Language of document :

JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

16 September 2013 (*)

(State aid – Partial exemption from the obligation to contribute to the Pension Protection Fund – Decision declaring the aid incompatible with the internal market – Concept of State aid – State resources – Advantage – Selective nature – Adverse effect on competition – Effect on trade between Member States – Equal treatment – Proportionality – Legitimate expectations – Obligation to state reasons – Putting into effect of the aid)

In Joined Cases T‑226/09 and T‑230/09,

British Telecommunications plc, established in London (United Kingdom), represented by G. Robert, M. Newhouse and T. Castorina, Solicitors, and by J. Holmes, Barrister, and H. Legge QC,

applicant in Case T‑226/09,

BT Pension Scheme Trustees Ltd, established in London, represented by J. Derenne and A. Müller-Rappard, lawyers,

applicant in Case T‑230/09,

v

European Commission, represented by L. Flynn and N. Khan, acting as Agents,

defendant,

APPLICATION for annulment of Commission Decision 2009/703/EC of 11 February 2009 concerning the State aid C 55/2007 (ex NN 63/07, CP 106/06) implemented by the United Kingdom of Great Britain and Northern Ireland – Crown guarantee to [British Telecommunications] (OJ 2009 L 242, p. 21).

THE GENERAL COURT (Eighth Chamber),

composed of L. Truchot, President, M.E. Martins Ribeiro and A. Popescu (Rapporteur), Judges,

Registrar: C. Kristensen, Administrator,

having regard to the written procedure and further to the hearing on 6 May 2013,

gives the following

Judgment

 The applicants

1        The applicant in Case T‑226/09, British Telecommunications plc (‘BT’), is an incorporated company governed by the law of the United Kingdom, active in the information technologies (‘IT’) sector. Its main activities include networked IT services, local, national and international telecommunications services and higher-value broadband and Internet services.

2        On 1 April 1984, pursuant to the Telecommunications Act 1984 (‘the 1984 Act’), BT became a public company wholly owned by the United Kingdom Government. On 6 August 1984, the business of British Telecommunications (‘the preceding undertaking’) was transferred to BT. The liabilities of the preceding undertaking were transferred to BT, apart from certain liabilities, defined in section 60(2) of the 1984 Act as liabilities arising under a deed between the Post Office, a predecessor of the preceding undertaking, and the trustees of its pension scheme. Following several disposals of shares to the public between November 1984 and 1997, the United Kingdom Government disposed of its entire shareholding in BT.

3        Under the rules of its pension scheme, the BT Pension Scheme (‘the BTPS’), BT must contribute regularly to the scheme in order to meet the pension benefits payable and also the costs and expenses of the scheme.

4        The applicant in Case T‑230/09, BT Pension Scheme Trustees Ltd (‘BTPS Trustees’), consists of the trustees of the BTPS, which is the current pension scheme for BT employees. On 31 March 1986, BT had established a new pension scheme for its new employees, called ‘British Telecommunications plc New Pension Scheme’ (‘BTNPS’), and the scheme established in 1983 for employees of the preceding undertaking, called ‘British Telecommunications Staff Superannuation Scheme’ (‘BTSSS’), was then closed to new staff members from that date. In 1993 the two schemes were merged and became the BTPS.

5        BTPS Trustees must ensure that, in the long term, the BTPS holds sufficient assets to cover the cost of the pension benefits payable under that scheme. BTPS Trustees are responsible for paying to the Pension Protection Fund any levies due in respect of the BTPS, in accordance with the Pensions Act 2004 and the subordinate legislation made thereunder.

 Background to the dispute

6        On 26 April 2006 one of BT’s competitors lodged a complaint with the Commission of the European Communities against a guarantee granted to BT by the United Kingdom Government. By emails dated 24 May and 22 June 2006, that competitor provided further information about the guarantee to the Commission.

7        In 2006 and 2007 the Commission sent various requests for information to the United Kingdom authorities, which responded to those requests. In addition, on 26 March 2007, at the request of the United Kingdom authorities, a meeting took place between representatives of the Commission and the lawyers representing BTPS Trustees.

8        On 28 November 2007 the Commission adopted and notified to the United Kingdom a decision (OJ 2008 C 15, p. 8) in which it found that the State guarantee granted to BT (‘the guarantee’) pursuant to section 68 of the 1984 Act, as amended by the Communications Act 2003 (‘the 2003 Act’), did not constitute State aid within the meaning of Article 87(1) EC, in so far as it covered, in the event that BT should become insolvent, its pension liabilities. In the same decision, moreover, the Commission initiated the formal examination procedure, pursuant to Article 87(2) EC, in respect of certain measures linked with the guarantee.

9        Following the publication of the decision of 28 November 2007, the Commission received comments from the United Kingdom authorities, and also from the UK Competitive Telecommunications Association, a trade association representing telecommunication operators competing with BT, from the original complainant, from BT and from BTPS Trustees. The comments of those interested parties were sent to the United Kingdom authorities. At the latter authorities’ request, and with the agreement of the interested parties, the Commission authorised the disclosure to BT of the non-confidential versions of the comments submitted by the third parties, on which the United Kingdom authorities and subsequently BT and BTPS Trustees, jointly, submitted comments. In July 2008 the Commission held a meeting with the United Kingdom authorities, which was followed by new clarifications provided by email, in September 2008. The lawyers representing BT and BTPS Trustees, at their request, met the Commission in August and October 2008.

10      On 11 February 2009 the Commission adopted Decision 2009/703/EC concerning State aid C 55/07 (ex NN 63/07, CP 106/6) implemented by the United Kingdom of Great Britain and Northern Ireland – Crown guarantee to BT (OJ 2009 L 242, p. 21; ‘the contested decision’).

 The contested decision

11      According to section 68 of the 1984 Act, as amended by the 2003 Act, the United Kingdom Government provided the guarantee, under which it is required to pay any liability for payment of the pensions contracted by the preceding undertaking and transferred to BT, so far as employees coming under the retirement scheme of employees of the preceding undertaking before 6 August 1984 are concerned, on condition that BT is insolvent and wound up and that the liabilities are payable in full or in part at the commencement of the winding up. Although since 1984 the guarantee has covered all the outstanding liabilities of the preceding undertaking transferred in 1984, since 2003 the guarantee has covered only liabilities for payment of pensions. The United Kingdom Government would then pay BTPS Trustees the amounts thus payable and would become an unsecured creditor of BT for those amounts, while BTPS Trustees would be an unsecured creditor of BT for any liabilities not covered by the guarantee (recitals 18 to 23 to the contested decision).

12      The main amendments to the general pension regulatory framework in the United Kingdom were introduced by the Pensions Acts 1995 and the 2004 Act (recital 29 to the contested decision). First, section 56 of the Pensions Act 1995 introduced a minimum funding requirement that the value of the assets of the scheme is not less than the amount of the liabilities of the scheme. However, that section does not apply to any occupational pension scheme which has been guaranteed by the Crown (recitals 30 and 31 to the contested decision). In addition, part 3 of the 2004 Act introduced new funding requirements, which replaced those established in 1995. Section 222 of the 2004 Act provides that the schemes concerned are required to hold sufficient and appropriate assets to cover their technical provisions. However, the Occupational Pension Schemes (Scheme Funding) Regulations 2005 exempt retirement schemes guaranteed by a public authority. If a part of a pension scheme enjoys such a guarantee, the guaranteed and non-guaranteed parts of the scheme are considered to be separate schemes (recital 35 to the contested decision).

13      Second, the 2004 Act introduced the Pension Protection Fund (‘the PPF’), which became operational in 2005 and which serves to pay compensation to members of pension schemes whose employers have become insolvent. Under the Pension Protection Fund (Entry Rules) Regulations 2005 (SI 2005 No 590) (‘the 2005 Regulations (Entry Rules’), the Occupational Pension Schemes (Employer Debt) Regulations 2005 (SI 2005 No 678) and the Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (SI 2005 No 277), the PPF is financed partly by the assets transferred from schemes from which it has assumed responsibility and partly by an annual levy raised on eligible pension schemes (‘the PPF levy’), unless those schemes have been given a public guarantee and are therefore exempted from that levy. Where part of a pension scheme is covered by a public guarantee, the guaranteed and non-guaranteed parts of the scheme should be considered to be separate schemes (recitals 32 to 34 to the contested decision).

14      The Commission observed that, in its decision of 28 November 2007, it had taken the view that, on its own, the guarantee was of benefit only to BT’s employees and therefore did not confer any advantage on BT, since the guarantee did not affect its credit rating, investment or employment policy. The Commission had therefore concluded that that guarantee, in so far as it did not confer any specific additional advantage on BT, independently of the modifications to the legal framework introduced in 1995 and 2004, did not constitute State aid within the meaning of Article 87(1) EC (recital 37 to the contested decision). On the other hand, the Commission had initiated the formal investigation procedure in respect of two measures relating to the pension liabilities covered by the guarantee: first, the exemption granted to the BTPS from the application of the minimum funding requirements to pensions covered by the guarantee, introduced by the Pensions Act 1995 and the 2004 Act; and, second, the exemption of the BTPS under the 2005 Regulations (Entry Rules) from the application, for pension liabilities covered by the guarantee, of the requirement of the 2004 Act to contribute an annual levy to the PPF (‘the exemption from the PPF levy’) (recitals 36 to 38 to the contested decision).

15      At recital 71 to the contested decision, the Commission considered that it was not established that the exemption from the minimum funding requirements laid down in the Pensions Act 1995 and the rules contained in the 2004 Act had procured or still procured an economic advantage for BT. It therefore concluded, in that respect, that there was no State aid within the meaning of Article 87(1) EC.

16      At recitals 72 to 90 to the contested decision, on the other hand, the Commission considered that the exemption from the PPF levy corresponding to the pension liabilities covered by the guarantee procured, in so far as it was granted owing to the existence of the guarantee and the guarantee was granted without any payment, a selective economic advantage for BT owing to the use of the public resources of the United Kingdom, such advantage being liable to distort competition and trade between Member States. According to the Commission, that exemption therefore constituted State aid within the meaning of Article 87(1) EC and, as it had not been notified to the Commission pursuant to Article 88(3) EC, it was unlawful.

17      Last, at recitals 101 and 102 to the contested decision, the Commission concluded that that exemption could not be declared compatible with the common market pursuant to Article 86(2) EC or Article 87(3) EC.

18      The operative part of the contested decision includes, in particular, the following provisions:

Article 1

The State aid unlawfully put into effect by the United Kingdom … Ireland for BT …, the beneficiary, in the form of an exemption for the [BTPS contribution] to the [PPF] as concerns the beneficiary’s pension liabilities covered by section 68(2) of the [1984 Act] as amended, is incompatible with the common market within the meaning of Article 87(1) [EC].

The United Kingdom … shall cease the incompatible State aid to BT …

Article 2

The United Kingdom … shall recover the aid referred to in Article 1 from the beneficiary.

The sum to be recovered shall bear interest for the entire period running from the date it was put into effect until the date of its recovery.

Article 3

Recovery of the aid referred to in Article 1 shall be immediate and effective.

Article 4

Within two months following notification of this Decision, the United Kingdom … shall submit the following information to the Commission:

(a)      the total amount to be recovered from the beneficiary;

(b)      a detailed description of the measures already taken and planned to comply with this Decision; and

(c)      documentary evidence that the beneficiary has been ordered to repay the aid.

The United Kingdom … shall keep the Commission informed of the progress of the national measures taken to implement this Decision until recovery of the aid referred to in Article 1 has been completed. It shall immediately submit, on simple request by the Commission, information on the measures already taken and planned to comply with this Decision. It shall also provide detailed information concerning the amounts of aid and recovery interest already recovered from the beneficiary.

Article 5

This Decision is addressed to the United Kingdom …’

 Procedure and forms of order sought

19      By applications lodged at the Court Registry on 9 June and 10 June 2009 respectively, BT and BTPS Trustees brought the actions in Case T-226/09 and Case T-230/09 respectively.

20      In Case T‑230/09, by separate document lodged at the Court Registry on 15 September 2009, the Commission raised an objection of inadmissibility under Article 114 of the Rules of Procedure of the Court. BTPS Trustees lodged their observations on that objection on 3 November 2009.

21      On 30 November 2010, Cases T‑226/09 and T‑230/09 were assigned to a new Judge-Rapporteur sitting in the Second Chamber.

22      In Case T‑230/09, by order of the Court (Second Chamber) of 14 July 2011, the objection of inadmissibility was joined to the substance and costs were reserved.

23      In Case T‑230/09, in the context of the measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, the Court (Second Chamber) requested the Commission on 21 July 2011 to answer in writing certain questions. The Commission complied with that request within the prescribed period.

24      Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Eighth Chamber, to which Cases T‑226/09 and T‑230/09 were therefore assigned.

25      By order of the President of the Eighth Chamber of the Court of 15 March 2013, Cases T‑226/09 and T‑230/09 were joined for the purposes of the oral procedure and the judgment, in accordance with Article 50 of the Rules of Procedure.

26      In Case T‑226/09, BT claims that the Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

27      In Case T-230/09, BTPS Trustees claim that the Court should:

–        reject the objection of inadmissibility as unfounded;

–        annul the contested decision;

–        in the alternative, annul Article 1 of the contested decision in so far as it refers to the unlawful implementation of the State aid at issue, and also Article 2, the first paragraph of Article 3 and Article 4 of the contested decision, in so far they related to repayment of the State aid at issue;

–        order the Commission to pay the costs.

28      In Case T-226/02, the Commission contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

29      In Case T‑230/09, the Commission contends that the Court should:

–        dismiss the action as inadmissible or, in the alternative, as unfounded;

–        order the applicant to pay the costs.

 Law

 1. Admissibility (Case T‑230/09)

30      In support of its objection of inadmissibility in Case T‑230/09, in the first place, the Commission claims that BTPS Trustees have no locus standi, as they are not directly concerned by the contested decision. In the second place, BTPS Trustees have no legal interest in challenging the contested decision, since, given the nature of their relationship with the beneficiary of the measure at issue, BT, they would be indemnified if any action should be brought against them as a result of the implementation of the contested decision.

31      BTPS Trustees maintain, in the first place, that the contested decision is of direct concern to them, as regards both the classification of the measure at issue as State aid and the recovery order and the order to cease payment of the State aid in future and, in the second place, that they have an interest on bringing an action for annulment of the contested decision.

32      It should be borne in mind that the Courts of the European Union are entitled to assess, according to the circumstances of each case, whether the proper administration of justice justifies the dismissal of the action on the merits without first ruling on the objection of inadmissibility raised by the defendant (Case C‑23/00 P Council v Boehringer [2002] ECR I‑1873, paragraphs 51 and 52, and Case C‑414/08 P Sviluppo Italia Basilicata v Commission [2010] ECR I‑2559, paragraphs 51 and 52).

