Research Handbook on European State Aid Law
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Research Handbook on European State Aid Law

Edited by Erika Szyszczak

This timely new Handbook reflects on current issues that confront State aid law and policy in the EU.
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Chapter 8: The Concept of Selectivity?

Andreas Bartosch


Andreas Bartosch Like a human being the concept of selectivity has two legs. One is its geographical dimension, the other its material one. Whilst the former has been clarified to a large extent by the EU Courts in the more recent past, the latter still remains a highly controversial subject as is evidenced by the numerous publications that have been dedicated to it.1 One of the conditions of the prohibition on the granting of State aid laid down in Article 107 TFEU is ‘the favouring of certain undertakings or the production of certain goods’ which is commonly referred to as the notion of selectivity. This concept of selectivity consists of two components, the first component being a geographical one, meaning in essence that a measure is selective if undertakings in a specific part of the entire territory of a Member State are treated differently, that is, more favourably than in the rest of this territory, and, the second component, a material one looking at all other forms of unequal treatment of undertakings by the intervention of a Member State. This chapter covers both notions of selectivity, but places greater emphasis on the much more controversial concept of material selectivity. As will be explored in some detail on the basis of the pertinent jurisprudence of the EU Courts, I assert that the same rules apply when it comes to selectivity, whether material or geographical, inside and outside the area of fiscal measures. I. GEOGRAPHICAL SELECTIVITY The notion of territorial or geographic...

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