2.3.5 Criterion 5: The aid must distort competition in the common market

Some handbooks on State aid discuss criteria 5 and 6 together. Much could be said for this approach, because the conditions that trade between Member States must be affected and competition distorted, are as a general rule inextricably linked.1

The condition that aid must distort competition is easily met. This is because an actual effect on competition is not required; a potential effect is sufficient.2 However, a mere reference to the selective nature of the aid measure is insuf- ficient to prove that the aid distorts competition.3 Even if in certain cases the very circumstances in which the aid is granted are sufficient to show that the aid is capable of affecting trade between Member States and of distorting or threatening to distort competition, the Commission must at least set out those circumstances in the statement of reasons for its decision.4

With respect to the criterion that the aid must distort competition in the common market, the De minimis regulation5 is of great importance. This Regulation states that aid of no more than EUR 200.000 granted over a period of three years is not regarded as State aid within the meaning of Article 107(1) TFEU.6