On August 19, China's Ministry of Justice issued a public notice determining that the European Union's cross-border investigative measures against Chinese entities during its review of JD.com under the Foreign Subsidies Regulation (FSR) constitute improper extraterritorial jurisdiction. The ministry ordered that no organization or individual shall execute or assist in executing such measures.
The ministry's spokesperson stated that, in accordance with the Regulations of the People's Republic of China on Countering Improper Extraterritorial Application of Foreign Legislation and Other Measures, the Ministry of Justice, together with the Ministry of Commerce and other relevant departments, lawfully identified and determined that the EU's actions constitute improper extraterritorial jurisdiction. Beijing urged Brussels to immediately rectify its erroneous practices and stop abusing the foreign subsidies investigation tool to create a fair, just, and predictable market environment for enterprises operating and investing in Europe. Should the EU persist, China vowed to take firm countermeasures in accordance with the law.
On August 20, He Yadong, spokesperson for China's Ministry of Commerce, reiterated at a regular press briefing that Beijing consistently opposes the EU's abuse of unilateral tools such as the FSR to suppress Chinese enterprises. He called on the EU to work with China to swiftly correct its wrongdoings in FSR investigations and strengthen communication through intergovernmental dialogue, adding that China would closely monitor the situation and take necessary measures to safeguard national security and the legitimate rights and interests of enterprises.
The EU's investigation into JD.com stems from a cross-border acquisition valued at 2.2 billion euros. In July 2025, JD.com announced plans to acquire CECONOMY, a German consumer electronics retail group that owns brands such as MediaMarkt and Saturn, operating over 1,000 stores across Europe. On April 17, 2026, JD.com formally notified the transaction to the European Commission. A month later, the Commission launched an in-depth investigation under the FSR, citing preliminary indications that JD.com may have received preferential financing, tax incentives, and government grants from China, and expressing concerns that such support could enhance its competitive advantage in the acquisition process.
The EU's probe focuses not on whether JD.com received government support, but on whether such support alters the competitive conditions of the acquisition. The Commission believes potential subsidies could fund the transaction, enabling JD.com to offer a higher premium to CECONOMY's management and shareholders, while leveraging logistics and technological capabilities to further strengthen its post-transaction market position. Should the subsidies be deemed to cause market distortion, the Commission could require remedies or even prohibit the deal. In July, the Commission issued a formal statement of objections to JD.com, pushing the transaction into a more substantive regulatory phase.
In response, JD.com denied that the acquisition relies on subsidized financing and argued that any support received would not be sufficient to distort competition in the EU market. The final outcome of the transaction remains pending the Commission's ruling, which is expected by October 2.
Beijing's latest decision is grounded in the Regulations on Countering Improper Extraterritorial Application of Foreign Legislation and Other Measures, which took effect on April 7, 2026. The regulations establish a mechanism for identifying, blocking, and countering improper extraterritorial measures. Once the State Council's legal affairs department, along with relevant authorities, determines that a measure constitutes improper extraterritorial jurisdiction, a public notice is issued, and no entity or individual is permitted to execute or assist in executing such measures. Additionally, the Chinese government may impose countermeasures and restrictions in areas such as trade and investment, depending on the level of risk. The regulations aim to safeguard China's sovereignty, security, and development interests while protecting the legitimate rights of Chinese citizens and organizations.
The JD.com case marks the second instance in which these regulations have been invoked against EU FSR investigations. On May 15, the Ministry of Justice made a similar determination regarding the EU's FSR investigation into Chinese company Nuctech, concluding that the EU's cross-border investigative practices against Chinese entities constituted improper extraterritorial jurisdiction and prohibiting any organization or individual from executing or assisting in executing such measures.
Zhan Kai, a consultant at Beijing Dacheng (Shanghai) Law Firm, noted that since the transaction occurs in the EU market, Brussels can still proceed with its investigation under its own laws and decide whether to impose conditions or veto the deal. However, within Chinese territory, whether enterprises, banks, law firms, and data holders can provide investigation materials as requested by the EU is subject to Chinese law; unauthorized cooperation with such investigations may carry legal risks. Zhan added that this is China's second retaliatory move against EU FSR probes since the regulations took effect. Beijing's focus is on countering the EU's investigative evidence-gathering that extends into Chinese territory, rather than denying the EU's authority to review the merger itself. If the EU continues to push forward, China may further issue enforcement prohibitions against specific entities assisting in the investigation and escalate countermeasures accordingly.
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