Subsidy control: guidance

Challenging subsidy decisions

Anyone whose interests may be affected by a subsidy or scheme, can make a challenge against it. 

Given the nature of the regime, someone is likely to have grounds to challenge a subsidy because their financial interests may be affected by it. A challenger is most likely to be a competitor of the beneficiary. 

The Secretary of State (Department for Business and Trade) can also challenge any subsidy because they have responsibility for ensuring that the UK remains compliant with its international commitments on subsidy control. 

An interested party can make a challenge by submitting an ‘application for review’ to the Competition Appeal Tribunal. This must be done within one calendar month of the subsidy or scheme being uploaded to the transparency database. 

However, an interested party also has one calendar month to make what’s called a ‘pre-action information request’ for any information they need to understand whether to challenge a subsidy. The public authority must provide this information within 28 days. After this, the interested party has a further calendar month to decide whether to proceed with a challenge.

Note, if a subsidy or scheme is not uploaded to the transparency database as per requirements held in the Act, the one calendar month challenge period will not commence and the subsidy/scheme will remain perpetually open to challenge.

Competition Appeal Tribunal (CAT)

If the interested party proceeds with the challenge, it will go to the Competition Appeal Tribunal. This is a specialist court that hears cases involving competition or economic regulatory issues.

The Tribunal will review the subsidy or scheme to judicial review standard to determine whether a subsidy decision was lawful. It won’t look at the merits or effectiveness of the subsidy. 

If the Tribunal finds that a subsidy decision was not lawful it may award remedies. These are the same remedies that the High Court or the Court of Session has. In Scotland those remedies include: orders for reduction, suspension or interdict.

But most importantly, there is a unique remedy of recovery available in challenges on subsidy control grounds. The Tribunal can order the public authority to recover some or all of a subsidy from the beneficiary.

The enforcement arrangements are designed to ensure compliance with the regime, and also give confidence to investors and businesses that public authorities will not give out excessively distortive subsidies. 

More information on the challenge process and Competition Appeal Tribunal (CAT) can be found in Chapter 13 of the Statutory Guidance and Part 5 of the Subsidy Control Act.