March 20, 2009

Private Enforcement of EC State Aid Law--EC's Revamped Notice on the Role of National Courts

Arnold & Porter Advisory

The chapter of the Treaty establishing the European Community (EC Treaty) containing the rules of competition comprises not only an antitrust section that deals with company conduct (such as cartels and abuse) but also a section concerning state measures that consist in granting financial support selectively to individual companies or specific economic sectors. Such measures are known as "state aids". It is no exaggeration to state the reform of state aid law enforcement has been -- together with cartel law enforcement -- the main competition policy priority of the present European Commission. The central tenet of this reform -- set out in the 2005 State Aid Action Plan (SAAP) -- is to encourage Member States to target their aid to projects that have the potential of achieving common interest objectives where the normal functioning of the market fails to provide companies with the necessary incentives to invest in such projects. Since 2005, the Commission has converted this Action Plan in a dozen or so legal instruments, such as a Community Framework for State aid for research, development, and innovation.

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