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Regulation on foreign subsidies distorting the internal market

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EU flag in front of parliament

On 28 November 2022, the EU institutions formally adopted a Regulation on foreign subsidies distorting the internal market. The new rules will have a major impact on M&A transactions and will significantly increase the administrative burden facing many EU and non-EU companies doing business in Europe. The Regulation is part of a broader effort to protect the EU’s geopolitical “open strategic autonomy”. It aims to level the playing field by allowing the European Commission to intervene where foreign subsidies granted directly or indirectly by third countries threaten to distort the EU internal market.