The Proposed Regulation on Foreign Subsidies Distorting the Internal Market:

The European Commission sees the control of foreign subsidies as a top priority set out in its 2021 Work Programme. According to the Commission, there are three general areas where such distortions manifest themselves – acquisitions of European undertakings; public procurement procedures; and the general market operation of economic operators active in the European Union. Consequently, on May 5, 2021 the Commission has adopted its legislative proposal for a Regulation on Foreign Subsidies Distorting the Internal Market aimed at ‘levelling the playing field’ in these three areas. This paper will focus on the third area. It seeks to answer the question whether the proposed solution is capable of solving the problem of an unfair advantage to foreign companies over their European competitors in the Internal Market, or whether it will remain a dead letter. The EU has its own ‘internal’ anti-subsidy system – the State aid law. Its vast acquis will serve as a conceptual lens in this paper. Firstly, because of the Commission's extensive experience in this area suggesting the likelihood that the new framework will be interpreted with a ‘State aid mindset’. Secondly, because many relevant subsidy-related problems were initially encountered there. And in this regard, thirdly, will provide a reference point for analysing challenges of international subsidy control in the absence of enforcement similar to that available in the EU.