Judgment of the General Court (First Chamber) 15 July 2026
JUDGMENT OF THE GENERAL COURT (First Chamber)
15 July 2026 ( * )
( State aid – Agricultural sector – Aid schemes for large enterprises in the primary agricultural sector in the Czech Republic – Decision declaring the aid incompatible with the internal market – Obligation to state reasons – Right to be heard – Error of assessment – Article 107(3)(c) TFEU – European Union Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020 – Presence of an incentive effect – Proportionality – Ex post consideration of a counterfactual scenario )
In Joined Cases T‑310/24 and T‑311/24,
Úsovsko Agro s. r. o., established in Klopina (Czech Republic),
Úsovsko Eko s. r. o., established in Klopina,
represented by R. Kubáč, lawyer,
applicants,
v
European Commission, represented by M. Abenhaïm and A.-L. Delbac, acting as Agents,
defendant,
THE GENERAL COURT (First Chamber),
composed, at the time of the deliberations, of M. Brkan, acting as President, I. Gâlea and T. Tóth (Rapporteur), Judges,
Registrar: I. Kurme, Administrator,
having regard to the written part of the procedure,
further to the hearing on 17 November 2025,
gives the following
Judgment
1 By their actions under Article 263 TFEU, the applicants, Úsovsko Agro s. r. o. and Úsovsko Eko s. r. o., seek the annulment of Commission Decision (EU) 2024/2474 of 5 April 2024 on the aid schemes SA.50787 (2021/C) (ex 2018/N) and SA.50837 (2021/C) (ex 2018/N) implemented by [the Czech Republic] in favour of large enterprises active in primary agricultural production (OJ L, 2024/2474; ‘the contested decision’).
Background to the dispute
2 The applicants are companies incorporated under Czech law active in the agricultural sector.
3 By letters of 29 March and 6 April 2018, the Czech Republic notified the European Commission, under Article 108(3) TFEU, of two aid schemes for enterprises of all sizes active in primary agricultural production respectively, on the one hand, for planting orchards, grown in compliance with the integrated production method and, on the other hand, for the construction of functional drop irrigation in orchards, hop fields, vineyards and nurseries (‘the aid schemes notified in 2018’).
4 The aid schemes notified in 2018 were referenced SA.50787 (2018/N) and SA.50837 (2018/N) respectively.
5 The aid schemes notified in 2018 were intended to replace – in order to enlarge the group of eligible beneficiaries by including large enterprises – existing aid schemes SA.46621 (2016/XA) and SA.46972 (2016/XA), which were exempt from the notification requirement under Commission Regulation (EU) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 193, p. 1).
6 On 6 March 2019, the Commission informed the Czech authorities of its decision to transfer the notifications of the aid schemes notified in 2018 into the register of non-notified aid measures, because aid had been granted to large enterprises prior to the date of those notifications.
7 By letter of 12 January 2021, the Commission adopted and communicated to the Czech Republic Decision C(2021)41 final inviting comments pursuant to Article 108(2) TFEU.
8 On the one hand, the Commission decided not to raise objections, in accordance with Article 108(3) TFEU and Article 4(3) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9), to the aid which would be granted under the aid schemes notified in 2018 after the adoption of that decision and its notification to the Czech authorities, on the ground that that aid was compatible with the internal market pursuant to Article 107(3)(c) TFEU.
9 On the other hand, the Commission decided to initiate the formal investigation procedure provided for in Article 108(2) TFEU in respect of the aid granted to large enterprises prior to the notification of that decision (‘the 2021 decision to initiate the formal procedure’). It stated that it had doubts as to the compatibility of such aid with the internal market under Article 107(3)(c) TFEU.
10 During the formal investigation procedure, the Commission received comments from the Czech Republic as well as from interested parties, including the applicants.
11 Moreover, in the context of the formal investigation procedure, the Czech Republic explained that the aid schemes introduced prior to the aid schemes notified in 2018, namely schemes SA.46621 (2016/XA) and SA.46972 (2016/XA), were limited to small and medium-sized enterprises (SMEs) and that the sole reason why aid had also been granted to large enterprises was that the national authorities had incorrectly assessed the size of those beneficiaries. It stated that the limitation of the aid to SMEs was made clear in the national legal basis by reference to Article 14 of Regulation No 702/2014. It also confirmed that recovery procedures in relation to aid granted to seven identified beneficiaries had been initiated in 2019 and that that aid related to aid granted in 2016 and 2017.
12 On 5 April 2024, the Commission adopted the contested decision in which it concluded that the aid schemes notified in 2018 had been put into effect before their notification in breach of Article 108(3) TFEU, with the result that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure constituted new aid and, consequently, had to be regarded as unlawful aid within the meaning of Article 1(f) of Regulation 2015/1589.
13 In the contested decision, the Commission considered that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure could not be regarded as compatible with the internal market under the derogation provided for in Article 107(3)(c) TFEU, on the ground that that aid did not fulfil the conditions on the presence of an incentive effect and proportionality as set out in the applicable provisions of the European Union Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020 (OJ 2014 C 204, p. 1; ‘the 2014 Guidelines’).
14 The operative part of the contested decision reads as follows:
The measures in favour of large enterprise beneficiaries active in primary agricultural production, for the restructuring of orchards and for the construction of drip irrigation in orchards, hop fields, vineyards and nurseries, unlawfully put into effect by [the Czech Republic] before the notification of [the 2021 decision to initiate the formal procedure] are in breach of Article 108(3) TFEU and constitute State aid in the form of two schemes.
