Vestager Weighs New Powers to Take on Tech Giants, China M&A
EU Weighs New Antitrust Powers to Take on Tech Giants
(Bloomberg) -- Margrethe Vestager, the European Union’s antitrust chief, is weighing the need for tougher powers to protect the bloc’s economy from the twin threats of Silicon Valley and China.
Vestager asked for feedback on June 2 about a potential new tool to intervene on markets -- such as technology -- before it’s too late for competition to be saved.
The move come weeks before the Dane is expected to unveil separate proposals that could arm antitrust watchdogs with tougher powers to vet deals or companies funded by the Chinese government and other foreign states.
“The world is changing fast and it is important that the competition rules are fit for that change,” Vestager said in a statement on the European Commission antitrust overhaul. “There are certain structural risks for competition, such as tipping markets, which are not addressed by the current rules.”
Internet platforms, from Alphabet Inc.’s Google to Amazon.com Inc., have attracted complaints over an alleged failure to play fair. After adding the role of tech chief to her job description, Vestager is looking at how enforcers could prevent tech giants from exploiting their dominance before competition is wiped out.
At the same time, she is weighing her options to tackle how some companies may use funding from foreign states to undercut European rivals or outbid them in M&A.
An EU initiative due to be published on June 17 seeks to assuage European businesses’ fears about Chinese state-owned firms that may pay less for financing to fund business operations within Europe, Vestager told Bloomberg TV last month.
European regulators are trying to walk a fine line between keeping Europe’s markets open and shielding its companies from rule-breakers. Vestager has come under intense pressure from French and German politicians and businesses to take action on the challenge posed by Chinese businesses.
The EU plans eventually to draft rules that tackle foreign subsidies after asking for comments on the various options, the commission’s press office said in an email. The initial paper will “present possible ways to address distortive effects cause by foreign subsidies in the single market and tackle foreign access to EU public procurement and EU funding,” the EU added.
The Financial Times reported that the EU measures would seek to review proposed acquisitions involving possible subsidies via a compulsory notification system.
If a takeover was facilitated by foreign subsidies that distort the EU’s internal market, the FT said buyers may have to make commitments to solve the problem or, as a last resort, the purchase could be blocked.
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