State Aid


For our European clients, Compass Lexecon’s economic experts draw on expertise in competition policy as well as in-depth regulatory and industry knowledge to address the challenges of governments granting State aid, companies receiving it, and the courts tasked with safeguarding competitive conditions.

Our economic experts offer clients analysis and advice on State aid in various contexts including:

  • Evaluating whether a given measure constitutes State aid by performing a market economy operator principle (MEOP) test
  • Comparing the net present value of an investment with and without aid to assess the aid’s incentive effect
  • Assessing how far a proposed or actual measure distorts market competition
  • Designing behavioral and structural remedies for recipients if a measure is deemed anti-competitive
  • Evaluating whether State aid complies with European Commission rules

To do this, our experts leverage cutting-edge economic analysis techniques and tools to interpret regulatory guidelines and their implications for each type of aid. This enables them to develop a framework for robust quantitative and qualitative assessment of any measure under consideration.

Our Energy Practice knows how to work with both transmission system operators (TSOs) and regulators on State aid compliance reviews relating to capacity market design and strategic reserve schemes. We also advise on renewable energy generation subsidies.

When questions arise about whether a measure constitutes State aid, and if that aid is permissible, Compass Lexecon’s economic consultants guide clients toward the best and fairest outcome, thanks to their industry expertise, detailed regulatory understanding, and command of the theory and practice of competition economics.

A new version of Compass Lexecon is available.