T-178/94

Commission of the European Communities, represented during the written pro­ cedure initially by Francisco Enrique Gonzalez Diaz and Michel Nolin, then by Francisco Santaolalla and Michel Nolin, and during the oral procedure by Fernando Castillo de la Torre, all of its Legal Service, acting as Agents, with an address for service at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

* Language of the case: Spanish.

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JUDGMENT OF 18. 12. 1997 — CASE T-178/94

APPLICATION for annulment of the Commission's decision, communicated to the Asociación Telefónica de Mutualistas by the Commission's letter D/30508 of 15 February 1994, to close the file on the complaint lodged by that association objecting to the State aid allegedly received by a public limited company, Com­ pania Telefònica de Espana SA,

Background to the complaint

1 The applicant, Asociación Telefónica de Mutualistas ('ATM') was established in 1987 in order to protect the rights of members of Institución Telefónica de Previ­ sion ('ITP'), a mutual social welfare association established by Compañia Telefon­ ica de España SA ('TESA') for the benefit of its employees and those in receipt of a pension from it.

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ATM ν COMMISSION

2 TESA is a commercial public limited company in which the State holds an interest. The Spanish State has granted it the right to provide the basic public telephone service. In 1992 the State's shareholding amounted to 32 % of its shares, the remainder being held by 300 000 other shareholders, each holding less than 0.5% of the shares. The applicant explained at the hearing that the State currently owns 21 % of its share capital. Moreover, the State appoints the majority of the members of TESA's administrative bodies.

3 ITP was created by TESA in 1944 on the basis of a Law of 6 December 1941 con­ cerning assistance funds and mutual social welfare associations and of the regu­ lation implementing that Law, approved by Decree of 26 May 1943. According to that regulation, such funds and mutual associations were to be governed by their statutes and regulations, provided that they were in accordance with the require­ ments of the Law and the implementing regulation. Those rules laid down, more­ over, that benefits provided by those bodies were to be regarded as compatible with benefits which their members could draw under the State's compulsory social insurance scheme, unless contrary statutory provisions or express provisions of the Ministry of Labour stipulated that those benefits replaced compulsory social insur­ ance benefits.

8 A Royal Decree of 20 November 1985 provides that the institutions to which the groups that are to be integrated belong are required to pay to the social security scheme a sum corresponding to the burdens and obligations which are to be assumed by it and that, if the resources available in order to ensure payment of the obligations for which those institutions replace the social security scheme are insufficient to cover the costs of the integration, the difference is to be paid by the bodies or undertakings which are required to provide financial cover for payment of the benefits which the institutions in question awarded.

9 In the meantime, in 1977 the Ministry of Employment had approved iTP's amended regulations. Since then, point 4 of the transitional provisions has stated that TESA 'will guarantee payment, for a period of 10 years, of benefits which ITP is required to provide and, for the purposes of quantifying that liability, the maxi­ mum guaranteed amount shall be fixed annually and the guarantee shall be renew­ able annually in such a way that it covers the period of 10 years commencing on each renewal date'. According to the applicant, the issue of the guarantee had even been required by the public authority as a condition of its approval of the regula­ tions.

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ATM ν COMMISSION

10 According to the minutes of its meeting of 24 July 1979, the steering committee of ITP noted that, in the context of ITP's acquisition of a block of shares in TESA, TESA had guaranteed that it would enter into certain undertakings in regard to ITP. Those undertakings consisted, in particular, of 'the extension of the above- mentioned guarantee in order to cover the technical reserves emphasized in the actuarial reports' and of the obligation to maintain that guarantee, updated annu­ ally, as stated in the transitional provision set out in paragraph 9 above.

Administrative procedure

15 Those are the circumstances in which a complaint was lodged with the Commis­ sion on 1 July 1993, on behalf of ATM, claiming that the Spanish public authorities had allowed a reduction in TESA's social charges, which constituted State aid. The measures to which the complaint objects, in the light of the explanations given during the administrative procedure and the proceedings before the Court, are as follows.

16 The aid consists first, in the fact that the public authorities allowed TESA to ben­ efit, between 1982 and the end of 1991, from the difference between the amount which it actually paid to ITP by way of contributions and the amount of contribu­ tions which, owing to the reduction coefficient, it did not have to pay to the gen­ eral social security scheme. That aid amounts to PTA 270 000 million. The appli­ cant requested the Commission to order TESA to pay that difference to ITP.

17 Second, the public authorities had allowed the cancellation of a guarantee which TESA was required to maintain in force so that ITP could always count on adequate cover for the benefits which it had to supply during the next ten years. That State measure provided an advantage to TESA which amounted to PTA 8 000 million.

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ATM ν COMMISSION

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JUDGMENT OF 18. 12. 1997 — CASE T-178/94

If ITP and the employees consider that their rights have been infringed by the non-performance of an undertaking imputable to TESA, they may, as they have done, seek redress in the competent national courts, which, if they consider it appropriate, will restore the complainants' rights.'

