Communicated on 28 August 2018
FIFTH SECTION
Application no. 47341/15
KONKURRENTEN.NO AS
against Norway
lodged on 18 September 2015
STATEMENT OF FACTS
1. The applicant, K As, is a privately owned limited liability company, established in Norway. It is represented before the Court by Mr J. Midthjell, a lawyer practising in Oslo.
The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
3. The applicant operated in the express bus market in Norway.
4. Sporveien Oslo AS (“Sporveien”) was a company owned and controlled by Oslo Municipality. Sporveien had three subsidiaries, including Unibuss AS, which again had a subsidiary Unibuss Ekspress AS, which, through another subsidiary – L AS – ran an express bus service on the same route as the applicant.
5. On 11 August 2006 the applicant complained to the EFTA Surveillance Authority (“ESA”) against alleged state aid to Sporveien, in breach of the EEA Agreement. ESA closed the case on 21 June 2010, finding that “in view of the termination of the incompatible existing state aid on 30 March 2008, [ESA] considers that no further measures are required in this case”.
6. On 2 September 2010 the applicant brought the decision of 21 June 2010 before the Court of Justice of the European Free Trade Association States (the “EFTA Court”), which, on 22 August 2011, annulled it (EFTA Court Case E-14/10 K AS v ESA (“Konkurrenten I”) [2011] EFTA Ct. Rep. 255).
7. On 8 September 2011 the applicant filed further complaints to ESA.
8. On 8 February 2012 the applicant served a pre-litigation notice on ESA, as it had not followed up the judgment of 22 August 2011 (see paragraph 6 above) by initiating an investigation into the alleged State aid to Sporveien.
9. On 28 March 2012 ESA opened a formal investigation into potential state aid to Sporveien (then Oslo Sporveier and Sporveisbussene).
10. On 19 December 2012 ESA issued its decision concerning the applicant’s complaints lodged in 2006 (see paragraph 5 above) (Dec. No. 519/12/COL – “the first contested decision”). It concluded that some of the impugned measures did not constitute state aid, and the remainders had constituted existing aid (aid which had existed prior to the entry into force of the EEA Agreement) which had been terminated. The investigation was therefore closed.
11. On 8 May 2013 ESA issued its decision concerning the applicant’s complaints lodged in 2011 (see paragraph 7 above) (Dec. No. 181/13/COL – “the second contested decision”). It found that some of the impugned measures did not constitute state aid, and the remainders had been grants on the basis of an existing system of aid. No formal investigation was therefore opened.
12. On 16 August 2013 the applicant applied to the EFTA Court for an order that the two contested decisions (see paragraphs 10-11 above) be annulled.
13. By the EFTA Court’s order of 20 March 2015, the application was dismissed as inadmissible (EFTA Court case E-19/13 K AS v ESA (“Konkurrenten II”) [2015] EFTA Ct. Rep. 52). The reasons were as follows:
“91 The Court finds no reason to address the applicant’s submissions concerning the possible relevance of the third limb of the fourth paragraph of Article 263 TFEU. It follows from the origin of this provision that its objective consists in preventing an individual from being obliged to infringe the law in order to have access to a court (see Case C-274/12 P Telefónica v Commission, judgment of 19 December 2013, published electronically, paragraph 27). Such a consideration does not apply in this case. Furthermore, only certain acts of general application, other than legislative acts, may constitute a regulatory act for the purposes of this provision (see Case C-583/11 Inuit Tapiirit Kanatami and Others v Parliament and Council, judgment of 3 October 2013, published electronically, paragraph 60). The contested decisions address particular measures in favour of Sporveien and/or its subsidiaries, and are therefore not of general application. Consequently, neither of the contested decisions would constitute a regulatory act within the meaning of the third limb of the fourth paragraph of Article 263 TFEU.
First contested decision
92 The action brought against the first contested decision seeks the annulment of ESA Decision No 519/12/COL of 19 December 2013 which closed a formal State aid investigation into potential aid to AS Oslo Sporveier and AS Sporveisbussene having regard to Article 1(2) of Part I and Article 7(2) of Part II of Protocol 3 SCA.
93 Pursuant to the second paragraph of Article 36 SCA, a natural or legal person may institute proceedings against a decision addressed to another person only if the decision is of direct and individual concern to them. Since the contested decision was addressed to the Kingdom of Norway, it must be considered whether it is of individual and direct concern to the applicant (see Case E-1/13 Míla v ESA, judgment of 27 January 2014, not yet reported, paragraph 43 and case law cited).
