State Aid
In Simple Terms
Government support to businesses (grants, tax breaks, subsidized loans) that is generally prohibited under EU law if it distorts competition in the internal market.
Formal Legal Definition
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, incompatible with the internal market under Article 107(1) TFEU.
Practical Example
If the Finnish government gives a tax break to a specific company that its competitors don't receive, this may constitute illegal state aid requiring Commission approval or the aid must be repaid.
Why It Matters
State aid rules ensure fair competition across the EU internal market. Unapproved aid can be ordered to be repaid even years later, creating significant financial risk for recipient companies.
Related Terms
How snowLEX helps with State Aid
snowLEX can help you analyze whether a government measure constitutes state aid, find relevant Commission decisions, and understand the block exemption regulations.
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