This article provides an overview of EU state aid cases to help users understand the cases, decisions, and awards datasets in the eusa package.
The cases dataset includes all state aid cases that the Commission has opened in response to member states notifying state aid measures under Article 108(3) TFEU from 2000 through 2020. The unit of observation is a case. The source of the raw data is the Commission’s state aid cases database.
The decisions dataset includes all decisions made in all state aid cases under Article 108(2) TFEU and Council Regulation (EU) 2015/1589 over the same period. The unit of observation is a decision. The source of the raw data is the Commission’s state aid cases database.
The awards dataset includs all awards granted by member states as part of authorized state aid measures from 2016 through 2020. These awards are reported under transparency requirements introduced by the Commission’s State Aid Modernisation (SAM) programme and Commission Regulation (EU) No 651/2014. The unit of observation is an individual award. The source of the raw data is the Commission’s state aid transparency database.
The Commission defines state aid as “an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities.” 1 State aid has four key features: there has to be an intervention in the economy by an EU member state, that intervention has to give the firm that receives the aid an advantage over other firms, the intervention has to distort competition, and the intervention has to affect intra-EU trade (trade between member states).
Article 107 of the Treaty on the Functioning of the European Union (TFEU) generally prohibits state aid, but allows some exemptions. Article 108 allows the Commission to decide if state aid is compatible with the rules of the EU’s single market.
There are three articles of the Treaty on the Function of the European Union (TFEU) that relate directly to state aid. Article 107(1) generally prohibits state aid:
Save as otherwise provided in the Treaties, 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 shall, in so far as it affects trade between Member States, be incompatible with the internal market.
Article 107(2) allows state aid that has a social character, that is in response to natural disasters, or that is related to the reunification of Germany. Article 107(3) allows state aid that promotes economic development, enables projects that are of “common European interest” or addresses a serious disturbance to a member state economy, facilitates economic activities in areas where aid does not adversely affect trade, or promotes culture and heritage conservation.
Article 108(1) allows the Commission to monitor state aid granted by member states. Article 108(2) creates an institutional procedure that the Commission can use to reject state aid that is not compatible with the rules of the single market, according to Article 107. Article 108(3) requires member states to notify the Commission of all state aid measures and to wait to implement measures until the Commission have approved them under the procedure created in Article 108(2). Article 108(4) allows the Commission to adopt regulations relating to certain categories of state aid that, according to any Council regulations passed under Article 109, are exempt from the Article 108(2) procedure.
Article 109 allows the Council to enact regulations for the application of Articles 107 an Article 108 and to determine when member states are exempt from reporting state aid measures to the Commission under Article 108(3).
Council Regulation (EC) No 659/1999 of 22 March 1999 defines the state aid approval procedure created by Article 108(2) TFEU. This regulation was amended by Council Regulation (EU) No 734/2013 of 22 July 2013 and then repealed and replaced by Council Regulation (EU) 2015/1589 of 13 July 2015.
Article 108(3) TFEU requires member states to notify state aid measures to the Commission. Once a member state has notified a state aid measure, the Commission opens a state aid case and determines whether or not the measure is compatible with the rules of the single market, as defined by Article 107 TFEU. This procedure has two phases: a preliminary examination and, if necessary, a formal investigation.
If a measure is exempt from the Article 108(3) TFEU notification requriement under Article 108(4) TFEU, which is either because the measure falls under a block exemption (see below) or because the aid is de minimis (below a certain amount), then the member state must still report certain information about the measure to the Commission. That information goes into the Commission’s database of state aid awards granted by member states.
The first phase of the procedure is the preliminary examination. If the state aid measure is not exempt from notification, the Commission will initiate a preliminary examination under Article 4 of Council Regulation (EU) 2015/1589, formerly Article 4 of Council Regulation (EC) No 659/1999. The Commission then has two months to evaluate the measure. The Commission can decide that the measure does not constitute state aid (paragraph 2), to not raise objections to the measure because it is compatible with the rules of the single market (paragraph 3), or to initiate a formal investigation (paragraph 4). The Commission can also decide to extend the two-month preliminary examination phase (paragraph 4).
