Introduction
Perhaps paradoxically, a public authority can adopt a measure that confers an advantage to undertakings without that measure constituting State aid. This is the case, for example, when the measure is not selective or does not affect trade between Member States. A public measure may also escape being classified as State aid when it is a regulatory act.
Normally, when the state forgoes potential revenue from allowing undertakings to exploit commercially a state asset for free or for a fee below market rate, there is transfer of state resources in the meaning of Article 107(1) TFEU. The state must charge a fee at a market rate. But not when it acts as a regulator.
In the latter case, the state does not have to charge a market price. However, the regulatory measure must conform with three principles. The criteria for allocating the right to access, use or exploit the asset must be announced in advance, they must be non-discriminatory and the fee must be justified by the objectives of the regulatory measure.
In 2021, the Commission concluded that digital licences granted for free in the Czech Republic did not constitute State aid [SA.55805].[1] Competitors challenged the Commission decision before the General Court which ruled on 14 May 2025, in joined cases T‑362/21 and T‑363/21, Telly & Česká asociace satelitních operátorů v Commission, that the applicants lacked legal standing because they could not prove that they were “individually concerned”.[2]
Before examining the reasoning of the General Court it is worth recalling why the Commission found the Czech measure to be free of State aid.
The Commission, first, explained that “(24) only advantages granted directly or indirectly through State resources can constitute State aid within the meaning of Article 107(1) TFEU. The transfer of State resources may take many forms. A positive transfer of funds does not have to occur; foregoing State revenue is sufficient. Waiving revenue which would otherwise have been paid to the State constitutes a transfer of State resources. In cases related to access to the public domain, a transfer of State resources is present if, in a given case, the public authorities do not charge the normal amount under their general system for access to the public domain or natural resources.”
Then, the Commission applied the principles above to the measure at hand that “(25) extends for free the rights of use of radio-frequency until 2030.” “(26) It results from the case law that the allocation of spectrum used for electronic communications services is a specific regulatory task entrusted to the national authorities, which have to exercise this power based on the objectives identified in the applicable Directives and decide on the most appropriate procedure, be it fee based or free of charge. In this respect, Member States do not have to act as a private profit maximizing operator in the allocation of licences and may pursue different legitimate policy objectives.”
“(28) As a consequence, the extension of the DTT rights of use free of charge has no impact on the Czech State budget since these rights of use are not and have never been awarded against payment. Therefore, it cannot be concluded that the State has waived any potential revenues since on the basis of a regular and continuous practice it did not collect any fees from the award of the DTT rights of use.”
Then the Commission added an interesting comment. “(29) The fact that only the current rights holders were awarded the DTT rights of use until 2030 does not modify this conclusion since the determination of the right holder (an undertaking or another) would have no impact on the State’s budget, as no payment is asked for DTT rights of use.” “(31) The complainants finally argue that the measure constituted aid because the rights of use of radio spectrum, which have an economic value for the right holder, were attributed in a discriminatory way and would therefore constitute a selective advantage. However, as demonstrated above, in the absence of a burden on the State budget caused by that advantage, that aspect is not sufficient to demonstrate the presence of State aid. The conditions mentioned in Article 107(1) TFEU are cumulative. If an advantage is not granted at the expense of the financial resources of the State, it does not constitute aid.” “(32) Since the measure does not fulfil the condition relating to the existence of State resources, it is sufficient to declare the measure not constituting State aid within the meaning of Article 107(1) TFEU.”
But one may wonder whether the Commission was correct to dismiss the argument concerning discriminatory treatment which appears to be inherent in or “indissolubly” linked to the measure in question. I suppose here the Commission made an implicit distinction between non-aid measures for which State aid rules do not apply and aid measures which cannot be declared compatible with the internal market if the Commission finds that they infringe other EU law.
Background
Telly and Česká asociace satelitních operátorů [CASO] [the applicants] sought the annulment of Commission decision on State aid measure SA.55805 concerning the extension of frequency licenses held by four operators of digital terrestrial television [DTT] networks in the Czech Republic. The Commission had concluded that the extension of the licences did not constitute State aid.
The extension of the DTT licences was made necessary by the release of the 700 MHz frequency band imposed by Decision 2017/899 of the European Parliament and the Council on the use of the 700 MHz frequency band by wireless broadband communications services. In addition, Member States were to ensure availability of that frequency band for terrestrial broadcasting services, including free television.
The Czech authorities had granted, free of charge, four DTT licences. The holders of those licences had to migrate to frequencies other than the 700 MHz band. Consequently, the applicants lodged complaints with the Commission alleging that the release of the 700 MHz band and the migration to another band constituted incompatible State aid for the DTT network operators.
In March 2021, the Commission adopted the contested decision finding that the extension of the DTT licences did not constitute State aid because it was not financed by state resources. The Commission noted in particular that the DTT licences had always been granted free of charge in the Czech Republic, and hence extending their validity without receiving any consideration did not involve foregoing state revenues. The Commission also noted that EU law did not require national authorities to grant the DTT licences in return for a fee.
