The European Commission has today launched a public consultation on a draft of the Guidelines for the implementation of the Foreign Subsidies Regulation (‘FSR Guidelines). Interested parties have eight weeks to comment, until September 12, 2025.
This consultation follows a Call for Evidence from March 2025 regarding the FSR Guidelines. The Commission also consulted Member States and selected stakeholders representing various sectors.
The draft FSR Guidelines clarify:
- how the Commission determines competition distortion due to foreign subsidies in mergers, public procurement, and reviews;
- the balancing test for evaluating whether the positive impacts of a subsidy outweigh its distortive effects;
- the Commissions authority to request prior notifications for mergers or foreign financial contributions below notification thresholds.
To assess distortion, two conditions must be met: the foreign subsidy should enhance the companys competitive position and negatively impact competition.
The draft Guidelines further explain how to assess whether a tender is unduly advantageous in public procurement due to foreign subsidies and clarify the criteria for justifying such advantages.
They also provide guidance on the balancing test, detailing the positive effects of subsidies and confirming their relevance to the specific subsidy in question.
Lastly, the draft Guidelines outline the conditions under which the Commission can request prior notifications of mergers and foreign financial contributions.
For more information about the public consultation, visit here.
Next steps
The consultation is open until September 12, 2025. The draft FSR Guidelines will be discussed with the FSR Advisory Committee in late 2025 and published by January 2026.
Background
The Foreign Subsidies Regulation took effect on July 13, 2023, enabling the Commission to address distortions in the internal market caused by foreign subsidies.
Further details can be found on the Commissions competition website and the Commissions “Have your say” portal.