The State aid referred to in Article 1, unlawfully put into effect by [the Czech Republic] in breach of Article 108(3) TFEU, is incompatible with the internal market.
1. [The Czech Republic] shall recover the incompatible aid referred to in Article 1 from the large enterprise beneficiaries.
…’
Forms of order sought
15 The applicants claim that the Court should:
– annul the contested decision;
– order the Commission to pay the costs.
16 The Commission contends that the Court should:
– dismiss the actions;
– order the applicants to pay the costs.
Law
17 In support of their actions, the applicants put forward two pleas in law, alleging, in essence, first, a failure to state reasons and, secondly, an error made in the context of the assessment of the compatibility of the aid received by them with the internal market under Article 107(3)(c) TFEU.
The first plea, alleging that the statement of reasons is flawed
18 First of all, the applicants argue that the operative part of the contested decision is not consistent with the grounds set out in that decision. In their view, whilst the operative part orders the recovery of the aid granted to large enterprises under the aid schemes notified in 2018 prior to the notification of the 2021 decision to initiate the formal procedure, the grounds in question relate to the aid granted to large enterprise beneficiaries in 2016 under the schemes SA.40137 (2014/XA) and SA.40138 (2014/XA), as well as in 2017 under the schemes SA.46621 (2016/XA) and SA.46972 (2016/XA), which were exempt from the notification requirement under Regulation No 702/2014, as aid intended for SMEs. Moreover, they argue that the aid granted to them prior to the latter decision was granted under the aid schemes introduced in 2016 and 2017, whereas the subject matter of the contested decision concerns aid schemes SA.50787 (2018/N) and SA.50837 (2018/N), under which no aid was granted to them.
19 Next, the applicants argue that it is impossible to determine with sufficient precision the temporal scope of the contested decision, in the context of which the Commission considers certain aid to be incompatible with the internal market. Moreover, they submit that the operative part of that decision is unclear, since Articles 1 and 3 of that operative part, which provide for the recovery of aid granted to large enterprises prior to the 2021 decision to initiate the formal procedure, do not clearly specify which period is covered. It is also impossible to determine precisely the amount of aid to be recovered.
20 Lastly, according to the applicants, the Commission did not set out in the contested decision the reasons which led it to conclude that the aid granted to large enterprises under the aid schemes notified in 2018 prior to the notification of the 2021 decision to initiate the formal procedure was incompatible with the internal market, since the statement of reasons for the contested decision was limited merely to an assessment of compliance with certain procedural conditions set out in the 2014 Guidelines.
21 The Commission disputes the applicants’ arguments.
22 According to the case-law, the statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court having jurisdiction to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. 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 that article 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 (see judgment of 23 November 2023, Ryanair and Airport Marketing Services , C‑758/21 P, EU:C:2023:917, paragraph 95 and the case-law cited).
23 In particular, therefore, the reasons given for a measure adversely affecting persons are sufficient if that measure was adopted in a context which was known to them (judgments of 14 April 2015, Council v Commission , C‑409/13, EU:C:2015:217, paragraph 79, and of 11 June 2020, Commission and Slovak Republic v Dôvera zdravotná poist’ovňa , C‑262/18 P and C‑271/18 P, EU:C:2020:450, paragraph 67).
24 It should also be noted that, according to settled case-law, the operative part of a decision must be read in the light of the terms of the reasons on which it is based (see judgment of 16 September 2013, Dornbracht v Commission , T‑386/10, EU:T:2013:450, paragraph 224 and the case-law cited).
25 In the present case, the applicants allege, in essence, a contradiction between, on the one hand, the first and third articles of the operative part of the contested decision and, on the other hand, the grounds of that decision. In their view, those articles of the operative part and those grounds can be understood as referring to aid schemes introduced during different periods, which entails, moreover, unclear obligations as to the amount to be recovered by the Czech Republic.
26 It is therefore necessary to examine whether the contested decision sets out, in a sufficiently clear and comprehensible manner, its material scope, its temporal scope and the reasons which led the Commission to conclude that the aid in question was incompatible with the internal market.
27 In the first place, as regards the material scope of the contested decision, it is apparent from Section 2.1, entitled ‘Scope of the decision’, that the aid schemes notified in 2018 were notified as aid schemes. A first aid scheme, the objective of which is ‘aid for restructuring of orchards’, was registered as SA.50787 (2018/N) and a second aid scheme, the objective of which is ‘aid for the construction of drip irrigation in orchards, hop fields, vineyards and nurseries’, was registered as SA.50837 (2018/N).
28 It should be noted that the objectives of the aid schemes notified in 2018, referred to in the grounds of the contested decision, are identical to those set out in Article 1 of that decision.
29 Moreover, it is stated in recitals 10 and 13 of the contested decision that, once they had been authorised, the aid schemes notified in 2018 were intended to replace the aid schemes registered as SA.46621 (2016/XA) and SA.46972 (2016/XA), which had the same objective, except that the latter were available only to SMEs and were therefore exempt from the notification requirement under Regulation No 702/2014.
30 Furthermore, recital 16 of the contested decision states that the legal basis for the aid schemes notified in 2018, and also for those replaced by them, was constituted, on the one hand, by the Zákon o zemědělství č. 252/1997 Sb. (Law on Agriculture No 252/1997) and, on the other hand, by rules for granting aid adopted on the basis of that law.