Admissibility
As always in State aid cases, the General Court examined, first, whether the applicants had legal standing to challenge the Commission decision that was addressed to the Czech Republic.
According to the fourth paragraph of Article 263 TFEU “(38) any natural or legal person may institute proceedings against an act addressed to that person (first situation) or which is of direct and individual concern to them (second situation), and against a regulatory act which is of direct concern to them and does not entail implementing measures (third situation).”
Before the General Court examined whether the applicants were directly and individually concerned, it considered necessary to examine the specific situation of ČASO which was a trade association representing satellite operators in the Czech Republic.
“(43) It should be borne in mind that actions brought by associations or groups are, according to case-law, admissible in three situations, namely where they represent the interests of persons who themselves would have standing to bring proceedings, or where they are distinguished individually because of the impact on their own interests as an association or as a group, particularly because their position as negotiator has been affected by the act whose annulment is sought, or again where a legal provision expressly grants them a number of powers of a procedural nature”.
“(44) Where an association brings an action on behalf of its members, it acts in place of its members. Consequently, if the members of that association have brought their own actions, the association’s action cannot be declared admissible on the basis that the association is representing its members”.
“(47) It is apparent from ČASO’s articles of association that that association may act to defend the collective and individual interests of its members, which is not disputed by the Commission.”
Interestingly, CASO had only two members one of which was Telly, the other applicant. Therefore, the General Court observed that “(48) since Telly brought its own action for the annulment of the contested decision, ČASO cannot rely on the individual standing of that member of the association to bring proceedings, in accordance with the case-law cited in paragraph 44 above.” “(49) Accordingly, the admissibility of ČASO’s action under the fourth paragraph of Article 263 TFEU must be examined solely on the basis of the representation of the interests of the other member of ČASO and the individual standing of that member of the association to bring proceedings.”
The applicants’ standing to bring proceedings under the second situation in the fourth paragraph of Article 263 TFEU
The General Court, first, reminded us that the conditions of direct and individual concern are cumulative. Therefore, it is sufficient that one of them not to be satisfied in order for the appeal not to be admissible. Then, the General Court began its analysis by examining the condition of individual concern.
“(52) Persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and, by virtue of those factors, distinguishes them individually just as in the case of the person addressed”.
As is well known, it is only when the Commission has doubts or encounters serious difficulties to determine either the presence of aid or the compatibility of the aid with the internal market and opens the formal investigation procedure that the TFEU imposes an obligation on the Commission to invite the parties concerned to submit their comments.
Therefore, “(55) by adopting a decision finding, after a preliminary examination, that the measure at issue does not constitute aid, the Commission also implicitly refuses to initiate the second stage, namely the formal investigation procedure provided for in Article 108(2) TFEU and Article 6(1) of Regulation 2015/1589 […] Where the formal investigation procedure is not initiated, interested parties, who could have submitted comments during that second stage, are deprived of that possibility. In order to remedy this, they are entitled to challenge the Commission’s decision not to initiate the formal investigation procedure before the EU judicature. Accordingly, an action for annulment of a decision based on Article 108(3) TFEU brought by a party concerned for the purposes of Article 108(2) TFEU is admissible where that party seeks to safeguard the procedural rights available to it under that latter provision […] The party seeking annulment bears the burden of proving the existence of doubts or serious difficulties that should lead to a formal investigation procedure being initiated, and may discharge that burden of proof by reference to a body of consistent evidence, concerning, first, the circumstances and the length of the preliminary examination procedure and, second, the content of the contested decision”.
“(56) On the other hand, if a party seeking annulment calls into question the merits of the decision finding, at the end of the preliminary examination, that the measure in question does not constitute aid, the mere fact that that party may be regarded as concerned within the meaning of Article 108(2) TFEU cannot suffice to render the action admissible. It must then show that it enjoys a particular status within the meaning of the judgment of 15 July 1963, Plaumann v Commission [C-25/62]. That is the case, in particular, where the party seeking annulment adduces evidence to show that the measure at issue is liable to have a substantial adverse effect on its position on the market concerned”.
The applicants’ plea, alleging an infringement of their procedural rights under Article 108(2) TFEU
The General Court pointed out that the applicants did “(66 & 70) not invoke a plea alleging infringement of their procedural rights under Article 108(2) TFEU as a result of the formal investigation procedure not being initiated […], but, on the contrary, sought to challenge the merits of the contested decision, which essentially rejected their complaints.”
Therefore, their individual concern had to be examined in the light of the Plaumann case law which requires that the aid measure is liable to have a substantial adverse effect on the applicant’s position on the market.
Was there a substantial adverse effect on the applicants’ market position?
The applicants claimed that Telly and the other member of ČASO were in direct competition with the DTT operators and the extension of the DTT licences substantially affected them.
The General Court clarified that “(84) demonstration, by the applicant, of a substantial adverse effect on its position on the market does not require a definitive finding on the competitive relationship between the applicant and the beneficiary undertakings, but requires only that the applicant adduce pertinent reasons to show that the Commission’s decision may adversely affect its legitimate interests by substantially jeopardising its position on the market in question”.
