The European Commission’s first investigation under the European Union’s foreign subsidies regulation is an excellent test case and provides good insight into how the commission will approach public procurement cases, McGuireWoods London partner Matthew Hall wrote in a March 19, 2024, Law360 article.
The European Commission on Feb. 16 launched an investigation into whether government subsidies gave a Chinese train-maker an unfair advantage in its bid for a Bulgarian government contract. The investigation is a textbook example of the intent behind the European Union Foreign Subsidies Regulation (EU FSR), which took effect on July 12, 2023, Hall wrote. The EU FSR doesn’t single out any country, but Chinese companies have been suspected of using government subsidies to undercut competition in the EU, Hall noted.
“The result of the investigation should be closely watched by any company active in large public procurement procedures in the EU that may have received foreign financial contributions, whether the bidder is based in China, the Middle East or even close EU trading partners and allies, such as the U.S. and U.K.,” wrote Hall, an antitrust lawyer and member of McGuireWoods’ Government Investigations & White Collar Litigation Department.