The second phase of the procedure is the formal investigation under Article 9 of Council Regulation (EU) 2015/1589, formerly Article 7 of Council Regulation (EC) No 659/1999. The Commission can decide that the measure does not constitute state aid (paragraph 2), it can decide that the measure is compatible with the rules of the single market and approve the measure (a “positive decision”) (paragraph 3), it can approve the measure subject to conditions that make the measure compatible with the rules of the single market (a “conditional decision”) (paragrph 4), or it can decide that the measure is not compatible with the rules of the single market and not approve the measure (a “negative decision”) (paragraph 5).
The Commission can remedy situations where the member state has already awarded unlawful aid. If the Commission decides that the measure is not compatible with the single market, and the member state has already awarded aid to firms, it can issue a negative decision with recovery under Article 16(1) of Council Regulation (EU) 2015/1589, formerly Article 14(1) of Council Regulation (EC) No 659/1999, which requires the member state to take all necessary measures to recover the aid from beneficiaries.
If the Commission believes that a state aid measure is not compatible with the single market, it can also issue a recommendation under Article 22 of Council Regulation (EU) 2015/1589, formerly Article 18 of Council Regulation (EC) No 659/1999, proposing alternative measures that would be compatible with the single market.
The member state that notified the state aid measure can withdraw the notification at any time during a preliminary examination, under Article 10(1) of Council Regulation (EU) 2015/1589, formerly Article 8(1) of Council Regulation (EC) No 659/1999, or during a formal investigation, under Article 10(2) of Council Regulation (EU) 2015/1589, formerly Article 8(2) of Council Regulation (EC) No 659/1999.
The Commission can also revoke any decision it has made as part of a preliminary examination or a formal investigation, under Article 11 of Council Regulation (EU) 2015/1589, formerly Article 9 of Council Regulation (EC) No 659/1999, if information provided by a member state that the Commission used in making the decision was incorrect.
If the Commission needs more information to make a decision, and a member state does not respond to a Commission request or provides incomplete information, the Commission can issue an information injunction to require the member state to provide the information under Article 12(3) of Council Regulation (EU) 2015/1589, formerly Article 10(3) of Council Regulation (EC) No 659/1999.
In situations where a member state has already adopted a measure that the Commission suspects is not compatible with the rules of the single market, the Commission can issue a suspention injunction under Article 13(1) of Council Regulation (EU) 2015/1589, formerly Article 11(1) of Council Regulation (EC) No 659/1999, to require the member state to suspend the measure until the Commission can reach a decision.
There are a number of situations in which the Commission can refer a state aid case to the Court of Justice. The Commission can directly refer a case to the Court for non-compliance with a decision under the Article 108(2) TFEU procedure, as reiterated by Article 28(1) of Council Regulation (EU) 2015/1589, formerly Article 23(1) of Council Regulation (EC) No 659/1999, without going through the standard infringement process outlined in Articles 258 TFEU and Article 260 TFEU.
In addition, if a member state does not comply with an injunction (an information injunction or a suspension injunction), the Commission can also refer a case under Article 14 of Council Regulation (EU) 2015/1589, formerly Article 12 of Council Regulation (EC) No 659/1999.
If a member state does not comply with the ruling of the Court in a state aid case, Article 28(2) of Council Regulation (EU) 2015/1589, formerly Article 23(2) of Council Regulation (EC) No 659/1999, allows the Commission to refer the case back to the Court under the standard Article 260 TFEU procedure.
