The Commission launches the first in-depth investigation under the Foreign Subsidies Regulation

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

Key conclusions

  • The Commission has preliminary concerns that e& may have received foreign subsidies that could distort the EU internal market, in particular in the form of an unlimited guarantee from the United Arab Emirates and loans from UAE-controlled banks that directly facilitated the transaction.
  • The Commission will assess whether foreign subsidies have actual or potential negative effects on the takeover process and the internal market in relation to the activities of the merged entity.
  • The Commission has 90 working days until 15 October 2024 to take a decision. The initiation of a detailed investigation does not prejudge its outcome.
  • The FSR requires companies to notify concentrations to the Commission when they reach certain turnover and foreign financial contribution thresholds. The Commission may accept obligations, prohibit the concentration or issue a no-objection decision.
  • The FSR Regulation is part of the EU’s efforts to ensure a level playing field for all companies operating in the internal market, while maintaining openness to trade and investment.


e& is a state-controlled telecommunications operator headquartered in the United Arab Emirates (UAE). PPF is a European telecommunications 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 enables the Commission to address distortions caused by foreign subsidies, thereby allowing 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 Regulation applies to foreign grants granted to enterprises conducting business activity in the EU, regardless of their origin, ownership or legal structure.

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

The FSR Regulation empowers the Commission to impose compensatory measures or adopt obligations to remedy the distortions caused by foreign subsidies. Remedies may include structural or behavioral measures such as divestment, licensing, access, transparency or repayment of a foreign grant. The Commission may also prohibit a 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.

Consequences for customers

The FSR Regulation introduces a new level of control for enterprises receiving foreign subsidies and conducting business in the EU. Companies should be aware of the notification obligations and potential remedies that may apply to their transactions, offerings or other market situations. Companies should also monitor developments in the Commission’s investigations and decisions under the FSR, as they will impact the interpretation and application of the new rules.

Our law firm has extensive experience and expertise in advising clients on competition, trade and investment matters in the EU. We can help clients assess the impact of the FSR on their business, prepare notifications and submissions to the Commission, and liaise with the Commission and other interested parties throughout the FSR proceedings. We can also advise clients on the implications of FSR for their contractual arrangements, due diligence processes and risk management strategies.

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