Antitrust Chronicle® – Foreign Subsidies

Dear Readers,

The EU Foreign Subsidies Regulation (“FSR”) entered into force on January 12, 2023 and will start to apply from July 12, 2023. As João Azevedo describes, the stated aim of the FSR is to protect the EU’s internal market from foreign subsidies which allegedly distort competition and thereby create a level playing field. The FSR grants the European Commission (“EC”) extensive powers to intervene against such potential distortions in relation to any economic activity, and a new notification regime for certain M&A transactions and public tenders, which is independent from current EU/national merger control and foreign direct investment (”FDI”) notification requirements. 

These new powers will enter into force in parallel with the existing State Aid and merger control rules that already apply within the EU and its Member States. Perhaps inevitably, the array of new potential regulatory obligations on extra-EU businesses operating within the EU internal market has provoked lively debate and criticisms. The articles in this Chronicle reflect the state of the art of this debate as the FSR is about to enter into force.

Christian Ahlborn & Carole Maczkovics note the extensive criticism of the draft implementing regulation of the FSR, especially in the context of large concentrations for which clearance must be obtained from the Commission where certain thresholds are exceeded. Their paper takes a close look at the potential distortion o