94 Pursuant to settled case law, persons other than those to whom a decision is addressed may claim to be individually concerned within the meaning of the second paragraph of Article 36 SCA only if the decision affects them by reason of certain attributes that are peculiar to them or if they are differentiated by circumstances from all other persons and those circumstances distinguish them individually just as the person addressed by the decision (see, inter alia, Míla v ESA, cited above, paragraph 44 and case law cited).
95 In State aid law, an applicant who challenges the merits of a decision appraising aid taken on the basis of Article 1(3) of Part I of Protocol 3 SCA or at the end of the formal investigation procedure is considered to be individually concerned by that decision if its market position is substantially affected by the aid to which the contested decision relates (see Míla v ESA, cited above, paragraph 55 and case law cited).
96 Accordingly, Konkurrenten must demonstrate that its position on the market is substantially affected. The mere fact that a measure such as those considered in the contested decision may exercise an influence on the competitive relationships existing on the relevant market and that the undertaking concerned was in a competitive relationship with the addressee of that measure cannot in any event suffice for that undertaking to be regarded as individually concerned by that measure. Therefore, an undertaking cannot rely solely on its status as a competitor of the undertaking in receipt of aid but must additionally show that its circumstances distinguish it in a similar way to the undertaking in receipt of the aid (see Case E-5/07 Private Barnehagers Landsforbund v ESA [2008] EFTA Ct. Rep. 62, paragraph 50 and case law cited).
97 The fact that an applicant was the originator of the complaint which led to the opening of the formal examination procedure, the fact that its views were heard and the fact that the conduct of that procedure was largely determined by its observations are factors which are relevant to the assessment of its locus standi (compare Case 169/84 COFAZ and Others v Commission [1986] ECR 391, paragraphs 24 and 25, and Case T-435/93 ASPEC and Others v Commission [1995] ECR II-1281, paragraph 63).
98 In the present case, the applicant played an active role during the procedure before ESA. It filed the initial complaint with ESA on 11 August 2006, sought the annulment of ESA Decision No 254/10/COL, which was annulled by the Court in Konkurrenten I, and submitted observations during the procedure referred to in Article 1(2) of Part I of Protocol 3 SCA.
99 However, the mere fact that the contested decision may have some impact on the competitive relationships existing on the relevant market and that Konkurrenten was in a competitive relationship with Sporveien’s subsidiary does not mean that the applicant’s competitive position is substantially affected. The applicant must also demonstrate the extent of the detriment to its market position (compare Case T-198/09 UOP v Commission, order of 7 March 2013, published electronically, paragraph 35).
100 To that end, Konkurrenten must establish a link between the measure which is the subject of the contested decision and the alleged substantial effect on its position on the market concerned. However, demonstrating a substantial adverse effect on its position on the market cannot simply be a matter of the existence of certain factors indicating a decline in its commercial or financial performance, but may be made by demonstrating the loss of an opportunity to make a profit or a less favourable development than would have been the case without such aid (compare Case C‑525/04 P Spain v Commission and Lenzing [2007] ECR I-9947, paragraph 35, and Case T-182/10 ASICAT v Commission, judgment of 15 January 2013, published electronically, paragraph 66).
101 In that regard, Konkurrenten has submitted that its market position has been substantially affected by the aid, asserting that “Sporveien adopted a strategy to expand into the express bus market in order to have more legs to stand on when its home market came under pressure with the impending market liberalization.” Without the contested aid, Sporveien would not have been able to pursue its expansion strategy and, indeed, Sporveien’s bus subsidiary would in all likelihood have had to cease operations or be divested. Furthermore, Konkurrenten contends that the extent of the negative effect on the company is also evident from the applicant’s resolve over the past seven years, before this Court and as a complainant in two State aid complaints before ESA, to restore a level playing field under Article 61 EEA.
102 In the absence of publicly available market data, Konkurrenten submits two annexes, A.26 and A.27 to the application, concerning the company’s commercial and financial performance as evidence. Annex A.26 is a report dated 12 August 2013 prepared by the applicant’s external accountants. The document contends that Konkurrenten would have had significantly increased income if it had not had to adapt to a lower income level as a consequence of competition from L AS. Annex A.27 is a report prepared by the bank of Konkurrenten dated 12 August 2013. This document states that Konkurrenten’s situation became very difficult when Oslo Sporveier (by way of Arctic Express, through its subsidiary L AS) entered the express bus market between Kristiansand/Arendal and Oslo in June 2006 as the company was “still in its initial phase” and the market already had considerable overcapacity.
