The European Commission has initiated a comprehensive review of the Foreign Subsidies Regulation (FSR), marking a key step in reinforcing transparency and fair competition within the EU’s internal market. Co-led by DG Competition (DG COMP – Directorate K) and DG Internal Market, Industry, Entrepreneurship and SMEs (DG GROW – Unit G.3), this first review, required under Article 52(2) of the FSR, will assess how effectively the Regulation addresses market distortions caused by foreign subsidies since its application began on 13 July 2023.

The review, due by 14 July 2026, will evaluate several core aspects, including the assessment of distortive foreign subsidies, the application of the balancing test, ex officio reviews, and the notification thresholds for mergers and public procurement. It will also examine the administrative complexity and cost implications of the FSR, particularly for small and medium-sized enterprises (SMEs).

Informed by the Competitiveness Compass (2025) and the Draghi report on European competitiveness, the initiative highlights the EU’s commitment to rigorous enforcement of fair competition rules while keeping regulatory burdens proportionate. To gather broad stakeholder input, the Commission has launched a fourteen-week public consultation, available in all 24 official EU languages via the Have Your Say portal, complemented by targeted consultations, bilateral meetings, and a commissioned study to analyse implementation practices.

The findings will shape the forthcoming FSR Review Report, which may be accompanied by legislative proposals (for instance, adjusting notification thresholds or review timelines). The final report will be presented to the European Parliament and the Council, followed by periodic reviews every three years to ensure continued oversight and improvement.