EU to review curbs on unfair competition from foreign state-owned firms
The European Commission is reviewing ways to curbing unfair competition from foreign state-owned companies as member states called for closer examination of Chinese investment in the bloc.
Margrethe Vestager, the competition commissioner, said some foreign companies were able to use government backing to gain an advantage when acquiring European rivals and that could be unfair competition practices.
She told the Financial Times the commission was looking at possible responses: “We found that there was a gap if, for instance, a state-owned company buys a European company and can pay anything if they want to because other potential buyers are bidding against state coffers.
“We are in the process of trying to figure out what to do about that.”
A Dutch proposal, first reported in the FT earlier in December would add a pillar to EU competition law, allowing the European Commission to intervene when state-owned companies were distorting competition.
“It is very ambitious and it is also quite worked through. So I think it’s an important contribution to the debate,” the EU executive vice-president said.
She stressed she had reached no conclusions on possible reforms but a person close to the matter said she was considering the Dutch proposal.
New commission president Ursula von der Leyen put tackling the EU’s loss of competitiveness against US tech companies and increasingly sophisticated Chinese manufacturing at the top of her agenda.
She recently promised to roll out a reinvigorated industrial strategy by March.
This month, the EU approved a €3.2bn fund to promote the research and development of the battery sector, one of the important industries the new strategy will seek to build up.