As part of its first review of the Foreign Subsidies Regulation (FSR), the European Commission has published a factual summary of stakeholder feedback gathered through a 14-week public consultation. The message is clear: while the FSR is widely seen as an important tool to protect the EU internal market, many respondents are calling for simplification, greater clarity and improved proportionality.
The consultation, which attracted 54 responses from companies, business associations and public authorities across the EU and beyond, focused on the practical implementation of the FSR since it became applicable in July 2023.
Concerns Over Legal Certainty and Administrative Burden
A significant number of respondents questioned the predictability of the distortion assessment under Article 4 FSR. Twenty-eight stakeholders considered the framework “not sufficiently clear and predictable,” arguing that the indicators are drafted at a high level of generality. Many called for clearer guidance on how the Commission weighs different factors and applies evidentiary standards.
Similarly, the balancing test under Article 6 FSR was criticized for lacking transparency. Nearly half of respondents said the test requires clarification, particularly regarding the definition of positive and negative effects and the applicable standards of proof.
Administrative burden emerged as a recurring theme. Twenty-three respondents said the notification thresholds for concentrations are too low, capturing too many non-problematic transactions. Businesses also highlighted the extensive reporting obligations under Form FS-CO, describing the scope of “foreign financial contributions” as overly broad and difficult to compile in practice.
In public procurement, 31 respondents found the notification scope unclear and unpredictable, pointing to ambiguities in key definitions and inconsistent application across Member States.
Balancing Integrity and Efficiency
Despite these criticisms, 30 respondents acknowledged the FSR’s importance for safeguarding a level playing field in the internal market. However, many stressed that its positive objectives must be balanced against concerns over procedural complexity, legal uncertainty and costs.
As the Commission prepares its review report, stakeholders appear united on one point: the FSR’s effectiveness will depend not only on robust enforcement, but also on clearer rules and a more proportionate framework.