Refusal by the European Commission to Pursue a Claim against Competitors

The plaintiff was an Austrian mobile operator contesting the level of regulatory fees it was required to pay. Specifically, as the claimant indicated, it was subject to fees similar to those applicable to a competing mobile operator owned by the Austrian state.

According to the claimant, the calculation of fees imposed on mobile operators which did not take account of the specific character of public operators constituted a breach of Article 86(1) of the EC Treaty.

Under the provision, in the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in the EC Treaty. Effectively, Article 86(1) of the EC Treaty implies that Member States may award special treatment to public undertakings only as far as,inter alia, undertakings from other Member States are not discriminated against and competition rules are fully respected. The claimant complained to the European Commission.

Pursuant to the practice of the European Commission, the facts of the case did not give rise to infringement of Community law as long as Member States did not impose on new entrants to the mobile telephony market fees higher than those applicable to traders already present in the market.

Hence the European Commission informed the claimant in writing that it would not further pursue any investigation of the complaint. The claimant therefore brought the case before the Court of First Instance requesting annulment of the European Commission’s decision not to further examine the complaint.

The CFI did find the claimant’s action admissible and ruled on the case. That judgment was, however, contested by the European Commission which brought an appeal to the ECJ against it.

The ECJ set aside the CFI’s judgment and made it clear that the CFI should have already declined the claimant’s action against the European Commission as inadmissible.

The ECJ observed that the European Commission is indeed required to ensure application of Article 86(1) of the EC Treaty upon which the claimant relied in the case. The European Commission enjoys corresponding powers to decide whether a public measure is in line with the EC Treaty rules and, in case of non-compliance, to indicate steps which Member States need to adopt to meet their obligations based on Community law.

As the ECJ confirmed, when the European Commission chooses to issue a decision against a Member State charged with a breach of Article 86(1) of the EC Treaty, an individual may enforce proceedings against such a decision before Community courts only if such a decision is, though formally addressed to that Member State only, of direct and individual concern to that individual.

However, the ECJ explained that the European Commission is not legally obliged to automatically enforce proceedings in case of a claim from a private party based on Article 86(1) of the Treaty. In other words, individual undertakings which claim that competitors might have been granted unlawful competitive advantage prohibited under Article 86(1) of the EC Treaty do not have a formal right to request the European Commission to conduct proceedings and make a decision regarding their claim.

The European Commission enjoys a substantial margin of discretion in deciding which claims it should consider founded and worth detailed investigation.

What follows, the refusal of the European Commission to further proceed with a complaint under Article 86(1) of the EC Treaty received from an individual undertaking may not be challenged. Particularly, such refusal may not be appealed to the CFI. When such an appeal nevertheless reaches the CFI, it should be dismissed as inadmissible.