31 In addition, it is apparent from Section 3 of the contested decision, entitled ‘Grounds for initiating the procedure’, and, in particular, from recital 38 of that decision, that the Czech authorities had confirmed that the aid schemes notified in 2018 had already been implemented prior to their notification.
32 Accordingly, the Commission was consistent in referring, in Article 1 of the operative part of the contested decision, to the ‘measures in favour of large enterprise beneficiaries … put into effect by [the Czech Republic] before the notification of [the 2021 decision to initiate the formal procedure]’ and stated that those measures ‘constitute[d] State aid in the form of two schemes’, namely one relating to the restructuring of orchards and the other to the construction of drip irrigation in orchards, hop fields, vineyards and nurseries.
33 Still consistent with this, the legal assessment of the aid in question was carried out in Section 7 of the contested decision as follows.
34 It is apparent from Section 7 of the contested decision, in particular, that the Commission considered that the aid schemes notified in 2018 constituted ‘aid schemes’ within the meaning of Article 1(d) of Regulation 2015/1589 and point 35.4 of the 2014 Guidelines, in so far as the national legal basis did not provide for further implementing measures for the grant of aid and the beneficiaries were defined therein in a general and abstract manner (recitals 120 to 131 of that decision).
35 On the basis of the explanations provided by the Czech authorities, the Commission considered in the contested decision that the granting of aid to large enterprises prior to the notification of the aid schemes notified in 2018, but on terms equal to those of the aid granted to SMEs in the context of an aid scheme exempt from the notification requirement under Regulation No 702/2014, resulted from an administrative error and not from the exercise of any discretionary power to influence the essential elements of the aid and the conditions under which it had been granted (recitals 134 to 137 of that decision).
36 Accordingly, the Commission noted that, in their comments on the 2021 decision to initiate the formal investigation phase, both the Czech Republic and the interested parties, including the applicants, had confirmed that the aid received by large enterprises had been received prior to the date of notification of the aid schemes notified in 2018 and their authorisation by the Commission. Consequently, the Commission concluded that the aid granted to large enterprises prior to the notification of that decision constituted new aid which was unlawful within the meaning of Article 1(f) of Regulation 2015/1589 (recitals 138 to 164 of the contested decision).
37 It follows from the foregoing that both the operative part of the contested decision and the detailed grounds on which it is based are comprehensible and consistent, since the essential characteristics of the aid measures being examined by the Commission are defined with sufficient clarity, that is to say, they are aid measures intended for the restructuring of orchards and the construction of drip irrigation in orchards, hop fields, vineyards and nurseries, and those measures take the form of aid schemes for large enterprises active in the primary agricultural production sector, which had been notified for the first time in 2018 and had, in practice, already been introduced in 2016 and 2017.
38 The applicants’ arguments concerning a failure to state reasons in relation to the material scope of the contested decision must therefore be rejected, in particular since they are based on a reading in isolation of certain recitals of that decision according to which the Commission assessed, in that decision, the legality and compatibility of the aid granted under the aid schemes introduced in 2016 and 2017.
39 Section 4 of the contested decision, relating to the observations by the Czech Republic, merely sets out the clarifications provided by that Member State during the formal investigation procedure concerning the aid schemes notified in 2018. It is apparent from recitals 68 and 69 of that decision that the Czech authorities confirmed that the aid schemes registered as SA.46621 (2016/XA) and SA.46972 (2016/XA), which were in force prior to the aid schemes notified in 2018, were limited to SMEs, as was apparent from the national legislation in force referred to in Article 14 of Regulation No 702/2014. Those authorities explained that the only reason for granting the aid also to large enterprises in that context was the erroneous assessment by those authorities of the size of those enterprises. Those authorities also referred to recovery procedures in relation to aid granted to seven identified beneficiaries in respect of aid received in 2016 and 2017.
40 Moreover, Section 5 of the contested decision solely sets out the comments submitted by interested parties and, in particular, by five beneficiaries of aid granted in 2016 and 2017 that are concerned by the recovery procedures relating to that aid, which had been granted to them on the ground that they had been erroneously considered to be SMEs, whereas they were large enterprises.
41 However, as is apparent from paragraphs 27 and 29 above, the Commission defined the material scope of the contested decision in a sufficiently clear and comprehensible manner by describing the characteristics of the aid schemes notified in 2018, with references SA.50787 (2018/N) and SA.50837 (2018/N).
42 Accordingly, whilst the Commission refers, in the contested decision, to aid schemes SA.46621 (2016/XA) and SA.46972 (2016/XA), it is precisely in order to place the notification of the aid schemes notified in 2018 in the context of the amendment of the previous aid schemes in order to extend the scope of recipients, by including large enterprises, whilst maintaining the same essential characteristics of the previous aid schemes, referred to in paragraph 37 above.
43 It is from that point of view that, in Sections 4 and 5 of the contested decision, the Commission refers to aid granted as a result of administrative errors to large enterprises under the aid schemes in force in 2016 and 2017.
44 Moreover, it should be noted, in accordance with the case-law referred to in paragraph 23 above, that the contested decision was adopted in a context which was known to the applicants. Furthermore, it is apparent both from the applications and from the applicants’ arguments at the hearing that the applicants were aware that the national legal basis permitting the granting of aid to undertakings active in primary agricultural production – that aid having the same purpose as that referred to in paragraph 37 above – was updated annually, in particular as regards the application forms to be submitted to the Czech authorities for the purpose of obtaining aid. The only change relevant to the present case, of which the applicants were also aware, occurred in 2018, namely the amendment of that legal basis to include large enterprises among the potential beneficiaries of the aid schemes notified in 2018.
