Commission / DEI (Judgment of the Court) [2014] EUECJ C-553/12 (17 July 2014)

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(Appeal — Competition — Articles 82 EC and 86(1) EC — Maintenance of preferential rights granted by the Hellenic Republic in favour of a public undertaking for the exploration and exploitation of lignite deposits — Exercise of those rights — Competitive advantage on the markets for the supply of lignite and wholesale electricity — Maintenance, extension or strengthening of a dominant position)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 30 November 2012,

European Commission, represented by T. Christoforou and A. Antoniadis, acting as Agents, assisted by A. Oikonomou, dikigoros, with an address for service in Luxembourg,

established in Amaroussion (Greece), represented by N. Korogiannakis, I. Zarzoura, D. Diakopoulos and E. Chrisafis, dikigoroi,

Dimosia Epicheirisi Ilektrismou AE (DEI), established in Athens (Greece), represented by P. Anestis, dikigoros,

Hellenic Republic, represented by M.-T. Marinos, P. Mylonopoulos and K. Boskovits, acting as Agents,

Elliniki Energeia kai Anaptyxi AE (HE & DSA), established in Kifisia (Greece),

composed of M. Ilešič (Rapporteur), President of the Chamber, C.G. Fernlund, A. Ó Caoimh, C. Toader and E. Jarašiūnas, Judges,

having regard to the written procedure and further to the hearing on 3 October 2013,

after hearing the Opinion of the Advocate General at the sitting on 5 December 2013,

1 By its appeal, the European Commission seeks to have set aside the judgment of the General Court of the European Union in DEI v Commission, T-169/08, EU:T:2012:448 (‘the judgment under appeal’), by which the General Court annulled Commission Decision C(2008) 824 final of 5 March 2008, on the granting or maintaining in force by the Hellenic Republic of rights in favour of Dimosia Epicheirisi Ilektrismou AE (DEI) for the extraction of lignite (‘the contested decision’).

2 DEI was created in 1950 in the form of a public undertaking belonging to the Greek State. It enjoyed the exclusive right to generate, transmit and supply electricity in Greece. In 1996, Greek Law No 2414/1996 on the modernisation of public undertakings (FEK A’ 135), permitted the conversion of the applicant into a company limited by shares, but still held by the State as sole shareholder.

3 On 1 January 2001 it was converted into a limited liability company in accordance, in particular, with Greek Law No 2773/1999 on the liberalisation of the electricity market (FEK A’ 286), which, inter alia, transposed Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (OJ 1997 L 27, p. 20). Under Article 43(3) of that law, the State’s shareholding in DEI’s capital may not in any case be lower than 51% of the shares with voting rights, even after an increase of capital. The Hellenic Republic held, at the time the contested decision was adopted, 51.12% of the shares in that undertaking. Since 12 December 2001, DEI’s shares have been quoted on the Athens Stock Exchange and the London Stock Exchange.

4 All Greek power stations operating on lignite belong to DEI. According to the Greek Institute for Geological and Mining Research, known reserves of lignite in Greece were estimated, as at 1 January 2005, at 4 415 million tonnes. According to the Commission, 4 590 million tonnes of lignite reserves still exist in Greece.

5 The Hellenic Republic has allocated to DEI exploration and exploitation rights for lignite in respect of mines the reserves of which amount to about 2 200 million tonnes. 85 million tonnes of reserves belong to private third parties. Over other public deposits, amounting to approximately 220 million tonnes, exploration and exploitation rights have been conferred upon other private third parties, those deposits partly supplying DEI’s power stations. No exploitation rights have yet been allocated in respect of about 2 000 million tonnes of lignite reserves in Greece.

6 Following the entry into force of Directive 96/92, the Greek electricity market was opened up to competition. In May 2005, a compulsory daily market for all sellers and buyers of electricity in the interconnected Greek network, which comprises mainland Greece and certain Greek islands, was created. On that market, generators and importers of electricity feed in and sell their production and their imports on a daily basis.

7 In 2003 the Commission received a complaint from an individual who requested confidentiality. According to the complainant, the Greek State’s decision to grant DEI, under Greek Legislative Decree No 4029/1959 of 12 and 13 November 1959 (FEK A’ 250) and Greek Law No 134/1975 of 23 and 29 August 1975 (FEK A’ 180), an exclusive licence to explore and exploit lignite in Greece was contrary to Article 86(1) EC, read together with Article 82 EC. Following correspondence with the Hellenic Republic, which took place between 2003 and 2008, the Commission adopted the contested decision.

