The paper analyses the Commission's power to exempt aid to promote culture and heritage conservation from the general prohibition laid down in Article 87 (1) EC. The so called cultural derogation has been used to approve aid to the audiovisual sector, printed cultural media, museums, national heritage as well as aid for theatre and music. Furthermore the paper examines the cases where the public support may not constitute State aid because it may not affect trade between Member States or because the aided cultural activity is not economic with the meaning of EC state aid rules. Moreover the author analyses the Commission's decisions in the film industry, in particular those where the "cultural test" has been applied. In conclusion it results from this review that the Commission is very much involved in the cultural sector and this may represent an aspect of the erosion of Member States' competence from the community action in this sector.