'The exemption from payment of certain amounts to the [general] social security scheme was decided by the Spanish Government in accordance with general Span­ ish social security law, and TESA fulfilled the conditions laid down in those provi­ sions. As regards any failure by TESA to perform the undertakings which it had entered into under the general legislation referred to, the Tribunal Supremo Español has held, by judgment of 26 December 1990, that under the general leg­ islation applicable TESA was not required to transfer amounts to ITP greater than those which it had in fact transferred. Consequently, the Commission cannot con­ clude that the difference in amount referred to constitutes State aid, since that situ­ ation is not contrary to the general legislation applicable.

[...]

in any event, the complainant's request that the Commission order TESA to pay to ITP the amount of the difference is not in conformity with Community law, since, if State aid were found to exist and to be incompatible, the Commission would order its repayment to the State'.

26 By order of the Court of 14 June 1995 consideration of the plea of inadmissibility was reserved for final judgment.

27 The parties lodged their defence, reply and rejoinder with the Court Registry on 21 August 1995, 9 October 1995 and 15 December 1995 respectively.

28 Upon hearing the report of the Judge Rapporteur, the Court of First Instance (First Chamber, Extended Composition) decided to open the oral procedure. By way of measures of organization of procedure, the Court put certain written ques­ tions to the parties, to which they duly replied.

29 The parties presented oral argument and their replies to the Court's questions at the hearing which took place on 30 September 1997.

Forms of order sought

30 The applicant claims that the Court should:

— declare the action inadmissible;

— alternatively, dismiss the action as unfounded; and

— order the applicant to pay the costs.

Admissibility

Arguments of the parties

32 The defendant claims that the action is inadmissible on two grounds. First, the applicant has no interest in bringing an action. Second, there is no act which the applicant may challenge, and, in any event, it does not have capacity to bring pro­ ceedings as provided for in the fourth paragraph of Article 173 of the EC Treaty.

35 Second, the applicant has no interest in bringing an action because the alleged State aid benefits solely TESA, an undertaking with which neither the applicant nor its members competed, whether directly or indirectly. The defendant relies in that regard on the orders of the Court of Justice of 30 September 1992 in Case C-295/92 Landbouwschap ν Commission [1992] ECR I-5003 and of 8 April 1981 in Joined Cases 197/80, 198/80, 199/80, 200/80, 243/80, 245/80 and 247/80 Lud- wigshafener Walzmühle Erling and Others v EEC [1981] ECR 1041 and contends that, when determining whether or not there is an interest in bringing an action, the analysis of competitive relationships must be made in relation to the applicant and not to persons or undertakings which might actually or potentially be affected by the measure in question. In the present case, neither ATM nor its members are directly or indirectly in a competitive relationship with TESA, nor in any other relevant relationship from the point of view of the protection of free competition. It follows, according to the defendant, that the upholding or annulment of the contested decision in no way affects the interests of ATM.

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38 Furthermore, the defendant considers that, on any view, the applicant is not indi­ vidually concerned, as required by the fourth paragraph of Article 173 of the Treaty. As a private association acting in these proceedings in the interests of its members and not in its own interests, the applicant is not individually concerned by a decision declaring that the State's alleged financial measure in favour of TESA does not constitute State aid for the purposes of Article 92 of the Treaty. More specifically, it did not act in the role of privileged interlocutor as required by judg­ ments of the Court of Justice in Joined Cases 67/85, 68/85 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219. Similarly, although the judgment of the Court of First Instance in Joined Cases T-447/93, T-448/93 and T-449/93 AITEC and Others v Commission [1995] ECR II-1971 confirmed that a professional asso­ ciation could be regarded as individually concerned where it could show that the competitive position of some of its members had been significantly affected by the aid in question and where an action by those members would have been admissible

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ATM ν COMMISSION

in accordance with the judgment of the Court of Justice in Case 169/84 Cofaz and Others ν Commission [1986] ECR 391, the Commission nevertheless considers that these requirements are not satisfied in the present case.

39 Nor is the applicant directly concerned as required by the fourth paragraph of Article 173 of the Treaty, since there is no causal connection between the decision not to raise objections on the ground that there was no State aid, and the loss which may have resulted from the Spanish social security legislation. Even assum­ ing that the Commission committed an error in categorizing the Spanish State's financial measures benefiting TESA and should therefore order the aid to be recov­ ered, the Spanish legal system provides no mechanism whereby the applicant's alleged loss could be made good.

43 As regards competition on the market, the applicant states that it has suffered an actual and definite loss owing to the State aid benefiting TESA, since the reduction in social contributions affected its members' rights. In that regard the applicant relies on Cook ν Commission, cited above, according to which parties concerned, within the meaning of Article 93(2) of the Treaty, are defined as the persons, undertakings or associations whose interests might be affected by the grant of the aid, in particular competing undertakings and trade associations. Since the appli­ cant is a professional association established in order to defend the interests of members of a provident scheme, anything which affects ITP or TESA is of direct interest to it.

44 The applicant claims that it also has an interest in bringing these proceedings because it was established in order to defend ITP's rights in circumstances where the defence of those rights would otherwise have been impossible on account of the control exercised by TESA over ITP.

