Common use of Selectivity Clause in Contracts

Selectivity. In order to constitute state aid a measure must favour certain undertakings or 36 the production of certain goods. A measure that is general in its application does not meet the selectivity condition. Individual measures that provide an advantage to one undertaking will be selective. Also general schemes are typ- ically set up in a way so as to exclude certain undertakings. They may be target- ed at a certain sector (rail transport and not road), or a certain type of activity (renewable but not non-renewable energy) and thereby be selective. The selectivity issue typically comes to the fore with tax or tax-like mea- 37 sures. In order to assess whether a measure such as a tax exemption provides an advantage that is selective, a three-step analysis is applied. First, the system of reference must be identified. Second, the position of the undertaking benefitting 37 Case C-280/00, 24.7.2003, Altmark, at para. 94.