45 Consequently, contrary to the applicants’ claims, no inconsistency between the operative part of the contested decision and the grounds of that decision can be found in that regard.
46 In the second place, as regards the temporal scope of the contested decision, the operative part of that decision specifies the aid in favour of large enterprises found to be unlawful and incompatible with the internal market and, therefore, subject to the obligation of recovery from beneficiaries. It is clear from Article 1 of that decision that it concerns aid schemes put into effect by the Czech Republic before the notification of the 2021 decision to initiate the formal procedure, that is to say, 12 January 2021, as is also apparent from recital 4 of the contested decision. Moreover, Article 3 of that decision orders the Czech Republic to recover the unlawful and incompatible aid paid to large enterprises, setting out the arrangements for recovery and for determining the amount of aid to be recovered.
47 Therefore, contrary to what the applicants claim, the operative part of the contested decision sets out a clear obligation on the Czech Republic, which is obliged under the fourth paragraph of Article 288 TFEU to take all measures necessary to ensure implementation of that decision and must succeed in actually recovering the sums owed in order to eliminate the distortion of competition caused by the anticompetitive advantage procured by that aid (see, to that effect, judgment of 14 November 2018, Commission v Greece , C‑93/17, EU:C:2018:903, paragraph 68 and the case-law cited).
48 Moreover, the fact that the operative part and the grounds of the contested decision do not specify the exact date on which the aid subject to recovery was made available under the aid schemes in question does not render the obligation on the Czech Republic ambiguous. According to the case-law, the Commission’s decision finding an aid scheme incompatible with the internal market need not include an analysis of the aid granted in individual cases on the basis of the scheme. It is only at the stage of recovery of the aid that it is necessary to look at the individual situation of each undertaking concerned (see, to that effect, judgment of 13 June 2019, Copebi , C‑505/18, EU:C:2019:500, paragraph 31 and the case-law cited). In the present case, since the aid in question was made available on the basis of the two aid schemes in question, it is for the national authorities to identify the individual aid which was made available to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure.
49 Contrary to what the applicants argue, the reference to aid measures SA.46621 (2016/XA) and SA.46972 (2016/XA), set out in particular in Section 2 of the contested decision, is explained by the intrinsic link between the aid schemes notified in 2018 and the earlier aid schemes, which were based on the same national legal basis. In that regard, it is sufficiently clear from that decision that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure was granted in the administrative and regulatory context of the aid schemes in force at the time.
50 In recitals 87 and 93 of the contested decision, the Commission took note of the applicants’ comments submitted during the formal investigation procedure, according to which the rules for granting aid contained in the aid schemes referred to in paragraph 29 above did not, between 2008 and 2018, lay down a condition that beneficiaries had to be SMEs.
51 Those comments show that aid schemes for SMEs with the same purpose as the aid schemes notified in 2018 had been introduced in the Czech Republic in 2008 and that the rules for granting aid, adopted on the basis of the Law on Agriculture No 252/1997, had been periodically amended in the following years.
52 At the hearing, the Commission stated, without being contradicted on that point by the applicants, that amendments to the rules for granting aid, adopted on the basis of the Law on Agriculture No 252/1997, gave rise in 2014 to aid schemes SA.40137 (2014/XA) and SA.40138 (2014/XA), which were exempt from the notification requirement under Regulation No 702/2014, also referred to in the applications and subsequently replaced by aid schemes SA.46972 (2016/XA) and SA.46621 (2016/XA) in 2016.
53 As regards the applicants in particular, they submitted their comments during the formal investigation procedure. It is noted in recitals 84 and 90 of the contested decision that one of the applicants received aid for the restructuring of orchards in December 2016 and December 2017, it being specified in brackets that this concerned ‘aid scheme SA.50787’, and that the other applicant received aid ‘under both aid schemes’ in December 2017, thereby implicitly but necessarily referring to the aid schemes notified in 2018.
54 Consequently, assuming that aid was also granted to large enterprises on the basis of the rules in force corresponding to aid schemes SA.40137 (2014/XA) and SA.40138 (2014/XA), that fact does not reveal any inconsistency in the statement of reasons for the contested decision.
55 In the statement of reasons for the contested decision, the starting point for the Commission’s assessment remains, consistently, the aid schemes notified in 2018 and put into effect prior to their authorisation.
56 Moreover, when assessed in particular in the light of the applicants’ interest in bringing proceedings, the aid in question received by them is specifically identified by precise dates, as stated in paragraph 53 above. However, the applicants did not allege the existence of other aid having the same purpose, either during the formal investigation procedure or before the Court.
57 Lastly, as regards the applicants’ argument that it is impossible to determine precisely the amount of aid to be recovered, it should be recalled that, according to the case-law, no provision of EU law requires the Commission, when ordering the recovery of unlawful aid declared incompatible with the internal market, to fix the exact amount of aid to be repaid. Moreover, the obligation on a Member State to calculate the exact amount of aid to be recovered forms part of the more general reciprocal obligation incumbent upon the Commission and the Member States of sincere cooperation in the implementation of Treaty rules concerning State aid (see judgment of 21 September 2022, Portugal v Commission (Madeira Free Zone) , T‑95/21, EU:T:2022:567, paragraph 229 and the case-law cited).