Article 109 TFEU allows the Council to pass regulations that exempt categories of state aid from the Article 108(3) TFEU notification requirement. Article 108(4) allows the Commission to pass regulations to implement those Council regulations The Council has delegated some of this authority to the Commission. Council Regulation (EC) No 994/98 of 7 May 1998 (the “enabling regulation”) delegates to the Commission the authority to exempt categories of state aid from the Article 108(3) notification requirement, called block exemptions, as well as to exempt de minimis aid.
This regulation was amended by Council Regulation (EU) No 733/2013 of 22 July 2012 and then repealed and replaced by Council Regulation (EU) 2015/1588 of 13 July 2015. This regulation was then amended by Council Regulation (EU) 2018/1911 of 26 November 2018.2
Commission Regulation (EC) No 800/2008 of 6 August 2008, called the General Block Exemption Regulation (GBER), identifies categories of aid that are compatible with the common market, called block exemptions, which are exempt from the Article 108(3) TFEU notification requirement. This regulation was amended by Commission Regulation (EU) No 1224/2013 of 29 November 2013 and then repealed and replaced by Commission Regulation (EU) No 651/2014 of 17 June 2014 (the “new GBER”).
Commission Regulation (EU) 2017/1084 of 14 June 2017 amended Commission Regulation (EU) No 651/2014 and created block exemptions for state aid related to port and airport intrastructure, among other minor changes. Commission Regulation (EU) 2020/972 of 2 July 2020 extended Commission Regulation (EU) No 651/2014, which would have expired in 2020, and made minor changes.3
In addition to block grant exemptions, Commission Regulation (EU) No 1407/2013 of 18 December 2013 creates an exemption for de minimis aid. Generally, state aid is de minimis if the amount is less than EUR 200,000 per firm over a three year period. This regulation is part of the Commission’s State Aid Modernisation (SAM) programme, launched on 8 May 2012.4 This regulation, which would have expired in 2020, was extended by Commission Regulation (EU) 2020/972 of 2 July 2020.5
On 8 May 2012, the Commission launched the State Aid Modernisation (SAM) programme, adopted in COM/2012/209. This programme included the introduction of new transparency rules, which were incorporated into Commission Regulation (EU) No 651/2014 (the “new GBER”), that require member states to publically report information about state aid awards that are exempt from notification under the Article 108(3) TFEU notification requriement.
Commission Regulation (EU) No 1388/2014 of 16 December 2014 (FIBER) and Commission Regulation (EU) No 702/2014 of 25 June 2014 (ABER) introduce similar requirements for state aid in fisheries, agricultural, and forestry sectors. State aid in these sectors is overseen by DG Maritime Affairs and Fisheries and DG Agriculture and Rural Development, as opposed to DG Competition.
Under Article 9(1) of Commission Regulation (EU) No 651/2014, member states must report certain information about state aid awards. Under Article 9(1)(a), they must report a list of information defined in Annex II. Under Article 9(1)(b), they must report the full text of all state aid measures. And under Article 9(1)(c), they must report a list of information defined in Annex III on each award above EUR 500,000. This includes the identity of the beneficiary, the aid instrument (e.g., grant, interest rate subsidy, guarantee, etc.), the objective of the aid, and the granting authority (the national, regional, or local government agency that granted the aid), among other things.
Under Article 11 of Commission Regulation (EU) No 651/2014, member states must also report all information specified in Annex II to the Commission (similar to the information they must report under Article 9), along with a link to the text of the state aid measure. Article 9 requries the Commission to publish this information on its website.
According to Article 9(2), for schemes that involve tax advantages and for schemes involving risk finance aid or regional urban development aid (defined in Articles 16 and 21, respectively), member states can report the amount of the award as a range, as reporting the exact amount could reveal private financial information about the firm to competitors.
https://ec.europa.eu/competition/state_aid/overview/index_en.html↩
The current consolidated version is available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02015R1588-20181227.↩
The current consolidated version is available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02014R0651-20200727.↩
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52012DC0209↩
The current consolidated version is available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02013R1407-20200727.↩