European Commission Clears First Acquisition Under EU Foreign Subsidies Regulation

In a highly anticipated decision, the European Commission (Commission) granted, on September 24, conditional approval for Emirates Telecommunications Group Company PJSC to acquire sole control of PPF Telecom Group B.V., excluding its Czech operations. This approval was issued under Regulation (EU) No 2022/2560 of the European Parliament and of the Council on foreign subsidies distorting the internal market (FSR) with stringent commitments to ensure fair competition within the EU single market.

This marks the first formal decision made under this new legal instrument, which sits at the intersection of merger control and State aid law. The FSR, in effect as of July 12, 2023, empowers the Commission to address potential market distortions caused by foreign subsidies, and is considered to be a critical tool to ensure fair competition within the EU while maintaining an open stance toward trade and investment.