58 Accordingly, it is sufficient for the Commission’s decision to include information enabling the addressee of that decision to work out itself, without overmuch difficulty, that amount (see judgment of 21 September 2022, Portugal v Commission (Madeira Free Zone) , T‑95/21, EU:T:2022:567, paragraph 230 and the case-law cited).
59 Moreover, as regards the applicants in particular, the amounts of aid which they received are identified in the contested decision and are quantified or, at the very least, quantifiable. Indeed, the applicants acknowledged in their applications, and even when questioned at the hearing in that regard, that footnote 73 to that decision specified the amounts of recoverable aid which the Czech Republic had identified for each of them.
60 Therefore, in the present case, it must be concluded that the temporal scope and quantification of the amounts of aid to be recovered are duly reasoned in the contested decision, since the applicants were in a position to understand and challenge the amounts to be recovered as set out in that decision.
61 In the third place, as regards the applicants’ complaint that the Commission failed to state the reasons which led it to conclude that the aid granted to large enterprises under the aid schemes notified in 2018 prior to the notification of the 2021 decision to initiate the formal procedure was incompatible with the internal market, the following must be noted.
62 In the contested decision, the Commission considered that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure could not be regarded as compatible with the internal market under the derogation provided for in Article 107(3)(c) TFEU on the ground, in particular, that the aid did not comply with the conditions, set out in Part I of the 2014 Guidelines, on the presence of an incentive effect and the proportionality of that aid (recital 189 of the contested decision).
63 More specifically, in recitals 178 to 181 of the contested decision, the Commission noted that none of the aid applications submitted by large enterprises in the context of the aid schemes in force in 2016 and 2017 included a counterfactual scenario. It therefore concluded that, if the conditions set out in points 72 and 73 of the 2014 Guidelines, according to which the situation without the aid had to be described by the aid applicant in the aid application and verified by the granting authority in advance of the aid grant, were not met, the presence of an incentive effect remained hypothetical and unproven.
64 Accordingly, in the contested decision, the Commission considered that the 2014 Guidelines did not provide for any alternative demonstration of the counterfactual scenario and that it could not accept or assess the ex post counterfactual scenarios which the large enterprise beneficiaries had submitted in their comments on the 2021 decision to initiate the formal procedure.
65 Moreover, in recitals 184 to 188 of the contested decision, the Commission recalled that, pursuant to point 95 of the 2014 Guidelines, in case of investment aid granted to large enterprises under the notified aid schemes, Member States had to ensure that the aid amount was limited to the minimum on the basis of a ‘net-extra cost approach’. Furthermore, it considered that, pursuant to point 97 of those guidelines, the Member State concerned had to ensure that the aid amount corresponded to the net extra costs of implementing the investment in the area concerned, compared to the counterfactual scenario in the absence of aid.
66 Consequently, the Commission considered that, since the investigation had confirmed that the large enterprises had not submitted counterfactual scenarios in their aid application, the Czech authorities had not had the available information which would have allowed them to check and confirm that the aid granted complied with the net-extra cost approach referred to in points 95 to 97 of the 2014 Guidelines. In addition, since no other point in those guidelines provided for an alternative demonstration of the net-extra cost approach, it considered that its doubts regarding the failure to ascertain the proportionality of aid granted to large enterprises were confirmed.
67 Therefore, in the contested decision, the Commission explained to the requisite legal standard the reasons why it had considered that the aid granted to large enterprises under the aid schemes notified in 2018, prior to the notification of the 2021 decision to initiate the formal procedure, was incompatible with the internal market.
68 As for the applicants’ arguments which concern, in actual fact, the merits of the grounds set out in the contested decision, it suffices to recall that, according to settled case-law, 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 contested measure (judgments of 22 March 2001, France v Commission , C‑17/99, EU:C:2001:178, paragraph 35, and of 18 January 2005, Confédération Nationale du Crédit Mutuel v Commission , T‑93/02, EU:T:2005:11, paragraph 67). Such arguments, therefore, inasmuch as they are put forward in the context of a plea alleging breach of the obligation to state reasons, must necessarily be rejected as ineffective (see, to that effect, judgment of 3 May 2017, Gfi PSF v Commission , T‑200/16, not published, EU:T:2017:294, paragraph 34 and the case-law cited).
69 It must therefore be found that the contested decision clearly and unequivocally indicates the Commission’s reasoning, setting out to the requisite legal standard the reasons which led it to conclude that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure was incompatible, and enables the Court to review those assessments by the Commission.
70 Consequently, in the light of all of the foregoing, the first plea must be rejected.
The second plea, alleging, in essence, that an error was made in the context of the examination of the compatibility of the aid received by the applicants with the internal market under Article 107 (3)(c) TFEU
71 This plea is divided, in essence, into three parts, alleging, first, that the compatibility of the aid received by the applicants with the internal market is a question of substance, secondly, that, in the present case, that aid is compatible with the internal market and, thirdly, an infringement of the right to be heard.
72 It is appropriate to examine, first of all, the third part and, next, the first two parts together, in so far as the applicants’ arguments in relation to the latter two parts seek, in essence, to demonstrate that the Commission made an error of law and an error of assessment in concluding that the aid which they received prior to the notification of the 2021 decision to initiate the formal procedure was incompatible with the internal market.
