EU: Brussels examines curbs on non-EU state-backed companies

Brussels’ competition chief is examining ways of curbing unfair competition from non-EU state-owned enterprises, as bloc Member States urge closer scrutiny of Chinese investment on the continent. 

Margrethe Vestager, the competition commissioner, said some companies outside the EU were able to use government backing to gain an advantage when acquiring European rivals. She said the Commission was looking at possible responses, including proposals for sweeping new powers submitted by the Dutch government.  

“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,” Ms Vestager told the Financial Times. “We are in the process of trying to figure out what to do about that.”

EU politicians are demanding responses to an aggressive push by Chinese state-supported companies to snap up European assets. Chinese investment in the EU peaked at €37.2 billion (US$41.5 billion) in 2016, according to figures from the Rhodium Group. 

Ms Vestager praised as “very handy” a Dutch proposal, first reported in the FT this month, which 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 to the rules.