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This article considers the longstanding question of the circumstances in which a State measure granting exclusive rights violates art.106(1) TFEU in conjunction with art.102 TFEU, and provides a critical assessment of the "effects theory", which was first rejected by the General Court and then endorsed on appeal by the Court of Justice in the Greek Lignite case. It is argued that the application of art.106(1) together with art.102 TFEU should not be based simply on the anti-competitive foreclosure effects of a State measure, making abusive conduct totally irrelevant. The article argues that identifying abusive conduct, even if it is only potential, and establishing a causal link between a State measure and abusive behaviour are two separate but equally important steps in the combined application of arts 106(1) and 102 TFEU, and discusses whether following Greek Lignite there is a clear and absolute choice in favour of the "effects theory".
