Brussels:The European Commission has given conditional approval for JD.com, Inc.'s acquisition of CECONOMY AG under the Foreign Subsidies Regulation (FSR). The approval mandates adherence to commitments proposed by the involved parties to address competition concerns.

According to European Commission - Lebanon, the decision follows an in-depth investigation launched after a Statement of Grounds was issued. The investigation revealed that JD.com, which operates a retail business and e-commerce marketplace from the Cayman Islands, received subsidies from the People's Republic of China. These subsidies, in the form of preferential financing, tax incentives, and grants, could potentially distort the EU internal market by enhancing JD.com's and CECONOMY's competitive capabilities.

To mitigate these concerns, JD.com and CECONOMY have agreed to conduct intra-group transactions on market terms and provide logistic and technology services to third parties on equivalent terms as to CECONOMY. These commitments are designed to prevent cross-subsidisation and eliminate any competitive advantage from JD.com's subsidized logistics and technology.

The Commission has found that these commitments adequately address the potential market distortions, allowing the acquisition to proceed under the condition of compliance. An independent trustee will oversee the implementation of the commitments, which are valid for a period of ten years.

The FSR, which came into force on July 12, 2023, enables the Commission to manage foreign subsidy-related distortions, ensuring fair competition in the EU market. Companies involved in mergers must notify the Commission if certain financial thresholds are met. The Commission can then accept commitments, prohibit the concentration, or issue a no-objection decision following its investigation.

More detailed information regarding the case will be accessible under case number FS.100253 on the Commission's competition website, pending resolution of any confidentiality concerns.