The third part, alleging an infringement of the right to be heard
73 According to the applicants, by disregarding the counterfactual scenarios which they provided during the formal investigation phase, the Commission infringed their right to submit comments and, ultimately, to be heard. They submit that the Court has nevertheless recognised the right of undertakings receiving aid to be heard, in particular those covered by the contested decision which have directly borne the economic consequences of that decision. They argue that the right to be heard constitutes one of the fundamental principles of EU law, guaranteed by Article 41(2)(a) of the Charter of Fundamental Rights of the European Union. Moreover, even assuming that the Commission did not infringe the applicants’ procedural rights, it certainly infringed those of the Czech Republic. In any event, the mere submission of their comments cannot be regarded as an effective exercise of the right to be heard within the meaning of Article 108(2) TFEU.
74 The Commission disputes the applicants’ arguments.
75 According to the case-law, the procedure for reviewing State aid provided for in Article 108 TFEU is a procedure initiated only against the Member State responsible for granting the aid. Only the Member State concerned, as the addressee of the Commission’s future decision, may rely on true rights of defence. By contrast, the undertakings receiving the aid and their competitors are considered only to be interested parties in the procedure, for the purposes of Article 108(2) TFEU. No special role is reserved to the recipients of aid, among all the interested parties, by any provision. Those recipients cannot rely on rights which are as extensive as the rights of the defence as such and cannot seek to engage in an adversarial debate with the Commission (see, to that effect, judgments of 24 September 2002, Falck and Acciaierie di Bolzano v Commission , C‑74/00 P and C‑75/00 P, EU:C:2002:524, paragraphs 81 to 83, and of 12 May 2011, Région Nord-Pas-de-Calais and Communauté d’agglomération du Douaisis v Commission , T‑267/08 and T‑279/08, EU:T:2011:209, paragraphs 71 and 78).
76 The parties concerned have, in essence, the role of information sources for the Commission in the procedure for reviewing State aid. It follows that, far from enjoying the same rights of defence as those which individuals against whom a procedure has been instituted are recognised as having, the parties concerned have only the right to be involved in the procedure to the extent appropriate in the light of the circumstances of the case (see judgment of 12 May 2011, Région Nord-Pas-de-Calais and Communauté d’agglomération du Douaisis v Commission , T‑267/08 and T‑279/08, EU:T:2011:209, paragraph 74 and the case-law cited).
77 Moreover, the Charter of Fundamental Rights is not intended to alter the nature of the review of State aid established by the Treaty or to confer on third parties a right of scrutiny which Article 108 TFEU does not provide (see, to that effect, judgment of 11 March 2020, Commission v Gmina Miasto Gdynia and Port Lotniczy Gdynia Kosakowo , C‑56/18 P, EU:C:2020:192, paragraph 90).
78 In the present case, it follows from recitals 84 to 95 of the contested decision that the applicants were given the opportunity to submit their comments during the formal investigation procedure.
79 Furthermore, in recitals 178 to 189 of the contested decision, the Commission responded to those comments and explained the reasons why it considered that the aid in question did not satisfy the conditions relating to the presence of an incentive effect and to proportionality set out in the provisions of the 2014 Guidelines which, in its view, were applicable.
80 In those circumstances, the applicants’ arguments that the Commission infringed their right to be heard must be rejected.
81 In the light of the foregoing considerations, the third part of the second plea must be rejected.
The first two parts, alleging, in essence, an error concerning the assessment of the compatibility of the aid received by the applicants with the internal market
82 The applicants submit that the Commission should have carried out a substantive analysis of the compatibility with the internal market of the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure, by directly applying Article 107(3)(c) TFEU and by examining each element on which the application of that provision depended, in particular the presence of an incentive effect and the proportionality of the aid in question, rather than verifying those conditions exclusively as ‘procedural requirements’ set out in the 2014 Guidelines. In their view, the requirement for large enterprises to submit a counterfactual scenario together with an aid application under points 71 and 73 of those guidelines and the subsequent verification of those documents by the national authorities do not constitute conditions for the compatibility of the aid, but rather provide the national authorities with verification tools.
83 Moreover, according to the applicants, the conditions relating to the submission of a counterfactual scenario and the proportionality of the aid in question should have been assessed ex post facto . By refusing to assess them ex post facto , the Commission was overly formalistic, contrary to the case-law and its own previous practice.
84 Furthermore, the applicants submit that the Czech Republic and the other interested parties which submitted comments during the formal investigation phase argued that the aid granted prior to the notification of the 2021 decision to initiate the formal investigation procedure had an incentive effect and was proportionate.
85 In any event, according to the applicants, point 70 of the 2014 Guidelines links the absence of an incentive effect solely to the start of the works, prior to the submission of the aid application, and not to the failure to submit a counterfactual scenario. It follows from the case-law that an incentive effect could even be present in the case of aid granted following an application for aid submitted after work on the relevant project or activity has started.
86 The Commission disputes the applicants’ arguments.
87 It should be noted that, under Article 107(3)(c) TFEU, aid to facilitate the development of certain economic activities or of certain economic areas may be considered to be compatible with the internal market, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.
88 Moreover, according to the case-law, the assessment of the compatibility of aid measures with the internal market, under Article 107(3) TFEU, falls within the exclusive competence of the Commission, subject to review by the Courts of the European Union (judgment of 19 July 2016, Kotnik and Others , C‑526/14, EU:C:2016:570, paragraph 37).
