Court of Justice 11-07-1996 ECLI:EU:C:1996:300

The plea in law concerning Article 169

In my view, the appeal is unfounded in so far as it concerns the possibility of challenging the Commission's refusal to commence the proceedings, provided for under Article 169, for failure to fulfil obligations, as requested by the appellant.

I shall disregard the fact that in previous judgments the Court^(*) has refused individuals the right to bring proceedings before the Community judicature under similar circumstances, in view of the wide discretion which the Commission enjoys with regard to commencing and pursuing the procedure in issue in this case. Although the case-law is consistent, it requires further explanation. As a matter of principle, the mere provision of such discretionary power, however broad it may be, does not in fact exempt the Commission from the obligation to take action under the prosecution principle and, consequently, cannot be sufficient in the present case to prevent its conduct from being challenged by individuals before the Community judicature. This is confirmed by the extensive case-law of the Court in the field of State aid,^(*) which reconciles the wide administrative discretion which the Commission enjoys in the field of Community law with the possibility of rendering its activity amenable to review by the Community judicature.

In my opinion, there is, in any event, another reason relating to the very nature of the provision in question which precludes the appellant from having the right it claims by way of this plea in law. Article 169 of the Treaty belongs, after all, to the provisions intended to govern the Community's institutional system and ensure its proper functioning. These are in fact provisions which exclusively concern relations between the Member States and the institutions.

Even though the Article 169 procedure, once put into motion, indirectly creates legal situations which may benefit individuals, it does not give them any right to intervene or any possibility of becoming involved in the procedure laid down by that provision: nor does it allow them to bring an action challenging the Commissions competences and decision-taking powers. The procedure under Article 169 thus operates at the level of inter-institutional relations, which is inaccessible for individuals.

It could certainly be stated that there is a lacuna in the system of judicial protection in that it does not enable individuals to bring an action for judicial review of decisions whereby the Commission decides not to initiate the procedure for failure to fulfil obligations.

None the less, to fill such a lacuna with the Court's power of interpretation would give rise, on closer examination, to far-reaching changes in the institutional framework, which is precisely the area in which the authors of the Treaty clearly intended to give the provision in question the role set out above: in the scheme of the Treaty Article 169 plays the part of governing relations between the Commission and the Member States. This is the conclusion to which a systematic interpretation of the provision leads: it need only be observed that the power to intervene in proceedings for failure to fulfil obligations initiated by the Commission, provided for in Article 37 of the Statute of the Court of Justice, is given only to the Member States and the Community institutions. The individual plays no part here, even in the initial pre-litigation stage. The inference must be that the individual has no standing to challenge any refusal of the Commission to take action.

By this I do not mean that the Community legal system otherwise leaves the individual totally bereft of protection. That is not the case. The individual may plead before national courts the unlawfulness of the State's conduct which he claims to be in breach of Community obligations, propose, if necessary, to the national court questions to be referred to the Court for a preliminary ruling under the Article 177 procedure and use the remedies available to him if his claims are upheld, including an action for damages. For these reasons also I consider that the appellant's first plea in law should be rejected.

The plea in law concerning Article 90(3)

As regards the second plea in law, I would state from the outset that the Commission — and the Court of First Instance, in view of the reasoning which underlies the contested order — appear to consider Article 90(3) and Article 169 as parallel provisions, so to speak. Article 90(3) confers on the Commission powers of review and supervision over the Member States, with regard to public undertakings and other undertakings treated as such for the purposes set out therein, which are discretionary in substantially the same sense as are the measures which the Commission may adopt pursuant to Article 169. It is therefore this wide margin of discretion which, here again, makes it impossible, according to the Court of First Instance (which refers on this point to its earlier judgment in Ladbroke Racing^(*)), for individuals to bring actions for annulment of negative decisions, such as that adopted by the Commission in the present case. This is the only decisive argument in the grounds of the order which is the subject of the present appeal. It should therefore be examined more closely.

Unlike Article 169, Article 90(3) forms part of the framework of provisions specifically designed to protect competition and to govern the conduct of undertakings in the market. Admittedly, a particular kind of undertaking is involved. Article 90 of the Treaty in fact covers cases in which a Member State upsets the normal functioning of competition by means of the influence it exerts over undertakings it controls or on which it has conferred special rights. The provision is thus intended to protect economic operators from any interference from the Member State, by means of the relations it maintains with the undertakings of the type described, which would jeopardize the fundamental economic freedoms enshrined in the Treaty. That provision thus protects competition, albeit in consonance with the performance in law and in fact of the specific task entrusted to the undertakings in question. It could not be otherwise.

