International Antitrust Law & Policy: Fordham Corporate Law 2001 - Hardcover
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Chapter 4a
STATE AIDS CONTROL AND THE
DISTORTION OF COMPETITION
—UNBUNDLING ‘‘DISTORTION’’
Eleanor M. Fox†
I. INTRODUCTION
In her provocative paper, ‘‘Competition Policy, State Aid and State
Enterprises,’’1 Adinda Sinnaeve notes with favor the increasing purview for
the European ban on unjustified state aids; the coming of age of state aid
policy in the competition system, with block exemptions and greater
predictability; the expansion of EU state aid policy to the candidate countries
and other trade partners; and ultimately, the hope of using the EU model for
prohibiting unjustified state aids as a model for nations and regions of the
world. She stresses the unity of state aid policy as a subset of competition
policy in the following senses: It, like antitrust and merger control, is
intended to prevent distortions of competition. The EU unifies competition
policy by demanding that neither states nor private enterprise distort
competition. ‘‘[T]he creation of a level-playing field for all enterprises
requires that State interventions disturbing this level-playing field be
brought under control.’’
In this eassay I probe these ideas. I use the occasion to explore the
meaning of ‘‘distortion of competition.’’
Part One of this comment places state aid policy in a perspective different
from that suggested by the paper, and doing so, it suggests why the European
model is not necessarily optimal for some other states and regions. Part Two
examines use of the concept ‘‘distortion of competition’’ in an array of EU
cases and observes that competition itself might be treated as distortive. Part
Three concludes.
As background for the essay, I try my own hand at unbundling ‘‘distortion
of competition.’’ That is, I observe its use, across several fields of EC law, in
all of the following senses:
1) Vertical restraints by private firms, such as exclusive contracts, may
impair or block competitors’ market access, shifting market share on
the basis of privilege or power;
Eleanor M. Fox is Walter J. Derenberg Professor of Trade Regulation at New
York University School of Law.
