Dear Readers,

Competition rules inevitably interact and come into conflict with other domains of economic regulation. This is very clear in the case of rules concerning government (and, in particular, foreign) subsidies. Both concern distortions of competition, but the former focuses on the conduct of private companies, whereas the latter constrains the actions of governments.

In the EU, for example, this dichotomy is reflected in the distinction between the antitrust rules (Articles 101 and 102 TFEU) and the State Aid rules (Articles 107 et seq). Moreover, competition-distorting subsidies are subject to disciplines under international trade agreements, and the rules set out under WTO agreements, which are independent from competition rules per se, yet nonetheless have obvious implications for their application in practice.

One area that has been deemed to be of concern of late has been foreign direct investment (“FDI”), i.e. the investment by foreign governments (or companies) in economic activities carried out within a host state. Recently, there has been political concern about a potential regulatory gap, whereby foreign governments could subsidize the activities of favored companies, while escaping the rules that would apply to subsidies granted by the host state itself.

This type of concern has crystallized in the form of the European Commission’s May 2021 Proposal for a Regulation on Foreign Subsidies Distorting the EU Internal Market, among other


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