89 It is also apparent from the case-law that, in the exercise of its discretion, the Commission may adopt guidelines in order to establish the criteria on the basis of which it proposes to assess the compatibility, with the internal market, of the aid measures envisaged by the Member States. In adopting such guidelines and announcing by publishing them that they will apply to the cases to which they relate, the Commission imposes a limit on the exercise of that discretion and cannot, as a general rule, depart from those guidelines, at the risk of being found to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (judgment of 19 July 2016, Kotnik and Others , C‑526/14, EU:C:2016:570, paragraphs 39 and 40).
90 Accordingly, in the specific area of State aid, the Commission is bound by the guidelines and notices that it issues, to the extent that they do not depart from the rules in the Treaty (see judgment of 2 December 2010, Holland Malt v Commission , C‑464/09 P, EU:C:2010:733, paragraph 47 and the case-law cited). It is therefore for the Courts of the European Union to determine whether the Commission has observed the rules which it adopted (see judgment of 8 April 2014, ABN Amro Group v Commission , T‑319/11, EU:T:2014:186, paragraph 29 and the case-law cited).
91 Furthermore, although the review carried out by the Courts of the European Union is limited as regards the complex economic and social assessments made by the Commission, that review is, by contrast, comprehensive as regards the evaluations made by the Commission which do not involve such assessments or as regards questions of a strictly legal nature (judgment of 10 May 2023, Ryanair and Condor Flugdienst v Commission (Lufthansa; COVID-19) , T‑34/21 and T‑87/21, EU:T:2023:248, paragraph 78).
92 In the present case, as is apparent from paragraphs 62 to 67 above, the Commission considered that the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure was not compatible with the internal market under the derogation provided for in Article 107(3)(c) TFEU, on the ground that that aid did not comply with the conditions set out in Part I of the 2014 Guidelines on the presence of an incentive effect and the proportionality of that aid.
93 In that regard, it is apparent from paragraph 87 above that aid to facilitate the development of certain economic activities or of certain economic areas ‘may’ be considered to be compatible with the internal market, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.
94 The provisions of the 2014 Guidelines and, in particular, the common assessment principles set out in Part I, Chapter 3, of those guidelines, on which the contested decision is based, are as follows.
95 According to point 66 of the 2014 Guidelines:
‘Aid in the agricultural and forestry sectors and in rural areas can only be found compatible with the internal market, if it has an incentive effect. An incentive effect is present when the aid changes the behaviour of an undertaking in such a way that it engages in additional activity contributing to the development of the sector which it would not have engaged in without the aid or in which [it] would only have engaged in a restricted or different manner. The aid must however not subsidise the costs of an activity that an undertaking would have incurred in any event and must not compensate for the normal business risk of an economic activity.’
96 Point 70 of the 2014 Guidelines reads as follows:
‘… the Commission considers that aid does not present an incentive for the beneficiary wherever work on the relevant project or activity has already started prior to the aid application by the beneficiary to the national authorities.’
97 The wording of points 72 and 73 of the 2014 Guidelines is as follows:
‘(72) In addition, large enterprises must describe in the application, the situation without the aid, which situation is referred to as the counterfactual scenario or alternative project or activity and submit documentary evidence in support of the counterfactual described in the application.
(73) When receiving an application, the granting authority must carry out a credibility check of the counterfactual and confirm that the aid has the required incentive effect. A counterfactual is credible if it is genuine and relates to the decision-making factors prevalent at the time of the decision by the beneficiary regarding the project or activity concerned.’
98 As a preliminary point, it is important to note that, in the present actions, the applicants do not contest the legality of the 2014 Guidelines in the light of primary law.
99 Moreover, in their applications, the applicants do not put forward any argument seeking to challenge the legality of the premiss on which the Commission relies in order to examine the compatibility of the aid at issue, according to which the aid that was granted to them constitutes individual aid granted in the context of an aid scheme. In that regard, in response to a question from the Court at the hearing, they maintained that they were the beneficiaries not of ad hoc individual aid granted outside the scope of an aid scheme, but of individual aid granted under an aid scheme.
100 It should also be recalled that, in accordance with the case-law cited in paragraph 89 above, the Commission could not depart from the 2014 Guidelines, at the risk of being found to be in breach of general principles of EU law, such as equal treatment or the protection of legitimate expectations.
101 In the present case, the Commission based its conclusion on the incompatibility with the internal market under Article 107(3)(c) TFEU of the aid granted to large enterprises prior to the notification of the 2021 decision to initiate the formal procedure, on the ground that the applicants had not submitted counterfactual scenarios in their aid application and that, accordingly, the national authorities had granted that aid without, in actual fact, having verified the credibility of such counterfactual scenarios and, consequently, the presence of an incentive effect and the proportionality of that aid.
102 In that regard, first, it is apparent from point 70 of the 2014 Guidelines, in essence, that, pursuant to Article 107(3) TFEU, the Commission considers all aid which satisfies the condition of having an incentive effect for its beneficiary to be compatible, provided that potential beneficiaries have submitted their aid application to the national authorities before work on the relevant project or activity has started.
103 Moreover, it follows from point 25 of the 2014 Guidelines that large enterprises are more likely to be significant players on the internal market and, consequently, in specific cases, aid which is granted to them may particularly distort competition and trade in the internal market. Therefore, according to point 72 of those guidelines, in their aid application, large enterprises must describe the situation without the aid, which situation is referred to as the counterfactual scenario or alternative project or activity and submit documentary evidence in support of the counterfactual described in the application.
104 Compliance with the condition relating to the submission of a counterfactual scenario falls within the scope of the verification obligation incumbent on the national authorities in the context of the granting of aid under an aid scheme duly notified to and approved by the Commission.
