Following complaints from two major players in the European film sector, the European Commission has initiated formal investigation proceedings into the funding of the Ciudad de la Luz film studio complex near Alicante, Spain. Films shot at this complex include “Asterix and the Olympic Games”. The investigation puts into question whether public funding provided by Valencia’s regional government, amounting to over EUR 200 million, constitutes unlawful State aid. The Spanish authorities claim that any private investor would have invested on the same terms and that, for this reason, the investment does not constitute State aid. The Commission doubts, however, that a private investor would have provided 100 per cent funding for such a new, large scale entrant in a competitive market. Interested parties are invited to submit their comments.