Proposal for a Regulation on foreign subsidies distorting the internal market

Author (Corporate)
Series Details COM (2021) 223
Publication Date 05/05/2021
Content Type , ,


Legislative initiative tabled by the European Commission on 5 May 2021, aimed at establishing a new instrument to address potential distortive effects of foreign subsidies in the European Union's Single Market.

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The draft law proposes the introduction of three tools, two notification-based and a general market investigation tool. In this context, the European Commission acquires the power to investigate financial contributions granted by public authorities of a non-EU Member State which benefit companies engaging in an economic activity in the European Union and redress their distortive effects, as relevant.

The proposed Regulation aims at closing the regulatory gap in the Single Market, whereby subsidies granted by non-EU governments currently go largely unchecked, while subsidies granted by Member States are subject to close scrutiny.

This initiative was tabled on 5 May 2021, following the adoption of a White Paper on levelling the playing field as regards foreign subsidies in June 2020 and a consultation process with stakeholders. It is seen as a key element of an updated EU Industrial Strategy which was published on the same day. The plenary of the European Parliament adopted a negotiating position on 4 May 2022. The Council of the European Union adopted its general approach on that same day. An informal agreement between the co-legislators on compromise text for this file was reached on 30 June.

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Commentary and Analysis
White&Case: Alert, 07/05/2021: The European Commission adopts far-reaching proposals to control foreign subsidies,economic%20activity%20in%20the%20EU.
Federation of German Industries (BDI): News, 20/07/2021: Protection of the single market: Commission wants to control third-country subsidies
Linklaters: Blog, 07/09/2021: EU Foreign Subsidies and Antitrust: an ongoing quest towards certainty and clarity
Wolters Kluwer: Competition Law Blog, 16/11/2021: The EU Anti-Subsidy Regulation – Implications for M&A
Wolters Kluwer: Competition Law Blog, 10/05/2022: The EU Anti-Subsidy Regulation Enters Trilogue Negotiations – New Obligations for Multinationals Coming into Focus
Linklaters: Blog, 11/05/2022: The EU nears new rules to curb unfair competition from foreign subsidies
European Centre for International Political Economy (ECIPE): Blog, 13/05/2022: While We Look at the TTC Progress, a Risk May Rise Elsewhere
EPRS: Briefing, June 2022: Distortive foreign subsidies regulation: A level playing-field for the single market
CMS Law-Now: eAlerts, 24/06/2022: Regulation on foreign subsidies is heading for the finish line - European companies need to be prepared

Reuters, 05/05/2021: With eye on China, EU drafts rules to curb state-backed foreign buyers
Politico, 05/05/2021: EU launches proposal to tackle foreign subsidies
Euronews, 26/04/2022: EU lawmakers back reining in subsidised foreign companies
EurActiv, 05/05/2022: EU starts negotiations on distortive foreign subsidies regulation

EUR-LEX: SWD(2021)99: Staff Working Document accompanying the Proposal - Impact Assessment
EUR-LEX: SWD(2021)100: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment
European Parliament: Legislative Observatory: Procedure File for Proposal on Regulation on distortive foreign subsidies (2021/0114(COD))
European Parliament: Legislative Train Schedule: Regulation on distortive foreign subsidies
European Commission: Competition Policy: Foreign Subsidies
European Commission: Press Release, 05/05/2021: Commission proposes new Regulation to address distortions caused by foreign subsidies in the Single Market
European Commission: Questions and Answers: Proposal for new Regulation to address distortions caused by foreign subsidies in the Single Market (5 May 2021)
European Commission: Statement by Executive Vice-President Margrethe Vestager on the Commission's proposal for a new Regulation to address distortions caused by foreign subsidies in the Single Market (5 May 2021)
Finnish Government: Press Release, 17/06/2021: Government supports intervention in foreign subsidies that distort competition in the European Union, but insists on clear rules
EPP EP Group: News, 25/04/2022: Europe is open but not naive
European Parliament: Press Release, 04/05/2022: New tool to protect internal market against distortive foreign subsidies
Council of the European Union: Press Release, 04/05/2022: Regulating distortive foreign subsidies in the internal market: Council adopts position
Renew Europe EP Group: News, 04/05/2022: New rules against unfair foreign subsidies on the internal market
S&D EP Group: Newsroom, 04/05/2022: High time to stop unfair competition by companies receiving distortive foreign subsidies
Council of the European Union: Press Release, 30/06/2022: Foreign subsidies distorting the internal market: provisional political agreement between the Council and the European Parliament
European Parliament: Press Release, 30/06/2022: Agreement on foreign subsidies: ensuring equal competition in the EU
European Commission: Press Release, 30/06/2022: Foreign Subsidies: Commission welcomes political agreement on Regulation on distortive foreign subsidies
European Commission: Press remarks by Executive Vice-President Vestager for the political agreement on the Foreign Subsidies Regulation (30/06/2022)
EPP EP Group: Newsroom, 30/06/2022: You're welcome to Europe's market if you play by the rules
S&D EP Group: Newsroom, 30/06/2022: Parliament and EU governments reach deal to clamp down on unfair foreign competition to better protect European companies and jobs

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