European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

The advantage directly granted to an undertaking and represented by a transfer of funds constitutes the simplest form of State aid. The transfer may be definitive (grants , capital injection, contribution, capital increase , conversion of loan into equity ) or momentary (advance, loan ), even negative, i.e. it results from the absence of temporary or final collection of sums of money (debt resched …

Direct advantage

The advantage directly granted to an undertaking and represented by a transfer of funds constitutes the simplest form of State aid. The transfer may be definitive (grants , capital injection, contribution, capital increase , conversion of loan into equity ) or momentary (advance, loan ), even negative, i.e. it results from the absence of temporary or final collection of sums of money (debt rescheduling, waiver of claims ).

The granting by a legislative instrument or a regulatory decision of subsidies coming from the national budget characterizes a State aid . The fact that subsidies are granted within the framework of a predetermined overall budget allocation to an indefinite number of beneficiaries who are not initially individually identified, is irrelevant . Subsidies for advertising campaigns, market surveys and acquisition of equipment leased to clients, intended for the exclusively commercial development of the beneficiary undertaking , operational subsidies granted by a Chamber of Commerce to an airline  or investment subsidies  constitute a direct advantage. On the other hand, there is no State aid where the subsidy is part of a comprehensive arrangement motivated by commercial considerations between rational operators in a market economy  or where it is proportional to the objectives sought by the measure .

Capital injections  or contributions of public funds  constitute a direct advantage where they are unlikely to generate an adequate return in the long term  or within a reasonable timescale . This is the case for a public capital increase, where the public holding reaches a significantly higher level than the original distribution and where the parallel withdrawal of private shareholders is largely due to the undertaking's poor profit outlook  or where it cannot be severed from two previous contributions made over a period of two years, without return, and where the State at the same time, acts as the guarantor of a loan extending far beyond the capital increase and purchases the subsidiary of the undertaking being restructured and which will benefit from the contributions .

A loan constitutes an aid where the fact that the perceived risk inherent to the loan is high is not reflected in the interest rate applied and the securities required to guarantee it, or the assets pledged by fixed or floating charges are insufficient to repay the loan in full . The recipient of aid is not necessarily the undertaking to which the public authorities granted the funds directly but rather the undertaking that actually benefited from the aid . Where the loan is granted on the same conditions as those of private-sector banks, the classification of State aid can be set aside .

Aid in the form of remission of debts , temporary waivers by the State of a public levy , waivers of debt  or the granting of a grace period for the payment of social security contributions , constitutes an advantage where the rescheduling measures do not correspond to the normal conduct of a private creditor insofar as private-sector banks would not grant the same conditions . By contrast, a release of debt does not constitute an aid where the claims are unenforceable and worthless in economic terms . The comparison between the portion of public claims in the total amount of debt held by an undertaking in difficulty in relation to private claims does not constitute a decisive criterion to assess whether remissions of debts granted by a public body contain any elements of State aid, as the Commission must in all cases check whether the remissions can only be explained by an intention to confer an advantage on the undertaking in question .

Commission Decision No 2004/838/EC of 10 December 2003, Budgetary grant for France Télévisions, LawLex200500005335JBJ: Awarding grants coming from the national budget by virtue of a legislative instrument or a regulatory decision is imputed to the State within the meaning of Article 107(1) TFEU; Case C-238/29 “Sātiņi-S” SIA v Dabas aizsardzības pārvald, Judgment of 27 January 2022, LawLex202200001154JBJ.

Commission Decision No 2008/137/EC of 7 March 2007, State aid in favor of Cyprus Airways Public Ltd, LawLex200800000283JBJ: The participation of a Member State in a capital increase which satisfies the private market economy investor test, amounts to a State aid where it cannot be severed from two previous contributions, over a period of two years, without return and where the State acts, at the same time, as the guarantor of a loan extending far beyond the capital increase and purchases a subsidiary of the company being restructured which will benefit from the contribution; Case C-163/22 P Gmina Miasto Gdynia et Port Lotniczy Gdynia-Kosakowo sp. z o.o. w likwidacji, Judgment of 22 June 2023, not available in English, holding that where the aid measure consists of a contribution to the capital of an undertaking, the resulting advantage cannot be allocated directly to one or other of the two economic activities of that undertaking, irrespective of whether they are dissociable or indissociable.

Case T-98/00 Linde v Commission [2002] ECR II-3961, LawLex200500005055JBJ.

Commission Decision No 2005/170/EC of 16 June 2004, Aid for the construction of a propylene pipeline, LawLex200700001547JBJ, for aid which makes it possible to carry out a project, of which the return on investment would be too weak without such aid, and which is limited to a level that allows nor more than a normal internal rate of return.

Commission Decision No 97/81/EC of 30 July 1996, Aid granted by the Austrian Government to Head Tyrolia Mares, LawLex200500004783JBJ. See also Commission Decision No 94/653/EC of 27 July 1994, Notified capital increase of Air France, LawLex200500004789JBJ.

Commission Decision No 92/318/EEC of 25 March 1992, Aid granted by Spain to Industrias Mediterraneas de la Piel SA, LawLex200500004683JBJ; No 96/614/EC of 29 May 1996, Measures granted by Italy in favour of Breda Fucine Meridionali SpA, LawLex200500004765JBJ.

Commission Decision No 96/614/EC of 29 May 1996, Measures granted by Italy in favor of Breda Fucine Meridionali SpA, LawLex200500004765JBJ; No 97/271/EC of 18 December 1996, Forges de Clabecq, LawLex200500004781JBJ; No 97/789/EC of 15 July 1997, Concerning the recapitalization of the company Alitalia, LawLex200400002554JBJ: the provision of capital from public funds is aid, provided private shareholders do not participate in the operation in proportion to their number of shares under conditions identical to those for the public investor and where the share they hold has no real economic significance (10%).