33      In the circumstances of the present case, the Court considers it necessary, in the interest of procedural economy, to begin by examining the pleas put forward by BTPS Trustees, without first ruling on the objection of inadmissibility raised by the Commission, since the action is, in any event and for the reasons set out below, unfounded.

 2. Substance

 Summary of the pleas for annulment

34      In its action in Case T‑226/09, BT puts forward seven pleas in law. They allege, in essence: in the first plea, an error in the finding of the existence of a selective economic advantage; in the second plea, a breach of the principle of equal treatment owing to the finding of a selective economic advantage; in the third plea, an error of law and of fact and a breach of the principles of legitimate expectations and legal certainty owing to the re-characterisation of the guarantee and the requirement to recover the guarantee; in the fourth plea, a breach of the principles of equal treatment and proportionality owing to the requirement to pay a levy to the PPF; in the fifth plea, an error in the finding of the existence of a distortion of competition and an effect on trade between Member States and insufficient reasoning in the contested decision on those points; in the sixth plea, an error in the finding of the existence of a transfer of State resources; and in the seventh plea, an infringement of Article 253 EC for failure to state reasons.

35      In their action in Case T‑230/09, BTPS Trustees put forward three pleas in law. The first plea, alleging infringement of Article 87(1) EC, consists of four parts. BTPS Trustees claim, in essence, in the first part, that there has been a breach of the condition relating to the selectivity of the measure at issue; in the second part, in the alternative, a breach of the condition relating to the economic advantage; in the third part, a breach of the condition relating to the distortion of competition and an effect on trade between Member States and, in the fourth part, a breach of the condition relating to the transfer of State resources. The second plea alleges infringement of Article 253 EC and breach of the obligation to state reasons. The third plea alleges, in essence, infringement of Article 88(3) EC, read with Article 1(f) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1), as amended, and of Article 14 of Regulation No 659/1999.

36      The Court considers it appropriate to examine the pleas relating to the characterisation of the measure at issue as State aid, before examining the pleas alleging infringement of Article 253 EC and, last, the plea alleging, in essence, infringement of Article 88(3) EC, read with Article 1(f) of Regulation No 659/1999, and of Article 14 of Regulation No 659/1999.

 The characterisation of the measure at issue as State aid

37      It should be borne in mind that Article 87(1) EC provides that, ‘[s]ave as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the product of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market’ (judgment of 25 March 2009 in Case T‑332/06 Alcoa Trasformazioni v Commission, not published in the ECR, paragraph 55).

38      Classification as aid – in the sense of State aid that is incompatible with the common market – requires that all the conditions set out in that provision be fulfilled. According to Article 87(1) EC, those conditions are as follows. First, there must be an intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must confer an advantage on the recipient by favouring certain undertakings or the production of certain goods. Fourth, it must distort or threaten to distort competition (Alcoa Trasformazioni v Commission, paragraph 37 above, paragraph 56).

39      According to the case-law, the concept of State aid, as defined in the Treaty, is a legal concept which must be interpreted on the basis of objective factors. For that reason, the Courts of the European Union must in principle, having regard both to the specific features of the case before them and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure falls within the scope of Article 87(1) EC (Case C‑487/06 P British Aggregates v Commission [2008] ECR II‑10515, paragraph 111).

 The error in the finding of the existence of a selective economic advantage (first plea in Case T‑226/09 and second part of the first plea in Case T‑230/09)

40      BT, by its first plea, and BTPS Trustees, by the second part of their first plea, which is put forward in the alternative, claim that the Commission was wrong to conclude that there was a selective economic advantage owing to the measure at issue.

41      It should be borne in mind that the Court of Justice has held on numerous occasions that the objective pursued by State measures is not sufficient to exclude those measures outright from classification as ‘aid’ for the purposes of Article 87 EC (see British Aggregates v Commission, paragraph 39 above, paragraph 84 and the case-law cited).

42      In fact, Article 87(1) EC does not distinguish between the causes or the objectives of State aid, but defines them in relation to their effects, and thus independently of the techniques used (see British Aggregates v Commission, paragraph 39 above, paragraph 85 and the case-law cited, and Joined Cases C‑106/09 P and C‑107/09 P Commission v Government of Gibraltar and United Kingdom [2011] ECR I‑0000, paragraph 87 and the case-law cited).

43      It should be borne in mind, moreover, that, in particular, measures which, in various forms, mitigate the charges which are normally borne by the budget of an undertaking and which, therefore, without being subsidies in the strict sense of the word, are similar in character and have the same effect, are considered to be aid (Joined Cases C‑399/10 P and C‑401/10 P Bouygues and Bouygues Télécom v Commission [2013] ECR I‑0000, paragraph 101, and Case T‑445/05 Associazione italiana del risparmio gestito and Fineco Asset Management v Commission [2009] ECR II‑289, paragraph 138).

44      BT and BTPS Trustees claim, in essence, that in the contested decision the Commission wrongly disregarded the additional pension liabilities transferred to BT in 1984, after it had been incorporated and before it was privatised (‘the additional pension liabilities’), which are as follows: first, full indexation of employee pension rights against inflation, whereas private sector schemes typically provide no indexation or a cap of 3%; second, retirement at age 60, whereas in the private sector the retirement age is typically 65; third, the transfer to BT of liability for enhanced early retirement terms on redundancy; fourth, restrictions on BT’s ability to amend the inherited pension rights or the obligation to finance them, and on BT's ability to cease employer contributions to the BTPS, to terminate benefit accrual under or to wind up the BTPS; and, fifth, BT’s inheritance of the net deficit of the BTPS on privatisation.

45      In fact, BT’s financing of the pension rights concerned and the guarantee are indivisible components of the same ‘pension protection package’ which enabled telecommunications liberalisation in the United Kingdom under the 1984 Act. According to BT and BTPS Trustees, the Commission erred in disregarding those obligations when assessing whether BT enjoyed a selective economic advantage. In addition, BT and BTPS Trustees maintain, in essence, that those obligations constitute abnormal charges and a structural disadvantage, which means that, owing to the link between the obligations and the guarantee, the measure at issue could not, according to the case-law, be classified as aid. Owing to that global approach, there is no economic advantage, since those obligations are more onerous financially than the exemption from the PPF levy, although BTPS Trustees state in the reply that the costs are abnormal because of their nature and not because they are high.

46      It is therefore appropriate to examine, in the first place, whether the Commission erred in not finding an indivisible link between the additional pension liabilities and the guarantee, while BT and BTPS Trustees also dispute the merits of the grounds set out at recital 80 to the contested decision, before, in the second place, determining whether, in the light of the case-law, the Commission was wrong to disregard such a link when assessing a selective economic advantage, in the form of the exemption from the PPF levy, in favour of BT.

47      In the first place, it should be observed that BT and BTPS Trustees do not rely on any indivisible link between the additional pension liabilities and the exemption from the PPF levy, which constitutes the measure at issue.

48      In addition, the arguments of BT and BTPS Trustees regarding the existence of an indivisible link between the additional pension liabilities and guarantee must be rejected.

49      In that regard, it should be stated that the funding by BT of the additional pension liabilities and the guarantee do indeed have a link for the BTPS members concerned. Those two mechanisms were put in place for their benefit. The BTPS members concerned were able to benefit from the maintenance of their rights and from the transfer to BT of the obligation to finance them and also from the provision of the guarantee in the event that BT should become insolvent and be wound up. But the two mechanisms cannot be regarded as indivisible, as one can exist without the other, since, in the case of the additional pension liabilities, the aim was to protect the rights of certain employees in the context of the change in status of their employer, whereas, in the case of the guarantee, the purpose was to protect those employees’ rights in the event of their employer’s insolvency.

50      Nor can it be maintained that those two mechanisms constitute indivisible elements with respect to BT. In that regard, the existence of a ‘temporal link’, owing to the fact that both mechanisms were adopted in the same regulations, is not significant. As regards a possible indivisible ‘substantive link’, it may be inferred from the fact that the guarantee covered other liabilities in 1984, before being limited to the additional pension liabilities in 2003, that the guarantee was not granted initially, in 1984, solely in respect of those liabilities. Above all, however, it must be considered that the two mechanisms are not indivisible with respect to BT, in so far as the guarantee will be implemented only if BT becomes insolvent and is wound up. In other words, BT is required to finance the first mechanism, namely the additional retirement liabilities, but it is only if BT becomes insolvent and is wound up, and is thus unable to meet those obligations, that the second mechanism will be implemented. The existence of the guarantee has no influence on whether or not BT will be required to meet the additional pension obligations and the way in which they will be satisfied.

51      Furthermore, the argument that the two mechanisms should be taken into consideration together, as the Commission observes at recital 75 to the contested decision, because they are intended to protect pensions, is incorrect. The expression ‘pension protection’ used by BT and BTPS Trustees covers two different aspects. As has been mentioned (see paragraph 49 above), in the case of the additional pension rights, the aim is to protect the rights of certain employees in the context of the change in status of their employer, whereas, in the case of the guarantee, the aim is to protect those employees’ rights in the event that their employer should become insolvent. The Commission clearly took into consideration, at that recital, the system of pension protection in the event of the insolvency of the employer (see paragraph 88 below).

52      In the light of the foregoing considerations, it must be concluded that BT and BTPS Trustees have not shown the indivisible link between the additional pension liabilities and the guarantee and, in particular, how the two mechanisms constitute a whole with respect to BT and, consequently, the Commission did not err in not finding such a link.

53      In addition, in so far as BT and BTPS Trustees dispute the merits of the grounds set out at recital 80 to the contested decision, their arguments must be rejected.

54      First, BT maintains that the Commission concludes that the additional pension liabilities do not ‘offset’ the advantage alleged to be provided by the reduced PPF levy, whereas the question to be considered is whether those liabilities are part of the overall factual and legal context which has to be taken into account when assessing whether BT enjoys any ‘selective advantage’. That complaint must be rejected in so far as the Commission’s conclusion was stated in response to an argument raised by BTPS Trustees during the administrative procedure, referring to an ‘offset’. It must be held that the Commission responded, at recital 80 to the contested decision, to BTPS Trustees’ argument that the exemption from the PPF levy was offset by the charges imposed on BT and the BTPS owing to the particular nature of the BTPS.

55      Second, BT and BTPS Trustees maintain that the consideration relating to shareholders set out at the first indent of recital 80 to the contested decision is irrelevant.

56      In that regard, it should be considered that the Commission responded from a number of aspects to the argument of BTPS Trustees set out at paragraph 54 above in order to show that ‘the alleged disadvantages [could not] be used to offset [the] advantage’. It thus stated the reasons why it considered that the charges imposed on BT should not be taken into consideration, and began by examining the point of view of the shareholders. It should be observed that the argument put forward by BT and BTPS Trustees during the administrative procedure was based on the fact that the guarantee and the additional pension liabilities were included in the same package of measures. In that context, the Commission’s consideration as to the lack of interest to the shareholders must be understood to mean that the guarantee was unimportant to BT and was therefore of little interest to the shareholders.

57      Third, at the second indent of recital 80 to the contested decision, the Commission stated that there was no temporal link between the exemption from the PPF levy and the additional pension liabilities. First, BT maintains that the absence of a temporal link is irrelevant, since there is such a link between those liabilities and the guarantee. Second, BTPS Trustees claim that, as the disadvantage linked with those liabilities persisted between 2005 and 2009, the temporal link with the exemption from the PPF levy since 2005 is obvious.

58      It cannot be considered that, as BT suggests, a temporal link exists between two mechanisms adopted 20 years apart, namely between the additional pension liabilities and the measure at issue, owing to the existence of such a link between those liabilities and the guarantee. In any event, the temporal aspect is irrelevant in the present case, since the fact that both mechanisms were adopted or exist in the same time frame does not mean that they constitute indivisible elements.

59      At the second indent of recital 80 to the contested decision, the Commission concluded that there was no ‘discernible substantive link’ between the guarantee and the additional pension liabilities. In that regard, BT and BTPS Trustees rely on the scope of the guarantee, in so far as, in essence, even though it may have covered other liabilities during a certain period, it was always intended to cover those additional pension liabilities. However, it is clear from the contested decision that there was no exclusive link between those liabilities and the guarantee, which BT acknowledges, and it is in that sense that the expression referring to the absence of a ‘discernible substantive link’ must be understood.

60      Furthermore, BT claims that it has already demonstrated the ‘indissoluble’ link between the guarantee and the additional pension liabilities, while BT and BTPS Trustees again claim that the guarantee was provided in very exceptional circumstances. However, that argument has already been answered (see paragraphs 47 to 51 above) and the Commission did not err in that respect (see paragraph 52 above).

61      Fourth, BT maintains that the Commission’s assertion, at the third indent of recital 80 to the contested decision, is quite insufficient to substantiate the contested decision. At the third indent of recital 80 to the contested decision, the Commission stated that it was responding to an argument of BT referring to the charges linked with the additional pension liabilities. The Commission’s assumption that those liabilities can have triggered benefits for BT, such as employee loyalty, must however be regarded not as a legal argument, but as an observation which, as the Commission asserts in its pleadings, assumes secondary importance in the statement of reasons set out in the contested decision concerning the existence of a selective economic advantage.

62      It follows from all of the foregoing that the argument put forward by BT and BTPS Trustees that the Commission erred in disregarding the additional pension liabilities when assessing whether BT enjoyed a selective economic advantage must be rejected. In the context of the examination of the measure at issue with respect to its classification as State aid under Article 87(1) EC and the examination of the condition of the economic advantage conferred on BT, it is necessary to examine the measure at issue by reference to BT and BTPS Trustees. As the argument put forward by BT and BTPS Trustees, first, rests on the incorrect premiss that there is an indivisible link between the guarantee and the additional pension liabilities and, second, does not explain that such a link exists between the measure at issue and the additional pension liabilities, it must be concluded that those liabilities must not be taken into consideration in that examination of the measure at issue.

63      In the second place, the argument, put forward by BT and BTPS Trustees, that the Commission could not conclude that there was an economic advantage in the form of the exemption from the PPF levy in the light of the case-law, in so far as BT bears abnormal charges and suffers a structural disadvantage, cannot succeed.

64      First, as regards Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1, 3, 4 and 28 to 30, on which BTPS Trustees rely, by analogy and a contrario, BTPS Trustees claim that, in that judgment, the Court of Justice did not exclude the principle that a countervailing effect of a measure, by comparison with abnormal charges, could take away from an apparent aid measure its character as State aid under Article 87(1). However, in that judgment the Court of Justice considered only that the concept of aid includes interventions which, in various forms, alleviate the burdens normally borne by an undertaking’s budget. BTPS Trustees’ argument is therefore based on an incorrect interpretation of that judgment and must be rejected.

