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In this episode of S&C\u2019s Critical Insights, Juan Rodriguez, Co-Head of S&C\u2019s European Competition Group and the Firm\u2019s Antitrust Group, and associate Marielena Doeding discuss the European Court of Justice\u2019s ruling in the Fiat case and its implication for future state aid investigations. This landmark judgment\u2014in which the Court of Justice annulled a General Court judgment and European Commission decision \u2013clarified the parameters under which the Commission may investigate individual tax rulings under state aid rules. Although the judgment reaffirms that the Commission may investigate tax measures for compliance with state aid rules, in doing so, it cannot apply its own version of the arm\u2019s length principle to tax measures; in particular, it cannot apply the arm\u2019s length principle to tax measures in jurisdictions unless \u2013 and then only to the extent that \u2013 the law of the jurisdiction incorporates that principle. Instead, the Commission must carefully consider national tax rules to assess whether or not a measure confers a selective advantage for state aid purposes.\nSullivan & Cromwell represented Fiat in this litigation.