Case C-124-10P EDF v COMMISSION: Putting the market investor test to the test?

The EDF case is of key importance for European state aid analysis in general and for the application of the so-called market investor principle in particular. In a modern economy the State assumes a variety of roles such as tax authority, shareholder, ultimate guarantor that certain public services are provided. The state also acts as quasi-financial or investment institution as a regulator of economic and social activity. Generally, state aid analysis is only concerned with the effects of a state measure – not the form of the measure nor indeed the overall objective of state intervention in the economy. The EDF case is important because it clarifies the relationship between the key concepts of form and effects in State aid analysis and gives guidance to the Commission on the type of analysis that needs to be performed on State measures, such as tax measures used to pursue certain objectives, before concluding that they can be considered ‘State aid’ within the meaning of Article 107(1) TFEU. This article argues that the EDF ruling injects a welcome dose of realism into State aid analysis at a time in which it is arguably becoming more difficult to pin down which of its many hats the State is wearing.