45 As regards the second ground of inadmissibility, the applicant claims that it is the addressee of the letter of 15 February 1994, which is a decision producing binding legal effects. That measure terminated the complaints procedure and contains an appraisal of the aid contested and, accordingly, prevents the applicant's members from satisfying their interests in the future.

46 In that regard the applicant relies on Case C-325/91 France ν Commission [1993] ECR 1-3283, paragraph 9, claiming that the existence of a challengeable act for the purposes of Article 173 of the Treaty depends on whether it produces legal effects,

49 In its rejoinder the defendant counters by stating that the judgment in SFEI and Others ν Commission, cited above, concerns the procedure applying Articles 85 and 86 of the Treaty, which provides in particular for the possibility of lodging complaints. That case is not applicable here. As regards the judgment in Irish Cement ν Commission, cited above, the defendant observes that if the Court of Justice had not held in that judgment that the action had been brought out of time, it would have had to consider whether the applicant was directly and individually concerned by the Commission's letter.

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JUDGMENT OF 18. 12. 1997 — CASE T-178/94

50 Lastly, as to the applicant's submission that there would be no possibility of judi­ cial review if this action were inadmissible, the defendant states that Article 92(1) of the Treaty is directly applicable and consequently may be relied on by the appli­ cant in national courts if it considers this to be appropriate.

Findings of the Court

51 The Court observes, first of all, that a decision terminating an investigation of the compatibility with the Treaty of an aid measure is always addressed to the Member State concerned and that a private individual is entitled to contest it before the Community judicature where the conditions of the fourth paragraph of Article 173 of the Treaty are satisfied.

56 The applicant is an association formed by the beneficiaries of the mutual provident association ITP. Those beneficiaries are all employees or pensioners of TESA, a company which established ITP in order to set up a system of social providence for its employees. The Court therefore finds that the members of the applicant association are in fact complaining that the alleged State aid benefits their present or former employer.

57 The applicant claims that, if there had been no State aid as alleged, ITP would not have been integrated into the general social security scheme and the beneficiaries would have been able to continue to receive benefits above those awarded by that general scheme. It adds that if the amount of aid were repaid to the State — as, in its view, the Commission should have ordered — the State would pay those amounts to ITP. As a result, ITP would be revived and the beneficiaries would have their right to higher benefits restored.

58 However, the Tribunal Supremo held that 'no right exists to seek payment to [ITP] of sums ... other than those legally provided for by the [provisions] governing it and it is common knowledge that the discrepancy between the normal contribu­ tion to the [general social security fund], on account of the fact that it assumes all

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JUDGMENT OF 18. 12. 1997 — CASE T-178/94

the insured risks, and the partial contribution made in the present case to TESA's [mutual association ...] is a problem arising from a legislative amendment, which cannot be resolved by the courts' (point 3 of the legal grounds of the judgment cited above). This Court finds that the Commission was correct in concluding that under national law TESA was not required to make any contribution to ITP in excess of what it had actually paid. Moreover, national law does not provide for payment to ITP of the difference between the normal contribution to the general social security scheme and the lower contribution payable to that association pur­ suant to the provisions applicable to it at the material time (see paragraphs 5 and 6 above).

61 As regards the other aspect of the alleged aid, the Court observes that, even if the Commission had found that the annulment of the guarantee constituted State aid and had ordered its reinstatement, that would merely have resulted in a guarantee by TESA that social benefits due to beneficiaries would be paid. However, TESA is already under an obligation, pursuant to the national measures cited in para­ graphs 8 and 13 above, to cover the cost of ITP's integration into the general social security scheme. Since that integration, the benefits are paid by the general social security scheme. As the applicant has not shown that the annulment of the guar­ antee led to specific losses on the part of its members, it has not been able to show that any reinstatement would have given rise to benefits which those members could claim. Nor has it shown that ITP would not have been integrated into the general scheme if the guarantee had been maintained in force.

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ATM ν COMMISSION

62 In the abovementioned circumstances, even though the effect of the decision was to close the file on the applicant's complaint, that decision clearly did not affect its legal sphere. It follows that the confirmation or annulment of that decision is in no way liable to affect the interests of the applicant or of its members. Consequently, the applicant has no interest in obtaining the annulment of the decision which it contests and therefore does not satisfy the requirements of the fourth paragraph of Article 173 of the Treaty.

63 The Court finds, furthermore, that, since the applicant is in fact an association of the employees of the undertaking which allegedly benefited from a State aid, it in no way competes with that undertaking and cannot establish an interest in bring­ ing proceedings on account of competitive effects (see, as regards the relationship between competitive effects and admissibility, for example, the order in Landbou­ wschap ν Commission, cited above, paragraph 12, and the judgment of the Court of First Instance in Case T-435/93 ASPEC and Others ν Commission [1995] ECR II-1281, paragraph 63).

On those grounds,

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

hereby:

1. Dismisses the application as inadmissible;

2. Orders the applicant to bear its own costs and to pay those of the Commis- sion.

Saggio Kalogeropoulos Tiili