65      Second, BT cites Case C‑53/00 Ferring [2001] ECR I‑9067; Case C‑280/00 Altermark Trans and Regierungspräsidium Magedburg [2003] ECR I‑7747 ‘Altmark’); and Case T‑157/01 Danske Busvognmænd v Commission [2004] ECR II‑917 (‘Combus’). However, BT states in the reply that those judgments are not directly applicable to the facts of the present case, which it also confirmed at the hearing with respect to Ferring and Altmark. None the less, it submits that those judgments at least make it possible to show that the net effect of the measure at issue must be taken into account.

66      It should be observed that Ferring and Altmark, paragraph 65 above, relate to situations concerning the question of the offsetting of costs associated with the provision of a public service of general economic interest. In the present case, however, although BT relies, with respect to the BTPS members concerned, on the obligation to finance pensions closely resembling civil service pensions, it does not identify any public service task of general economic interest which it performs or for which it is responsible. Those judgments are therefore irrelevant in that respect in the present case.

67      As regards Combus, paragraph 65 above, BT and also, in essence, BTPS Trustees maintain that the ‘underlying logic of that judgment’ is applicable in the present case. Conversely, the Commission contends that that judgment cannot be reconciled with established case-law. It denies that that judgment, in particular paragraph 57 thereof, on which BT and BTPS Trustees rely, it can be used to support the inference that a measure offsetting a structural disadvantage does not constitute State aid.

68      In the present case, even on the assumption that it might be considered that BT and BTPS Trustees could maintain, in reliance on Combus, paragraph 65 above, that a measure offsetting a structural disadvantage does not constitute State aid, they would need to demonstrate, in accordance with that judgment, that BT suffers a structural disadvantage as a result of the abnormal charges and that the measure at issue alleviates those charges.

69      The situation in the present case is different from that in Combus, paragraph 65 above, as BTPS Trustees acknowledged at the hearing in answer to a question from the Court. In that case, the measure at issue ‘released’ the undertaking concerned from a ‘disadvantage’. On the assumption that the charges linked to the additional pension liabilities were abnormal, the arguments of BT and BTPS Trustees rest on the incorrect premiss that those charges should be taken into consideration (see paragraph 62 above). They cannot therefore constitute a charge from which BT would be released as a result of the measure at issue or a charge that would be alleviated. In addition, it must be held that the measure at issue does not in any way ‘release’ BT from its additional pension liabilities, which endure, as BT and BTPS Trustees themselves emphasise.

70      Third, BT and BTPS Trustees based their argument that BT bears abnormal charges and suffers a structural disadvantage on Joined Cases T‑254/00, T‑270/00 and T‑277/00 Hotel Cipriani and Others v Commission [2008] ECR II‑3269, upheld on appeal in Joined Cases C‑71/09 P, C‑73/09 P and C‑76/09 P Comitato ‘Venezia vuole vivere’ v Commission [2011] ECR I‑4727, and also on Joined Cases T‑427/04 and T‑17/05 France and France Télécom v Commission [2009] ECR II‑4315.

71      In that regard, it should be observed that the Court of Justice considered in Comitato ‘Venezia vuole vivere’ v Commission, paragraph 70 above (paragraph 100), that this Court’s finding, in Hotel Cipriani and Others v Commission, paragraph 70 above, that the reductions in social security contributions at issue constituted aid within the meaning of Article 87(1) EC was already justified by the ground, set out at paragraphs 181 to 184 of the judgment under appeal, that the objective of compensating for competitive disadvantages of undertakings established in Venice and Chioggia, pursued by the reductions in social security contributions, could not remove from those advantages their character as aid within the meaning of Article 87(1) EC. The Court of Justice therefore considered that the complaints against paragraphs 185 to 195 of that judgment, relating to the possibility that a measure designed to compensate for a structural disadvantage could escape the classification as aid, paragraphs 187 and 189 examining Combus, paragraph 65 above, were directed at grounds stated purely for the sake of completeness and were therefore nugatory. It cannot therefore be inferred from that judgment of the Court of Justice that that Court confirmed the principle which BT and BTPS Trustees derive from Combus, paragraph 65 above, that a measure intended to offset a structural disadvantage might escape the classification as State aid, outside the criteria established in Altmark, paragraph 65 above.

72      In addition, BT and BTPS relied at the hearing on Case C‑81/10 P France Télécom v Commission [2011] ECR I‑0000, paragraph 43, upholding France and France Télécom v Commission, paragraph 70 above (paragraph 207). In that judgment, the Court of Justice observed that this Court, while recognising that the Commission, when examining a measure liable to constitute State aid, is entitled to take account of specific charges affecting an advantage, had none the less held, at paragraph 207 of the judgment under appeal, that a measure cannot be saved from categorisation as State aid where the beneficiary of the measure is subject to a specific charge which is different from and unconnected with the aid in question. The Court of Justice considered that that assertion by this Court was based on a correct interpretation of Article 87(1) EC (Case 173/73 Italy v Commission [1974] ECR 709, paragraph 34). In the present case, the additional pension liabilities should not be taken into consideration for the purposes of the examination of the measure at issue (see paragraph 62 above) and they are separate from the exemption from the PPF levy and unconnected with the latter in that context, while BTPS Trustees themselves observe that the exemption from the PPF levy was not expressly based on the intention to offset exceptional burdens.

73      In that regard, it should be observed that if the exemption from the PPF levy were considered to be linked with the additional pension liabilities and to be intended to offset those liabilities, that would lead, in fact, to the question whether a measure constitutes aid within the meaning of Article 87(1) EC being assessed not on the basis of the effects of the measure at issue but on the basis of the objectives pursued by it.

74      It should be borne in mind, having regard to the case-law cited at paragraphs 41 and 42 above, and as the Court of Justice held in Comitato ‘Venezia vuole vivere’ v Commission, paragraph 70 above (paragraphs 94 and 95), that, according to the case-law, the grounds underlying an aid measure do not suffice to exclude the measure at the outset from classification as aid within the meaning of Article 87 EC. Article 87(1) EC does not distinguish between measures of State intervention by reference to their causes or their aims but defines them in relation to their effects (see, to that effect, Case C‑172/03 Heiser [2005] ECR I‑1627, paragraph 46 and case-law cited).

75      Consequently, in the present case, it must be held that the objective of offsetting the structural disadvantage suffered by BT as a result of the additional pension liabilities, as pursued by the measure at issue, could not deprive the advantage thus conferred of its character as State aid within the meaning of Article 87(1) EC.

76      In the light of all of the foregoing considerations, it must be concluded that if the objective of the measure at issue was to offset a structural disadvantage, consisting in the additional pension liabilities, such an objective could not be taken into consideration, as it is necessary to assess the effects of the measure at issue, in accordance with the case-law referred to (see paragraphs 41 and 42 above). As for the examination of the effects of the measure at issue for the purpose of assessing whether BT enjoys a selective economic advantage, BT and BTPS Trustees maintain, incorrectly, that the Commission erred in the contested decision in treating the guarantee in isolation from the additional pension liabilities and in having disregarded those liabilities in its examination. It also follows that, as those additional liabilities did not have to be taken into account for the purpose of the analysis of the measure at issue, their financial cost, contrary to BT’s assertions, by comparison with the cost of the exemption from the PPF levy is irrelevant.

77      Last, it should be observed that BT’s argument that transferring the additional pension liabilities to it represented a ‘good deal’ for the United Kingdom Government is irrelevant. It is also based on the incorrect premiss that those liabilities should be taken into consideration in the examination of the measure at issue (see paragraph 62 above).

78      Accordingly, the Commission did not err in considering, at recitals 81 and 82 to the contested decision, that BT benefited from a selective economic advantage, and it follows from all of the foregoing considerations that the first plea in Case T‑226/09, and also the second part of the first plea in Case T‑230/09, must be rejected.

 Breach of the principle of equal treatment owing to the finding of a selective economic advantage (second plea in Case T‑226/09)

79      BT maintains that, in concluding that the applicant enjoyed a selective economic advantage, the Commission made a ‘manifest error of assessment’ and breached the principle of equal treatment. It submits that to require BTPS Trustees to contribute to the PPF in respect of liabilities already covered by the guarantee would constitute a breach of the principle of equal treatment.

80      According to the case-law, the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified (Case C‑390/06 Nuova Agricast [2008] ECR I‑2577, paragraph 66, and Joined Cases T‑30/01 to T‑32/01 and T‑86/02 to T‑88/02 Diputación Foral de Álava and Others v Commission [2009] ECR II‑2919, paragraph 319).

81      In the first place, employers’ liabilities arising under private pension schemes covered by the PPF are fundamentally different from the public sector liabilities assumed by BT under the BTPS, as the latter scheme is more onerous than comparable private sector schemes. In addition, the possibility of altering the advantages conferred on BT’s employees is very limited. In order to assert that BT enjoyed a selective economic advantage, the Commission ought to have undertaken a proper comparative analysis of the situation of private sector employers contributing to the PPF and BT’s situation as regards their pension liabilities. It would then have inevitably concluded that BT’s situation, viewed in the round, was much worse than that of its private sector competitors, notwithstanding that BT did not pay the PPF levy in respect of the additional pension liabilities covered by the guarantee.

82      It should be observed that BT is relying on a breach of the principle of equal treatment on the basis of the difference in situation between it and its private sector competitors, on account of the additional pension liabilities, which, it submits, are more onerous, and the absence of flexibility concerning the possibility of changing those liabilities. However, since those liabilities are not to be taken into consideration in the analysis of the measure at issue (see paragraph 62 above), BT’s argument must be rejected, in that it rests in that respect on an incorrect premiss.

83      In the second place, as regards the selective nature of a measure, BT relies on British Aggregates v Commission, paragraph 39 above (paragraphs 82 and 83), where it was held, first, that, as Article 87(1) EC prohibits State aid ‘favouring certain undertakings or the production of certain goods’, that is to say, selective aid, in order to determine whether a measure is selective, it is appropriate to examine whether, within the context of a particular legal system, that measure constitutes an advantage for certain undertakings by comparison with others which are in a comparable legal and factual situation, and, second, that the concept of State aid does not refer to State measures which differentiate between undertakings and which are, therefore, prima facie selective where that differentiation arises from the nature or the overall structure of the system of which they form part. BT maintains, in essence, that the Commission breached the principle of equal treatment in concluding that the measure at issue was of a selective nature.

84      First, BT maintains that pension schemes benefiting from protection under a Crown guarantee, like the BTPS, and the companies financing them, cannot be said, in the light of the overall objective of pension protection, to be in a comparable legal and factual position to those protected by the PPF and the companies financing them. BT’s position is analogous to that of the public sector pension schemes, which are not generally eligible to receive compensation from the PPF and are not required to pay any levy to fund it.

85      Second, BT claims that, even if it were regarded as being in a comparable legal and factual position to that of undertakings whose schemes form part of the PPF, the payment for PPF protection by private sector pension schemes which are not sufficiently protected by other arrangements arises from the nature of the overall system of pension protection in the United Kingdom of which they form part. There is no reason why the BTPS should pay a levy to the PPF, since that arises from the overall system of pension protection established in the United Kingdom, and not from a selective advantage granted to BT.

86      It should be borne in mind that, according to the case-law, Article 87(1) EC prohibits State aid ‘favouring certain undertakings or the production of certain goods’, that is to say, selective aid. It has consistently been held that Article 87(1) EC requires it to be determined whether under a particular statutory scheme a national measure is such as to favour ‘certain undertakings or the production of certain goods’ over others which are in a legal and factual situation that is comparable in the light of the objective pursued by that scheme (see Case C‑88/03 Portugal v Commission [2006] ECR I‑7115, paragraph 54 and the case‑law cited; Commission v Government of Gibraltar and United Kingdom, paragraph 42 above, paragraph 75 and the case-law cited; and Case T‑308/00 Salzgitter v Commission [2013] ECR II‑0000, paragraph 116).

87      As a preliminary point, it should be observed that BT maintains, in the application, that the Commission was correct to take the view in the contested decision that the reference framework includes both the PPF, under the 2004 Act, and the ‘pension protection mechanism for [BT’s] employees’, under the 1984 Act (recital 75). BT explains, however, in the reply that the ‘protection mechanism’ concerning BT under the 1984 Act should include the additional pension liabilities which it assumes. However, as has been stated (see paragraph 62 above), those liabilities are not to be taken into account in the context of the analysis of the measure at issue.

88      It should be observed that the legal framework referred to by the Commission at recital 75 to the contested decision is the framework of the protection of pensions against the employer’s insolvency, whether that protection is afforded by the PPF or by a public guarantee. In that regard, BT does not dispute that the BTPS comes within that framework. Nor does it put forward any argument in order to maintain that, in that particular legal framework, it would not need protection if it became insolvent, because it would be in a different legal and factual situation from the other schemes within the same general framework.

89      Accordingly, it must be held that, in the light of the objective of pension protection against the employer’s insolvency, the BTPS and BT are in a different legal and factual situation from those of the pension schemes and the companies responsible for them, coming within the same legal framework, defined by the Commission at recital 75 to the contested decision.

90      BT claims, admittedly, that since its pension scheme does not come under the PPF, it is not required to pay a levy to that fund. That, in its submission, arises from the overall system for pension protection established in the United kingdom, not as a result of ‘a selective advantage’ granted to BT.

91      It must be held that BT wrongly applies only a part of the Commission’s reasoning in the contested decision (recitals 72 to 78 to the contested decision). The Commission took into consideration overall system for pension protection in the event of the employer’s insolvency. In that system, the regulations at issue provided that certain pension schemes, including BT’s, benefit from exclusion from the PPF and from an exemption from paying the levy to the PPF, because they are covered by a Crown guarantee. In that regard, although BT claims that, as for other public sector schemes, the guarantee means that the BTPS members concerned already benefit from secure provisions for protecting their pensions, it should be observed that BT and the BTPS do not come within the public sector, as BT confirmed at the hearing in answer to a question put by the Court. As the Commission considered in the contested decision, in that overall system, BT, owing to its exclusion from the PPF and the exemption from the PPF levy, does not make any contribution in exchange for the protection against employer insolvency concerning a part of its employees.