“(85) The substantial adverse effect on the applicant’s competitive position on the market in question results not from a detailed analysis of the various competitive relationships on that market, allowing the extent of the adverse effect on its competitive position to be established specifically, but, in principle, from a prima facie finding that the grant of the measure covered by the Commission’s decision leads to a substantial adverse effect on that position”.
“(87) As regards the factors accepted by the case-law for the purpose of establishing a substantial adverse effect of that kind, in the first place, the mere fact that an act may exercise an influence on the competitive relationships existing on the relevant market and that the undertaking concerned is in a competitive relationship with the beneficiary of that act cannot suffice for that undertaking to be regarded as being individually concerned by that act. Therefore, an undertaking cannot rely solely on its status as a competitor of the undertaking in receipt of aid”’
“(88) Demonstrating a substantial adverse effect on a competitor’s position on the market cannot simply be a matter of the existence of certain factors indicating a decline in the applicant’s commercial or financial performance, such as a significant decline in turnover, appreciable financial losses or a significant reduction in market share following the grant of the aid in question. The grant of State aid can also have an adverse effect on the competitive situation of an operator in other ways, in particular by causing the loss of an opportunity to make a profit or a less favourable development than would have been the case without such aid”.
“(89) Furthermore, the case-law does not require the applicant to provide information as to the size or geographic scope of the markets in question, or as to its market shares or those of the beneficiary of the measure at issue or any competitors on those markets”.
The General Court went on to examine and reject the arguments of the applicants that they suffered a substantial adverse effect as a result of the aid.
“(94) The applicants have not provided any information […] regarding the quantification of the alleged advantages in favour of the DTT licence holders, […], or regarding the actual impact of those advantages on the price charged by those holders to audiovisual content providers which choose to broadcast through DTT.”
“(103) The condition relating to individual concern laid down by the fourth paragraph of Article 263 TFEU is therefore not satisfied.” “(104) Since the criterion of individual concern has not been satisfied, it must be concluded, without there being any need to examine the criterion of direct concern, that the present actions are not admissible under the second situation provided for by the fourth paragraph of Article 263 TFEU.”
Next, the General Court examined whether the applicants had legal standing under the third situation defined in the fourth paragraph of Article 263 TFEU, according to which any natural or legal person may institute proceedings against regulatory acts which are of direct concern to them and do not entail implementing measures. Regulatory acts have general application on the basis of objective criteria and apply to specified categories of undertakings.
The General Court noted that “(115) in the field of State aid […] Commission decisions authorising or prohibiting a national scheme are of general application. That general application derives from the fact that such decisions apply to objectively determined situations and produce legal effects with respect to a category of persons envisaged in a general and abstract manner”.
“(117) For a State measure to be classified as an aid scheme within the meaning of the first limb of Article 1(d) of Regulation 2015/1589, three cumulative conditions must be satisfied. First, aid may be granted individually to undertakings on the basis of an act. Second, no further implementing measure is to be required for that aid to be granted. Third, undertakings to which individual aid may be granted must be defined ‘in a general and abstract manner’”.
The issue at hand was whether the DTT licences would be extended automatically without any intermediate decision after the Commission approved the measure in question. If that would be the case, then the Commission decision had the character of a regulatory act.
However, the General Court found that “(128) on reading the applicable provisions of national law, […] the extension of the DTT licences could be granted by the chair of the council of the regulatory authority only on a case-by-case basis in the context of individual decisions, […], which involved the exercise of discretion going beyond the mere technical application of the provisions concerned.”
“(131) It follows that extending the DTT licences was conditional on the adoption of ‘further implementing measures’, within the meaning of Article 1(d) of Regulation 2015/1589.”
“(132) Therefore, it must be held that the national provision identified in the contested decision as forming the legal basis for extending the DTT licences does not establish an aid scheme within the meaning of Article 1(d) of Regulation 2015/1589, without the need to determine whether that provision satisfies the third condition referred to […] above, relating to the definition of the recipients in ‘a general and abstract manner’.”
“(133) In the light of the foregoing, it must be held that the contested decision does not constitute an act of general application and, therefore, does not come within the category of ‘regulatory acts’, within the meaning of the third limb of the fourth paragraph of Article 263 TFEU.”
“(134) It must therefore be concluded that the actions are not admissible under the third limb of the fourth paragraph of Article 263 TFEU, without it being necessary to examine the criteria relating to direct concern and the existence of implementing measures.”
Conclusions
On the basis of the above reasoning the General Court dismissed in the action in its entirety as inadmissible. The applicants’ failure to also argue infringement of their procedural rights was a fatal error. Perhaps they could have been successful had they identified some ambiguity in the Commission decision that could have convinced the General Court that the Commission encountered serious difficulties and should have opened the formal investigation procedure.
[1] The full text of the Commission decision can be accessed at:
https://ec.europa.eu/competition/state_aid/cases1/202118/287186_2270969_187_2.pdf
[2] The full text of the judgment can be accessed at:
