112 COMPETITION LAW IN TOURISM 1. INTRODUCTION As a part of competition law, the European State aid law is designed to protect and maintain undistorted market situations in the internal market. Compared with other parts of competition law, State aid law is regulating the activities and behaviour of the EUMember States, as by granting selective advantage to certain undertakings they can distort competition and affect trade relations. Tourism being and essential economic sector in Europe2, there is fierce competition for the consumer’s time and money. Consequently, State aid rules also apply in the tourism sector and limit the funding possibilities of the Member States. The present article will explain the general principles of State aid law, followed by an outlook on cases when the tourism sector was concerned. Individual cases from the EU jurisprudence and the Commission’s practice will be shown, and compatibility rules applicable for touristic projects will also be briefly explained. 2. THE PRINCIPLES OF STATE AID CONTROL The main provisions and principles of State aid law are laid down in Articles 107-109 of the Treaty on the Functioning of the European Union (TFEU). Although Article 107(1) TFEU sets a general ban to grant State aid, this ban is not absolute and, based on the empowerment of the TFEU, the European Commission3, the controlling body in the State aid field, can authorise the granting of aid formultiple reasons. Over the decades, the EuropeanCommission, as the centralised competition authority in the field of State aid, has developed a fairly complex system of exemptions and detailed compatibility conditions based on the relevant articles of the TFEU, which allows aid to be granted for different purposes4. As granting of State aid is generally prohibited, Article 108 TFEU requires the Member States to notify all their aid plans to the Commission before executing them (ex-ante notification obligation), and wait until the Commission 2 Source: https://ec.europa.eu/eurostat/web/tourism. 3 The TFEU also empowers the Council of the European Union to authorise aid granted by a Member State, but this happens quite rarely. 4 The list of these rules can be acceded at: https://ec.europa.eu/competition/state_aid/legislation/legislation. html.
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