Dutch input reflected in EU-proposal to safeguard a level playing field between companies
Companies using government support from non-EU countries to compete unfairly with (Dutch and other) EU entrepreneurs are a growing problem. Therefore, State Secretary Mona Keijzer (Economic Affairs and Climate Change) previously presented a Dutch cabinet proposal to tackle this issue. Now, these efforts are largely reflected in the European Commission's legislative proposal for a more level playing field in the EU market, which was published today.
The EU-legislation includes three instruments. The first instrument allows tackling distortions of competition due to state aid (both financial and in the form of goods or services). If there is suspicion of unfair competition on the EU market based on subsidies, the European Commission can start an investigation on its own initiative, including enforcement with financial sanctions. Fines are also imposed for failure to cooperate with such an investigation and for providing false information.
The second instrument focuses specifically on distortions caused by state aid in takeovers and mergers. Companies that receive state aid from a third country and wish to acquire an EU company must report it so that it can be investigated whether they are competing unfairly with EU operators. If so, measures can be taken. Finally, there will be a public procurement instrument that provides for an obligation to notify companies that may be recipients of public support from a third country when they bid for a contract in the EU.
State Secretary Mona Keijzer (EZK): "We want to continue doing business with countries and companies from outside the EU. That has always given us economic advantages and jobs. But this is only possible if that market is fair and not distorted by companies that enjoy unfair competitive advantages due to their home situation. I am pleased that the European Commission also adopts the essence of the Dutch approach in this legislative proposal, to be able to investigate the behavior of a company when suspected of competing unfairly with the help of state aid, including sanctions. Now, it is key to make this proposal as efficient and effective as possible and to implement it quickly."
The European proposal is aimed at detecting state aid, but does not specifically look at companies that have an unregulated dominant position in their home market, which is one of the components of the Dutch proposal: the level playing field instrument (LPFI) that can be read here.
Legislation as part of broad package on EU Industrial Strategy
In the coming months, the government will send an official position statement on the EU-proposal to the House of Representatives. The proposal will then be discussed by the ministers concerned at the EU Competitiveness Council and in the European Parliament.
The legislative proposal is part of a broader package concerning the EU industrial strategy that was published today. Together with other Member States, the Netherlands is advocating in the EU for a more effective industrial strategy. A level playing field and the preservation of an open economy are central to this. At the same time, there is a task to work on open strategic autonomy and the mapping and reduction of (undesired) dependencies.