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The ‘Effect on Trade’ Criterion in European Union State Aid Law: A Critical Approach

Bernadette Zelger


Keywords: Effect on Trade, Local Impact

This piece focuses on the second aspect of the fourth criterion for a measure to qualify as aid pursuant to Article 107(1) TFEU, namely whether a respective measure has an effect on trade between Member States or rather qualifies as purely local in nature. It will be demonstrated that the Commission’s existing guidance on the effect on trade criterion in its Notion of Aid Notice and its package of recent Commission decisions provide two main criteria which have to be considered when assessing whether or not a measure is local. Therefore, these packages, along with further guidance of the Commission on the effect on trade criterion in its Notion of Aid Notice, do provide a framework for identifying local measures, however, the framework provided does not pursue a ‘safe harbour’ approach like, for example, the Commission’s General Block Exemption Regulation or the De Minimis Regulation. This article provides a critical analysis of the existing legal framework and the Commission’s guidance in this respect, and concludes by suggesting a novel policy approach.
Keywords: Effect on Trade; Competition; Distortion; Notion of Aid.

Bernadette Zelger, Magistra iuris, Department of Law, Leopold-Franzens-University of Innsbruck, Innsbruck, Austria; LLM in Competition Law, School of Law, Queen Mary University of London, United Kingdom. The author wishes to thank Dr. Maria Ioannidou for her support, encouragement and comments on earlier drafts. Thanks are also due to Michael Weinberger for reading drafts and assisting with the written English. All errors and omissions remain the responsibility solely of the author.


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