8 By that decision, the Commission found, inter alia, that the grant and maintenance of those rights was contrary to Article 86(1) EC, read together with Article 82 EC, since it created a situation of inequality of opportunity between economic operators as regards access to primary fuels for the purposes of generating electricity and allowed DEI to maintain or reinforce its dominant position on the Greek wholesale electricity market by excluding or hindering any new entrants.

9 In the contested decision, the Commission states that the Hellenic Republic knew since the adoption of Directive 96/92, the transposition of which was due by 19 February 2001 at the latest, that the electricity market had to be liberalised. The Commission adds that the Hellenic Republic adopted State measures concerning two distinct markets, the first being that of supplying lignite and the second being the wholesale electricity market, which concerns the generation and supply of electricity in power stations and the importation of electricity by means of interconnection systems.

10 According to the Commission, DEI held a dominant position on both those markets, with a market share of more than 97% and 85% respectively. In addition, there was no prospect of new market entrants being capable of significantly reducing DEI’s share of the wholesale electricity market, since imports, which represent 7% of total consumption, did not constitute a genuine competitive restraint on that market.

11 Concerning the State measures in question, the Commission notes that DEI had been granted, pursuant to Legislative Decree No 4029/1959 and Law No 134/1975, exploitation rights for 91% of public deposits of lignite for which rights were granted. The Commission states that, during the period of application of those measures, despite the possibilities offered by the national legislation, no other right over a significant deposit was granted. Moreover, it indicates that DEI obtained without calls for tender exploration rights over some exploitable deposits for which exploitation rights had not yet been granted. The Commission adds that power stations operating on lignite, which are the least costly in Greece, are the most used, since they produce 60% of the electricity permitting the supply of the interconnected network.

12 According to the Commission, by granting DEI and maintaining in its favour quasi-monopolistic lignite exploration rights which ensure that it has privileged access to the most attractive fuel in Greece for the purposes of generating electricity, the Hellenic Republic thereby created inequality of opportunity between economic operators on the wholesale electricity market and thus distorted competition, maintaining or reinforcing DEI’s dominant position and excluding or hindering any new entrants, despite the liberalisation of the wholesale electricity market.

13 By the contested decision, the Commission also requested the Hellenic Republic to inform it, within a period of two months from notification of that decision, of the measures which it intended to take to correct the anti-competitive effects of the State measures at issue, whilst indicating that those measures were to be adopted and put into effect within eight months from its decision.

14 By application lodged at the Registry of the General Court on 13 May 2008, DEI brought an action for the annulment of the contested decision. During the proceedings, the Hellenic Republic intervened in support of DEI, whilst Elliniki Energeia kai Anaptyxi AE (HE & DSA) and Energeiaki Thessalonikis AE, limited liability companies operating in the electricity generation sector in Greece, intervened in support of the forms of order sought by the Commission.

15 In support of its action, DEI relied on four pleas, claiming, first, errors of law in applying the combined provisions of Articles 86(1) EC and 82 EC, and a manifest error of assessment; second, infringement of the duty to state reasons under Article 253 EC; third, (i) infringement of the principles of legal certainty, the protection of legitimate expectations and the protection of private property and (ii) misuse of powers; and, fourth, infringement of the principle of proportionality.

16 The first plea was divided into five parts, the second and fourth of which called into question the Commission’s conclusion that the exercise of the lignite exploitation rights granted to DEI had had the effect of extending its dominant position from the lignite supply market to the wholesale electricity market in breach of Article 86(1) EC read together with Article 82 EC. In essence, according to the General Court, DEI put forward two arguments against that conclusion of the Commission. By its first argument, DEI asserted that, in order to prove the infringement of the combined application of those provisions, it was necessary for the undertaking concerned to enjoy an exclusive or special right within the meaning of Article 86(1) EC, which was not the case.

17 By the second of those arguments, which the General Court examined first, DEI criticised the Commission for not establishing the existence of an actual or potential abuse of DEI’s dominant position on the markets concerned, although such proof was a precondition for the application of Article 86(1) EC in conjunction with Article 82 EC.

18 In paragraph 85 of the judgment under appeal, the General Court found that the focus of the dispute, in this case, was primarily whether the Commission had to identify an actual or potential abuse of DEI’s dominant position, or whether it was sufficient for it to establish that the State measures in question distorted competition in favour of DEI by creating inequality of opportunity between economic operators.

19 Regarding the lignite supply market, the General Court held, in paragraphs 87 to 89 of the judgment under appeal, that, by the State measures at issue, the Hellenic Republic had granted DEI lignite exploitation rights in respect of mines the reserves of which amounted to around 2 200 million tonnes; that those measures, which predated the liberalisation of the electricity market, had been maintained and continued to affect that market; and that in addition, despite the interest shown by DEI’s competitors, no economic operator had been able to obtain from the Hellenic Republic exploitation rights over other lignite deposits, even though Greece had around 2 000 million tonnes of lignite reserves which had not yet been exploited.

20 The General Court considered however that the fact that it was impossible, for other economic operators, to gain access to the lignite deposits still available could not be imputed to DEI since the granting of lignite exploitation licences depended exclusively on the will of the Hellenic Republic. The General Court added that, on that market, DEI’s role had been limited to exploiting deposits over which it held rights, since the Commission had not claimed that, as regards access to lignite, DEI had abused its dominant position on the market for the supply of that raw material.

21 The General Court went on to analyse, in paragraphs 90 to 93 of the judgment under appeal, the Commission’s finding that the fact that it was impossible for DEI’s competitors to enter the lignite supply market had repercussions on the wholesale electricity market. The Commission had argued in that regard that, as lignite is the most attractive fuel in Greece, its exploitation allowed the generation of electricity with a low variable cost, and the electricity to be put on the compulsory daily market with a more favourable profit margin than the electricity generated using other fuels. According to the Commission, DEI could thus maintain or strengthen its dominant position on the wholesale electricity market by excluding or hindering all new entrants to that market.

22 After recalling, in paragraph 91 of the judgment under appeal, that, following the liberalisation of the wholesale electricity market, a compulsory daily market had been created in Greece; that the rules for the functioning of that mechanism were not called into question by the contested decision and had to be observed both by DEI and its competitors; and that, moreover, DEI had been present on that market before its liberalisation, the General Court pointed out the following:

‘92 The Commission has not established that privileged access to lignite was capable of creating a situation in which, by the mere exercise of its exploitation rights, [DEI] could have been able to commit abuses of a dominant position on the wholesale electricity market or was led to commit such abuses on that market. Similarly, the Commission does not accuse [DEI] of having, without objective justification, extended its dominant position on the market for the supply of lignite to the wholesale electricity market.

93 By finding simply that [DEI], a former monopolistic undertaking, continues to maintain a dominant position on the wholesale electricity market by virtue of the advantage conferred upon it by privileged access to lignite and that that situation creates inequality of opportunity on that market between [DEI] and other undertakings, the Commission has neither identified nor established to a sufficient legal standard to what abuse, within the meaning of Article 82 EC, the State measure in question has led or could lead [DEI].’

23 The General Court then examined, in paragraphs 94 to 103 of the judgment under appeal, the settled case-law mentioned in the contested decision, according to which a Member State infringes the prohibitions laid down by Articles 86(1) EC and 82 EC where the undertaking in question is led, by the mere exercise of the exclusive or special rights conferred upon it, to exploit its dominant position in an abusive manner or where those rights are capable of creating a situation in which that undertaking is led to commit such abuses. After analysing the judgments in Raso and Others, C-163/96, EU:C:1998:54, Höfner and Elser, C-41/90, EU:C:1991:161, Merci convenzionali Porto di Genova, C-179/90, EU:C:1991:464, Job Centre, C-55/96, EU:C:1997:603, and MOTOE, C-49/07, EU:C:2008:376, the General Court concluded, in paragraph 103 of the judgment under appeal:

‘It is apparent from those judgments … that the abuse of a dominant position by the undertaking enjoying an exclusive or special right may either result from the possibility of exercising that right in an abusive way or be a direct consequence of that right. However, it does not follow from that case-law that the mere fact that the undertaking in question finds itself in an advantageous situation in comparison with its competitors, by reason of a State measure, in itself constitutes an abuse of a dominant position.’