It should, however, be pointed out that it is the economic operators who benefit under Article 90. In so far as the rules intended to protect competition are applicable, they apply in exactly the same way to the categories of undertakings referred to in Article 90 as to all the others. Article 90(3) provides, moreover: ‘The Commission shall ensure the application of the provisions of this Article and shall, where necessary, address appropriate directives or decisions to Member States’.

However, I do not consider that the letter and the spirit of Article 90 rule out, as the Court of First Instance holds, the possibility of making subject to judicial review Commission decisions refusing to act on complaints submitted by individuals which it does not consider worthwhile taking up.

Article 90 is placed among the other rules on competition under Title V of the Treaty. The sedes materiae is significant. The provision forms part of others which concern the conduct of undertakings in the field of competition, in particular those which govern State aid. The place and aim of the provision attest to the fact that the individual may not, in the present case, be deprived of the judicial protection which he enjoys in the vital area of competition. It is clear, in any event, that the provision in question cannot properly be compared to Article 169 and the other provisions specifically, or rather, exclusively intended to govern institutional relations at Community level. The argument, advanced by the Commission, that Article 90(3) and Article 169 are comparable does not stand up to scrutiny.

Nor, in my opinion, is it possible to uphold the view adopted by the Court of First Instance, which declared inadmissible the action brought by the person concerned against the decision not to act, basing that conclusion, here again, on the underlying discretionary power of the institution.

According to the Court of First Instance, the Commission's discretion is so broad, that it is under no obligation to take action or, therefore, to give reasons for any refusal to take action on complaints lodged with it by the undertakings concerned. This means that the latter have no right to bring an action against measures whereby the Commission refuses to issue directives or adopt decisions addressed to the States whose unlawful conduct is complained of by individuals. The Commission would thus be deciding not to make use of a power which the Court of First Instance defines as a true prerogative reserved to it by Article 90(3).

However, I believe that the Court of Justice is called upon in this case to reflect on the case-law, established by its judgments and those of the Court of First Instance, where a discretion, broad though it may be, is conferred on the Commission in a field in which, under the scheme of the Treaty, public interest considerations encroach on the interests of free competition, but not to the point of overwhelming them. I have in mind, for example, State aid.^(*) Where there is free competition, there is protection of the individual; this is something which is at the foundations of the common market. Recognizing the unchallengeability of that discretion where review is sought by an individual is fully justified only inasmuch as the Community legal system is exclusively intended to regulate public interests and inter-institutional relations: as I said earlier, the present case concerns an area in which the requirements of competition are interlinked with, and are to be reconciled with, those taken into account by the Treaty in order to protect general superior interests, in particular State interests, in so far as they are relevant to Community law.

Consequently, I consider that the view to be taken of the present case should be different from that taken by the Court of First Instance. It is like where a party claims that judicial review of negative decisions in the field of State aid is admissible: a decision of that kind could take the following form: the Commission is requested by an undertaking to check whether aid granted to other competing undertakings is compatible with the Treaty and it refuses to take any such action. Both in that case and in the case now before the Court, it is for the Commission to adopt measures to be addressed to the Member States which are binding upon them in respect of specific requirements as to conduct. The Member State is thus the natural addressee of the decisions and of other acts adopted by the Commission, either under Articles 92 and 93 or under Article 90.^(*) However, in my view, this does not stop individuals from challenging before the Community judicature measures adopted by the Commission inasmuch as Article 90 grants them the right to have applied in their regard Community rules intended to protect freedom to carry on business and freedom of competition.

The conclusion at which I arrive requires one further explanation. The subjective conditions governing the right to bring an action against measures which the Commission has adopted under Articles 92 and 93, as discernible from the case-law of the Court of Justice and of the Court of First Instance in this field, also apply, in my opinion, from the point of view from which I regard this case, notably as regards the individual whose position is protected by Article 90(3). However, the Court of First Instance did not deal with this aspect of the present case. It considered it sufficient, for the purpose of its decision, that the individual had absolutely no right to bring an action in view of the supposedly unchallengeable nature of the measure. The sole justification given in the contested order for this decision is, as I have said, the breadth of the powers conferred on the Commission. The mistake lay in not seeing that, in the context of Article 90(3), that power is limited by individuals' subjective rights, disregard of which may be relied upon by the person concerned before the Community judicature.

In the light of the foregoing considerations, I therefore consider that the contested order should be annulled only in so far as it concerns the inadmissibility of the action against the Commission's refusal to initiate the proceedings provided for in Article 90(3) of the Treaty.

Moreover, since the present case largely concerns the assessment of facts, and in order to ensure access to both tiers of the judicature, I consider it appropriate that the Court of First Instance should assess whether the action in the present case fulfils other conditions of admissibility and possibly give a decision on the substance.