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JD.com Faces Rival Heat Over Ceconomy Deal
10 Sep
Summary
- Competitors criticize JD.com's concessions for Ceconomy acquisition.
- EU's Foreign Subsidies Regulation targets potential unfair state aid.
- JD.com must improve concessions to gain EU approval by October 23.
Chinese e-commerce giant JD.com is facing criticism from competitors regarding concessions offered for its $2.5 billion purchase of German electronics retailer Ceconomy. The European Commission, the EU's competition enforcer, has relayed this negative feedback to JD.com. This development puts pressure on JD.com to enhance its proposals as the Commission weighs the deal, with a decision deadline set for October 23.
The EU is scrutinizing the acquisition under the Foreign Subsidies Regulation, which aims to address unfair foreign state aid. Earlier this year, the Commission's preliminary review suggested JD.com may have benefited from subsidies from Beijing, such as preferential financing and grants.
To address specific concerns raised by the Commission in July, JD.com proposed that Ceconomy would access its European logistics and technology at market rates. Additionally, smaller rivals would reportedly gain access on fair, non-discriminatory terms. The effectiveness of these concessions in satisfying both the Commission and competitors remains to be seen.
