State Aid Law Blog

State Aid Uncovered Blog

In Lexxion’s State Aid Uncovered blog, Prof. Phedon Nicolaides publishes weekly critical analyses of recent State aid judgments and decisions. Each post presents the key points of a court judgment or EU Commission decision, places it in the context of similar case law or practice, assesses the underlying reasoning and highlights any inconsistencies or contradictions.

Guest contributions from other State aid experts will also be published on the blog at irregular intervals to complement the content of the blog posts.

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State Aid Uncovered ×

Exemption from Taxes that Protect the Environment May not be Selective – Part I

Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]

Correct Pricing for the Use of Publicly Funded Infrastructure

Publicly funded infrastructure must be made available to users at prices that correspond to its market value.   Introduction   When publicly-funded infrastructure is placed at the disposal of an undertaking, that undertaking must pay a market price, otherwise it derives an advantage in the meaning of Article 107(1) TFEU. But what is the market price? Is it the price […]

PART I: Concessions and State Aid: Does the State Act as a Regulator or Market Operator?

When Member States act as regulators they need not maximise revenue from the granting of concessions rights. When Member States act as regulators they must grant concession rights on the basis of procedures which are competitive, transparent, non-discriminatory and unconditional. Introduction   Is it possible for a public authority to grant State aid through a defective procurement procedure? The answer […]

i) Transfer of State Resources, ii) Non-recovery of Incompatible Aid, iii) Primacy of Agricultural Policy over Competition Policy

Private resources that come under the control of a public authority become state resources. The only defence for not recovering incompatible aid is absolute impossibility. Agricultural policy objectives take precedence over those of competition policy. Introduction This article reviews a case involving transfer of state resources and a case concerning failure to recovery of incompatible State aid. It also draws […]

Even the Catholic Church Is not Absolved from State Aid Rules: The Essence of Economic Activity – PART I

Purely religious activities and education funded by the state are not economic in nature. Introduction On 27 June 2017 the Court of Justice ruled in case C‑74/16, Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe.[1] The ruling was in response to a request from a Spanish administrative court dealing with a tax dispute between religious schools and the municipality of […]

The Art, Science and Law of Funding Services of General Economic Interest

The compulsory nature of an assigned public mission makes the services covered by the mission different from those provided by market operators for profit.   Introduction The justification of government intervention for the purpose of ensuring delivery of adequate services of general economic interest [SGEI] and the design of measures that compensate providers of SGEI can be very tricky. This […]

Financial Cooperatives

National courts may not question Commission decisions but they may ask the Court of Justice for guidance on how to interpret Commission decisions. Protection of shareholders of a particular category of companies is a selective measure. Introduction This is the last article dealing with the judgments that were rendered by EU courts on 21 December 2016. This article reviews the reply […]

Funding of the Spanish Public Broadcaster and Hypothecation of Taxes

Tax payers have grounds to object to a tax on the basis of Article 107(1) TFEU only when the tax is “asymmetrical” or when it is “hypothecated” to an aid measure.   Introduction On 10 November 2016, the Court of Justice ruled in case C‑449/14 P, DTS v European Commission.[1] DTS, a Spanish television company, appealed against the judgment of the General […]

Existing v New Aid and Role of National Courts

Modification of an existing aid measure turns it into a new aid measure if it affects its compatibility with the internal market. National courts must also notify to the Commission any new aid measure they detect.   Introduction On 26 October 2016, the Court of Justice ruled in case C‑590/14 P, DEI v Commission.[1] DEI, the incumbent electricity producer in Greece appealed against […]

No Affectation of Trade

Public subsidies that do not affect cross-border trade either directly or indirectly do not constitute State aid in the meaning of Article 107(1). The direct trade effect is the impact on customers or users. The indirect trade effect is the impact on potential market entrants.   Introduction In April 2015, the Commission surprised us with seven decisions that concluded that […]

State Aid Uncovered ×

Exemption from Taxes that Protect the Environment May not be Selective – Part I

Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]

Correct Pricing for the Use of Publicly Funded Infrastructure

Publicly funded infrastructure must be made available to users at prices that correspond to its market value.   Introduction   When publicly-funded infrastructure is placed at the disposal of an undertaking, that undertaking must pay a market price, otherwise it derives an advantage in the meaning of Article 107(1) TFEU. But what is the market price? Is it the price […]

PART I: Concessions and State Aid: Does the State Act as a Regulator or Market Operator?

When Member States act as regulators they need not maximise revenue from the granting of concessions rights. When Member States act as regulators they must grant concession rights on the basis of procedures which are competitive, transparent, non-discriminatory and unconditional. Introduction   Is it possible for a public authority to grant State aid through a defective procurement procedure? The answer […]

i) Transfer of State Resources, ii) Non-recovery of Incompatible Aid, iii) Primacy of Agricultural Policy over Competition Policy

Private resources that come under the control of a public authority become state resources. The only defence for not recovering incompatible aid is absolute impossibility. Agricultural policy objectives take precedence over those of competition policy. Introduction This article reviews a case involving transfer of state resources and a case concerning failure to recovery of incompatible State aid. It also draws […]

Even the Catholic Church Is not Absolved from State Aid Rules: The Essence of Economic Activity – PART I

Purely religious activities and education funded by the state are not economic in nature. Introduction On 27 June 2017 the Court of Justice ruled in case C‑74/16, Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe.[1] The ruling was in response to a request from a Spanish administrative court dealing with a tax dispute between religious schools and the municipality of […]

The Art, Science and Law of Funding Services of General Economic Interest

The compulsory nature of an assigned public mission makes the services covered by the mission different from those provided by market operators for profit.   Introduction The justification of government intervention for the purpose of ensuring delivery of adequate services of general economic interest [SGEI] and the design of measures that compensate providers of SGEI can be very tricky. This […]

Financial Cooperatives

National courts may not question Commission decisions but they may ask the Court of Justice for guidance on how to interpret Commission decisions. Protection of shareholders of a particular category of companies is a selective measure. Introduction This is the last article dealing with the judgments that were rendered by EU courts on 21 December 2016. This article reviews the reply […]

Funding of the Spanish Public Broadcaster and Hypothecation of Taxes

Tax payers have grounds to object to a tax on the basis of Article 107(1) TFEU only when the tax is “asymmetrical” or when it is “hypothecated” to an aid measure.   Introduction On 10 November 2016, the Court of Justice ruled in case C‑449/14 P, DTS v European Commission.[1] DTS, a Spanish television company, appealed against the judgment of the General […]

Existing v New Aid and Role of National Courts

Modification of an existing aid measure turns it into a new aid measure if it affects its compatibility with the internal market. National courts must also notify to the Commission any new aid measure they detect.   Introduction On 26 October 2016, the Court of Justice ruled in case C‑590/14 P, DEI v Commission.[1] DEI, the incumbent electricity producer in Greece appealed against […]

No Affectation of Trade

Public subsidies that do not affect cross-border trade either directly or indirectly do not constitute State aid in the meaning of Article 107(1). The direct trade effect is the impact on customers or users. The indirect trade effect is the impact on potential market entrants.   Introduction In April 2015, the Commission surprised us with seven decisions that concluded that […]

State Aid Uncovered ×

Exemption from Taxes that Protect the Environment May not be Selective – Part I

Member States have discretion to impose taxes that penalise environmentally harmful activities. Exemption of undertakings whose activities do not harm the environment does not constitute State aid whenever the exempted undertakings are not in a comparable situation.   Application of Article 107(1) to the Asturias tax   In this case, exempted establishments were those with sales area less than 4000m2 or […]

Correct Pricing for the Use of Publicly Funded Infrastructure

Publicly funded infrastructure must be made available to users at prices that correspond to its market value.   Introduction   When publicly-funded infrastructure is placed at the disposal of an undertaking, that undertaking must pay a market price, otherwise it derives an advantage in the meaning of Article 107(1) TFEU. But what is the market price? Is it the price […]

PART I: Concessions and State Aid: Does the State Act as a Regulator or Market Operator?

When Member States act as regulators they need not maximise revenue from the granting of concessions rights. When Member States act as regulators they must grant concession rights on the basis of procedures which are competitive, transparent, non-discriminatory and unconditional. Introduction   Is it possible for a public authority to grant State aid through a defective procurement procedure? The answer […]

i) Transfer of State Resources, ii) Non-recovery of Incompatible Aid, iii) Primacy of Agricultural Policy over Competition Policy

Private resources that come under the control of a public authority become state resources. The only defence for not recovering incompatible aid is absolute impossibility. Agricultural policy objectives take precedence over those of competition policy. Introduction This article reviews a case involving transfer of state resources and a case concerning failure to recovery of incompatible State aid. It also draws […]

Even the Catholic Church Is not Absolved from State Aid Rules: The Essence of Economic Activity – PART I

Purely religious activities and education funded by the state are not economic in nature. Introduction On 27 June 2017 the Court of Justice ruled in case C‑74/16, Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe.[1] The ruling was in response to a request from a Spanish administrative court dealing with a tax dispute between religious schools and the municipality of […]

The Art, Science and Law of Funding Services of General Economic Interest

The compulsory nature of an assigned public mission makes the services covered by the mission different from those provided by market operators for profit.   Introduction The justification of government intervention for the purpose of ensuring delivery of adequate services of general economic interest [SGEI] and the design of measures that compensate providers of SGEI can be very tricky. This […]

Financial Cooperatives

National courts may not question Commission decisions but they may ask the Court of Justice for guidance on how to interpret Commission decisions. Protection of shareholders of a particular category of companies is a selective measure. Introduction This is the last article dealing with the judgments that were rendered by EU courts on 21 December 2016. This article reviews the reply […]

Funding of the Spanish Public Broadcaster and Hypothecation of Taxes

Tax payers have grounds to object to a tax on the basis of Article 107(1) TFEU only when the tax is “asymmetrical” or when it is “hypothecated” to an aid measure.   Introduction On 10 November 2016, the Court of Justice ruled in case C‑449/14 P, DTS v European Commission.[1] DTS, a Spanish television company, appealed against the judgment of the General […]

Existing v New Aid and Role of National Courts

Modification of an existing aid measure turns it into a new aid measure if it affects its compatibility with the internal market. National courts must also notify to the Commission any new aid measure they detect.   Introduction On 26 October 2016, the Court of Justice ruled in case C‑590/14 P, DEI v Commission.[1] DEI, the incumbent electricity producer in Greece appealed against […]

No Affectation of Trade

Public subsidies that do not affect cross-border trade either directly or indirectly do not constitute State aid in the meaning of Article 107(1). The direct trade effect is the impact on customers or users. The indirect trade effect is the impact on potential market entrants.   Introduction In April 2015, the Commission surprised us with seven decisions that concluded that […]

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