Free Competition and State Aid
Within the context of free competition in the Internal Market, Member State sometimes intervene through the use of public resources to promote certain economic activities or to protect national industries. By favoring certain firms over their competitors, this State Aid is liable to distort competition
The Treaty on the Functioning of the European Union prohibits the State Aids that falsify or threaten to falsify the competition on the Internal Market (art 108 TFEU and Regulation n.794/2004
adopted to increase the transparency and the juridical safety of State Aids).
The monitoring of State Aids carried out by the European Commission aims at striking balance between the positive and negative effect of such Aids.
There are some exceptions to this principle:
- Aids compatible with the Internal Market in accordance with Regulation 800/2008
- Regional Aids, Regulation 1628/2006