June 23, 2024

EU announces new powers to control auctions by foreign companies

2 min read

Margaret Vestager, the European Commission’s Competition Commissioner, speaks at a news conference in Brussels, Belgium.

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LONDON – The European Union wants to prevent government-subsidized foreign companies from entering its market, which could have repercussions, especially for Chinese-backed companies.

The European Commission, the EU’s governing body, proposed three new tools on Wednesday that would have the power to investigate financial contributions made by public officials from non-EU countries. This will happen when the recipient company tries to participate in the European market.

“We want every company operating in Europe to respect our home rules, no matter where they come from,” European competition president Margaret Wester said at a news conference.

If this assistance undermines fair competition, the EU will not allow European governments to provide financial assistance to companies. However, these rules have left foreign subsidies for decades, and the Commission wants to change that.

“Companies are free to use foreign subsidies to buy business in Europe. Some have been able to reduce their competitors in public tenders because they are not very efficient, but because they receive financial support from overseas, they are not the kind of companies that do not receive such a reduction,” Vestager said.

State influence It is often discussed in the EU, but as many businesses struggle for money, the current epidemic has exacerbated the problem. In addition, there is growing concern over Chinese companies operating particularly active in the European market in the wake of the 2011 debt crisis.

In 2016, Chinese technology company Tencent bought a majority stake in Finnish mobile games maker Supercell, and Chinese electronics maker Media German robotics company Cuca.

Under the new plan, the Brussels-based company wants to verify contributions of at least 500 500 million ($ 600 million) in EU-based revenue and foreign subsidies of at least மில்லியன் 50 million. The Commission wants to investigate bids in public procurement processes where the estimated value is 250 million euros or more.

Therefore, foreign-backed companies and companies looking to acquire European companies must disclose how much they have received and obtain approval from the Commission before proceeding with the contract. Failure to disclose information may result in penalties and transactions being reviewed.

In addition, the Commission wants to launch its own investigations when it suspects that a foreign grant has been granted but has not been disclosed.

The proposal will now be discussed by European lawmakers and member states before the legislature.

In an email, Dutch Foreign Secretary Mona Geizer said: “We want to continue to do business with countries and companies outside the EU, which has always provided us with economic benefits and jobs. “

The Commission’s proposal was welcomed by European Parliament legislator Reinhard Petticofer: “Past negligence in enforcing China’s competitive neutrality has contributed to the fact that European industrial policy must now more firmly defend its own interests. In order to secure Europe’s industrial future.”

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