EU state aid Definition

GLOSSARY

What does EU state aid mean?

Action by a public authority of a member state, using public resources, to favour certain undertakings or the production of certain goods.

The term state aid designates the action by a public authority (national, regional, local) of a Member State, using public resources, to favour certain undertakings or the production of certain goods. Under article 107 of TFEU, 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 production of certain goods, and affecting trade between member state, is deemed incompatible with the Internal Market and therefore prohibited.

State aid may nevertheless be permitted if justified by objectives of general interest (aid having a social character, making good the damage caused by natural disasters, promoting the economic development of disadvantaged areas, etc.). The European Commission keeps under constant review all systems of aid existing in the EU member states, in order to ensure that state aid does not distort competition.

View the related practice notes about EU state aid

International merger control developments—March/April 2020

International merger control developments—March/April 2020 Monthly round-up of international merger control developments for March/April 2020. This month has seen the entry into force of the new pre-merger control regime in Uruguay, confirmation of the new regime in Vietnam (which enters into force next month), the annual threshold revision in Italy, confirmation that the Canadian thresholds will not change this year; additionally, a large number of competition authorities are also taking action in relation to the coronavirus (COVID-19) outbreak that impacts merger control reviews. Coronavirus (COVID-19) Responses—impact on merger control reviews Competition authorities around the world are starting to announce measures that will impact merger control reviews. In order to keep track of these measures in this fast-moving and unprecedented situation, we have published a new document that summarises these developments. This is available here - MJ merger control–competition authorities and coronavirus (COVID-19) status [Archived]. Vietnam—amended merger control regime with new thresholds to enter into force next month The Implementing Decree providing details on the amendments to the competition law in...

What is State aid—flowchart

What is State aid—flowchart The flowchart

Discover our 115 Practice Notes on EU state aid

If a grant agreement concluded before the end of the transition period is deemed to be de-minimis aid under the current State aid regime, can the grant payments continue to be made after the end of the transition period on that basis?

If a grant agreement concluded before the end of the transition period is deemed to be de-minimis aid under the current State aid regime, can the grant payments continue to be made after the end of the transition period on that basis? The short answer is that the position is not clear as it depends on legislation which is presently in draft. Under the Withdrawal Agreement, the UK remains subject to existing EU State aid rules during the transition/implementation period and the EU authorities retain competence to initiate State aid administrative procedures in respect of the UK for four years after the end of the transition period on 31 December 2020 (IP completion day). However, as noted in the query, the detail of the State aid regime and approach in the UK after IP completion day is not clear. Assuming that draft legislation recently presented to Parliament (the State Aid (Revocations and Amendments) (EU Exit) Regulations 2020, SI 2020/Draft) does become law, then as of IP...

How are state aid rules applied in respect of public service broadcasting?

How are state aid rules applied in respect of public service broadcasting? There are sector specific rules in relation to state aid and broadcasting. We refer you to Commentary: Public Service Broadcasting and State Aid: Butterworths Competition Law Service [2331]. In order for there to be state aid under Article 107 TFEU: (i) there must be an intervention by the state or by means of state resources; (ii) the intervention must be liable to affect trade between Member States; (iii) it must confer an advantage on the beneficiary; (iv) it must distort or threaten to distort competition. Broadcasters with a public service mandate are typically funded out of a state budget or through levies on citizens that own broadcasting equipment (eg the TV licence in the UK). This public funding is generally considered to distort the internal market as public service broadcasters from various countries compete with each other, and with private companies, for the rights to television programmes and events, as well as advertising contracts...

See the 3 Q&As about EU state aid

Public Law weekly highlights—19 December 2024

This week's edition of Public Law weekly highlights includes: case analysis of the judgment in McAleenon, where the Supreme Court ruled that judicial review is available where alternative claims would not serve the same purpose, the European Commission’s referral of the UK to the European Court of Justice, and the government’s white paper on devolution in England. Additionally featured are selected Brexit highlights, including the latest Brexit SIs. This edition further includes updates on Public procurement, Subsidy control and state aid and Equality and human rights.

Competition weekly highlights—19 December 2024

This week's edition of Competition weekly highlights includes, from a UK perspective: (1) the latest NSI Act 2021 developments, (2) the DCMS’ decision to extend its deadline for responses to its consultation on updating the media mergers regime, and (3) the CMA grants permission for collective action against Google over alleged market abuse. This week’s highlights also includes, from an EU perspective: (1) the General Court’s judgment dismissing further actions against Commission’s decision finding that a scheme designed to promote regional development in Maderia was unlawful State aid.

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GLOSSARY