24 Lastly, in paragraphs 104 to 118 of the judgment under appeal, the General Court replied to a final argument put forward by the Commission, which considered that the contested decision complied with the case-law according to which a system of undistorted competition could not be guaranteed unless equality of opportunity between the various economic operators was assured. The Commission maintained in that regard that if inequality of opportunity between economic operators, and thus distortion of competition, was the result of a State measure, such a measure constituted an infringement of Article 86(1) EC read in conjunction with Article 82 EC.

25 In paragraph 105 of that judgment, the General Court held that it does not follow from the judgments on which the Commission had relied, namely the judgments in France v Commission, C-202/88, EU:C:1991:120, GB-Inno-BM, C-18/88, EU:C:1991:474, and Connect Austria, C-462/99, EU:C:2003:297, that, for it to be concluded that an infringement of Article 86(1) EC, applied in conjunction with Article 82 EC, had been committed, it was sufficient to establish that a State measure distorted competition by creating inequality of opportunity between economic operators, without it being necessary to identify an abuse of the undertaking’s dominant position.

26 After analysing those judgments, the General Court found, in paragraph 113 of the judgment under appeal, that, whilst it was true that the Court of Justice had in its judgments used the formulations relied on by the Commission, the latter could not rely only on those formulations without taking into consideration their context. In paragraphs 114 to 117, the General Court also held that the Commission’s argument was not supported by the judgment in Dusseldorp and Others, C-203/96, EU:C:1998:316, which the Commission had relied on at the hearing.

27 The General Court concluded, at paragraph 118 of the judgment under appeal, that it did not follow from that case-law that the Commission ‘was not required to identify and establish the abuse of a dominant position to which the State measure in question led, or could lead, [DEI]’.

28 Since the General Court held in paragraphs 87 to 93 of the judgment under appeal that the Commission had not, in its contested decision, established an abuse of a dominant position, it accordingly held, in paragraph 119 of that judgment, that the second argument raised by DEI in the context of the second and fourth parts of the first plea was well founded and annulled the contested decision, ‘without it being necessary to examine the other complaints, parts and pleas submitted’.

– in the alternative, examine the other pleas for annulment relied upon in Case T-169/08 and annul the contested decision;

31 By documents lodged at the Court Registry on 25 March 2013, Mytilinaios AE, Protergia AE and Alouminion AE applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission.

32 By order of 11 July 2013 the Vice-President of the Court granted that request.

33 In support of its appeal, the Commission relies on two grounds, alleging, first, an error of law in the interpretation and application of Article 86(1) EC in conjunction with Article 82 EC and, secondly, deficient, incorrect and insufficient reasoning.

34 By its first ground, directed against paragraphs 94 to 118 of the judgment under appeal, the Commission claims that the General Court erred in law in the interpretation and application of Article 86(1) EC in conjunction with Article 82 EC in holding that the Commission was required to identify and establish the conduct constituting abuse of a dominant position to which the State measure in question had led, or could have led, DEI.

35 According to the Commission, when Article 82 EC is applied in conjunction with Article 86(1) EC to situations where there is inequality of opportunity between economic operators, and thus distorted competition which stems from a State measure, that State measure in itself constitutes an infringement of Articles 86(1) EC and 82 EC. It is therefore sufficient to prove that the measure indeed created inequality of opportunity by favouring the privileged public undertaking and thereby affected the structure of the market by allowing that undertaking to maintain, strengthen or extend its dominant position to another, neighbouring or downstream market, for example by preventing new competitors from entering that market.

36 Accordingly, the Commission criticises the General Court for having incorrectly applied the case-law of the Court of Justice to the facts of the present case and for having distorted the basis of the contested decision. It states in that regard that, contrary to what the General Court held, that decision was not based on the finding that the mere fact that DEI found itself in an advantageous situation in comparison with its competitors, by reason of the State measures at issue, in itself constituted an abuse of a dominant position. On the contrary, that decision described the infringement in detail; it stated that the State measures at issue had created inequality of opportunity between DEI and its competitors and that, by the mere exercise of the rights conferred by those measures on DEI, that undertaking was able to extend its dominant position from the (upstream) lignite supply market to the (downstream) wholesale electricity market in Greece. That extension to the downstream market had the effect of restricting competition on it by excluding new entrants to that market, even after the adoption of measures to liberalise it. Moreover, despite requests to that effect, no right over a significant lignite deposit was granted to competitors of DEI.

