Europe’s legislators have agreed to empower the European Union to better monitor foreign investments and prevent companies subsidised by their respective states from subjecting EU businesses to disloyal competition, Belga News Agency reports.
Once this mechanism takes effect, it will enable the European Commission to examine any economic activity subsidised by a third country on the EU market, particularly in the case of bidding for the purchase of European companies or tendering for public markets, the EU Council said in a news release.
The new tool, which was approved on Thursday by EU legislators, will be used for mergers and acquisitions worth €500 million and above, as well as public tenders for markets in excess of €250 million.
The Commission will also have the right to carry out investigations into subsidies provided up to five years before the regulation’s entry into effect and which cause distortions in the domestic market after the regulation takes effect.
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In the event of non-compliance with European law, it will be empowered to set fines and, where applicable, take reparatory measures or accept commitments from the companies concerned to take measures that can remedy the distortions to competition, according to the news release.
The provisional accord is the fruit of an agreement between members of the European Parliament, European Commissioners, and negotiators from France, which holds the EU’s six-month rotating presidency until Friday. It still needs to be approved by the European Council and Parliament.
If approved, it would not take effect before mid-2023, given the time needed to staff the commission to enable it to assume its new responsibility.