision expressly mentions ECR 1063, paragraph 15. 70 — Since the Commission's inquiry "was not directed against Matra's complaint, and lists and analyses the Matra, its procedural rights are, according to the Court's principal factors in that complaint. The case-law, less far-reaching than those of an undertalting which is the object of an investigation; see Joined Cases Commission states, moreover, without being 142 and 156/84 BAT and Reynolds v Commission [1987] ECR 4487, paragraph 20: 'the procedural rights of the com­ contradicted by Matra on this point, that plainants are not as far-reaching as the right to a fair hearing before adopting the contested decision, it of the companies which are the object of the Commission's investigation'. already had before it all the numerous and

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71 — In competition cases, even if a formal procedure is initiated, 73 — That docs not answer the question whether the rights of the that does not mean that the entire case file is communicated defence were respected with regard to other third parties. to third parties. Thus documents containing business Since Matra is the only manufacturer in Europe producing secrets cannot in any circumstances be made public; sec the multi-purposes vehicles exclusively (see point 9 above) and, judgments in Case 53/85 AKZO Chemie v Commission moreover, has a dominant position in that market segment [1986] ECR 1965, paragraph 26 et seq., and DAT and Rey- (see point 15 above), the question does not really arise. To nolds, paragraph 21. guarantee the rights of the defence even for interested par- tics who arc not aware of the informal procedure initiated 72 — At the hearing the Commission, on the other hand, asserted under Article 93(3) of the EEC Treaty, it is necessary, as that Matra in one way or other had always had access even Advocate General Tesauro recommends, to extend the con­ to the most confidential documents of the Commission. It ditions of admissibility for the benefit of those parties (sec gave as an example the reports which were drawn up at Set­ note 14 above). úbal in October 1992 ana whose contents found their way into the press.

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