First EU Foreign Subsidies Probe Expected to Leave Key Questions Unanswered

First EU Foreign Subsidies Probe Expected to Leave Key Questions Unanswered

February 28, 2024, Global Competition Review

Johan Ysewyn's commentary was included in an article appearing in Global Competition Review on the European Commission’s Foreign Subsidies Regulation (FSR) powers.

Johan notes that it is notable that the commission’s first substantive probe under the new rules focuses on public procurement – and not a merger situation. This is not entirely surprising, as tackling the potentially distortive effect of foreign subsidies in a merger context may be “harder to determine” than in public procurement cases, where it's easier to compare the exact terms of the offer, he said.

It remains unclear how the enforcer will assess merger control situations under the regulation, which makes a future first in-depth investigation under that banner absolutely key, Johan said. He added that clarity in that area is especially important because of transparency concerns that practitioners have flagged about the commission’s decision-making under the new regulation.