37 According to the Commission, since the contested decision explained how, in the first place, the maintenance in force of the contested measures and, in the second place, the mere exercise of the preferential rights granted to DEI and its conduct on the downstream market led to the risk of abuse of its dominant position on that market by preventing or restricting access by new competitors, the Commission had satisfied all the criteria laid down by the case-law of the Court concerning the application of Articles 86(1) EC and 82 EC.

38 DEI and the Hellenic Republic submit that that ground of appeal is unfounded. They argue that it is clear from the case-law of the Court of Justice that, in order to be able to apply Article 86(1) EC in conjunction with Article 82 EC, the Commission must establish the conduct constituting abuse to which the State measure in question led or could have led the undertaking concerned. The fact that the State measure at issue led to a situation of inequality of opportunity was a necessary, but not sufficient, precondition for the application of those articles. The Commission is seeking in essence to transform Article 86(1) EC into an autonomous, higher-ranking provision. The General Court did correctly apply that case-law to the facts of the present case.

39 It should be recalled that, pursuant to Article 86(1) EC, Member States are not to enact or maintain in force, in the case of public undertakings and the undertakings to which they grant special or exclusive rights, any measure contrary to the rules contained in the EC Treaty, in particular those provided for in Article 82 EC.

40 In so far as it may affect trade between Member States, the abuse of a dominant position within the common market or in a substantial part thereof is prohibited by Article 82 EC.

41 It should be noted that, according to the case-law, a Member State is in breach of the prohibitions laid down by Article 86(1) EC in conjunction with Article 82 EC if it adopts any law, regulation or administrative provision that creates a situation in which a public undertaking or an undertaking on which it has conferred special or exclusive rights, merely by exercising the preferential rights conferred upon it, is led to abuse its dominant position or when those rights are liable to create a situation in which that undertaking is led to commit such abuses (see, to that effect, the judgments in Connect Austria, EU:C:2003:297, paragraph 80, and MOTOE, EU:C:2008:376, paragraph 49 and the case-law cited). In that respect, it is not necessary that any abuse should actually occur (judgments in GB-Inno-BM, EU:C:1991:474, paragraphs 23 to 25; Raso and Others, EU:C:1998:54, paragraph 31; and MOTOE, EU:C:2008:376, paragraph 49).

42 Thus, a Member State will be in breach of those provisions where a measure imputable to a Member State gives rise to a risk of an abuse of a dominant position (see the judgment in MOTOE, EU:C:2008:376, paragraph 50 and the case-law cited).

43 It is clear from the Court’s case-law that a system of undistorted competition, such as that provided for by the Treaty, can be guaranteed only if equality of opportunity is secured as between the various economic operators (see the judgments in GB-Inno-BM, EU:C:1991:474, paragraph 25; MOTOE, EU:C:2008:376, paragraph 51; and Connect Austria, EU:C:2003:297, paragraph 83 and case-law cited).

44 It follows that if inequality of opportunity between economic operators, and thus distorted competition, is the result of a State measure, such a measure constitutes an infringement of Article 86(1) EC read together with Article 82 EC (see the judgment in Connect Austria, EU:C:2003:297, paragraph 84).

45 The Court has moreover had occasion to state in that regard that, although the mere fact that a Member State has created a dominant position by the grant of exclusive rights is not as such incompatible with Article 82 EC, the EC Treaty none the less requires the Member States not to adopt or maintain in force any measure which might deprive that provision of its effectiveness (judgments in ERT, C-260/89, EU:C:1991:254, paragraph 35; Corbeau, C-320/91, EU:C:1993:198, paragraph 11; and Deutsche Post, C-147/97 and C-148/97, EU:C:2000:74, paragraph 39).

46 It follows from the matters addressed in paragraphs 41 to 45 above that, as the Advocate General states in point 55 of his Opinion, infringement of Article 86(1) EC in conjunction with Article 82 EC may be established irrespective of whether any abuse actually exists. All that is necessary is for the Commission to identify a potential or actual anti-competitive consequence liable to result from the State measure at issue. Such an infringement may thus be established where the State measures at issue affect the structure of the market by creating unequal conditions of competition between companies, by allowing the public undertaking or the undertaking which was granted special or exclusive rights to maintain (for example by hindering new entrants to the market), strengthen or extend its dominant position over another market, thereby restricting competition, without it being necessary to prove the existence of actual abuse.