103 The Court notes that, although Sporveien’s subsidiary is a competitor of the applicant on the express bus route between the central and southern regions of Norway, Konkurrenten has not asserted at the very least that Arctic Express operations were cross-subsidised by its parent undertaking.
104 It is not for the Court to seek and identify in the annexes the pleas and arguments on which the action is based, since the annexes have a purely evidential and instrumental purpose (see Case E-15/10 Posten Norge v ESA [2012] EFTA Ct. Rep. 246, paragraph 112 and case law cited). While Arctic Express entered the particular express bus route market in June 2006, the statements made in Annex A.26 regarding Konkurrenten’s financial position refer at the very latest to the period between June and August 2006. Given that prior to the entry of Arctic Express onto the particular bus route market there was no relationship of rivalry between the applicant and the Sporveien group as a whole, the information presented in Annex A.26 is manifestly deficient in demonstrating a detrimental impact upon the applicant’s market position. Annex A.27 lacks any information of a probative value. More specifically, the document makes reference to undated assessments and evaluations.
105 It follows from the foregoing that the applicant has not established that its market position was substantially affected by the aid which is the subject of the first contested decision. Consequently, the applicant lacks standing to challenge the first contested decision pursuant to the second paragraph of Article 36 SCA. The action against the first contested decision is therefore inadmissible.
Second contested decision
106 This action concerns an ESA decision on State aid taken at the end of the preliminary investigation having regard to Article 1(1) of Part I and Articles 4(2) and 13(1) of Part II of Protocol 3 SCA. The reasoning in paragraphs 93 and 94 above applies mutatis mutandis.
107 The purpose of the preliminary examination is to enable ESA to form a first opinion on the existence of State aid and, if aid exists, on its partial or complete compatibility with the functioning of the EEA Agreement. If ESA finds, at the conclusion of the preliminary examination, that the measure does not constitute State aid within the scope of Article 61(1) EEA, it shall record that finding by way of a decision under Article 4(2) of Part II of Protocol 3 SCA, as it did in the present case.
108 If ESA finds that the measure must be considered as State aid within the scope of Article 61(1) EEA, but that no doubts can be raised as to its compatibility with the functioning of the EEA Agreement, ESA shall adopt a decision under Article 4(3) of Part II of Protocol 3 SCA to raise no objections. These two types of decision are, by implication, also a refusal to initiate the formal investigation procedure pursuant to Article 1(2) of Part I of that Protocol (see Case E-8/13 Abelia v ESA, order of 29 August 2014, not yet reported, paragraph 73 and case law cited).
109 However, if ESA finds, after the preliminary examination, that State aid exists and that it has doubts or serious difficulties in establishing whether the aid is compatible with the functioning of the EEA Agreement, it shall adopt a decision to initiate the formal investigation procedure provided for in Article 1(2) of Part I of Protocol 3 SCA and Article 6(1) of Part II of that Protocol (see Abelia v ESA, cited above, paragraph 74 and case law cited).
110 Therefore, at the end of the preliminary examination, ESA is obliged to initiate the formal investigation procedure if it is unable to overcome all doubts or difficulties raised that the measure under consideration does not constitute State aid, unless it also overcomes all doubts or difficulties concerning the measure’s compatibility with the EEA Agreement, even if it were State aid (see Abelia v ESA, cited above, paragraph 75 and case law cited). 111 The formal investigation procedure is designed to enable ESA to be fully informed about all the facts of the case. Thus, pursuant to Article 6(1) of Part II of Protocol 3 SCA, a decision to open the formal investigation procedure involves calling upon the EFTA State concerned and upon other interested parties (collectively referred to in Article 1(2) of Part I of Protocol 3 SCA as parties concerned) to submit comments within a prescribed period which must not as a rule exceed one month (see Abelia v ESA, cited above, paragraph 76 and case law cited).
112 It is only in connection with the formal investigation procedure that Part II of Protocol 3 SCA imposes an obligation on ESA to give the parties concerned notice to submit their comments (see Abelia v ESA, cited above, paragraph 77 and case law cited).
113 Where ESA decides not to initiate the formal investigation procedure, the persons intended to benefit from the procedural guarantees under that investigation may secure compliance therewith only if they are able to challenge ESA’s decision before the Court (see Abelia v ESA, cited above, paragraph 78 and case law cited).
