State Aid Procedural Regulation Grants More Powers to the European Commission

by McDermott Will & Emery

New rules of procedure in EU State aid investigations will enter into force very soon. The European Commission will, for the first time, have the opportunity to request information from entities other than the EU Member State concerned, such as public and private companies that are not subject of a State aid investigation themselves. Companies will be obliged to respond to the information request and fines might be imposed for failing to respond on time or providing incorrect, misleading or incomplete information. Other major changes include a more restrictive approach in dealing with complaints and the European Commission now being able to conduct inquiries across various EU Member States into a particular sector.

On 23 July 2013, the Council of the European Union adopted changes to the Procedural Regulation, which specifies the rules of procedure in EU State aid investigations. All companies in the European Union—including those not benefitting from State aid themselves—should be aware of the changes, especially as the text will soon enter into force and fines will be imposed for non-compliance. The most significant policy changes are outlined below and relate to, amongst other things, the European Commission’s (Commission) information gathering powers and the formal requirements for complaints to the Commission.

Information Gathering in Individual EU State Aid Investigations

In the European Union, public authorities are prohibited from granting State aid to public or private companies, unless the aid has been approved by the Commission, which has exclusive competence to authorise it. The Commission can initiate an investigation following a notification by the EU Member State granting the aid, on its own initiative or following a complaint.

The revised Procedural Regulation significantly widens the Commission’s ability to gather information in EU State aid investigations. In the past, the EU Member State concerned was the only source of information, i.e., the Commission did not have the power to request information from any other entity than the relevant EU Member State, not even from the beneficiary of the aid. The Commission had to rely on the information provided by the EU Member State involved and any publicly available information.

The revised Procedural Regulation foresees for the first time the possibility for the Commission, after the opening of a formal investigation procedure, to request information from third parties such as other EU Member States, public and private companies and trade associations. The Commission will only require the approval by the EU Member State concerned for information requests directed at the aid beneficiary. Other than this restriction, the EU Member State has no way of objecting to the gathering of information from third parties.

Companies and trade associations will be obliged to respond to the Commission’s information requests comprehensively. The Commission may impose fines of up to 1 per cent of the total turnover in the preceding business year where companies or trade associations supply incorrect or misleading information. Failure to provide information can be fined with periodic penalty payments of up to 5 per cent of the company or association’s average daily turnover in the preceding business year for each working day of delay.

It can be expected that the consequences of the Commission’s new information gathering rights will be manifold. The Commission will no longer be dependent on the information provided by the EU Member State concerned for the assessment of the measure under investigation. At the same time, EU Member States “lose control” over State aid procedures insofar as they can no longer control the selection of information provided to the Commission. Public and private companies may be confronted with the administrative burden of responding to information requests or fines for failure to respond completely and correctly, even if they do not benefit from State aid themselves. In addition, it is important to note that these companies might be required to submit information that indicates they received illegal State aid themselves, which might potentially prompt the Commission to start a separate State aid investigation against the companies concerned.

The Commission can make use of its new information gathering powers as soon as the changes to the Procedural Regulation enter into force, which will be 20 days after their publication in the Official Journal of the European Union.

Sector Inquiries

The revised Procedural Regulation allows the Commission to conduct an inquiry across various EU Member States into a particular sector. Such sector inquiries, which are already possible under antitrust law, are supposed to assist the Commission in assessing individual cases and formulating sector-specific guidelines.

On one hand, the introduction of this tool will be appreciated by public authorities and public and private companies. Previously, in some sectors, the Commission had to open numerous investigation procedures to gather the information necessary to adopt sector-specific guidelines for, e.g., the aviation sector. This approach, which will no longer be necessary under the revised Procedural Regulation, created enormous difficulties for the companies concerned. On the other hand, the Commission now has the option to open formal investigation procedures on the basis of the information received in the sector inquiry. Furthermore, sector inquiries may burden companies that are not benefitting from State aid themselves.

More Restrictive Approach in Dealing with Complaints

The Commission is currently obliged to adopt a formal decision on all cases initiated by complaints received in any form whatsoever, even if the complaint is not well-founded from a factual or legal point of view. In order to reduce the number of unfounded State aid complaints, and thereby the administrative burden for the Commission, the revised Procedural Regulation introduces a compulsory complaints form.

Complainants are now required to submit a certain amount of mandatory information. Exactly what information is required and how concrete it needs to be will be revealed when the Commission publishes the complaint form. If complainants fail to provide the mandatory information, or the facts do not provide sufficient grounds to show the existence of unlawful aid, the Commission can more easily reject the complaint and will no longer be under an obligation to adopt a formal decision.

A Missed Opportunity

Despite the significant changes introduced by the revised Procedural Regulation, it may be seen as a missed opportunity to formalise the role of the aid beneficiary in EU State aid investigations. Only the EU Member State concerned continues to have procedural rights in State aid investigations. For aid beneficiaries, it can be highly unsatisfactory to be the object of the investigation without having any procedural rights, especially as the beneficiary will—in the case of a negative decision—be required to repay any illegal State aid.

Katharina Dietz, a paralegal at McDermott Will & Emery’s Brussels office, also contributed to the article.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.