The White & Case Foreign Subsidies Regulation Quarterly (FSRQ) is an information and discussion resource regarding the EU Foreign Subsidies Regulation. FSRQ provides updates on recent enforcement activity and trends.
Below is a selection of recent developments in Q2 2026 and the key FSR statistics for M&A deals.
Key Q2 2026 FSR developments
- First in-depth FSR merger into a Chinese acquirer
- Challenge of FSR information requests before the EU General Court
- Remedy in first completed FSR public procurement investigation
- Internal data protection rules for FSR investigations
First in-depth FSR merger into a Chinese acquirer
On 28 May 2026, the Commission opened an in-depth investigation into the proposed acquisition of CECONOMY AG ('CECONOMY') by JD.com, Inc. ('JD.com').
This is the first in-depth merger investigation opened by the Commission under the FSR involving a Chinese acquirer. The Commission has, however, previously opened four in-depth investigations into public procurement procedures involving Chinese entities and launched two ex officio investigations into Chinese companies under the FSR.
The Commission is investigating not only the financial terms of JD.com's offer but also the non-financial aspects of the offer, in particular the logistical and technological capabilities JD.com has proposed to combine with CECONOMY's retail network. One aspect of the investigation is whether the combination of an elevated offer price and a compelling operational offering served to deter rival bidders from making competing offers.
CECONOMY operates approximately 1,000 consumer electronics stores across 11 European countries through the MediaMarkt and Saturn brands. JD.com forms part of the JD Group, a Chinese group whose principal activities comprise retail business and an e-commerce marketplace platform in China. In the EU, JD Group's activities include retail operations mainly under the 'Joybuy' brand, as well as logistics and warehousing services.
Preliminary indication of foreign subsidies
The Commission considers that JD Group may have received the following foreign subsidies from China within the meaning of Article 3 FSR, granted in the three years preceding the announcement of the transaction:
- Preferential financing: debt instruments granted by financial institutions whose actions can be attributed to China on preferential terms that JD Group would not have obtained under normal market conditions;
- Tax measures: Chinese tax measures limited to certain undertakings that conferred a benefit through the foregoing of revenues otherwise due;
- Grants: Chinese grants limited to certain undertakings, either through schemes with restricted eligibility or through the exercise of discretion by the Chinese authorities; and
- Other financial contributions: further financial contributions potentially qualifying as foreign subsidies, to be examined in the course of the in-depth investigation.
Preliminary indications of distortion of the internal market
The Commission has identified two distinct channels through which the potential foreign subsidies may distort competition in the internal market: distortion arising in the acquisition process itself, and distortion in the post-transaction operations of the combined entity.
Distortion in the acquisition process
According to the Commission, the potential foreign subsidies may have improved JD Group's competitive position in the acquisition process by:
- releasing resources for financing the transaction; and
- contributing to securing management and shareholder support from the target through a high premium (JD.com offered €4.60 per share, approximately 43% above CECONOMY's undisturbed share price) and access to JD Group's potentially subsidised logistical and technological capabilities.
The Commission is also investigating whether the combination of price and JD Group's technological and logistics capabilities discouraged other potential bidders from making competing offers.
Distortion in the activities of the merged entity after the transaction
According to the Commission, the potential foreign subsidies may have bolstered JD Group's financial resources and logistical and technological capabilities, which could be integrated into the combined entity's operations, enabling business strategies harmful to competition in the internal market.
Procedure and possible outcomes
The Commission will conduct an in-depth investigation of 90 working days, with a decision due by 2 October 2026. Following the investigation, the Commission may issue a no-objection decision (where no distortion is found or the positive effects outweigh the negative effects); accept commitments that fully and effectively remedy the distortion identified; or prohibit the transaction.
Challenge of FSR information requests before the EU General Court
On 29 May 2026, Chinese wind-turbine manufacturer Goldwind Science & Technology brought proceedings before the EU General Court to contest information requests issued by the Commission in the course of an FSR investigation. The company is seeking both annulment of the requests and an interim order suspending compliance with the demands pending the outcome of the proceedings.
Goldwind has been subject to Commission scrutiny since April 2024, on the basis that grants, loans and favourable tax treatment may have enabled it to compete on advantageous terms in the European market. In February 2026, the Commission opened an in-depth investigation, having formed the preliminary view that Goldwind "may have been granted foreign subsidies that distort the internal market". The investigation will determine whether the company has acted in breach of the FSR and, if so, what corrective measures may be required.
As part of that in-depth investigation, the Commission issued information requests to Goldwind. It is those requests that form the subject matter of the present proceedings.
The use of information requests has emerged as a recurring point of legal contention in FSR enforcement. The underlying difficulty is that information concerning foreign subsidies is frequently held by or attributable to a foreign government, which can lead to questions about whether the Commission should have the right to access this information.