47 In those circumstances, it follows that, contrary to the General Court’s analysis in paragraphs 105 and 118 of the judgment under appeal, it is sufficient to show that that potential or actual anti-competitive consequence is liable to result from the State measure at issue; it is not necessary to identify an abuse other than that which results from the situation brought about by the State measure at issue. It also follows that the General Court erred in law in holding that the Commission, by finding that DEI, a former monopolistic undertaking, continued to maintain a dominant position on the wholesale electricity market by virtue of the advantage conferred upon it by its privileged access to lignite and that that situation created inequality of opportunity on that market between the applicant and other undertakings, had neither identified nor established to a sufficient legal standard the abuse to which, within the meaning of Article 82 EC, the State measure in question had led or could have led DEI.

48 The first ground of appeal must therefore be upheld and the judgment under appeal must be set aside, without there being any need for the Court to examine the second ground of appeal, which is put forward purely in the alternative to the first.

49 In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the Court quashes the decision of the General Court, it may itself give final judgment in the matter, where the state of the proceedings so permits.

50 In the present case, the Court has the necessary information to give final judgment on the second and fourth parts of the first plea submitted at first instance.

51 In paragraph 59 of the judgment under appeal, the General Court considered it appropriate first to examine the second part of the first plea, alleging an error on the Commission’s part inasmuch as the Commission claims that the existence of exclusive or special rights is not a necessary condition of the infringement of the combined provisions of Articles 86(1) EC and 82 EC, and the fourth part of that plea, alleging that DEI did not extend its dominant position from the lignite supply market to the wholesale electricity market because of its alleged privileged access to a primary fuel.

52 The General Court, in the same paragraph, took the view that there was no need, at that stage, to rule on the validity of the definition of the relevant markets adopted by the Commission in the contested decision, which was the subject of the first part of the first plea raised by DEI, and started from the premiss that that definition, contrary to what was claimed by DEI, was not vitiated by a manifest error of assessment.

53 In the circumstances, and on the basis of that same premiss, the Court has the necessary information to give final judgment on the second and fourth parts of the first plea raised at first instance by DEI.

54 DEI, supported by the Hellenic Republic, states that the Commission incorrectly held that the legal classification of DEI as a ‘public undertaking’ was sufficient to demonstrate an infringement of the combined provisions of Articles 86(1) EC and 82 EC. It is clear from the case-law that, in order to apply the theory that the public undertaking extended its dominant position from one market to another, which was neighbouring and separate, the Commission must necessarily show that the measure grants or reinforces exclusive or special rights. In the present case, DEI did not have exclusive rights, since it was not the only undertaking carrying out the economic activity at issue. Nor could DEI’s exploration and exploitation rights be classified as ‘special rights’ within the meaning of Article 86(1) EC, since they were granted to a limited number of beneficiaries.

55 The Commission, supported by the interveners, replies, in essence, first, that the scope of the combined provisions of Articles 86(1) EC and 82 EC is not restricted to State measures which grant special or exclusive rights and, secondly, that in any event, such rights were granted to DEI.

56 It is clear from the wording of Article 86(1) EC that the provision is applicable, on the one hand, to public undertakings and, on the other, to the undertakings to which Member States grant special or exclusive rights. In the present case, it is not disputed that DEI is a public undertaking.

57 In addition, as pointed out in paragraphs 41 to 44 above, if inequality of opportunity between economic operators, and thus distorted competition, is the result of a State measure, such a measure, be it legislative, regulatory or administrative, constitutes an infringement of Article 86(1) EC read in combination with Article 82 EC.

58 DEI therefore was wrong to assert that, in order to apply the theory that the public undertaking extended its dominant position from one market to another, which was neighbouring and separate, the Court’s case-law requires the Commission to show that the State measure at issue grants or enhances special or exclusive rights.

59 It is sufficient that the measure at issue creates a situation in which a public undertaking or an undertaking on which the State has conferred special or exclusive rights is led to abuse its dominant position (see, to that effect, the judgment in Connect Austria, EU:C:2003:297, paragraph 80 and case-law cited).

