View this page on Reckon Online

Reckon home page

Philip Morris (State aid)

Court of Justice of the European Communities
Case C-730/79, Philip Morris Holland BV v Commission of the European Communities
[1980] ECR 2671
Judgment of 17 September 1980 available online (HTML, about 6 pages)

Concept of effect on trade under Article 87 (State aid)
Article numbers refer to the 1997 consolidated version of the EC Treaty.

The case was a challenge to a European Commission prohibition on State aid by the Dutch government to a Philip Morris cigarette plant in Holland.

The judgment clarifies two aspects of the concept of effect on trade between Member States under Article 87(1).

First, the effect does not need to be a restriction on competition, let alone a significant such restriction. The court rejected Philip Morris' argument that an analysis of the relevant markets and the application of "all the criteria for deciding whether there are any restrictions on competition under [ Article 81 and Article 82 ] of the Treaty" (paragraph 9) was a precondition for finding aid to be illegal under Article 87.

Second, the judgment clarifies that an actual effect of trade does not need to be proven: it is enough to establish a potential effect on trade between Member States.

The court's findings are captured in the following extract from paragraph 11:

"When State financial aid strengthens the position of an undertaking compared with other undertakings competing in intra-community trade the latter must be regarded as affected by that aid."

This page is managed by Reckon LLP. Users are encouraged to contribute relevant views and links. Use the "Edit this page" or "Add a comment" button above to edit the text or to add comments and notes. Advice on making contributions (including trackback) is in the Guidelines.

Last changed by Franck at 8:03 PM on Tuesday 22 November 2005.

Reference for this page:
Reckon Open "Philip Morris (State aid)" 2005-11-22T20:03:06
Link within Reckon Open: [[Philip Morris (State aid)]]