The Goldwind case follows proceedings brought earlier in 2026 by the Chinese security-scanner company Nuctech, which similarly contested information demands issued in the context of a separate FSR investigation (for details see previous edition of the FSRQ). On 15 May 2026, China's Ministry of Justice and Ministry of Commerce jointly declared the Commission's investigative measures against Chinese entities in its FSR investigation as an "improper extraterritorial jurisdiction measure" under Chinese law and prohibited any organisation or individual from complying or assisting with the Commission's investigation.
On 3 June 2026, the EU General Court handed down two significant judgments in Lagardère and Vivendi (see our alert here), clarifying the boundaries of the Commission's powers to issue requests for information (RFIs) in merger control proceedings. The standards established by the judgments regarding the extent of the Commission's powers to compel the production of documents are likely to be applied to broader antitrust investigations beyond the merger control sphere, including FSR investigations.
The proceedings are registered as Case T-335/26, Goldwind Science & Technology v Commission, and Case T-335/26 R, Goldwind Science & Technology v Commission (interim measures).
Remedy in first completed FSR public procurement investigation
The Commission has accepted commitments from a consortium bidding for a public contract to extend the Lisbon metro, marking the first occasion on which a full investigation under the FSR has been brought to a conclusion through voluntary remedial action by the parties concerned.
The consortium in question is led by Portuguese construction group Mota-Engil, which had originally included Portugal CRRC, a subsidiary of Chinese rolling stock manufacturer CRRC, as a subcontractor. Under the terms of the commitments accepted by the Commission, Portugal CRRC will be replaced by Polish rolling stock manufacturer Pojazdy Szynowe PESA Bydgoszcz Spółka Akcyjna (PESA), which has not received distortive foreign subsidies.
The Commission's investigation focused on state-linked financial support received by CRRC from Chinese public authorities, including €36 billion in public contracts, a €471 million subsidy, and a significant tax benefit. The in-depth investigation confirmed the Commission's preliminary findings, establishing that those subsidies had conferred an unfair competitive advantage on the consortium, to the detriment of other tenderers and the integrity of the internal market.
A significant procedural feature of the case is that the Commission's scrutiny extended to the role of a subcontractor. This approach is permitted under the FSR in respect of "main" subcontractors, generally understood to be those supplying more than 20% of the goods and services within a consortium. In the present case, CRRC had been contracted to supply 12 trams for the Lisbon project.
Although CRRC indicated to the Commission that it was prepared to withdraw from the consortium voluntarily, the Commission elected to continue its investigation, in part due to concerns that CRRC might seek to re-enter the tender through a different consortium arrangement. The Commission is understood to have been unable to obtain all of the evidence it sought in connection with CRRC's participation and reached its decision on the basis of the information available to it.
Two earlier FSR procurement investigations (one concerning rail services in Bulgaria and another relating to solar parks in Romania) were discontinued after the Chinese bidders involved withdrew from the relevant tender processes. The Lisbon case is accordingly the first in which the Commission has carried an investigation through to a substantive conclusion.
Internal data protection rules for FSR investigations
On 30 June 2026, the Commission adopted a Decision (C(2026) 4536 final) laying down internal rules governing the provision of information to data subjects and the restriction of certain data subject rights in relation to the processing of personal data for the purposes of investigation, enforcement and monitoring under the EU Foreign Subsidies Regulation.
The Decision establishes the internal rules to be followed by the Commission when informing data subjects of the processing of their personal data in accordance with Regulation (EU) 2018/1725, and sets out the conditions under which the Commission may restrict the application of certain data subject rights.
The Decision identifies three principal grounds on which restrictions may be applied:
- where the exercise of data subject rights would jeopardise the purpose of the Commission's investigative, enforcement and monitoring tasks under the FSR, for instance where there is a risk of evidence being destroyed or tampered with;
- where the exercise of those rights would adversely affect the protection of the data subject or the rights and freedoms of others, such as informants or other persons who have reported to the Commission; and
- where the exercise of those rights would jeopardise the Commission's cooperation with the competent authorities of the Member States.
Where a restriction is sought on the third ground (namely, to safeguard cooperation with Member State authorities), the Commission is required to consult the competent authorities of the relevant Member States on the potential grounds for imposing the restriction and on its necessity and proportionality, unless such consultation would itself jeopardise the Commission's activities.
Any restriction must respect the essence of fundamental rights and freedoms and be necessary and proportionate in a democratic society. Before applying a restriction, the Commission is required to carry out and document a case-by-case assessment of its necessity and proportionality, limited to what is strictly necessary to achieve its objective.
Article 3 requires the Commission to publish on its website a data protection notice informing all data subjects of the Commission's activities involving the processing of their personal data for the purposes of its investigation, enforcement and monitoring tasks under the FSR. The notice must provide information on the potential restrictions of data subjects' rights, specifying which rights may be restricted, the grounds on which restrictions may be applied, their potential duration, and data subjects' right to submit a complaint to the European Data Protection Supervisor. In addition to the general notice, the Commission is required to individually inform, by appropriate means, legal representatives and staff members of undertakings under investigation, as well as informants, about the processing of their personal data.
Key statistics – M&A deals
All statistics are updated as of 25 June 2026.
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