61 DEI disputes the Commission’s conclusion that the exercise of the lignite exploitation rights, which DEI owns, had the effect of extending its dominant position from the lignite supply market to the wholesale electricity market in breach of Article 86(1) EC, in conjunction with Article 82 EC, since the conditions governing the application of the theory of the extension of a dominant position are not fulfilled in the present case. First of all, in all the cases in which the Courts of the European Union have applied that theory, the undertaking enjoyed a legal or de facto monopoly over a market and the State measure at issue awarded exclusive or special rights over a neighbouring and separate market, which is not the case here. Secondly, DEI has neither the power conferred by legislation to enable it to determine the activity of its competitors nor is it able to impose costs on its competitors. Thirdly, the Commission, in examining the possible abuse, should have examined the impact of the alleged infringement on the interests of consumers. Finally, fourthly, the Commission defined lignite as an essential facility, but failed to show that lignite was essential for operating on the wholesale electricity market.

62 The Hellenic Republic submits that the Commission does not mention any abuse of a dominant position by DEI, whether existing or even potential. In the present dispute, the existence of such an abuse is a necessary precondition for the purposes of the combined application of Articles 86(1) EC and 82 EC.

63 The Commission, supported by the interveners, argues, first, that the State measures which may fall within the prohibitions of Articles 86(1) EC and 82 EC are not restricted to special or exclusive rights. Secondly, the finding that those provisions have been infringed does not depend on the exercise of powers and competences conferred by legislation. Thirdly, the case-law does not require that the potential damage caused to consumers by the infringement of those provisions should be examined. Fourthly, DEI incorrectly asserts that the Commission, in recitals 132 and 238 of the contested decision, took the view that access to lignite was an essential facility.

64 As a preliminary point, the arguments of the Hellenic Republic should be rejected, for the reasons stated in paragraphs 39 to 46 above.

65 In addition, the Court must disregard the claimed ‘conditions of application’ of the theory of the extension of a dominant position, which are summarised in paragraph 61 above and which, according to DEI, follow from the case-law of the Court.

66 It is settled case-law that practices by an undertaking in a dominant position which tend to extend that position to a neighbouring but separate market by distorting competition amount to abuse of a dominant position within the meaning of Article 82 EC (see, to that effect, the judgment in Connect Austria, EU:C:2003:297, paragraphs 81 and 82 and case-law cited).

67 Similarly, the Court has previously stated that the extension of a dominant position, without any objective justification, is prohibited ‘as such’ by Article 86(1) EC in conjunction with Article 82 EC, where that extension results from a State measure. As competition may not be eliminated in that manner, it may not be distorted either (see, to that effect, the judgments in Spain and Others v Commission, C-271/90, C-281/90 and C-289/90, EU:C:1992:440, paragraph 36, and GB-Inno-BM, EU:C:1991:474, paragraphs 21, 23 and 24).

68 It is therefore not necessary, as claimed by DEI, for the Commission to show, in every case, that the undertaking concerned enjoys a monopoly or that the State measure at issue awards it exclusive or special rights over a neighbouring and separate market, or that it has any regulatory powers. Having regard to the case-law referred to in paragraphs 41 to 44 above, the claim that there is an obligation on the Commission to show the impact of the infringement of the combined provisions of Articles 86(1) EC and 82 EC on the interests of consumers must also be rejected; Article 82 EC may moreover cover practices which are harmful as a result of their impact on an effective competition structure (see, to that effect, the judgment in Europemballage and Continental Can v Commission, 6/72, EU:C:1973:22, paragraph 26). Finally, DEI’s argument that the Commission defined lignite as an essential facility is based on a false premiss, as the Commission only referred to DEI’s situation of ‘quasi-monopoly’ on the electricity wholesale market.

70 In the light of the foregoing, the second and fourth parts of the first plea raised by DEI before the General Court must be rejected, and the case must be referred back to the General Court so that it may examine the first, third and fifth parts of the first plea and the other pleas relied on by DEI.

71 Since the case is being referred back to the General Court, it is appropriate to reserve the costs.

1. Sets aside the judgment of the General Court of the European Union in DEI v Commission, T-169/08, EU:T:2012:448;

2. Refers the case back to the General Court of the European Union for adjudication on the pleas raised before it on which the Court of Justice of the European Union has not ruled;

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Commission / DEI (Judgment of the Court) [2014] EUECJ C-553/12 (17 July 2014) URL: http://www.bailii.org/eu/cases/EUECJ/2014/C55312.html Cite as: EU:C:2014:2083, [2014] EUECJ C-553/12, ECLI:EU:C:2014:2083

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