92      In order to dispute that it is in a different legal and factual position from that of the other undertakings and their pension schemes which, in the framework defined at recital 75 to the contested decision, must pay a levy in exchange for protection against the insolvency of the employer, BT puts forward no argument, apart from claiming that its additional pension liabilities and the extent of those liabilities should be taken into consideration, as they are indivisibly linked to the guarantee. However, that argument has already been rejected (see paragraph 62 above). In addition, BT stated at the hearing that it did not claim that the guarantee constituted ‘consideration’ for its additional liabilities.

93      Accordingly, it must be held that, in the case of BT and the BTPS, the exemption from the PPF levy arises only from the existence of the guarantee, which means that the part of the BTPS concerned does not form part of the PPF. As that mechanism results in an exemption from any payment for the protection granted (see paragraphs 91 and 92 above), it does not appear, first, that the exemption from the PPF levy arises from the overall system for pension protection established in the United Kingdom or, second, that to require BT’s pension scheme, and therefore BT itself, to pay a levy equivalent to the PPF levy is not objectively justified and constitutes a breach of the principle of equal treatment.

94      In the light of all of the foregoing considerations, the second plea in Case T‑226/09 must be rejected.

 The breach of the condition relating to the selectivity of the measure at issue (first part of the first plea in Case T‑230/09)

95      BTPS Trustees claim that there has been a breach of the condition on selectivity. They maintain, in essence, that in the contested decision the Commission did not clearly determine the correct reference system and its objective and incorrectly found that the BTPS benefited from an exemption. BTPS Trustees also claim that the Commission did not carry out the three-stage analysis required by settled case-law, consisting, first, in defining the common regime constituting the relevant reference network; second, in establishing a ‘derogation’ from that regime and, accordingly, a prima facie selective advantage; and, third, in examining whether the ‘derogation’ results from the nature of the general system of which it forms part.

96      It is appropriate to bear in mind the case-law cited at paragraph 86 above, according to which Article 87(1) EC prohibits State aid ‘favouring certain undertakings or the production of certain goods’, that is to say, selective aid. It has consistently been held that Article 87(1) EC requires it to be determined whether under a particular statutory scheme a State measure is such as to favour ‘certain undertakings or the production of certain goods’ over others which are in a legal and factual situation that is comparable (see Portugal v Commission, paragraph 86 above, paragraph 54 and the case-law cited; Commission v Government of Gibraltar and United Kingdom, paragraph 42 above, paragraph 75 and the case-law cited; and Case Salzgitter v Commission, paragraph 86 above, paragraph 116).

97      According to equally well-established case-law, the concept of State aid does not refer to State measures which differentiate between undertakings and which are, therefore, prima facie selective where that differentiation arises from the nature or the overall structure of the system of which they form part (British Aggregates v Commission, paragraph 39 above, paragraph 83).

98      In addition, it is appropriate to bear in mind the case-law, cited at paragraphs 41 and 42 above, according to which the Court has repeatedly held that the objective pursued by State measures is not sufficient to exclude those measures outright from classification as ‘aid’ for the purposes of Article 87 EC, as Article 87(1) EC does not distinguish between the causes or the objectives of State aid, but defines them in relation to their effects.

99      In the first place, BTPS Trustees claim that the Commission did not properly identify the common or normal regime constituting the relevant reference framework. It submits that the Commission incorrectly described the nature and the objective of the pension protection regime in the United Kingdom.

100    First, BTPS Trustees’ argument is based on a contradiction between recitals 72 and 75 to the contested decision, which refer to the appropriate reference framework to which the exemption from the PPF levy should be compared. In BTPS Trustees’ submission, the reference system must include ‘all measures established in order to achieve protection of pensions’, contrary to what the Commission, as it acknowledges in its pleadings, states at recital 72 to the contested decision.

101    It should be observed that the Commission considered, at recital 75 to the contested decision, that ‘the reduction of the levy to be paid to the [PPF was not] justified “by the logic of the system”’, that ‘the “system” set out in the United Kingdom for the protection of pension rights [could not] be regarded as constituted by the [PPF] alone’ and that, ‘[r]ather, all measures established in order to achieve protection of pensions must be taken into consideration’.

102    At recital 72 to the contested decision, the Commission summarised the mechanism of the PPF, which was created by the 2004 Act as a measure for the protection of pensions of general application for employees whose employer became insolvent, and described the system for exemption from the levy to the PPF where a pension fund is guaranteed by the Crown. The Commission concluded that recital by stating that, ‘[i]n other words, the general system is that additional protection must be paid by the employers in the form of a full levy’. As regards the use of the expression ‘general system’ in that recital, it must be considered that the expression must be understood as referring to the mechanism of the PPF, which is a protective measure of general application, and to the general rule thus established, which is the rule requiring payment of a levy, and not, as BTPS Trustees maintain, to the reference framework defined by the Commission.

103    Contrary to the BTPS Trustees’ assertion, those two recitals are therefore not contradictory and the Commission did indeed define the reference system as being constituted by the PPF and also by all measures established in order to achieve pension protection, namely, in particular, the Crown guarantees to which the PPF refers, such a framework also being that regarded as relevant by BTPS Trustees.

104    Furthermore, contrary to BTPS Trustees’ claim, the Commission did not define the general system solely by reference of the employers’ liability to pay a levy to the PPF. The Commission examined the question of the levy as consideration for the pension protection, in the event of the insolvency of the employer, in the framework of the reference system defined, which includes the PPF and the guarantee to which it refers in the present case. In the context of that examination, the Commission endeavoured to determine the possible payment relating to the protection provided by one or other of the two mechanisms. At recital 73 to the contested decision, the Commission considered that ‘[a]s a result, there [was] a difference between the [PPF] levy which [BTPS Trustees] [had] actually paid since 2005 [for the pension liabilities not covered by the guarantee] and the levy which [BTPS Trustees] would have paid had the existence of the … guarantee been ignored’. At recital 75 to the contested decision, the Commission stated that ‘the BTPS obtain[ed] the protection of the … guarantee without any payment’, and, at recital 76 to that decision, that ‘the protective arrangements from which the BTPS benefits [were] made available at no cost to BT’.

105    Accordingly, BTPS Trustees’ argument as to the definition of the relevant reference framework must be rejected.

106    Second, BTPS Trustees claim that, even if the Court should be satisfied that the Commission defined the reference system to the requisite standard, the selectivity of the exemption from the PPF levy ought to have been examined in the context of the overall system of pension protection, which includes the additional pension liabilities, which are linked to the guarantee. That argument, however, must be rejected, because, for the reasons already stated (see paragraphs 47 to 52 above), those liabilities should not be taken into consideration in the context of the examination of the measure at issue (see paragraph 62 above).

107    In the second place, BTPS Trustees assert that the Commission ought to have examined and determined whether the advantage conferred by the exemption from the PPF levy could be selective, by demonstrating that that measure derogated from the common regime in so far as it differentiated between economic operators who, in the light of the objective assigned to the relevant legislative system of the Member State concerned, were in a comparable factual and legal situation. If there was a derogation from the common regime, the Commission ought then to have determined whether that derogation arose from the nature of the general system of which it formed part.

108    In that regard, BTPS Trustees refer to the objective of the pension protection regime in the United Kingdom, which is not to ensure that payment for pension protection is made by employers, but to protect pensions. In answer to the Commission, BTPS Trustees assert that it is common ground that the scope of Article 87(1) EC must be determined by reference to the effect of the measure and not to the objectives to be achieved. However, it claims that, according to settled case-law, regard must be had to the objective pursued by regime when assessing whether the measure at issue favours one undertaking over others that are in a comparable factual and legal situation. That principle was further developed in Portugal v Commission, paragraph 86 above (paragraph 81). In BTPS Trustees’ submission, it is in that context, that is to say, in demonstrating that the exemption from the PPF levy is inherent in the logic and overall nature of the United Kingdom pension protection regime and thereby that it is not selective, that BTPS Trustees referred to the objective of that regime. The exemption from the PPF levy is not a derogation from the protection regime in question, but it is justified by the existence of protective mechanisms in addition to the PPF, in the context of an overall reference system. The exemption from the PPF levy is thus part of the nature or the structure of the pension protection system.

109    It should be observed that BTPS Trustees do not clearly distinguish in their argument the question of the prima facie selectiveness of the measure at issue and the fact that it may be justified by the nature or the structure of the general system of which it forms part.

110    As already stated (see paragraph 103 above), the system taken into consideration does not consist of the PPF alone, but of all the measures established to protect pensions in the event of the insolvency of the employer, as the Commission made clear in the contested decision, at recital 75, which must be read in the light of recitals 72 and 73 to the contested decision. Under the 2004 Act and the 2005 regulations (Entry Rules), it is provided that the PPF, as a protective measure of general application in the event of the insolvency of the employer, is applied to a pension scheme, unless, in particular, another mechanism referred to in those regulations, such as a Crown guarantee, applies to a pension scheme, in whole or in part. It is for that reason that, although BTPS Trustees take issue with the use of the word ‘exemption’ in relation to the PPF, it is appropriate in the present case.

111    In the context of that overall system, as taken into consideration by the Commission, the situation of BT and the BTPS does not differ from the situations of the other undertakings and their pension schemes by reference to the objective pursued, which is to protect pensions in the event of the insolvency of the employer.

112    However, in the context of that overall system, as the mechanism of the PPF implies a levy in consideration for the protection given, exemption from that mechanism, by reference to another mechanism involving no payment in consideration of the protection provided, has the effect of creating a selective measure in favour of those who, owing to that exemption, do not come within the PPF and who are thereby exempt from paying a levy to the PPF. That is the case for the BTPS and BTPS Trustees and, accordingly, for BT. In that regard, it must be held that BTPS Trustees do not claim that a levy should be paid by way of consideration for the guarantee, unless they rely on the existence of the additional pension liabilities, but the argument that those liabilities should be taken into consideration has already been rejected (see paragraph 62 above).

113    In BTPS Trustees’ submission, that differentiation is justified, however, by the existence of protective mechanisms in addition to the PPF, in the context of an overall reference system, and the exemption from the PPF levy is part of the nature or the structure of the pension protection system.

114    First, it should be observed that the burden of proving the existence of such justifications is borne in principle by the Member State (see, to that effect, France and France Télécom v Commission, paragraph 70 above, paragraph 232).

115    BTPS Trustees maintain, admittedly, in that regard, that, owing to the contradiction between recitals 72 and 75 to the contested decision and the fact that it is impossible to determine the reference system used by the Commission in its analysis, the United Kingdom, and consequently BT and BTPS Trustees, were unable to respond to the Commission’s claim that the exemption from the PPF levy did not form part of the nature and general scheme of the United Kingdom’s pension protection regime.

116    That argument must be rejected, however, in that it is based on an incorrect premiss, alleging the existence of a contradiction between recitals 72 and 75 to the contested decision and the fact that it was impossible to determine the reference system used by the Commission (see paragraphs 100 to 105 above).

117    Second, BTPS Trustees’ argument that the BTPS does not satisfy the conditions for eligibility for the PPF and is not entitled to benefit from the PPF and, moreover, that the exemption from the PPF levy is part of the nature and the structure of the United Kingdom’s pension protection system, is simply based on the description of the mechanism examined. In the light of the objective of the overall system, which is to protect pensions in the event of insolvency, BTPS Trustees do not state how the mechanism of referring to the guarantee and the exemption from the PPF levy are necessary to the achievement of the objective of that system.

118    Third, as regards BTPS Trustees’ argument that the ‘intrinsic qualities’ of the additional pension liabilities mean that the PPF is an inappropriate mechanism to offer the requisite level of protection and justifies the existence of the guarantee, it must be rejected. As those liabilities must not be taken into consideration in the context of the pension protection system, as applied in the present case, and of the examination of the measure at issue (see paragraph 62 above), any ‘intrinsic qualities’ which they may have are irrelevant. The question is whether the differentiation in relation to the charges resulting from the exemption from the PPF levy and, consequently, of any payment by way of consideration for the protection of pensions in the event of the insolvency of the employer is justified by the nature or the structure of that pension protection system. It is apparent from recitals 72, 75 and 77 to the contested decision that the underlying objective of the overall system to which the Commission refers is the obligation for employers to make a financial contribution to the protection granted in the event of their insolvency. There is no reason why, in the case of the BTPS, there was no payment in consideration of that protection. BTPS Trustees adduce no evidence in that regard and do not claim that the United Kingdom adduced any evidence to that effect during the administrative procedure.

119    As for the parallel which BT draws with 140%-funded schemes, which are not required to pay the levy because they are overfunded by a substantial margin and because their assets are sufficient to provide equivalent protection to the level of compensation payable by the PPF, it is irrelevant. On the assumption that it is established that such schemes are exempt from paying a levy to the PPF, in so far as such schemes would not need external protection in the event of the insolvency of the affiliated undertaking, BTPS Trustees adduce no evidence to show that those schemes and the BTPS are in a comparable situation and do not maintain that, owing to its intrinsic qualities, the BTPS does not need such protection, by one of the mechanisms of the overall system to which the Commission refers, and is thereby exempt from paying a levy in consideration for that protection, in consequence of the exemption from the PPF levy.

120    It must be concluded that, in application of the case-law cited by BTPS Trustees (Portugal v Commission, paragraph 86 above, paragraph 81), the exemption from the PPF levy is not a mechanism inherent in the overall system for the protection of pensions in the event of the insolvency of the employer which is necessary for the achievement of the objective of that regime.

121    Consequently, BTPS Trustees’ argument that the Commission was wrong to conclude in the contested decision that the measure at issue was selective must be rejected.

122    That conclusion is not called into question by BTPS Trustees’ argument that payment of a levy to the PPF would place BT at a disadvantage. Their reasoning is based on a theory of reduction of the contributions of the pension systems depending on the PPF because of the procedures for implementing the contested decision, which does not relate to the question of the assessment of the selectivity of the measure and the review of the lawfulness of the contested decision.

123    In the third place, BTPS Trustees maintain that the Commission was wrong to conclude, at recital 84 to the contested decision, that the relevant provision in the 2005 Regulations (Entry Rules) benefited only BT, as the measure at issue also applies to other undertakings.

124    In that regard, it is sufficient to observe that the contested decision, and in particular recital 84 thereto, examines BT’s situation and the measure considered to constitute individual aid. The fact that BT is not the only undertaking to benefit from a selective measure does not mean that the Commission erred in classifying the measure at issue as individual aid, since other undertakings do not benefit from the same measure, which renders it selective.

125    In the light of all of the foregoing, BTPS Trustees’ argument that, when analysing the selectivity of the measure at issue, the Commission examined the third stage referred to at paragraph 95 above without considering the first two stages, must be rejected. Accordingly, the first part of the first plea in Case T‑230/09 must be rejected.

