The Concept of an “Economic Unit” in State Aid Matters and the Deggendorf Principle

ACEA, active in the electricity and water sectors, received unlawful and incompatible aid from the Italian State. The aid, granted under a scheme, was to be recovered. New individual aid, intended to also benefit ACEA and to support an energy saving project, was found compatible with the internal market. However, the European Commission opened a formal investigation procedure, based on the principle laid down by the Deggendorf case law, allowing it to make compatibility of the new aid conditional upon prior repayment of the earlier aid, in order to prevent any cumulative and therefore distorting effect. Before the Commission took a decision and following a series of reorganisations within th...