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Chronopost (State aid: EC, CFI x2 and ECJ x2)

European Commission
"No State aid" decision of 1 October 1997 (12 pages, PDF)

Court of First Instance
Case T-613/97, Ufex and others v Commission of the European Communities
Judgment of 14 December 2000 annulled by the ECJ in 2003
Judgment of 7 June 2006 annulled by the ECJ in 2007

Court of Justice of the European Communities
Joined cases C-83/01 P, C-93/01 P and C-94/01 P
Chronopost SA, La Poste and French Republic v Ufex and others
Judgment of 3 July 2003 annulling the 2000 CFI judgment
Joined cases C-341/06 P and C-342/06 P
Judgment of 1 July 2008 annulling the 2006 CFI judgment

ECJ Advocate General opinions
Opinion of 12 December 2002 providing material for the 2003 ECJ judgment
Opinion of 6 December 2007 providing material for the 2008 ECJ judgment

State aid; interpretation of Article 87(1)
Article numbers refer to the 1997 consolidated version of the EC Treaty.

The Chronopost case was a long drawn-out piece of litigation about the applicability of Article 87(1) to arrangements whereby Chronopost, an express parcels delivery company which is a subsidiary of the French State post office organisation La Poste, was given access to La Poste's national network. The question is whether this access, which is an advantage given specifically to Chronopost out of the State resource that is the La Poste network, was State aid.

On 1 October 2007, the Commission found that there was no State aid.

Ufex and other competitors of Chronopost appealed, and the CFI supported them and on 14 December 2000 annulled the Commission finding that there was no State aid.

Chronopost, La Poste and France appealed the CFI judgment and the ECJ agreed with them on 3 July 2003. It annulled the CFI decision on the grounds that the CFI had erred in law in setting out the relevant test for the existence of State aid, and referred the matter back to the CFI.

On 7 June 2006 the CFI annulled the Commission decision again, this time on the grounds of lack of reasoning and because the Commission had been wrong to disregard the value of goodwill in the transfer of Postadex (including a customer database) from La Poste to Chronopost.

On 1 July 2007 the ECJ annulled the CFI's new decision and definitely restored the Commission's finding of no aid.

The erroneous test proposed by the CFI

At paragraph 68, the CFI considered that the principle that a transaction has no State aid element if it is on normal market terms could be applied to the assistance provided by La Poste (as an arm of the State) to Chronopost (as the undertaking allegedly in receipt of State aid). Specifically, the CFI held at paragraph 75 that the relevant concept of "normal" market terms entailed a comparison with "a private holding company or a private group of undertakings not operating in a reserved sector". The CFI quashed the Commission's decision because it failed to apply this test in order to identify whether there was State aid.

The ECJ's rejection of the CFI test and determination of the correct test

The ECJ found that the CFI has erred in law in using a test based on comparisons with normal market conditions, because La Poste's network, built to meet non-commercial public service requirements and on the basis of a reserved sector, was too dissimilar to a commercial network to enable the comparisons in the CFI's test. Paragraph 38 of the ECJ judgment notes the "absence of any possibility" of using the CFI's test.

Instead, the ECJ held (paragraphs 39-40) that the relevant test was whether Chronopost had been charged on an objectively rational basis for no less than the costs that its use of the network had caused.

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Last changed by Franck at 8:06 AM on Wednesday 2 July 2008.

Reference for this page:
Reckon Open "Chronopost" 2008-07-02T08:06:47
Link within Reckon Open: [[Chronopost]]