Commission Decision No 97/271/EC of 18 December 1996, Forges de Clabecq, LawLex200500004781JBJ.

Commission Decision No 97/271/EC of 18 December 1996, Forges de Clabecq, LawLex200500004781JBJ; No 97/789/EC of 15 July 1997, Concerning the recapitalization of the company Alitalia, LawLex200400002554JBJ.

Commission Decision No 2008/137/EC of 7 March 2007, State aid in favor of Cyprus Airways Public Ltd, LawLex200800000283JBJ.

Commission Decision No 1999/484/EC of 3 February 1999, State aid in favor of Hijos de Andrés Molina, LawLex200400002621JBJ; No 96/614/EC of 29 May 1996, Measures granted by Italy in favour of Breda Fucine Meridionali SpA, LawLex200500004765JBJ, for a loan granted to an undertaking in debt which would have already been wound up after losses which wiped out its share capital, as its debts were so large as to rule out any prospect of profitability even in the long term; No 2000/536/EC of 2 June 1999, Aid granted by Italy to Seleco SpA, LawLex200400002593JBJ, for a loan granted by a regional authority to an undertaking the financial position of which prevents from expecting any profitability.

Commission Decision No 2001/856/EC of 4 October 2000, Aid to Verlipack, Belgium, LawLex200500004729JBJ. See also in the same case: Case C-457/00 Belgium v Commission [2003] ECR I-6931, LawLex200500004602JBJ: recipient of aid is not necessarily the undertaking to which the public authorities granted the funds directly but rather the undertaking that actually benefited from the aid.

Case T-123/97 Salomon (SA), Judgment of 6 October 1999, LawLex200500005236JBJ; Case T-110/97 Kneissl Dachstein v Commission [1999] ECR II-2881, LawLex200500005237JBJ; Case T-110/97 Kneissl Dachstein v Commission [1999] ECR II-2881, LawLex200500005237JBJ: the conversion of a shareholder loan into equity, granted by a public undertaking in its capacity as controlling shareholder does not give rise to any transfer of public resources within the meaning of Article 107(1) TFEU, where the loan constituted from the start an irrecoverable debt or involved the waiver of repayment of an irrecoverable debt owing to the serious over-indebtedness of the beneficiary.

Commission Decision No 2000/536/EC of 2 June 1999, Aid granted by Italy to Seleco SpA, LawLex200400002593JBJ.

Commission Decision No 91/1/EEC of 20 December 1989, Concerning aid in Spain to Magefesa, LawLex200400002459JBJ.

Commission Decision No 93/625/EC of 22 September 1993, Aid granted by the French Government to the Paris mutuel urbain (PMU), LawLex200400002492JBJ.

Case T-37/97 Forges de Clabecq SA v Commission [1999] ECR II-859, LawLex200500005219JBJ; Case T-217/02 Ter Lembeek v Commission [2006] ECR II-4483, LawLex200700000476JBJ.

Case C-256/97 DM Transport [1999] ECR I-3913, LawLex200500005071JBJ, ECLR, 1999, 531-539, obs. CRISCUOLO.

See for an example, Commission Decision No 2002/458/EC of 1 March 2000, Aid schemes implemented by Greece in favour of the settlement of debts by the agricultural cooperatives, LawLex200500004607JBJ; Case C-278/00 Greece v Commission [2004] ECR 3997, LawLex200500004503JBJ.

Commission Decision No 1999/395/EC of 28 October 1998, State aid granted by Spain to Sniace SA, LawLex200500005336JBJ; No 2000/796/EC of 21 June 2000, Aid granted by Germany to CDA Compact Disc Albrechts GmbH, LawLex200700000307JBJ.

Case T-152/99 HAMSA v Commission [2002] ECR II-3049, LawLex200500004882JBJ.

Commission Decision No 1999/484/EC of 3 February 1999, State aid in favor of Hijos de Andrés Molina, LawLex200400002621JBJ; See by contrast: No 2000/536/EC of 2 June 1999, Aid granted by Italy to Seleco SpA, LawLex200400002593JBJ: a debenture loan granted by public-sector banks, which constitute a minority within a consortium of banks, under the same conditions as the private-sector banks, is not covered by Article 107(1) TFEU.

Case T-217/02 Ter Lembeek v Commission [2006] ECR II-4483, LawLex200700000476JBJ: the waiver by a regional authority of a definite fixed claim held on an operator, in exchange for the surrender of shares of no value in a company, is a State aid.

Commission Decision No 2004/838/EC of 10 December 2003, Budgetary grant for France Télévisions, LawLex200500005335JBJ.

Case T-55/99 CETM v Commission [2000] ECR II-3207, LawLex200500005208JBJ.

Commission Decision No 92/483/EEC of 24 June 1992, Concerning aid provided by the Brussels Regional Authorities (Belgium) in favor of the activities of Siemens SA, LawLex200500005354JBJ.

French Conseil d'Etat, 27 February 2006, Ryanair Limited: operational subsidies granted by a Chamber of Commerce to an airline in order to encourage it to serve an airport and therefore to increase traffic, do not correspond to a normal remuneration of a service that could be paid by a private market economic investor where they greatly exceed the cost of promotion activities actually carried out, as the airline have no obligation to give back the sums paid in case of non-performance.

Commission Decision No 1999/342/EC of 30 September 1998, Aid from Austria to Agrana Stärke GmbH, LawLex200500004743JBJ, Case T-98/00 Linde v Commission [2002] ECR II-3961, LawLex200500005055JBJ.

European Competition Law

379. Direct advantage

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Les décisions de justice citées dans ce paragraphe :

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379. Direct advantage

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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