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State aid meaning

What does State aid mean?
In practice, state aid refers to public financial support that selectively benefits businesses and risks distorting competition or trade. Under EU law (Articles 107-109 TFEU and case law), it covers advantages granted through state resources that favour certain undertakings or goods and affect trade between Member States. Typical measures include grants, loans, guarantees, tax reliefs, equity injections and land or services below market value. Unless covered by the General Block Exemption Regulation or de minimis rules, aid must be notified to and approved by the European Commission; unlawful aid can be recovered with interest. In Great Britain, the EU state aid regime no longer applies; the statutory regime uses subsidy and is governed by the Subsidy Control Act 2022. A subsidy is public financial assistance conferring a specific economic advantage with effects on competition, investment or international trade, assessed by self-assessment, with transparency and potential CMA Subsidy Advice Unit scrutiny and Competition Appeal Tribunal (CAT) review. In Northern Ireland, EU state aid rules may still apply where measures affect trade in goods or electricity with the EU under the Windsor Framework (with potential UK-wide reach). In Ireland, the EU state aid regime fully applies.
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View the related Checklists about State aid

CHECKLISTS
EU VBER 2022 vertical agreements drafting and compliance checklist: safe harbour criteria, dual distribution, online restrictions, RPM, territorial and customer limits, non-compete and MFN clauses, severance and transition

This checklist outlines the key matters to weigh when preparing fresh vertical agreements, or revising current ones, to determine whether they qualify for the block exemption under Commission Regulation (EU) 2022/720, the Vertical Block Exemption Regulation 2022 (VBER 2022), together with the 2022 Vertical Guidelines. It is not a full manual to VBER 2022; rather, it serves where a commercial lawyer seeks confirmation that a vertical arrangement sits within VBER 2022 (and any guidance released pursuant to it). Introduction to EU VBER 2022 Any arrangement that influences trade or limits competition within the EU can fall under the ban on anti-competitive agreements in Article 101(1) TFEU. That said, an agreement is not barred if it either: qualifies for an individual exemption under Article 101(3) TFEU, or falls within an applicable block exemption Before 1 June 2022, the pertinent block exemption for vertical arrangements was set out in Commission Regulation (EU) No 330/2010, the Vertical Block Exemption Regulation 2010 (VBER...

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CHECKLISTS
State aid issue-spotting: a practical decision flowchart for lawyers

The flowchart below sets out how to spot State aid issues:...

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CHECKLISTS
EU R&D Block Exemption Regulation 2023 (Reg 2023/1066): Drafting Checklist for R&D Agreements—scope, conditions, market share thresholds, hardcore/excluded restrictions, duration, withdrawal, and transition period

R&D agreements—drafting for the EU R&D BER 2023—checklist This Checklist outlines the key issues to address when preparing new Research and Development (R&D) agreements, or revising current R&D arrangements, to determine whether they fall within the EU R&D BER 2023 (Commission Regulation (EU) 2023/1066 on the application of Article 101(3) of the Treaty on the Functioning of the European Union (TFEU) to specific categories of research and development agreements). It is not a detailed manual on the EU R&D BER 2023; rather, it is a practical tool for commercial lawyers aiming to confirm that an R&D agreement sits within the EU R&D BER 2023 and the accompanying Horizontal Guidelines. Introduction to the EU R&D BER 2023 Any arrangement that impacts trade or restricts competition in the EU may fall under the ban on anti‑competitive agreements in Article 101(1) TFEU. That said, an agreement will not be prohibited if it: meets the conditions for exemption under Article 101(3) TFEU, or benefits from a relevant...

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NEWS
EU competition and State aid: pharmaceutical enforcement 2018–2022, MEO test guidance on risk finance, mergers update (26 January 2024)

Competition policy Commission publishes report on enforcement of EU antitrust and merger control rules in the pharmaceutical sector between 2018–2022 The Commission has issued a report on competition enforcement—covering antitrust and merger control—in the pharmaceutical sector, outlining the activities undertaken by the Commission and national competition authorities during 2018 to 2022. It updates an earlier 2019 report that examined the period from 2009 to 2017. Alongside a broad overview of enforcement in pharmaceuticals, the report describes the sector’s key features that guide competition assessments and, through concrete and practical examples, clearly demonstrates how competition law action protected undertakings and consumers, including in the course of the Covid-19 crisis...

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NEWS
Daily EU competition law round-up: General Court appeals (Teva, Red Bull, Nvidia), mergers (Liberty/Dorna, Infravia/Iliad), State aid (Croatia, Austria), Foreign Subsidies Regulation (Amcor/Berry) — 24 February 2025

Antitrust A fresh appeal has been filed before the General Court in Case T- 19/25, Teva Pharmaceutical Industries and Teva Pharmaceuticals Europe v Commission, challenging the Commission’s decision in Teva (Copaxone) (AT.40588) and requesting that the fine-imposing infringement ruling be annulled—see further, application A fresh appeal has been submitted before the General Court in Case T- 682/24, Red Bull and Others v Commission, brought against the Commission for failing to reimburse additional costs incurred due to the disproportionate prolongation of an inspection—see further, application NOTE—For all...

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NEWS
EU competition law: Commission Phase I clearances (Kee Safety; Grand Bahamas Shipyard); new merger notifications; Broadcom/VMware decision documents; Finnish soft drinks tax not State aid

Mergers The Commission approved: the securing of joint control over Kee Safety Group by Inflexion Private Equity Partners LLP and 65 Equity Partners Pte. Ltd (M.11983) following a phase I investigation—for further details, see Midday Express the attainment of joint control of Grand Bahamas Shipyard Ltd...

