Commission launches first in-depth investigation under Foreign Subsidies Regulation

On 10 June 2024, the European Commission announced that it had opened an in-depth investigation to assess, on the basis of the Foreign Subsidies Regulation (FSR), the acquisition of sole control over PPF Telecom Group BV (PPF) by Emirates Telecommunications Group Company PJSC (e&), excluding its Czech business. This is the first in-depth investigation under the FSR, which entered into force on 12 July 2023 and aims to eliminate distortions in the EU internal market caused by foreign subsidies.

The central theses

  • The Commission has preliminary concerns that e& may have received foreign subsidies that could lead to distortions in the EU internal market. In particular, these subsidies may have taken the form of an unlimited guarantee from the United Arab Emirates and a loan from banks controlled by the United Arab Emirates, which directly facilitated the transaction.
  • The Commission will examine whether the foreign subsidies have actual or potential negative effects on the acquisition process and the internal market with regard to the activities of the merged entity.
  • The Commission must take a decision within 90 working days (i.e. by 15 October 2024). The opening of an in-depth investigation does not prejudge the outcome of the investigation.
  • Under the FSR, companies must notify mergers to the Commission if certain turnover and foreign financial contribution thresholds are met. The Commission may accept commitments, prohibit the merger or issue a consent decision.
  • The FSR is part of the EU’s efforts to ensure a level playing field for all companies operating in the internal market while remaining open to trade and investment.


e& is a state-controlled telecom operator based in the United Arab Emirates (UAE). PPF is a European telecom operator and a subsidiary of the PPF Group. PPF operates in the Czech Republic, Bulgaria, Hungary, Serbia (Yettel) and Slovakia (O2). The transaction was notified to the Commission on 26 April 2024.

The FSR is a new set of rules that allows the Commission to address distortions of competition caused by foreign subsidies. This will enable the EU to ensure a level playing field for all companies operating in the internal market while remaining open to trade and investment. The FSR applies to foreign subsidies to companies carrying out economic activities in the EU, regardless of their origin, ownership or legal form.

The FSR covers three types of situations: (i) mergers involving foreign subsidies, (ii) public procurement tenders involving foreign subsidies, and (iii) other market situations involving foreign subsidies. The FSR provides a notification system for mergers and public procurement procedures, as well as a general market investigation tool for other situations. The FSR also establishes a cooperation mechanism with third countries to facilitate the exchange of information and the resolution of concerns.

The FSR empowers the Commission to impose remedies or accept commitments to eliminate the distortions of competition caused by foreign subsidies. The remedies may include structural or behavioural remedies such as divestment, licensing, access, transparency or repayment of the foreign subsidy. The Commission may also prohibit concentration or exclude a bidder from a public procurement procedure if the foreign subsidy cannot be remedied.

The FSR complements existing EU rules on competition, trade and investment and does not affect the rights and obligations of the EU and its Member States under international agreements.

Impact on customers

The FSR introduces a new level of control for companies receiving foreign subsidies and carrying out economic activities in the EU. Companies should be aware of the reporting obligations and possible remedies that may apply to their transactions, offers or other market situations. Companies should also follow the developments of the Commission’s investigations and decisions under the FSR, as these will influence the interpretation and application of the new rules.

Our law firm has extensive experience and expertise in advising clients on EU competition, trade and investment issues. We can assist clients in assessing the impact of the FSR on their activities, preparing communications and submissions to the Commission and cooperating with the Commission and other stakeholders throughout the FSR process. We can also advise clients on the impact of the FSR on their contractual arrangements, due diligence processes and risk management strategies.

Please do not hesitate to contact us if you have any questions or concerns regarding the FSR or the Commission’s investigation into e&’s acquisition of PPF.