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The content concerns Finnish legislation.
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  2. Public Procurement and Competition Law⁠
  3. State Aid⁠
  4. What is State Aid?
  1. State Aid

What is State Aid?

The objective of state aid control is, as laid down in the founding Treaties of the European Union, to ensure that government interventions do not distort competition and trade inside the EU. In this respect, state aid is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities.

Article 107(1) of the Treaty on the Functioning of the European Union states the following:

“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.”

The EU state aid rules are founded on the interpretation of this Article as well as the case law of the European Courts of Justice.

Four cumulative criteria comprise the definition of state aid: the involvement of state resources, the selectivity of the measure, the impact on competition and the impact on trade.

Related articles

  • When is State Aid Allowed?

    Once it has been established that the four criteria of the definition of state aid are fulfilled and the measure therefore constitutes state aid in the meaning of state aid rules, the measure may not be implemented before the European Commission has analysed the compatibility of the measure with the Common Market.
    Read article
  • How Unlawful State Aid is Recovered

    Under state aid rules, the Commission has the duty to order member states to recover state aids that have been found incompatible with the Common Market and have been granted without prior notification to the Commission.
    Read article

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