 The error of law and of fact and the breach of the principles of legitimate expectations and legal certainty owing to the re-characterisation of the guarantee and the requirement to recover the guarantee (third plea in Case T‑226/09)

126    BT maintains that the Commission erred in law and in fact and breached the principle of legitimate expectations in re-characterising a measure which was not aid at the time it was granted as the ‘underlying reason’ why aid was granted 20 years later.

127    In the first place, BT claims, in essence, that in the contested decision the Commission erred in law and in fact in re-characterising the guarantee.

128    First, BT claims, in the reply, that the Commission ‘conceded that it [had] effectively re-characterised the … guarantee as [State] aid’. However, in answer to a question put by the Court at the hearing, BT stated that it did not maintain that the Commission had, in the contested decision, re-characterised the guarantee as State aid.

129    In any event, as BT itself observes, it must be emphasised that the Commission observed in the contested decision, at recital 37, that it had considered in its decision of 28 November 2007 that the guarantee did not constitute State aid. In addition, it stated, at recital 77 to the contested decision, that ‘it [did] not find the guarantee to be, in itself, an aid to BT’.

130    The Commission stated on several occasions that the measure characterised as State aid in the contested decision is the exemption from the PPF levy corresponding to the pension liabilities covered by the guarantee (in particular, at recitals 83, 89, 91 and 102).

131    Second, as regards the argument that the Commission characterised the guarantee as the ‘underlying reason’ for the measure characterised as State aid in the contested decision, it should be observed that the Commission stated, in the contested decision, that the measure at issue was the consequence of the guarantee (recital 57), that it was triggered by the existence of the guarantee (recital 60), that the guarantee constituted the underlying reason why BT received an advantage which exempted it from payment of the PPF levy or again that the guarantee was recognised by the 2004 Act as justification for the exemption (recital 77), which corresponds to the description of the measure at issue.

132    Although the Commission took the view that the guarantee did not in itself constitute State aid, that is to say, independently of the changes to the legal framework introduced in 2004 (see paragraph 14 above), that does not have the consequence, as the measure at issue was granted owing to the existence of the guarantee, that the guarantee could not be taken into consideration for the purpose of characterising that measure, that measure conferring an advantage on BT, as State aid. Furthermore, the fact that the guarantee was taken into account does not have the effect of ‘re-characterising’ the guarantee, as BT incorrectly maintains, since the use of the word ‘re-characterisation’ assumes that a characterisation which has been applied has been reconsidered. In fact, the Commission maintained its initial assessment, namely that the guarantee did not in itself constitute State aid.

133    In addition, the judgments which BT cites are irrelevant, since they related to existing aid, which is not the case of the guarantee (see paragraph 129 above). In Case C‑44/93 Namur-Les assurances de credit [1994] ECR I‑3829, the issue related to the determination, in particular, of whether an amendment of an existing aid scheme had come about and whether a decision had affected that scheme. Furthermore, in Joined Cases T‑211/04 and T‑215/04 Government of Gibraltar and United Kingdom v Commission [2008] ECR II‑3745), amendments had been made to an initial scheme, which had been characterised as existing aid, and it was necessary to determine, in particular, whether those modifications had affected the initial scheme in its actual substance, thus transforming it into a new aid scheme. It was in that context that the Court of Justice had characterised the modifications as ‘elements [that were] severable’ from the initial scheme. Consequently, BT’s argument that the legislation relating to the PPF, enacted in 2004, is wholly severable from and separate from the 1984 provisions fixing the principle of the guarantee is irrelevant.

134    In that regard, it is appropriate, in any event, to reject BT’s argument that the financial burden potentially borne by the United Kingdom on account of the pension advantages was incurred on privatisation in 1984 and remained unchanged by the 2004 Act. The Commission did not address the question of State resources in order to characterise the guarantee as State aid but did so in order to characterise the exemption from the PPF levy as State aid. The question whether the measure at issue involved State resources because it was granted as a consequence of the grant of the guarantee is a different question and falls to be examined when the Court examines the arguments which BT has put forward in support of its sixth plea, alleging an error in the finding of the existence of a transfer of State resources.

135    It follows from all of the foregoing considerations that the Commission did not ‘re-characterise’ the guarantee in the contested decision.

136    That conclusion is not called into question by BT’s argument that the Commission’s statements highlight the inherent inconsistency of its position. BT relies in that respect on inconsistency between the contested decision and the Commission’s written pleadings before the Court. It should be borne in mind that, in the present action, the Court must examine the lawfulness of the contested decision. In that decision, as BT itself observes, the guarantee is not characterised in itself as State aid and, as regards recovery of the aid in question, Article 2 of the contested decision, read with Article 1 of that decision, provides that the State aid put into effect in the form of an exemption for the BT Pension Fund contribution to the PPF as concerns certain of BT’s pension liabilities is to be recovered. There is thus no inconsistency in the contested decision.

137    In the second place, BT claims that there has been a breach of the principles of legitimate expectations and legal certainty owing to the re-characterisation of the guarantee as the ‘underlying reason’ why BT receives an advantage and of the requirement to recover the aid.

138    It is appropriate, first of all, to reject as inadmissible, in the light of the requirements set out in Article 44(1)(c) of the Rules of Procedure, the complaint alleging breach of the principle of legal certainty, as BT submits no argument in support of that complaint.

139    As regards the alleged breach of the principle of legitimate expectations, BT’s argument rests on the incorrect premiss that the Commission ‘re-characterised’ the guarantee (see paragraphs 127 to 135 above) and it must therefore be rejected, including the reference to an alleged claim for recovery of the guarantee, which does not exist in the contested decision (see paragraph 136 above).

140    In addition, BT’s argument that, as the guarantee did not confer an advantage when it was granted in 1984, a diligent businessman would legitimately expect that the introduction of separate legislation, 20 years later, which did not change the guarantee, would not give rise to State aid either, must be rejected. Apart from the fact that the guarantee was substantially changed in 2003 (see paragraph 11 above), BT does not explain how the fact that one measure is not characterised as State aid may give assurances as to the characterisation of another measure adopted subsequently.

141    For the sake of completeness, on the assumption that BT also claims that there has been a breach of the principle of legitimate expectations owing to the demand for recovery of the measure at issue, it must be observed that BT does not submit any argument in that respect and that that complaint must be rejected.

142    In the light of all of the foregoing, the third plea in Case T‑226/09 must be rejected.

 Breach of the principles of equal treatment and proportionality owing to the requirement that BTPS Trustees to pay a levy to the PPF (fourth plea in Case T‑226/09)

143    BT claims that there has been a breach of the principles of equal treatment and proportionality, since it is required to pay twice for the pension protection provided by the guarantee, whatever form the second payment might take, whether a levy to the PPF or a fee for the guarantee.

144    In answer to a question put by the Court at the hearing, BT stated that it did not claim that there had been a breach of those principles on account of the recovery required, but because of the characterisation of the measure at issue as State aid and the requirement to cease to implement the measure in the future.

145    It should be observed that BT claims that there has been a breach of the principles of equal treatment and proportionality, but does not specifically relate its arguments to one or other of the alleged breaches.

146    In any event, BT’s argument rests on the incorrect premiss that the implementation of the contested decision means that it is required to ‘pay twice’.

147    In BT’s submission, the ‘first payment’ is the consequence of the assumption of the additional pension liabilities, while the ‘second payment’ either relates to the PPF levy, that ‘payment’ being the consequence of the payment of funds to BTPS Trustees, who must pay the levy to the PPF, or consists in the payment of a fee by way of consideration for the guarantee.

148    It must be held that the two ‘payments’ do not have the same cause, as the first relates to the constitution of the pensions and the second to the protection of the pensions in the event that BT should become insolvent.

149    In addition, that argument is based on the incorrect premiss that the additional pension liabilities must be taken into consideration in the analysis of the measure at issue by reference to Article 87(1) EC (see paragraph 62 above).

150    Consequently, there is no ‘first payment’ to be taken into consideration and the implementation of the contested decision does not entail a ‘double payment’ on the part of BT.

151    Contrary to BT’s assertions, moreover, the payment of a fee by way of consideration for the protection of the pensions in the event of its insolvency cannot aggravate the economic disadvantage which it suffers. In so far as BT does not make a payment, for part of its employees, by way of consideration for the protection of their pensions in the event that it should become insolvent, BT, on the contrary, benefits from an economic advantage (see paragraph 78 above).

152    In the light of all of the foregoing considerations, BT’s argument concerning the breach of the principles of equal treatment and proportionality cannot succeed. Accordingly, the fourth plea in Case T‑226/09 must be rejected.

 The error in the finding of the existence of distortion of competition and an effect on trade between Member States (fifth plea in Case T‑226/09 and third part of the first plea in Case T‑230/09) and insuffiency of reasoning in the contested decision on those points (fifth plea in Case T‑226/09)

153    BT and BTPS Trustees claim that there has been an error in the finding of the existence of distortion of competition and an effect on trade between Member States.

154    According to settled case-law, for the purpose of characterising a national measure as State aid, it is not necessary to demonstrate that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition (Case C‑494/06 P Commission v Italy and Wam [2009] ECR I‑3639, paragraph 50).

155    In particular, when aid granted by a Member State strengthens the position of an undertaking by comparison with other undertakings competing in intra-Community trade, the latter must be regarded as influenced by that aid (Commission v Italy and Wam, paragraph 154 above, paragraph 52). In that regard, the fact that an economic sector has been liberalised at Community level may serve to determine that the aid has a real or potential effect on competition and affects trade between Member States (Commission v Italy and Wam, paragraph 154 above, paragraph 53; judgment of 4 March 2009 in Case T‑424/05 Italy v Commission, not published in the ECR, paragraph 153; and judgment of 8 September 2009 in Case T‑303/05 AceaElectrabel v Commission, not published in the ECR, paragraph 70).

156    Furthermore, the Commission merely needs to establish that the aid in question is of such a kind as to affect trade between Member States and threatens to distort competition. It does not have to define the market in question or analyse its structure and the ensuing competitive relationships (see Case T‑369/06 Holland Malt v Commission [2009] ECR II‑3313, paragraph 63 and the case-law cited).

157    In addition, it should be borne in mind that the condition that the aid must be capable of affecting trade between Member States does not depend on the local or regional character of the services supplied or on the scale of the activity (AceaElectrabel v Commission, paragraph 155 above, paragraph 61; see, to that effect, Altmark, paragraph 65 above, paragraph 82).

158    With regard to the condition of the distortion of competition, it should be borne in mind that, in principle, aid intended to release an undertaking from costs which it would normally have had to bear in its day-to-day management or normal activities distorts the conditions of competition (Commission v Italy and Wam, paragraph 154 above, paragraph 54, and Holland Malt v Commission, paragraph 156 above, paragraph 54).

159    As regards the obligation to state reasons, it should be made clear that it is sufficient that the Commission establishes that the measure at issue is of such a kind as to affect trade between Member States and threatens to distort competition, while there is no need to define the relevant market. Likewise, if the Commission has correctly explained how the aid at issue was likely to have such effects, it is not required to carry out an economic analysis of the actual situation of the relevant market, of the market shares of the undertakings in receipt of the aid, of the positions of the competing undertakings and of the patterns of trade in question between Member States (see AceaElectrabel v Commission, paragraph 155 above, paragraphs 51 and 52 and the case-law cited; see, to that effect, judgment of 6 September 2006 in Joined Cases T‑304/04 and T‑316/04 Italy and Wam v Commission, not published in the ECR, paragraph 64 and the case-law cited, upheld on appeal in Commission v Italy and Wam, paragraph 154 above, paragraph 58).

160    It is in the light of those considerations that the Court must ascertain whether the findings made by the Commission in the contested decision are sufficient to support the conclusion that the measure at issue had an impact on competition and on trade between Member States. To that end, reference should be made to recitals 85 to 88 to the contested decision, where the Commission’s analysis in that respect is set out.

 ­– Case T‑226/09

161    BT disputes the merits of the contested decision in that the Commission considered that the measure at issue was likely to affect trade between Member States and to distort, or threaten to distort, competition.

162    In the first place, as regards the distortion of competition, first, the Commission, in BT’s submission, has not explained how a distortion of competition can arise as a result of the exemption from the PPF levy, given the additional pension liabilities. According to BT, if, as the Commission asserts at recital 75 to the contested decision, the United Kingdom pension protection system includes both the pension protection measures provided for in the 1984 Act and those provided for in the 2004 Act, then the overall effects of that system on BT should be taken into consideration, since they place BT at a considerable structural disadvantage by comparison with its competitors.

163    In that regard, it should be observed that the Commission considered, at recital 75 to the contested decision, that ‘the “system” set out in the United Kingdom for the protection of pension rights [could] not be regarded as constituted by the [PPF] alone’ and that, ‘[r]ather, all measures established in order to achieve protection of pensions must be taken into consideration’, mentioning the guarantee at that recital. As BT’s argument is based on the additional pension liabilities being taken into account, it must be rejected in that it is based on an incorrect premiss (see paragraph 62 above). It should also be borne in mind that the Commission did not err in concluding that there was a selective economic advantage (see paragraphs 78 and 94 above).

164    Second, in BT’s submission, the Commission’s statements at recitals 85 to 88 to the contested decision are insufficient. The Commission does not refer to the economic context in which BT operates. Furthermore, the Commission makes an error of assessment when it bases its conclusions on paraphrasing, at recital 86 to the contested decision, the Ofcom market reviews reported in BT’s 2008 Annual Report and in Form 20-F, when the regulatory position summarised in that report had altered fundamentally before the adoption of the contested decision. BT takes issue with the Commission for having failed to conduct any market investigation that would have enabled it to understand the situation of the relevant markets and BT’s position on those markets at the time of the contested decision. In any event, owing to the existence of multiple markets, the assertion that BT has a significant market position for leased lines, as though there were only a single market for leased lines, is meaningless. In response to the Commission, BT contends that it does not consider that only aid granted to a dominant undertaking can distort competition.

165    It should be observed, first of all, that BT asserts that its principal activities include networked information technology services, local, national and international telecommunications services and higher-value broadband and Internet products and services. BT does not deny that there is competition in the sectors in which it is active.

166    Nor does BT deny being active on the markets, coming within those sectors of activities, to which the Commission refers at recital 86 to the contested decision. In addition, as the measure at issue alleviates the charges that BT would normally have had to bear in the context of its day-to-day management, namely the funding of the protection of certain employees in the event that it should become insolvent, that measure is not linked to a specific part of the undertaking’s activities.

167    Furthermore, the Commission observes at recital 86 to the contested decision that BT’s competitors on those markets do not benefit from the exemption from the PPF levy, which BT does not dispute.