114 On this basis, an action for the annulment of such a decision brought by an interested party within the meaning of the formal investigation procedure is admissible where the party seeks, by instituting proceedings, to safeguard the procedural rights available. This applies both to a decision under Article 4(2) of Part II of Protocol 3 SCA that a measure does not constitute State aid and a decision not to raise objections under Article 4(3) of Part II of that Protocol (see Abelia v ESA, cited above, paragraph 79 and case law cited).
115 In the second contested decision, ESA found that the fifteen short-term liquidity loans and the bus for metro and tram contracts for ad hoc interruptions did not involve State aid. While ESA found that the metro and tram guarantees, infrastructure loans and the NBB measures involved State aid, those measures were granted on the basis of an existing aid scheme compatible with the EEA Agreement.
116 Pursuant to Article 1(h) of Part II of Protocol 3 SCA, an “interested party” means, inter alia, any person, undertaking or association of undertakings whose interests might be affected by the granting of State aid, in particular competing undertakings and trade associations (see Abelia v ESA, cited above, paragraph 80 and case law cited, and, for comparison, Case C-83/09 P Commission v Kronoply and Kronotex (“Kronoply”) [2011] ECR I-4441, paragraph 63 and case law cited). In other words, that term covers an indeterminate group of persons.
117 Article 1(h) of Part II of Protocol 3 SCA does not rule out the possibility that an undertaking which is not a direct competitor of the beneficiary of the aid can be categorised as an interested party, provided that that undertaking demonstrates that its interests could be adversely affected by the grant of the aid (see Abelia v ESA, cited above, paragraph 81, and compare, to that effect, Kronoply, cited above, paragraph 64).
118 For this purpose, it is necessary for that undertaking to establish, to the requisite legal standard, that the aid is likely to have a specific effect on its situation. This requirement entails that the undertaking in question is able to show a legitimate interest in the implementation or non-implementation of the alleged aid measures at issue or, if those measures have already been granted, in their maintenance. Such a legitimate interest may consist, inter alia, in the protection of its competitive position, in so far as that position would be adversely affected by the aid measures (see Abelia v ESA, cited above, paragraph 82, and compare, to that effect, Kronoply, cited above, paragraphs 65 and 66 and case law cited).
119 As regards the extent to which the applicant’s position on the market was affected, it should be borne in mind, that it is not for the Court, when it is considering whether the application is admissible, to make a definitive finding on the competitive relationship between the applicant and the recipient of the aid. In that context, it is for the applicant alone to adduce pertinent reasons to show that ESA’s decision may adversely affect its legitimate interests by seriously jeopardising its position on the market in question (compare COFAZ and Others v Commission, cited above, paragraph 28, and Case T-36/99 Lenzing v Commission [2004] ECR II-3597, paragraph 80).
120 However, if an applicant calls into question the merits of the decision not to initiate the formal investigation procedure, the mere fact that it is an interested party cannot suffice for the action to be considered admissible. An applicant that challenges the merits of a decision not to open the formal investigation procedure is individually concerned by that decision only if its market position is substantially affected by the State aid in question (see Míla v ESA, cited above, paragraph 55 and case law cited).
121 As regards the second contested decision, on the basis of its submissions described in paragraphs 101 and 102 above, Konkurrenten has not established that its position on the market may have been significantly affected by the State aid. Nor has Konkurrenten established to the requisite legal standard that it is an interested party within the meaning of Article 1(h) of Part II of Protocol 3 SCA, having failed to demonstrate that the aid was likely to have a specific effect on its situation. Therefore, the applicant lacks the legal standing to challenge the second contested decision.
122 Consequently, it must be held that the action brought against the second contested decision is inadmissible.”
COMPLAINT
The applicant company complains under Article 6 of the Convention that it has been denied access to court and the right to a reasoned decision.
QUESTIONS TO THE PARTIES
1. Is the respondent State responsible under Article 1 of the Convention for the proceedings before the Court of Justice of the European Free Trade Association States (the EFTA Court) in which the applicant company was involved?
2. In the event that the Convention applied to the proceedings in which the applicant company was involved, did the proceedings concern the company’s “civil rights and obligations” in the sense of Article 6 of the Convention and, if yes, were the proceedings compatible with the first paragraph of that provision, in particular with respect to “access to court” and the reasons provided?
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