The EU Commission launches public consultation on a proposed new instrument to address distortive effects of foreign subsidies in the internal market

On June 17, 2020, in response to calls from the European Council [1] and certain Member States, [2] the European Commission published a White Paper setting out its proposals for a comprehensive set of new tools to tackle the potentially competition-distorting effects of foreign subsidies on the level playing field of the EU internal market. These tools also aim to address existing gaps in EU competition, public procurement, and trade defence rules regarding foreign subsidies. 1. Rationale of the Commission’s Initiative The rationale of the Commission’s initiative is twofold: — First, the White Paper seeks to address the undue competitive advantage that certain companies may obtain from subsidies granted by third-country governments. By leveraging their privileged position, the