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View the related Practice Notes about State aid

PRACTICE NOTES
Court of Justice of the European Union State aid appeals—live tracker of appeals from the General Court and recovery actions

This tracker monitors current Court of Justice appeals concerning State aid (Articles 107–109 TFEU) and other aid recovery actions. For concluded matters, consult Court of Justice State aid appeals—closed cases tracker. Note—closed appeals are transferred from this page to the closed trackers within seven days of the final ruling. For the Commission’s recent State aid decisions, see EU State aid decisions—ongoing cases tracker; for appeals pending before the General Court, see General Court State aid appeals—ongoing cases tracker; and for national references before the Court of Justice touching on State aid, see Court of Justice State aid national references—ongoing cases tracker. Appeals from the General Court Case C-306/26 P, LM v Commission — Appeal against the General Court’s order in Case T-261/25 declaring inadmissible an annulment action concerning parts of Commission decision SA.44944—Tax treatment of public casinos in Germany and SA.53552—Alleged guarantee for public casinos in Germany (Wirtschaftlichkeitsgarantie). Latest development: Lodged—07/04/2026. Case C-505/24 P, Condor Flugdienst v Ryanair —...

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PRACTICE NOTES
UK-EU TCA: Trade in Goods—Preferential Origin, MFN Tariffs, Import/Export Controls, Valuation, Remedies, Tariff Rate Quotas, SPS/TBT and Customs Facilitation

Introduction to the UK-EU Trade and Cooperation Agreement This Practice Note summarises the key features of the UK‑EU Trade and Cooperation Agreement (TCA) that affect trade in goods between the UK and the EU. It covers customs and export duties and other charges, and outlines the preferential rules of origin operating between the parties. It also considers import and export restrictions and licensing, customs valuation, trade remedies and tariff rate quotas. Further topics include sanitary and phytosanitary measures, technical barriers to trade, and measures on customs and trade facilitation. On 24 December 2020, UK and EU negotiators concluded an accord shaping their future relationship. The UK–EU Trade and Cooperation Agreement is a wide‑ranging instrument arising from the UK’s departure from the EU’s internal market (Brexit) and extends beyond trade in goods and services. It also covers a range of other Brexit‑related matters, including: investment competition state aid tax transparency air and road transport energy and sustainability fisheries data...

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PRACTICE NOTES
Sustainability agreements under EU competition law: 2023 Horizontal Guidelines, soft safe harbour for standardisation, application of Article 101(1) and 101(3) TFEU, and national developments

This Practice Note This Practice Note describes how sustainability agreements are assessed at present. It first indicates when sustainability initiatives and sustainability standardisation arrangements fall within Article 101 TFEU, as interpreted in the updated Horizontal Guidelines issued. It then recaps what the revised Horizontal Guidelines say about the circumstances and methods for justifying sustainability agreements under Article 101(3) TFEU in practice. Finally, it adds context by outlining recent national developments in this field also. Regulation (EU) No 1217/2010, the Research and Development Block Exemption Regulation (R&D BER 2010), and Regulation (EU) No 1218/2010, the Specialisation Block Exemption Regulation (SBER 2010)—collectively termed the Horizontal Block Exemption Regulations (HBERs)—together with the Guidelines on the Applicability of Article 101 TFEU to Horizontal Co-operation Agreements (Horizontal Guidelines), lapsed on 30 June 2023. As background, on 1 March 2022 the European Commission opened a public consultation, inviting interested stakeholders to submit views on drafts of the revised HBERs and on a draft revised Guidelines on the Applicability of Article 101 TFEU to Horizontal...

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PRECEDENTS
Consent to act as director and statement of non-disqualification – United Kingdom company appointment letter

The [ Secretary OR Directors ] [ insert company name ] [ insert company address ] [ Insert date ] Dear [ [ insert name ] OR Company Secretary ] Re: [ insert company name ] [ Limited OR PLC ] (the Company) Consent to act as director I agree to serve as a director of the Company. This consent will remain effective until I withdraw it, or until I resign from the role of director. I also confirm that I am not disqualified from holding a directorship. Accordingly, I provide the following particulars to aid the Company in notifying the appropriate authorities regarding my appointment as director: [ Name and any former names ] [ Usual residential address ] [ Country, state or part of the United Kingdom in which you are normally resident ] [ Service address if applicable ] [ Business occupation (if any) ] [ Nationality ] [ Date of...

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Q&As
Are s106 TCPA contributions caught by State aid rules or exempt?

State Aid: The Basics Guide The Department for Business, Innovation & Skills’ July 2015 guide, State Aid: The Basics Guide, explains that state aid arises wherever public resources are used to give organisations an edge over others, potentially distorting competition and harming consumers and businesses across the EU. The concept is deliberately wide, as an “advantage” can be delivered in many ways, for example: grants loans tax breaks the use or sale of a state asset free of charge or for less than market value Public authorities, including local authorities in England and Wales, are accountable for ensuring their policies and projects comply with these requirements. During the implementation period following Brexit, state aid rules continue to apply in the UK. The annex to the Department for Education’s November 2019 publication, Securing Developer Contributions for Education, notes that unlawful state aid can occur in relation to developer contributions towards education...

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