105 In the present case, the applicants do not dispute that their aid application, which gave rise to the aid granted in 2016 and 2017, did not contain counterfactual scenarios and that such scenarios were submitted only during the formal investigation procedure of 2021, in response to the doubts raised by the Commission in the 2021 decision to initiate the formal investigation procedure.
106 It was therefore possible for the Commission not to take into account the counterfactual scenarios submitted during the formal investigation procedure of 2021, which, in accordance with points 72 and 73 of the 2014 Guidelines, had to be submitted to the national authorities for the purposes of granting individual aid in the context of an aid scheme.
107 Furthermore, it follows from the failure to include counterfactual scenarios in the aid applications that the proportionality of the aid granted was not assessed in the light of the requirements of points 95 to 97 of the 2014 Guidelines, which impose additional conditions applicable to investment aid subject to an individual notification requirement and to investment aid for large enterprises in the context of notified aid schemes.
108 Secondly, it follows from points 72 and 73 of the 2014 Guidelines that the credibility of the counterfactual scenario must be examined prior to the granting of the aid, a condition which is of essential importance in the context of Section 3.4 of those guidelines concerning the presence of an incentive effect. It is inherent in the very requirement to present a counterfactual scenario in the aid application that failure to comply with that requirement renders any counterfactual scenario drawn up subsequently entirely lacking in credibility. Accordingly, the Commission was entitled to consider that the presence of an incentive effect could not, in the present case, be demonstrated by the submission of a counterfactual scenario several years after the aid was granted.
109 Thirdly, the applicants do not dispute that the Czech authorities granted aid to the applicants in 2016 and 2017 under aid schemes whose essential characteristics coincided with those of the aid schemes notified in 2018 and that, de facto, those schemes had resulted in the systemic granting of individual aid to large enterprises, on account of an administrative omission, as described in particular in paragraphs 38 to 43 above.
110 It follows that, in a case such as the present one, the applicants cannot criticise the Commission for having restricted its examination of the compatibility with the internal market of the aid which was granted to them to verification of compliance with the provisions of the 2014 Guidelines concerning the presence of an incentive effect and the proportionality of individual aid granted to large enterprises under an aid scheme. In that regard, it should be noted that any departure from those guidelines is liable, on the one hand, to undermine the effectiveness of the Commission’s State aid control system, one of the fundamental elements of which is the notification requirement laid down in Article 108(3) TFEU.
111 On the other hand, such a derogation would run the risk of being in breach of general principles of law, such as equal treatment in relation to the competitors of large enterprises which received aid in 2016 and 2017, it being noted that undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in Article 108 TFEU and a diligent business operator should normally be able to determine whether that procedure has been followed (see, to that effect, judgments of 15 December 2005, Unicredito Italiano , C‑148/04, EU:C:2005:774, paragraph 104, and of 19 March 2015, OTP Bank , C‑672/13, EU:C:2015:185, paragraph 77).
112 Fourthly, even though the Member States retain the right to notify the Commission of proposed aid which does not meet the requirements laid down in guidelines such as the 2014 Guidelines and the Commission may authorise such proposed aid in exceptional circumstances (see, to that effect, judgments of 19 July 2016, Kotnik and Others , C‑526/14, EU:C:2016:570, paragraph 43, and of 31 January 2023, Commission v Braesch and Others , C‑284/21 P, EU:C:2023:58, paragraph 92), in the present case, the Czech Republic neither requested that the Commission directly apply Article 107(3)(c) TFEU for the purposes of assessing the aid granted to large enterprises prior to the notification of the 2018 aid measures, nor relied in that notification, during the formal investigation procedure, on exceptional circumstances.
113 On the contrary, it is apparent from the file that the Czech authorities granted aid to large enterprises prior to the notification of the 2018 aid schemes, namely in 2016 and 2017, on the ground that they had failed to establish that those undertakings were not eligible for that aid. Consequently, the fact that the Czech Republic argued during the formal investigation procedure that that aid nevertheless had an incentive effect and was proportionate cannot be interpreted as reliance on exceptional circumstances, still less as proof of the existence of such circumstances.
114 Moreover, as regards the applicants’ argument based on the Commission’s previous practice, they do not demonstrate any similarities with the present case which would render that practice applicable and, in any event, the legality of the contested decision must be assessed solely in the context of Article 107(3)(c) TFEU, read in conjunction with the 2014 Guidelines, and not in the light of an alleged previous decision-making practice of the Commission (see, to that effect, judgment of 26 October 2022, Siremar v Commission , T‑668/21, not published, EU:T:2022:677, paragraph 121 and the case-law cited).
115 Lastly, in the light of the foregoing, the applicants’ arguments seeking to demonstrate that the aid granted to them in 2016 and 2017 had an incentive effect and was proportionate, in accordance with the criteria of the 2014 Guidelines, are ineffective.
116 Accordingly, the first two parts of the second plea must be rejected.
117 The actions must therefore be dismissed in their entirety.
Costs
118 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
119 Since the applicants have been unsuccessful, they must be ordered to bear their own costs and to pay those of the Commission, in accordance with the form of order sought by the Commission.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Dismisses the actions;
2. Orders Úsovsko Agro s. r. o. and Úsovsko Eko s. r. o. to pay the costs.
Brkan | Gâlea | Tóth
Delivered in open court in Luxembourg on 15 July 2026.
V. Di Bucci | | S. Papasavvas
Registrar | | President
* Language of the case: English.