26 State aids are transfers of state resources which provide selective support to particular companies. When the state confers even a limited advantage on an undertaking, there is usually a distortion, or risk of distortion, of competition. To protect competition across the EU, the European Commission provides a complex body of treaty-based legislation, frameworks and case law to establish which aid is, and is not allowable.
27 Aid is payable through a large variety of measures and instruments, including tax relief, soft loans and provisions to help prepare an undertaking for privatisation as well as grants and subsidies. As such, it is important that the state aid rules are considered from the onset of any proposal to ensure that proposed measures will be compatible with EU competition rules.
28 Further detail is available from the DTI and the European Commission.4
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4 See the DTI website (State Aid Policy Unit): http://www.dti.gov.uk and the European Commission's website on competition http://www.europa.eu.int.