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

Unlike sectoral or regional aid, aid which may be held compatible with the internal market laid down in Article 107(3)(b) TFEU are very rarely claimed before the EU courts. They target two well distinct objectives: to promote the execution of an important project of common European interest and to remedy a serious disturbance in the economy a Member State.

A project can be classified as an important project of European interest, within the meaning of Article 107(3)(b) TFEU only where it forms part of a transnational European programme supported jointly by a number of governments of the Member States or arises from concerted action by them to combat a common threat such as environmental pollution . This is not the case of a project aimed at using a new technology where the products concerned are sold on a saturated market  or a tax aid scheme aimed at strengthening the Italian banking system insofar as it benefits mainly to the economic operators of that Member State and not the Union as a whole .

The Commission has published a Communication on Important Projects of Common European Interest (IPCEIs) . It clarifies that the rules applicable to the financing of such projects are set out in the R&D&I Framework  and in the Guidelines on State aid for environmental protection. The Commission has taken the opportunuity of the implementation of the policy of modernizing State aid to adopt this communication consolidating the previous guidance and replacing any existing provisions on IPCEI. All economic sectors are concerned. The Communication does not however apply to measures involving aid to undertakings in difficulty or undertakings which are subject to an outstanding recovery order or which entail a violation of Union law. The aid proposal must concern a single or integrated project. The project must contribute in a concrete, clear and identifiable manner to one or more Union objectives and must have a significant impact on competitiveness of the Union, sustainable growth, addressing societal challenges or value creation across the Union . The project must normally involve more than one Member State and its benefits must extend to a wide part of the Union.  The positive spillover effects must benefit not only the undertakings or the sector concerned but also have wider relevance and application to the European economy or society. The project must involve co-financing by the beneficiary and the aid must be necessary and proportionate. The Member State must show that the proposed aid measure constitutes the appropriate policy instrument to address the objective of the project and that there are no other less distortive types of aid instruments by which the same result could be achieved.

Case T-390/20 Scandlines Danmark ApS, Judgment of 28 February 2024, LawLex202400007947JBJ, recalling this principle.

Case 62/87 Exécutif régional wallon v Commission [1988] ECR 1573, LawLex200500005401JBJ.

Case C-66/02 Italy v Commission [2005] ECR 10901, LawLex200700001460JBJ; Case C-148/04 Unicredito Italiano [2005] ECR I-11137, LawLex200600001240JBJ.

Communication from the Commission 2014/C 188/02 of 20 June 2014.

Community Framework for State aid for Research and Development and Innovation, OJ C 323 of 30 Dec. 2006

The project must represent an important contribution to the Union’s objectives, for instance by being of major importance for the Europe 2020 strategy, the European Research Area, the European strategy for KETs, the Energy Strategy for Europe etc. (pt 15).

The negative effects of the aid measure in terms of distortions of competition and impact on trade between Member States must be limited and outweighed by the positive effects in terms of contribution to the objective of the common European interest. In assessing the negative effects of the aid measure the Commission will assess the risk of market foreclosure and dominance.

418. Aid to promote the execution of an important project of common European interest