THE IMPACT OF COVID-19 ON COMPETITION LAW 107 Regulation, and the Commission is wary of mergers that are likely to limit innovation (a concern occurring predominantly in research-based industries). II.2.3. STATE AID In the EU, contrary to most countries around the world, State aid (government support) is a legal issue. When the founding fathers set up the first European Community, they knew too well the historic pattern subsidy races, whereby national governments supported their national champions to bolster their international competitiveness. The EU Treaty established the principle that, in order to create a level playing field in the Single Market, any national aid must be in line with the Treaty objectives and be approved in one form or another by the European Commission. The reality is that State aid for the tourism sector can be – and has been – granted for several reasons, including regional development, sector development, sustainability reasons and many others. There are many ways of “slotting” such aid into the system7. III. THE NEW WORLD: POST-COVID-19 III.1. The Competitive Environment The author’s personal assessment, based on the currently available information, is that, for the next couple of years, the competitive environment will change, but not entirely. Indeed, we witness an unprecedented challenge to the global economy, but there is also much dramatisation and negativism in the media, which has a historical tendency to emphasise the negative and ephemeral. As Romain Papy has emphasised in his presentation for this conference8, the airline industry has always recovered fairly quickly from any crisis in the past. Why would it be any different now? Still, some things will change, at least temporarily. Many tourists will be more “health risk-aware”, and there may be travel restrictions and a reduced offering. 7 See Bertold Bär-Bouyssière’s commentary on EU State aid law (Articles 107-109 TFEU), in German language, that can be found in: EU-Kommentar, Nomos, 4th edition, 2019, a collective work initiated and edited by Professor Jürgen Schwarze of Freiburg University. 8 Romain Papy’s presentation “Beyond the EU State Aid Temporary Framework in the Aviation Sector” at the International Web Conference on The Legal Impacts of COVID-19 in the Travel, Tourism and Hospitality Industry, ESHTE/INATEL/USAL, 20-24 April 2020.
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