EU DRAWS UP RULES TO PREVENT INDUSTRIAL TAKEOVERS BY US, CHINA

The European Union (EU) is drawing up new rules to prevent companies subsidized by countries such as China and the United States from taking over its industrial champions or winning public contracts.

In a proposal unveiled on Wednesday, the European Commission (EC) argues that it needs new powers to prevent unfair competition in its massive unified market and to preserve the bloc's "strategic autonomy," Hanna Ziady wrote for CNN Business late on June 18, 2020.

"We need the right tools to ensure that foreign subsidies do not distort our market, just as we do with national subsidies," Margrethe Vestager, the EC official in charge of competition and digital policy, said in a statement.

The EU executive branch is seeking the authority to scrutinize companies that may be using subsidies from foreign governments to undercut competitors in the bloc. It would also review acquisitions of EU companies by foreign rivals. If a foreign buyer is found to unfairly benefit from subsidies, it could be forced to pay back the money or sell assets to satisfy European authorities. In some cases, the EU could block the purchase entirely.