Following an investigation, the European Commission (Commission) concluded that a preferential electricity tariff scheme in Sardinia which favoured three metal producing companies amounted to illegal state aid. Italy argued that it had to subsidise the three companies, Portovesme (a zinc and lead producer), Eurallumina (an aluminium producer) and ILA (which produces aluminium products), to compensate for the fact that electricity is more expensive in Sardinia. The Commission was not swayed by this argument on the grounds that compensation for higher energy costs distorts competition and could result in a “subsidy race” within the EU. The Commission has called upon Italy to recover €12m from Portovesme, €5m from Eurallumina and €300,000 from ILA.