168    Consequently, by conferring a selective economic advantage on BT (see paragraphs 78 and 94 above), the exemption from the PPF levy improves BT’s competitive position by comparison with competing undertakings which do not enjoy that advantage. That gives rise to a distortion of competition or, at least, the risk of such distortion, while the finding of the existence of the selective economic advantage in favour of BT is sufficient to establish a risk of the distortion of competition within the meaning of Article 87(1) EC, in accordance with the case-law cited at paragraph 158 above.

169    In accordance with the case-law referred to at paragraph 156 above, it is also appropriate to reject BT’s argument that the Commission relied in the contested decision on a set of facts and on regulations which fundamentally changed and that the Commission did not carry out the slightest market investigation that would have enabled it to understand the situation on the relevant markets and also BT’s position on those markets at the time of the contested decision. That argument does not call into question the fact that the measure at issue enables BT’s position to be strengthened by comparison with its competitors’ positions.

170    For the same of completeness, it should be observed that the information from BT’s 2008 Annual Report corresponds, in any event, to a period during which the measure at issue existed. The fact that BT’s position may have been changed in the sense that it was subsequently reduced on the relevant markets is not such as to undermine the existence of distortion of competition as a result of the measure at issue at the time of the adoption of the contested decision.

171    It must be held that the Commission therefore did not err in concluding, at recital 86 to the contested decision, that, on a certain number of markets on which BT was active, competition between BT’s competitors and BT was distorted on account of the measure at issue.

172    In the second place, as regards the effect on trade between Member States, BT maintains that the Commission’s statements at recitals 85 and 87 to the contested decision are insufficient. It maintains that the Commission provides no information relating to the relevant electronic communication markets on which BT operates, in any Member State outside the United Kingdom. The Commission does not explain whether it is referring to regional, national or international markets. Nor does it disclose what it means when it says, at recital 85 to the contested decision, that BT is ‘significantly active’ in certain Member States. Last, BT maintains that the Commission’s observation, at recital 85 to the contested decision, that the provision of electronic communications services inherently entails communication of content between networks across borders within the common market, whether such services are supplied on a local, national or cross-border basis, is unsubstantiated and unfounded.

173    It should be observed that BT does not call into question the fact that it takes part in Community trade. In that regard, BT does not dispute the evidence put forward by the Commission and taken from BT’s 2008 Annual Report, which is mentioned in the contested decision. The Commission thus stated, at recital 85 to the contested decision, referring to BT’s 2008 Annual Report, that BT was active in the provision of electronic communication services in several Member States.

174    At recital 86 to the contested decision, moreover, the Commission stated that competition between BT and its competitors was weakened as a result of the measure at issue and, at recital 87 to the contested decision, that, given BT’s activities and position on national and international markets for electronic communications, the advantage conferred as a result of the measure at issue might affect trade between Member States.

175    Consequently, in accordance with the case-law referred to at paragraphs 154 to 157, in the light of the circumstances mentioned by the Commission in the contested decision, the Commission did not err in considering, at recital 87 to the contested decision, that the condition relating to an effect on trade between Member States was satisfied in the present case.

176    It must be concluded that the Commission’s statements, at recitals 85 to 87 to the contested decision, are sufficient, in application of the case‑law cited at paragraphs 154 to 158 above, to support its conclusion that the measure at issue might have an impact on intra-Community trade and on competition.

177    Furthermore, BT maintains that, according to the case-law, even where the circumstances in which the aid is granted are sufficient to show that the aid is capable of affecting trade between Member States and of distorting or threatening to distort competition, the Commission must at least set out those circumstances in its decision. In that regard, it should be observed that, in accordance with the case-law referred to at paragraph 159 above, the references in the contested decision to the effect on trade and the distortion of competition enable BT to know the reasons why the Commission considered that the measure at issue constituted State aid (see paragraphs points 166, 167, 173 and 174 above) and the Court to exercise its review of legality.

178    That conclusion is not called into question by BT’s argument invoking, in the light of the principles identified in Italy and Wam v Commission, paragraph 159 above (paragraph 67), upheld on appeal in Commission v Italy and Wam, paragraph 154 above (paragraph 59), the deficiency in the Commission’s analysis, at recitals 85 to 88 to the contested decision, relating to whether the alleged aid is capable of distorting competition and affecting trade between Member States.

179    It should be borne in mind that, in Commission v Italy and Wam, paragraph 154 above (paragraphs 58 and 59), the Court of Justice considered that, if the Commission could not confine itself to a general reason, it was not required to carry out an economic analysis of the actual situation of the relevant market or the patterns of the trade in question between Member States or to show the real effect of the aid at issue. Furthermore, in that case, as the Commission submits, the specific circumstances of the case required additional information and a more detailed analysis of the potential effects of the aid at issue on trade between Member States and on competition (paragraph 64), since the aid at issue was intended to fund the costs of market penetration in non-member States, which is not the case here.

180    Accordingly, in Case T‑226/09, the fifth plea, alleging an error in the finding of the existence of distortion of competition and of an effect on trade between Member States, and insufficiency of reasoning in the contested decision on those points, must be rejected.

 – Case T‑230/09

181    BTPS Trustees claim that there has been a breach of the conditions relating to the distortion of competition and an effect on trade. In their submission, the Commission cannot satisfy those conditions, which are inextricably linked, if it does not adduce sufficient evidence of the existence of a selective economic advantage.

182    It should be observed that the arguments put forward by BTPS Trustees concern only the link between the conditions relating to the distortion of competition and the effect on trade between Member States and the conditions of the selectivity of the measure and of the economic advantage conferred by the measure at issue, whereas BTPS Trustees put forward no specific arguments intended to challenge recitals 85 to 88 to the contested decision relating to the Commission’s assessment of the conditions relating to the distortion of competition and the effect on trade between Member States.

183    Consequently, it is sufficient to state that, as the Commission did not err in concluding that there was a selective economic advantage as a result of the measure at issue (see paragraphs 78 and 125 above), BTPS Trustees’ arguments must be rejected.

184    Accordingly, in Case T‑230/09 the third part of the first plea, alleging breach of the condition relating to the distortion of competition and the effect on trade between Member States, must be rejected.

185    It follows from all of the foregoing considerations that the first plea in Case T‑226/09 and the third part of the first plea in Case T‑230/09 must be rejected.

 The error in the finding of the existence of a transfer of State resources (sixth plea in Case T‑226/09 and fourth part of the first plea in Case T‑230/09)

186    BT and BTPS Trustees maintain, in essence, that the Commission erred in concluding that there was a transfer of State resources.

187    It follows from the case-law of the Court of Justice that only advantages granted directly or indirectly through State resources or constituting an additional burden on the State are to be regarded as aid within the meaning of Article 87(1) EC. The very wording of that provision and the procedural rules laid down in Article 88 EC show that advantages granted from resources other than those of the State do not fall within the scope of the provisions in question (see Bouygues and Bouygues Télécom v Commission, paragraph 43 above, paragraph 99 and the case‑law cited; see, to that effect, Case T‑25/07 Iride and Iride Energia v Commission [2009] ECR II‑245, paragraph 23).

188    It should be noted that, according to settled case-law, it is not necessary to establish in every case that there has been a transfer of State resources for the advantage granted to one or more undertakings to be capable of being regarded as a State aid within the meaning of Article 87(1) EC (see Bouygues and Bouygues Télécom v Commission, paragraph 43 above, paragraph 100 and the case-law cited).

189    In particular, measures which, in various forms, mitigate the burdens normally included in the budget of an undertaking, and which therefore, without being subsidies in the strict meaning of the word, are similar in character and have the same effect, are considered to be aid (see Bouygues and Bouygues Télécom v Commission, paragraph 43 above, paragraph 101 and the case-law cited).

190    It is settled case-law that Article 87(1) EC defines measures of State intervention in relation to their effects (see Bouygues and Bouygues Télécom v Commission, paragraph 43 above, paragraph 102 and the case-law cited).

 – Case T‑226/09

191    In BT’s submission, the Commission made a ‘manifest’ error of fact and of law in finding that there had been a transfer of state resources.

192    In the first place, BT maintains that the Commission erred, at recital 57 to the contested decision, in finding that there had been a transfer of State resources, since there was no selective advantage for BT.

193    In that regard, it is sufficient to state that the argument which BT bases on the premiss of the absence of a selective advantage must be rejected. The Commission was not incorrect to find that there had been a selective advantage in favour of BT (see paragraphs 78 and 94 above).

194    In the second place, BT maintains that, even on the view that it did benefit from a selective advantage, there was no transfer of State resources.

195    First, it submits that, at recital 59 to the contested decision, the Commission asserts that, owing to the grant of the guarantee, the United Kingdom Government committed its financial resources free of charge in the event of BT becoming insolvent. BT maintains that it has shown that the 2004 Act and the fact that it is not required to fund the PPF levy are part of the overall system of pension protection, including the 1984 Act, the effect of which was to place BT at a considerable financial disadvantage. Accordingly, the financial cost of the additional pension liabilities and thus of the pension protection system as a whole is much higher than any ‘revenue foregone’ as a result of the non-payment of the PPF by BT. The Commission has not explained how there can be a transfer of State resources, since the pension protection measure in the 1984 Act has the net effect of imposing an abnormal financial burden on BT. Following the decision to impose those additional liabilities, which would otherwise have been borne by the State, on BT, the effect of the privatisation package was, and continues to be, that a considerable burden was and is transferred from State resources to BT’s resources, rather than the other way round.

196    That argument of BT cannot be accepted. It rests on the incorrect premiss that the additional pension liabilities must be taken into consideration for the purpose of examining the measure at issue (see paragraph 62 above). It is also irrelevant for the purpose of examining whether the advantage conferred was funded through State resources.

197    Second, by submits that the Commission stated at recitals 57 to 60 to the contested decision that, in the event of BT’s insolvency or a deficit in the scheme, any outstanding debt linked with the pensions would be paid by the State under the guarantee rather than by the privately-funded PPF, which would have the effect of placing a burden on State resources. However, in the event of BT’s insolvency and the implementation of the guarantee, the payments made by the State would be made not to BT but to the members of the BTPS, who are not undertakings within the meaning of Article 87 EC. There would be no indirect transfer of State resources to BT either, as it would have ceased to exist. Those payments cannot therefore constitute a transfer of State resources within the meaning of Article 87(1) EC.

198    It must be observed that the Commission acknowledges that, in the event of BT’s insolvency, the public funds would not be paid to BT, which, moreover, led the Commission to conclude that the guarantee did not in itself constitute State aid.

199    Conversely, it should be observed that in the contested decision, although, at recital 59, the Commission effectively established a link between BT’s insolvency and the transfer of State resources, it considered that there was also a transfer of State resources without that insolvency occurring. Thus, the Commission considered that the guarantee ‘was granted … free [of charge] since it [did] not concomitantly trigger the regular or deferred payment by BT to the public budget of competent financial bodies of the United Kingdom of any fee or financial compensation whatsoever’. The Commission added that ‘[i]t follow[ed] that the United Kingdom [forewent] the possible revenues and, hence, the State resources which it could [have] obtain[ed] from granting the benefit of the … guarantee’. Furthermore, at recital 60 to the contested decision, the Commission established a link between the exemption from the PPF levy and the guarantee. It considered that ‘the exemption from the payment of the levy to the [PPF] corresponding to the pension liabilities covered by the … guarantee set out in the [2004 Act were] triggered by the existence of a Crown guarantee which involve[d] resources of the United Kingdom [and that it] follow[ed] that [that exemption was] dependent on and thus involve[d] resources of the United Kingdom within the meaning of Article 87(1) EC’.

200    It follows from those recitals to the contested decision that the Commission did not confine its analysis of the condition relating to State resources to the situation in which BT would be insolvent. It also examined that question from the exemption from the PPF levy, which is triggered by the guarantee.

201    BT’s arguments must therefore be rejected.

202    In the light of all of the foregoing, BT’s argument and, accordingly, in Case T‑226/09, the sixth plea, alleging an error in the finding that there was a transfer of State resources, must be rejected.

 – Case T‑230/09

203    BTPS Trustees claim that there has been a breach of the condition relating to the transfer of State resources. In the first place, it claims that if BT were to become insolvent and if the guarantee should be called on, any payment would be made not in favour of BT but in favour of the members of the BTPS, who are not undertakings within the meaning of Article 87 EC.

204    In that regard, BTPS Trustees raise the same argument as BT in Case T‑226/09 and it must be rejected for the same reasons (see paragraphs 198 to 200 above).

205    In the second place, BTPS Trustees observe that, at recital 57 to the contested decision, the Commission stated that ‘the exemptions involve[d] State resources because they [were] the consequence of the … guarantee, which involve[d] State resources of the United Kingdom’ and because the measure was adopted by the legislative bodies of the United Kingdom. In BTPS Trustees’ submission, at recital 59 to the contested decision, the Commission stated that ‘the financial resources of the United Kingdom [were] committed if BT [should become] insolvent’ and that the guarantee ‘was granted … free [of charge] since it [did] not concomitantly trigger the regular or deferred payment by BT to the public budget of competent financial bodies of the United Kingdom of any fee or financial compensation whatsoever’.

206    BTPS Trustees maintain that the transfer of State resources which the Commission has described relates to the guarantee only, which the Commission correctly did not characterise as State aid. The Commission refers to that transfer as also fulfilling the condition of a transfer of State resources in relation to a separate measure, namely the fact that the BTPS does not satisfy the conditions to enter the PPF. In assimilating the transfer of State resources in the event of BT’s insolvency to the transfer of State resources linked to the ineligibility of the BTPS to enter the PPF, the Commission thus made an error of law.

207    It should be observed, first of all, that the wording used by BTPS Trustees, namely ‘the ineligibility of the BTPS to enter the PPF’, may suggest that the measure at issue does not involve financial resources. However, the measure at issue, as defined by the Commission in the contested decision, is the exemption from the PPF levy, which entails a financial aspect.

208    It should be observed, next, that in the context of the system taken into consideration by the Commission, namely the system of the protection of employees’ pensions in the event of the insolvency of their employer, whether by the PPF or by another means to which the system refers, such as a Crown guarantee, the Commission considered whether, owing to the exemption from the PPF levy granted on account of the existence of the guarantee, BTPS Trustees and BT enjoyed an economic advantage, which involved State resources, and it concluded that they did (see, to that effect, recital 60 to the contested decision).

209    However, BTPS Trustees claim that the Commission ought to have considered more specifically whether the non-payment of the PPF levy entailed in itself a transfer of State resources, and not to have confined itself to examining a transfer of State resources consequent upon the implementation of the guarantee. In that regard, BTPS Trustees claim that, in order to find that the ineligibility of the BTPS to enter the PPF constitutes State aid, the Commission ought to have considered whether the conditions laid down in Case C‑482/99 France v Commission (‘Stardust’) [2002] ECR I‑4397 regarding imputability to the State were fulfilled. BTPS Trustees observe that the Commission did not raise that question at recital 60 to the contested decision.

