The 2014 Block Exemption Regulation of State Aid Control in the EU
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Unlike other competition regimes, the EU controls State aids of Member States. An undertaking that receives a State’s support obtains an advantage over its rivals in the market, and this may distort competition and inter-State trade. Therefore, the EU competition rules of State aid, which have a characteristic of international law, prohibit subsidies for undertakings, except when the aids can be justified. In particular, EU State aid control aims at ensuring a level functioning of the internal market, preventing market entry barriers and the inhibition of competition resulting from State protectionism of the market. Whilst the subject of State aid is important in the EU, it has not been highlighted in Korea. However, because the number of beneficiary undertakings from Korea is growing, the demand for study on State aid is also increasing. Furthermore, the EU State aid control is considered as a role model for the international trade regime. Moreover, the Korea-EU FTA includes the provision of State aid. This provision implies that understanding EU competition rules on State aid has become crucial for Korean firms. This article thus aims at introducing the recent development of EU law regarding State aid control, focusing on the newly adopted block exemption regulation of 2014 and the development of Ordoliberalism in the EU competition regime that is distinctive.
Abstract
Unlike other competition regimes, the EU controls State aids of Member States. An undertaking that receives a State’s support obtains an advantage over its rivals in the market, and this may distort competition and inter-State trade. Therefore, the EU competition rules of State aid, which have a characteristic of international law, prohibit subsidies for undertakings, except when the aids can be justified. In particular, EU State aid control aims at ensuring a level functioning of the internal market, preventing market entry barriers and the inhibition of competition resulting from State protectionism of the market. Whilst the subject of State aid is important in the EU, it has not been highlighted in Korea. However, because the number of beneficiary undertakings from Korea is growing, the demand for study on State aid is also increasing. Furthermore, the EU State aid control is considered as a role model for the international trade regime. Moreover, the Korea-EU FTA includes the provision of State aid. This provision implies that understanding EU competition rules on State aid has become crucial for Korean firms. This article thus aims at introducing the recent development of EU law regarding State aid control, focusing on the newly adopted block exemption regulation of 2014 and the development of Ordoliberalism in the EU competition regime that is distinctive.
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