EUROPEAN UNION LAW – PROBLEM 8
COMPETITION LAW
1. What forms of State Aid are there? (definition/justification)
2. State Aid I: Jurisdictional Aspects
State aid is financial assistance paid out of State resources that assist specific undertakings
to fight the forces of competition. States might decide to aid a private undertaking so as
to rescue jobs or to stabilize an economic sector this is not for free, citizens need to
pay taxes to finance the State aid.
Three articles cover State aid:
I. Art.107 TFEU sets out the jurisdictional and substantive criteria as to when a
public intervention constitutes a State aid that is incompatible with the internal
market THIS IS THE CENTRAL PROVISION. The first par. is the general prohibition.
Par 2 and 3 contain 2 sets of justifications;
II. Art. 108 TFEU provides the procedural frame for the control of State aid within the
Union;
III. Art. 109 TFEU grants a regulatory competence to the Council to make any
appropriate regulations for the application of art. 107 and 108 TFEU.
a. The concept of ‘State Aid’
As said above, the central prohibition is codified in art. 107 (1) TFEU prohibits State aid
that distorts competition and affects trade within the internal market (the prohibition is
not directly effective because i3t is linked to the exemptions in art. 107(3) TFEU).
Case Law: Heiser Case (Page 382) – part 2 -
Para 32: “according…de minimis aid”
Literature: Chapter 18, p. 750, pp. 760-778, pp. 781-794;
Articles: European Commission ‘Report on the implementation of the Commission notice on
the application of the State aid rules to measures relating to direct business taxation
Diagram on State Aid
Cases: PreussenElektra, Stardust, Commission v. Italy, Belgium v. Commission, Portugal
v. Commission, Heiser
COMPETITION LAW
1. What forms of State Aid are there? (definition/justification)
2. State Aid I: Jurisdictional Aspects
State aid is financial assistance paid out of State resources that assist specific undertakings
to fight the forces of competition. States might decide to aid a private undertaking so as
to rescue jobs or to stabilize an economic sector this is not for free, citizens need to
pay taxes to finance the State aid.
Three articles cover State aid:
I. Art.107 TFEU sets out the jurisdictional and substantive criteria as to when a
public intervention constitutes a State aid that is incompatible with the internal
market THIS IS THE CENTRAL PROVISION. The first par. is the general prohibition.
Par 2 and 3 contain 2 sets of justifications;
II. Art. 108 TFEU provides the procedural frame for the control of State aid within the
Union;
III. Art. 109 TFEU grants a regulatory competence to the Council to make any
appropriate regulations for the application of art. 107 and 108 TFEU.
a. The concept of ‘State Aid’
As said above, the central prohibition is codified in art. 107 (1) TFEU prohibits State aid
that distorts competition and affects trade within the internal market (the prohibition is
not directly effective because i3t is linked to the exemptions in art. 107(3) TFEU).
Case Law: Heiser Case (Page 382) – part 2 -
Para 32: “according…de minimis aid”
Literature: Chapter 18, p. 750, pp. 760-778, pp. 781-794;
Articles: European Commission ‘Report on the implementation of the Commission notice on
the application of the State aid rules to measures relating to direct business taxation
Diagram on State Aid
Cases: PreussenElektra, Stardust, Commission v. Italy, Belgium v. Commission, Portugal
v. Commission, Heiser