210    First, it must be held that BTPS Trustees do not develop their argument that the Commission did not consider whether the conditions laid down in Stardust, paragraph 209 above, were fulfilled. In particular, they do not explain why that judgment would be relevant in the present case, in particular in the light of the question of the imputability of the measure at issue to the State.

211    In any event, BTPS Trustees’ argument, in that it is based on Stardust, paragraph 209 above, cannot succeed. That judgment concerned a public undertaking and, as regards the imputability to the State of the measures at issue, the question was whether the public authorities should be regarded as having been involved, one way or another, in the adoption of those measures (Stardust, paragraph 52). In the present case, it is common ground that the measure at issue is provided for in regulations adopted by the State. The decision to exempt BTPS Trustees from the PPF levy for the pension commitments covered by the guarantee must be regarded as a decision imputable to the State.

212    Second, it should be borne in mind that, for the purposes of finding that there is State aid, the Commission must establish a sufficiently direct link between the advantage conferred on the beneficiary and a reduction in the State budget, or indeed a sufficiently concrete risk of imposing additional charges on that budget (see Bouygues and Bouygues Télécom v Commission, paragraph 43 above, paragraph 107 and the case-law cited).

213    In the present case, the Commission bases the existence of a link between the advantage resulting from the exemption from the PPF levy and the use of public resources, characterised by the grant of the Crown guarantee, free of charge, on the finding that the State adopted rules whereby the schemes with appropriate provisions, such as the guarantee, are exempt from contributing to the PPF (recitals 59 and 60 to the contested decision).

214    That link is sufficiently direct, within the meaning of the case-law cited at paragraph 212 of this judgment. It is substantial, since the guarantee is one of the conditions of the grant of the exemption from the levy; and it is expressly established by the rules in question.

215    In addition, although from 1984 the guarantee had covered all the outstanding liabilities of the preceding undertaking that were transferred to BT in 1984, since 2003 the State has been liable only for payment of pensions (recitals 18 to 20 to the contested decision). It was only two years later, in 2005, that the PPF was set up and it is from that year that BT has been exempt from contributing to that body (recitals 32 to 34 to the contested decision). In that regard too, there is thus a temporal link between the decision to maintain the guarantee in 2003 and the setting-up of the mechanism for contributing to the PPF.

216    Accordingly, in that context, the Commission has established a sufficiently direct link between the advantage granted to BT and the commitment of State resources, and BTPS Trustees’ argument must be rejected, as the Commission, for the purposes of characterising the measure at issue as State aid, did not err in considering that the commitment of State resources owing to the guarantee, on which the existence of the measure at issue depended, permitted the conclusion that the measure at issue involved the commitment of State resources.

217    In the third place, in BTPS Trustees’ submission, the Commission could not find, without any justification, that the transfer of State resources pertaining to the guarantee, notwithstanding the fact that that measure did not constitute aid, constituted the requisite transfer of State resources for ‘all “exemptions”’ (in their pleadings, BTPS Trustees emphasise both the word ‘all’ and the letter ‘s’ in ‘exemptions’) under the 2004 Act in relation to public guarantees, without further specifying or defining the relevant transfers of State resources.

218    Although BTPS Trustees do not specify the relevant recitals to the contested decision, it should be observed that the Commission stated at recitals 57 and 60 to the contested decision that the ‘exemptions’, that is to say, the exemption from the minimum funding requirements laid down in the Pension Act 1995 and the 2004 Act, and also the exemption from the PPF levy, involved State resources.

219    In any event, it must be held that ‘all exemptions’ under the 2004 Act mentioned in the contested decision were not characterised as State aid and that BTPS Trustees’ action does not seek annulment of the contested decision with respect to the examination of the exemption from the minimum funding requirements laid down in the Pensions Act 1995 and the 2004 Act.

220    Consequently, there is no need to examine whether the Commission did or did not define the transfer of State resources by reference to measures other than the measure at issue, in particular the exemption from the minimum funding requirements laid down in the Pensions Act 1995 and the 2004 Act. As for the question of the transfer of State resources in the case of the measure at issue, resulting from the 2004 Act, namely the exemption from the PPF levy, it is sufficient to state that BTPS Trustees’ arguments have been answered (see paragraphs 203 to 216 above).

221    In the light of all of the foregoing, BTPS Trustees’ argument and, accordingly, in Case T‑230/09, the fourth part of the first plea, alleging breach of the condition relating to the transfer of State resources, must be rejected.

222    It follows from all of the foregoing considerations that the Commission did not err in considering that the condition relating to State resources for the purpose of characterising the measure at issue as State aid was satisfied. According, the sixth plea in Case T‑226/09 and the fourth part of the first plea in Case T‑230/09 must be rejected.

 Infringement of Article 253 EC and breach of the obligation to state reasons (seventh plea in Case T‑226/09 and second plea in Case T‑230/09)

223    BT and BTPS Trustees claim that the Commission has infringed Article 253 EC and breached its obligation to state reasons.

224    It is settled case-law that the statement of reasons required by Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the Court to carry out its review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Commission v Italy and Wam, paragraph 154 above, paragraph 48, and judgment of 30 November 2011 in Case T‑238/09 Sniace v Commission, not published in the ECR, paragraph 37).

225    In particular, the Commission is not required to take a position on all the arguments raised before it by the parties concerned. It is sufficient for it to set out the facts and legal considerations having essential importance in the structure of the decision (see Sniace v Commission, paragraph 224 above, paragraph 38 and the case-law cited; see, to that effect, Case T‑335/08 BNP Paribas and BNL v Commission [2010] ECR II‑3323, paragraph 94).

226    When applied to the characterisation of a measure as aid, that principle requires that the reasons why the Commission considers that the measure at issue falls within the scope of Article 87(1) EC be stated (see AceaElectrabel v Commission, paragraph 155 above, paragraph 43 and the case-law cited).

227    Furthermore, it should be borne in mind that a contradiction in the statement of the reasons on which a decision is based constitutes a breach of the obligation laid down in Article 253 EC such as to affect the validity of the measure at issue if it is established that, as a result of that contradiction, the addressee of the measure is not in a position to ascertain, wholly or in part, the real reasons for the decision and, as a result, the operative part of the decision are, in whole or in part, devoid of any legal justification (Associazione italiana del resparmio gestito and Fineco Asset Management v Commission, paragraph 43 above, paragraph 82).

228    Last, it must be borne in mind that the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the measure at issue (Case C‑17/99 France v Commission [2001] ECR I‑2481, paragraph 35; see, to that effect, Case C‑367/95 P Commission v Sytraval and Brink’s France [1998] ECR I‑1719, paragraph 67).

229    It is the light of those principles that the Court must examine the various complaints put forward by BT and BTPS Trustees concerning the insufficiency of the reasoning in the contested decision.

 Case T‑226/09

230    In the first place, BT relies on a breach of Article 253 EC, claiming that, ‘[f]or the reasons set out above’, the contested decision is vitiated by a failure to state reasons. In BT’s submission, the Commission did not state reasons in order, first, to demonstrate that BT enjoys a ‘selective advantage’, taking into account the full economic and factual context; second, to explain why the additional pension liabilities should be disregarded in the analysis; third, to demonstrate that it has treated like cases alike and made a proper comparison between undertakings in a comparable position; fourth, to show why BT should be compelled to pay twice for the protection of the liabilities of the BTPS covered by the guarantee; fifth, to demonstrate a distortion of competition and an effect on trade between Member States; and, sixth, to demonstrate a transfer of resources.

231    It should be observed that BT develops no argument in support of this complaint. It merely asserts, in the application, that there has been a failure to state reasons ‘[f]or the reasons set out above’. It refers, in that regard, to the summary of its other pleas.

232    It should be borne in mind that, under Article 44(1)(c) of the Rules of Procedure, the application must inter alia contain a summary of the pleas in law on which it is based. In addition, in accordance with the case-law, irrespective of any question of terminology, that summary must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application, even without further information. It is necessary, for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself, so as to guarantee legal certainty and sound administration of justice (Case T‑322/01 Roquette Frères v Commission [2006] ECR II‑3137, paragraph 208).

233    In that regard, it is not the task of the Court to search through all the matters relied on in support of a plea in order to ascertain whether those matters could also be used in support of another plea (see, to that effect, Roquette Frères v Commission, paragraph 232 above, paragraph 209).

234    For the sake of completeness, it should be observed that BT was in a position to bring the present action and to challenge the grounds of the contested decision and the Court was in a position to review the legality of those grounds.

235    This complaint of BT must therefore be rejected.

236    That conclusion is not called into question by BT’s argument that the Commission did not even explain precisely what the measure allegedly conferring a selective advantage consisted of; BT refers in that regard to paragraph 6 of the reply. BT observes that, at that paragraph, that the Commission emphasised in the contested decision that the selective advantage arose from the non-payment of part of the levy duty to the PPF. BT also refers in that regard to various recitals to the contested decision (recitals 77, 78, 80 (2nd indent), 81 (1st sentence), 88, 89 and 90). Consequently, BT cannot validly maintain that the contested decision does not even explain precisely what the measure allegedly conferring a selective advantage consists of.

237    Furthermore, even on the assumption that BT must be understood as referring, in relation to the complaint alleging failure to demonstrate a distortion of competition and an effect on trade between Member States, to paragraph 86 of the application, coming under its fifth plea, alleging, in essence, an error in the finding of the existence of a distortion of competition and an effect on trade between the Member States and insufficient reasoning in the contested decision on those points, it must be held that its complaint must be rejected (see paragraph 177 above).

238    In the second place, as BT refers to its other pleas, which seek to challenge the merits of the grounds of the contested decision, and refers to the Commission’s ‘inadequate reasoning’, its argument challenges the merits of the grounds of the contested decision and must therefore necessarily be rejected in the context of this plea, which alleges a breach of the obligation to state reasons.

239    Consequently, in Case T‑226/09, the seventh plea, alleging infringement of Article 253 EC for failure to state reasons, must be rejected.

 Case T‑230/09

240    BTPS Trustees claim that there has been an infringement of Article 253 EC; they maintain that the statement of reasons is either contradictory or insufficient with respect to, first, the reference system; second, the analysis of the condition relating to selectivity; third, the reasons why the Commission considers that the additional pension liabilities have no relevance for the purposes of the examination of BT’s general position on the market by comparison with its competitors; and, fourth, the analysis of the condition relating to State resources.

241    BTPS Trustees’ argument cannot succeed in that they claim that there has been an infringement of Article 253 EC with respect to the four points raised.

242    In the first place, in BTPS Trustees’ submission, the Commission did not clearly identify which ‘system’ it was using as a reference when analysing the condition on selectivity, although it appears to have based its reasoning solely on the system referred to at recital 72 to the contested decision. In addition, BTPS Trustees claim that there is a contradiction in reasoning between, on the one hand, recitals 72 and 76 and, on the other hand, recital 75 to the contested decision.

243    As has been pointed out (see paragraph 101 above), the Commission defined the reference system at recital 75 to the contested decision, where it stated that ‘the “system” set out in the United Kingdom for the protection of pension rights cannot be regarded as constituted by the [PPF] alone’ and that ‘[r]ather, all measures established in order to achieve protection of pensions must be taken into consideration’.

244    At recital 72 to the contested decision, the Commission described the PPF, which was created by the 2004 Act as a measure for the protection of pensions of general application for employees whose employer became insolvent. Furthermore, the expression ‘general system’ must be understood as referring to the PPF mechanism, which is a protective measure of general application, and to the general rule thus established, which is the rule that contributions are payable, and not, as BTPS Trustees maintain, to the reference framework defined by the Commission (see paragraph 102 above).

245    As for recital 76 to the contested decision, BTPS Trustees maintain that the Commission again regards the payment for the additional protection in case of the employer's insolvency as being key to the overall system, with reference to the provisions of the 2004 Act on the PPF levy only, rather than considering ‘all measures established in order to achieve protection of pensions’, as it previously stated at recital 75. However, BTPS Trustees are relying on a misreading of the contested decision. At recital 76 to the contested decision, the Commission stated that ‘the protective arrangements from which the BTPS benefits [were] made available at no cost to BT’. The Commission thus referred to the fact that no payment was made for the protection afforded by the guarantee, which is among the measures that should be taken into consideration, as the Commission stated at recital 75 to the contested decision.

246    It follows from the foregoing that, in the light of the three recitals to the contested decision to which BTPS Trustees refer, that decision contains sufficient and non-contradictory reasoning, so that BTPS Trustees’ argument that there has been a breach of the obligation to state reasons with respect to the determination of the relevant reference framework must be rejected.

247    In the second place, BTPS Trustees claim that there has been an infringement of the Commission’s obligation to state reasons as regards its analysis of the condition relating to selectivity, in particular the failure to carry out any three-stage analysis, as required by the relevant case-law. In addition, at recital 84 to the contested decision, the Commission breached its obligation to explain why it considered that the provisions of the 2004 Act were selective in that they favoured BT. The Commission refers to the guarantee, although the provisions of the 2004 Act under which a system does not satisfy the necessary conditions where a guarantee has been granted in respect of the members of the scheme concerned do not specifically refer to BT and are of more general application.

248    That argument of BTPS Trustees must be rejected.

249    First, as regards the relevant reference system and its objective, which is the protection of pensions, the Commission defined them at recital 75 to the contested decision, as already mentioned (see paragraphs 101 to 103 above).

250    Second, as regards whether, in view of the objective of the system, a particular measure constituted differentiation, the Commission defined the reference framework at recital 75 to the contested decision, where it stated that ‘all measures established in order to achieve protection of pensions must be taken into consideration’ and that ‘the “system” set out in the United Kingdom for the protection of pension rights [could not] be regarded as constituted by the [PPF] alone’. At recital 72 to the contested decision, the Commission described the system of the PPF, which entailed payment of a levy, and the link between the existence of a Crown guarantee and exclusion from the PPF, entailing exemption from the PPF levy. The Commission set out, at recitals 73 and 74 to the contested decision, the situation of the BTPS by reference to that global system, owing to the existence of the guarantee, and the impact on the amount of the contribution to the PPF paid by BTPS Trustees. The Commission then stated, at recitals 75 and 76 to the contested decision, that the guarantee was granted at no cost. At recital 77 to the contested decision, the Commission described the link, in BT’s case, between the guarantee and the exemption from the PPF levy. At recital 78 to the contested decision, the Commission explained that it considered that the exemption from the PPF levy constituted an advantage for BT, as it diminished the PPF levy which would otherwise have been payable and that the exemption was dependent on the existence of the guarantee. At recitals 83 and 84 to the contested decision, the Commission explained how, owing to the links between BT and the BTPS, the measure was selective with respect to BT.

251    Third, BTPS Trustees claim that there has been a breach of the obligation to state reasons as regards whether that differentiation was justified, either because the alleged beneficiary was not placed in the same factual and legal position as other undertakings to which the reference system was applicable, or because the differentiation was inherent in the nature of the system. In that regard, as concerns the first point, it is connected to the assessment of the selective nature of the measure and the Commission explained the reasons why it considered that the measure was selective (see paragraph 250 above). As regards the second point, it must be emphasised that the Commission, at recital 75 to the contested decision, addressed the question of justification ‘by the logic of the system’ and rejected it.

252    Fourth, as regards recital 84 to the contested decision, it must be read with recitals 72 to 78 to the contested decision (see paragraph 250 above) and the Commission has thus sufficiently explained how it considered that the measure was selective with respect to BT, in particular.

253    In the third place, in BTPS Trustees’ submission, the contested decision is insufficiently reasoned as regards the reasons why the additional pension liabilities are irrelevant for the purpose of considering BT’s overall position on the market by comparison with its competitors. The reasons on which the Commission relies at the first and third indents of recital 80 to the contested decision are not directly related to the issue of additional liabilities. The arguments on which the Commission relies in respect of the other advantages which BT could have derived from protection comparable to that of the civil service which it had to provide following privatisation ‘[would involve] a radical leap in logic’, according to the expression used by Advocate General Sharpston in her Opinion in Commission v Italy and Wam, paragraph 154 above, at [2009] ECR I‑3642, points 37 to 39. In any event, at the third indent of recital 80 to the contested decision, the Commission gives no reason for the specific advantages from which BT could have benefited from civil-service-type pensions for the section of employees concerned, as those advantages somehow neutralised the burden of the extra liabilities.

254    It should be observed that, at recital 80 to the contested decision, the Commission referred to BTPS Trustees’ argument that ‘the potential advantage deriving from the lower levies to the [PPF was] more than compensated by the [additional] liabilities and financial burdens of GBP borne by BT and [the] BTPS because of the special nature of [the] BTPS’. The Commission then stated that it ‘[did] not consider that the alleged disadvantages could be used to offset this advantage’, and gave three reasons. Those are, first, the shareholders’ view of the guarantee; second, the absence any of links between the alleged disadvantage, the measure at issue and the guarantee; and, third, the possible advantages derived by BT with respect to its employees.

255    Although BTPS Trustees claim that the first and third reasons stated are irrelevant, they do not deny that the second reason provides the Commission’s answer to the issue of the lack of relevance of the additional pension liabilities. In addition, in claiming that the first and third reasons are irrelevant, BTPS Trustees dispute the merits of the grounds of the contested decision, but not the sufficiency of the statement of reasons, and their argument must therefore necessarily be rejected in the context of this plea, alleging breach of the obligation to state reasons. Last, as regards, more particularly, the third reason, BTPS Trustees maintain that the Commission did not mention the specific advantages from which BT benefited. However, it must be held that the Commission described those advantages where it stated that ‘[o]ne [could] not, however, exclude that those rights [had], in turn, triggered benefits for BT such as increased loyalty or acceptance of different salary and working conditions by the employees concerned than if those rights had not existed’. In addition, in stating that they understand that the Commission considered that those advantages neutralised the burden of additional liabilities, BTPS Trustees acknowledge that the contested decision contains a statement of reasons in that regard.

256    It must therefore be concluded that, contrary to BTPS Trustees’ assertions, the Commission stated the reasons why it considered that the additional pension liabilities were irrelevant in the present case. Consequently, the Commission stated to the requisite legal standard the reasons on which the contested decision was based in that regard and BTPS Trustees’ argument must be rejected.

257    In the fourth place, in BTPS Trustees’ submission, the Commission was at fault, at recitals 57 to 60 to the contested decision, in not showing how the transfer of State resources as a consequence of guaranteeing benefits in relation to members of the BTPS could also constitute a transfer of State resources for several ‘exemptions’ under the 2004 Act resulting from the existence of Crown guarantees, and not specifically from the guarantee granted to members of the BTPS. That argument cannot succeed.

258    It should be observed that the Commission considered that the measure at issue was one of the exemptions under the 2004 Act as a result of the guarantee in favour of the BTPS for a part of its members. Consequently, the statement of reasons for the contested decision must relate to the State resources involved in that exemption in particular, which is linked with the guarantee, as the Commission explained, at recitals 57 and 60 to the contested decision. The Commission stated, at recitals 58 and 59 to the contested decision, the reasons why the guarantee involved State resources. At recital 60 to the contested decision, after referring to the link between the guarantee and the exemption at issue, the Commission indicated the consequences which it inferred with respect to the State resources involved concerning the measure at issue.

259    Accordingly, in Case T‑230/09, the second plea, alleging infringement of Article 253 EC and breach of the obligation to state reasons, must be rejected.

260    It follows from all of the foregoing considerations that the contested decision meets the requirements of Article 253 EC. Consequently, the seventh plea in Case T‑226/09 and the second plea in Case T‑230/09 must be rejected.

 Infringement of Article 88(3) EC read with Article 1(f) of Regulation No 659/1999 and of Article 14 of Regulation 659/1999

261    The Commission disputes the admissibility of the third plea in Case T-230/09 and maintains that it is in any event unfounded.

262    BTPS Trustees claim that the aid in question is not unlawful, since it was not put into effect, as a result of the setting up of an escrow arrangement, which is mentioned in the contested decision. They maintain that Articles 1 and 2 of the contested decision constitute an infringement of Article 1(f) of Regulation No 659/1999. BTPS Trustees also claim that there has been an infringement of Article 14 of Regulation No 659/1999, since, as the aid in question is not unlawful, the Commission cannot order its recovery, moreover with interest, from BT.

263    Under Article 1(f) of Regulation No 659/1999, unlawful aid is defined as ‘new aid put into effect in contravention of Article [88](3) of the Treaty’, that is, aid granted without having been notified beforehand to the Commission or, where it has been notified, granted before the Commission has given a decision within the prescribed time-limits.

264    In the present case, it is common ground that the measure at issue was not notified to the Commission, which became aware of it after a complaint was lodged by a competitor of BT, and that the measure entered into force and was put into effect without being authorised by the Commission. Consequently, the aid granted under the measure at issue was not granted in accordance with the procedure laid down in Article 88(3) EC.

265    The Commission was therefore correct to characterise the measure at issue, in Article 1 of the contested decision, as unlawful aid.

266    Furthermore, it should be borne in mind that under Article 14(1) of Regulation No 659/1999 the Commission is obliged to recover the unlawful aid which it has declared incompatible with the common market in order to restore the situation that existed before the aid was granted. The wording of that provision indicates that recovery is to be the rule. The decision not to require recovery, where that would be contrary to a general principle of European Union law, is merely an exception.

267    At recital 102 to the contested decision, the Commission concluded that the measure at issue constituted State aid within the meaning of Article 87(1) EC, which could not be declared compatible with the common market. In the operative part, the contested decision provides that the State aid unlawfully put into effect by the United Kingdom in favour of BT is incompatible with the common market (Article 1) and that the United Kingdom is to recover the aid from the beneficiary (Article 2).

268    BTPS Trustees do not maintain in the present case that recovery would be contrary to a general principle of European Union law. It follows from the case-law of the Court of Justice, moreover, that recovery of unlawful aid is the logical consequence of the finding that it is unlawful and is intended to restore the previous situation (Case C‑183/91 Commission v Greece [1993] ECR I‑3131, paragraph 16, and judgment of 10 September 2009 in Case T‑75/03 Banco Comercial dos Açores v Commission, not published in the ECR, paragraph 126). As the aid in the present case was unlawful, the Commission was entitled to consider, in Article 2 of the contested decision, that it must be recovered.

269    It follows that, contrary to BTPS Trustees’ assertions, the Commission did not, by means of Articles 1 and 2 of the contested decision, infringe Article 1(f) and Article 14 of Regulation No 659/1999.

270    That conclusion is not called into question by BTPS Trustees’ argument that, as an escrow arrangement had been entered into by BT, the PPF and BTPS Trustees, to which the contested decision refers at recitals 106 and 107, BT could not benefit from any advantage owing to the payment, into the corresponding escrow account, of the amounts which would have been payable to the PPF in the absence of the measure at issue, and also of the corresponding interest. In BTPS Trustees’ submission, Articles 1 and 2 of the contested decision constitute an infringement of the very concept of ‘unlawful aid’, in so far as the Commission fails to draw the slightest conclusion from recitals 106 and 107 to the contested decision and as the Commission cannot demand recovery of the aid without infringing Article 14 of Regulation No 659/1999.

271    However, the recovery of State aid, including provisional recovery, notably by means of an escrow account, must be distinguished from failure to put the State aid into effect. BTPS Trustees’ argument relating to the notice entitled ‘Towards an effective implementation of Commission decisions ordering Member States to recover unlawful and incompatible State aid’ (OJ 2007 C 272, p. 4) is therefore irrelevant in the present case, in so far as that notice concerns recovery of aid and, moreover, recovery after the adoption of a Commission decision.

272    The measure at issue consists in an exemption from the PPF levy, which is provided for in regulations adopted by the State. It should be observed that the putting into effect of that exemption was not subject to a request from BTPS Trustees or to any prior authorisation, and that the exemption was applied on the entry into force of the 2005 Regulations (Entry Rules). In addition, it follows from the case-law that aid may be regarded as having been granted even if the amount of the aid has not yet been paid to the beneficiary (judgment of 1 July 2010 in Case T‑64/08 Nuova Terni Industria Chimiche v Commission, not published in the ECR, paragraph 234). Accordingly, in those circumstances, the fact that BT, BTPS Trustees and the PPF had entered into an escrow arrangement, and the fact that the sums that would have been payable to the PPF in the absence of the measure at issue were paid into an escrow account before the adoption of a Commission decision, did not allow the Commission to consider in the contested decision that the aid at issue was no longer put into effect, when the measure at issue continued to be applied unconditionally and the funds were not even paid directly to the PPF.

273    It should be observed, moreover, that the obligation placed on a Member State to calculate the exact amount of aid to be recovered – particularly where that calculation is dependent on information which that Member State has not provided to the Commission – forms part of the more general reciprocal obligation to cooperate in good faith in the implementation of Treaty rules concerning State aids imposed on the Commission and the Member States (Case C‑382/99 Netherlands v Commission [2002] ECR I‑5163, paragraph 91).

274    In the present case, the amount of the aid at issue was not known with certainty to BTPS Trustees at the time when the escrow arrangement was entered into, nor was it known to the Commission, BTPS Trustees and the United Kingdom authorities at the time of the adoption of the contested decision, as is apparent from the letter from those authorities to the Commission, produced by the Commission in the context of the measures of organisation of procedure.

275    Consequently, even if BTPS Trustees’ assertion that the precise amounts due to the PPF were paid into an escrow account is true, it cannot affect the validity of the contested decision in that it finds that the aid was unlawful and requires its recovery; it can affect only how the aid is recovered (Case T‑354/99 Kuwait Petroleum (Nederland) v Commission [2006] ECR II‑1475, paragraph 68). In principle, the recovery of the aid must take place in accordance with the relevant provisions of national law, subject however to the proviso that those provisions are to be applied in such a way that the recovery required by European Union law is not rendered practically impossible (Case C‑142/87 Belgium v Commission (‘Tubemeuse’) [1990] ECR I‑959, paragraph 61, and Case C‑5/89 Commission v Germany [1990] ECR I‑3437, paragraph 12), and any dispute in that regard falls within the exclusive jurisdiction of the national courts (Kuwait Petroleum (Nederland) v Commission, paragraph 68).

276    Consequently, BTPS Trustees are incorrect to claim that, as a consequence of Article 1 and 2 of the contested decision, there has been an infringement of Article 1(f) and Article 14 of Regulation No 659/1999 in so far as the Commission failed to take account of the escrow arrangement referred to at recitals 106 and 107 to the contested decision.

277    Accordingly, the third plea in Case T‑230/09 must be rejected as unfounded, without there being any need to rule on its admissibility.

278    In the light of all of the foregoing considerations, the actions in Case T‑226/09 and Case T‑230/09 must be dismissed in their entirety.

 Costs

279    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

280    As the applicants have been unsuccessful, they must be ordered to pay the costs in the present cases, in accordance with the forms of order sought by the Commission.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1.      Dismisses the actions;

2.      In Case T‑226/09, orders British Telecommunications plc to pay the costs;

3.      In Case T‑230/09, orders BT Pension Scheme Trustees Ltd to pay the costs.

Truchot

Martins Ribeiro

Popescu

Delivered in open court in Luxembourg on 16 September 2013.

[Signatures]

Table of contents


The applicants

Background to the dispute

The contested decision

Procedure and forms of order sought

Law

1. Admissibility (Case T‑230/09)

2. Substance

Summary of the pleas for annulment

The characterisation of the measure at issue as State aid

The error in the finding of the existence of a selective economic advantage (first plea in Case T‑226/09 and second part of the first plea in Case T‑230/09)

Breach of the principle of equal treatment owing to the finding of a selective economic advantage (second plea in Case T‑226/09)

The breach of the condition relating to the selectivity of the measure at issue (first part of the first plea in Case T‑230/09)

The error of law and of fact and the breach of the principles of legitimate expectations and legal certainty owing to the re-characterisation of the guarantee and the requirement to recover the guarantee (third plea in Case T‑226/09)

Breach of the principles of equal treatment and proportionality owing to the requirement that BTPS Trustees to pay a levy to the PPF (fourth plea in Case T‑226/09)

The error in the finding of the existence of distortion of competition and an effect on trade between Member States (fifth plea in Case T‑226/09 and third part of the first plea in Case T‑230/09) and insuffiency of reasoning in the contested decision on those points (fifth plea in Case T‑226/09)

– Case T‑226/09

– Case T‑230/09

The error in the finding of the existence of a transfer of State resources (sixth plea in Case T‑226/09 and fourth part of the first plea in Case T‑230/09)

– Case T‑226/09

– Case T‑230/09

Infringement of Article 253 EC and breach of the obligation to state reasons (seventh plea in Case T‑226/09 and second plea in Case T‑230/09)

Case T‑226/09

Case T‑230/09

Infringement of Article 88(3) EC read with Article 1(f) of Regulation No 659/1999 and of Article 14 of Regulation 659/1999

Costs


* Language of the case: English.