Société internationale de diffusion et d'édition (SIDE) v Commission of the European Communities.

• Jurisdiction: European Union
• Court: General Court (European Union)
• ECLI: ECLI:EU:T:2002:53
• Date: 28 February 2002
• Docket Number: T-155/98
• Procedure Type: Recours en annulation - fondé

Avis juridique important

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61998A0155

Judgment of the Court of First Instance (Fourth Chamber, extended composition) of 28 February 2002. - Société internationale de diffusion et d'édition (SIDE) v Commission of the European Communities. - State aid - Operating aid - Article 92(1) and (3)(d) of the EC Treaty (now, after amendment, Article 87(1) and (3)(d) EC) - Conditions for exemption from the prohibition under Article 92(1) of the Treaty - Reference market - Export aid in the book sector. - Case T-155/98.

European Court reports 2002 Page II-01179

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

State aid - Prohibition - Derogations - Aid which may be regarded as compatible with the common market - Export aid in the book sector - Assessment of the effects of aid on competition and trade - Reference market - Delimitation - Criteria

(EC Treaty, Art. 92(3)(d) (now, after amendment, Art. 87(3)(d) EC))

Summary

$$In order to establish whether, in the course of assessing whether an export aid in the book sector may be regarded as compatible with the common market, competition is affected to an extent that is contrary to the common interest for the purposes of Article 92(3)(d) of the Treaty (now, after amendment, Article 87(3)(d) EC), it is necessary to define the market on which the aid takes effect. So far as concerns the material definition of the market, in order to be considered the subject of a sufficiently distinct market, it must be possible to distinguish the service or the good in question by virtue of particular characteristics that so differentiate it from other services or other goods that it is only to a small degree interchangeable with those alternatives and affected by competition from them. In that context, the degree of interchangeability between products or services must be assessed in terms of their objective characteristics, as well as the structure of supply and demand on the market, and competitive conditions.

The Commission must examine the effects of a State aid on competition and trade between the other operators carrying on the same activity as that for which the aid was granted, so as to carry out an assessment of the true impact of such an aid on competition. Unless it carries out such an assessment, the Commission commits a manifest error of assessment as regards the definition of the market.

( see paras 56-57, 71 )

Parties

In Case T-155/98,

Société internationale de diffusion and d'édition (SIDE), established in Bagneux (France), represented by N. Coutrelis, lawyer, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by G. Rozet and B. Mongin, acting as Agents, with an address for service in Luxembourg,

defendant,

supported by

French Republic, represented by J.-F. Dobelle, G. de Bergues and F. Million, acting as Agents, with an address for service in Luxembourg,

intervener,

APPLICATION for annulment of the last sentence of Article 1 of Commission Decision 1999/133/EC of 10 June 1998 concerning State aid in favour of Coopérative d'exportation du livre français (CELF) (OJ 1999 L 44, p. 37),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition),

composed of: P. Mengozzi, President, R. García-Valdecasas, V. Tiili, R.M. Moura Ramos and J.D. Cooke, Judges,

Registrar: D. Christensen, Administrator,

having regard to the written procedure and further to the hearing on 4 July 2001,

gives the following

Judgment

Grounds

Facts

1 The Société internationale de diffusion et d'édition (SIDE) is an agency company established in France. Its activities consist in particular of exporting French-language books to other Member States of the European Union and to non-member countries.

2 CELF (Coopérative d'exportation du livre français, trading as Centre d'exportation du livre français), which was formed in 1977, is a limited cooperative society whose object, according to the most recent version of its statutes, is directly to handle orders from abroad or the overseas territories and departments for books, brochures and all communications media, and more generally to carry out any transactions for the purpose, in particular, of furthering the promotion of French culture throughout the world by means of the abovementioned media. Most of the 101 members of CELF are publishers established in France, although membership is open to all persons engaged in the publication or distribution of French-language books, irrespective of their place of establishment.

3 Like SIDE, CELF is commercially active in distributing books, chiefly in countries and areas that are not French-speaking, since in French-speaking areas, particularly Belgium, Canada and Switzerland, that task is performed by the distribution networks set up by publishers.

4 Among the various operators involved in the distribution of books, agents, who deal only with retailers or organisations but not with the final consumer, enable orders to be satisfied which publishers or their distributors do not find remunerative. The agent collects orders, each inconsiderable in itself, from different customers and approaches the publisher or distributor, who thus needs to deliver to only one place. Similarly, the agent gathers together orders from his bookselling or institutional customers in respect of works from different publishers, thus sparing his customers the need to place multiple orders with many different suppliers. On account of the fixed costs for handling each order, an agent's involvement makes it possible to make savings at both the distributor level and the customer level, which makes it economically worthwhile.

5 In 1979 CELF was in financial difficulties, and booksellers, publishers, the Syndicat National de l'Édition and the public authorities reached agreement that it should be preserved. Thus it was decided to grant compensatory subsidies towards the handling of small orders, which began in its present form in 1980.

6 The operating subsidy granted to CELF is intended to offset the extra cost involved in handling small orders from booksellers established abroad. It enables CELF to meet orders which, because of the substantial transport costs in relation to the total value of the order involved, are regarded as barely worthwhile by the publishers or their associated distributors. Consequently, the grant of that subsidy helps to spread the French language and to propagate French-language literature.

7 In practice, the support mechanism works in the following way. Booksellers who need small quantities of works published by different publishers place their orders with CELF, which then acts as export agent. The subsidy is specifically designed to make it possible to meet orders to the value of less than FRF 500, excluding costs of carriage, which are considered to be below the break-even point. One quarter of the amount of subsidy granted during the previous year is disbursed at the beginning of the year, the balance being granted in the autumn, after the public authorities have examined CELF's operational estimates and the fluctuations in the first part of the financial year. Within three months of the end of the financial year, an account showing how the subsidy has been used, together with a list of supporting documents, must be forwarded to the Ministry of Culture and French Language.

8 By letter of 20 March 1992 the applicant's legal adviser drew the Commission's attention to the aid for promoting, transporting and marketing French books which he claimed the French Ministry of Culture and French Language was granting to CELF. In that letter, he asked the Commission whether the aid in question had been notified in accordance with Article 93(3) of the EC Treaty (now Article 88(3) EC).

9 By letter of 2 April 1992 the Commission asked the French authorities for information about the measures in favour of CELF.

10 On...