Facts Available, Reasons Required: The FSR Meets China's Blocking Order

China has prohibited cooperation with the European Commission's investigation, under the Foreign Subsidies Regulation (FSR), into JD.com's proposed acquisition of CECONOMY. By an order of 19 August 2026, its Ministry of Justice barred any organisation or individual from implementing or assisting the Commission's cross-border information demands. CECONOMY owns MediaMarkt and Saturn. The Commission opened that investigation on 28 May 2026 and set out its preliminary concerns in July: that JD.com may have received preferential financing, tax measures and grants attributable to the Chinese State, which may have helped it finance the bid. Reports in early October suggest that the transaction is heading for clearance with commitments, with a decision due by 4 November 2026.

The case raises a question that will recur whenever an acquirer's records sit in China: what must the Commission still establish when the power to request evidence and the ability to obtain it come apart? The FSR itself recognises that they may: Article 13 entitles the Commission to require information, but Article 15(1) makes inspections outside the EU conditional on the third country raising no objection. This article argues that the FSR allows the Commission to proceed with less evidence, but not with less justification. Article 16 fills evidential gaps, however, it does not lower the standard that a decision under Article 25 must meet.

The Commission's powers and where they stop

The Commission's competence in this case rests on the notification regime of Regulation (EU) 2022/2560 [2022] OJ L330/1. Under Article 21, a concentration must be notified where the thresholds in Article 20(3) are met: the acquired undertaking is established in the EU and generates EU turnover of at least EUR 500 million, and the undertakings concerned received combined foreign financial contributions of more than EUR 50 million in the three preceding years. JD.com notified the transaction on 17 April 2026. Where there are sufficient indications of a distortive foreign subsidy, the Commission may open an in-depth investigation, in which Article 17 backs its information powers with fines and periodic penalty payments. Nothing in the Regulation, however, can compel a third country to permit access to records held on its territory.

The JD.com order sits within a longer history of both cooperation and rivalry. DG Competition and its Chinese counterparts have held a Competition Policy Dialogue since 2004, and in 2019 the Commission and China's State Administration for Market Regulation signed a Memorandum of Understanding on state aid control and the Fair Competition Review System. The FSR changed the tone. In January 2025, China's Ministry of Commerce concluded a trade barrier investigation by finding that the EU's FSR practices targeting Chinese enterprises constitute trade and investment barriers. The JD.com order, adopted under the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States in force since April 2026, follows a first order of 15 May 2026 in the Nuctech case. The resulting conflict of laws has been examined on this blog by Alexandr Svetlicinii.

The undertaking is caught between a duty under Article 13 to supply information and a prohibition under Chinese law on doing so. That conflict must be shown, not simply asserted. The General Court made the point in Nuctech (Case T-284/24 R, August 2024). Nuctech relied on Chinese data security, personal information and state secrets legislation to resist access to mailboxes held on servers in China. Refusing interim relief, the Court noted that the data could be accessed from within the EU, that the EU subsidiaries were responsible in their own right, and that the risk of penalties under Chinese law had not been shown where no authorisation had been sought from the Chinese authorities. Although an interim order, it indicates that a general reference to foreign law will not place an investigation beyond reach.

What Article 16 does and what it does not

Article 16(1) permits the Commission to adopt certain decisions, including a prohibition under Article 25(3)(c), on the basis of the facts available where an undertaking or the third country that granted the subsidy fails to cooperate. Article 16(3) adds that where an undertaking fails to provide the information necessary to determine whether a financial contribution confers a benefit, it may be deemed to have received that benefit.

The scope of these provisions is limited. Under Article 2(1), a foreign subsidy requires a financial contribution provided directly or indirectly by a third country, a benefit, and limitation to one or more undertakings or industries. A prohibition then requires a finding under Articles 4 to 6 that the subsidy distorts the internal market: that it improves the undertaking's competitive position and actually or potentially affects competition negatively, after balancing any positive effects. Article 16(3) deems one element, the benefit. It does not deem the others.

Take a loan whose terms cannot be obtained. Public information may show that the lender is a State-owned bank, which goes to the existence and attribution of a financial contribution. The benefit may then be deemed. Neither step establishes that the loan facilitated this acquisition, or that it affects competition in the internal market. Those conclusions still need evidence, and the decision must show how the available facts support them.

Trade law has already drawn this line. Article 16 closely mirrors the facts available rules of EU trade defence, which implement Article 12.7 of the WTO Agreement on Subsidies and Countervailing Measures. In the US-Carbon Steel India (2014), the Appellate Body held that facts available must reasonably replace the missing information, that this requires a process of reasoning and evaluation, and that non-cooperation cannot by itself be the basis for selecting the facts relied on. WTO law does not govern the interpretation of the FSR, but the logic transfers. Without it, an investigation risks becoming circular as a suspected subsidy prompts a request, the request meets a blocking order, and the refusal is treated as confirming the suspicion. The distinction is between having less evidence and needing less justification.

Commitments do not avoid the question

A negotiated outcome does not make this problem disappear. Unlike a commitments decision under Article 9 of Regulation 1/2003, which requires no finding of an infringement, a decision with commitments under Article 25(3)(a) FSR requires a finding that a foreign subsidy distorts the internal market, together with commitments that, in the words of Article 7(2), fully and effectively remedy that distortion. Moreover, in the case FS.100011 e&/PPF Telecom Group (2024), the Commission identified the distortive subsidies, including an unlimited State guarantee, before accepting commitments in September 2024.

Two consequences follow. First, Article 16(1) expressly names prohibition decisions under Article 25(3)(c), but not decisions with commitments under point (a). How far a commitments decision may rest on facts available is not settled by the text. Second, the remedies reportedly offered by JD.com, access to its European logistics and technology for CECONOMY at market rates and for rivals on fair and non-discriminatory terms, operate in the EU and can be monitored there. Whether measures aimed at the effect of a subsidy fully and effectively remedy a distortion whose source the Commission cannot fully see is what the decision will need to explain.

What the decision should show

A clear account of evidential method would help such as identifying the material that was unavailable, explaining the substitute evidence relied on, justifying the comparisons drawn and acknowledging the uncertainty that remains. It would not remove dependence on foreign cooperation, but it would make the consequences of its absence more predictable for undertakings, and the Commission's reasoning more open to scrutiny under the duty to state reasons in Article 296 TFEU and on review before the EU Courts.

When the decision in JD.com/CECONOMY is published, its significance will lie less in the outcome than in the reasoning. Practitioners should ask which constituent elements of the foreign subsidy were established on evidence, which were deemed under Article 16(3), and how the Commission connected the two. A blocking order may place documents beyond the Commission's reach, it does not relieve the Commission of its duty to state reasons. Where facts are available only in part, the reasons must be given in full.