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Legal Framework : Article 107

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Legal framework - Article 107 (1) TFEU

According to Article 107 (1) of TFEU, which contains a general prohibition of certain forms of State aid, five cumulative criteria’s must be fulfilled in order to constitute State aid. Firstly, the aid must be granted by a “Member State or through State resources”, Secondly, the aid must be granted to “undertakings”. Thirdly, the State intervention must distort or threaten to distort competition and affect intra-trade between Member states. Fourthly, it must favour (confer an advantage on) the recipient of the aid, and fifthly, a state measure must favour “certain undertakings or the production of certain goods” (selectivity).
In the opening decision against, the main question is whether the tax ruling in question (confirming the APA) conferred an economic advantage upon Starbucks BV .
Since, the Dutch tax authorities did issue the tax rulings in question and they resulted in a loss of tax revenue (reduction of the State budget), and the Starbucks Group operate across the EU, and any state support will or has the potential to threaten the intra-trade between Member States , the fulfilments of the first, second, and third conditions are rather unproblematic or as stated by the EC “relatively “straightforward” .
Considering that the tax rulings seem “designed” and therefore exclusively reserved for the companies concerned the fulfilment of selectivity seems also met . In consequence, in order to determine whether the EC’s assessment
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