STATE AIDS AND THE CONSEQUENCES OF THEIR ILLEGALITY UNDER EC LAW

Abstract

The prohibition ofState aids in the EC Treaty applies where competition is distorted by benefits that take theform either ofthe giving ofState resources to one or more undertakings or ofthe State abstainingfrom collect{ng, from one or more undertakings, resources that the State would otherwise be entitled to collect from them. Although State aids are defined in very broad terms, the concept ofa State aid does not extend to: State action that does not involve a disposal ofState resources in either a positive sense (in theform ofa grant of State resources) or in a negative sense (in theform ofthe State refraining/rom collecting resources from an undertaking); and State action that is indistinguishablefrom the decisions ofprivate sector commercial undertakings. Ifthe grant ofState aid is prohibited, it must be recoveredfrom the recipient ofthe aid andfew defences to recovery are available. 

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