The FSR aims to curb unfair competition in the EU by preventing distortive non EU subsidies that give recipient companies an unfair financial advantage, thereby affecting the internal market. It imposes notification obligations for certain public procurement procedures and mergers and acquisitions, while also empowering the Commission to conduct FSR investigations on its own initiative based on information it receives from any source. These ex officio inquiries differ materially from notification based reviews: the Commission is not constrained by strict deadlines and may examine subsidies granted up to ten years ago (but not earlier than July 2018) compared with the three year limit for notification cases.
The Temu raid follows the Commission’s 2024 inspections of Nuctech’s premises in Poland and the Netherlands . The Chinese airport scanner manufacturer challenged those dawn raids before the European Court of Justice at the preliminary stage but did not prevail. Last week, the Commission opened an in depth investigation into Nuctech, building on the earlier inspections, on suspicions that grants, preferential tax treatment and favourable financing enabled the company to offer prices and terms in public tenders that competitors could not reasonably match. Taken together, these developments indicate that the Commission is accelerating its FSR enforcement and is prepared to conduct dawn raids and in depth probes to scrutinise potentially distortive foreign subsidies in EU markets it considers relevant.