Europe News

EU pressured to change rules so domestic firms can take on US, China rivals

Key Points
  • Exactly one year ago, the European Commission, which oversees competition rules in the 27-member bloc, denied a merger between Alstom and Siemens.
  • Since then, some EU countries have called for changes to allow more consolidation, which could in turn help companies on the global stage.
European Commissioner for Competition Margrethe Vestager talks to the media during a news conference on the concurrence case with Google online search advertising on March 20, 2019 in Brussels, Belgium.
Thierry Monasse | Getty Images News | Getty Images

Four EU nations are pressuring the region's competition authorities to relax merger rules so European firms are better equipped to fight Chinese and U.S. competitors.

Exactly one year ago, the European Commission, which oversees competition rules in the 27-member bloc, denied a merger between Alstom and Siemens. The French and German companies said their project would have created a European rail champion with revenues of about 15 billion euros ($16.5 billion). However, in the eyes of the Commission the project had "serious competition concerns." Since then, some EU countries have called for changes to allow more consolidation, which could in turn help companies on the global stage.

"The nature of global competition has changed. European companies now have to compete with foreign companies that sometimes benefit from substantial state support or from protected domestic markets, in some instances to a very high degree," the economy ministers of France, Germany, Italy and Poland said in a letter to the EU's competition chief dated Tuesday.

"We therefore call on the Commission to propose a revised version of the guidelines of merger control," the ministers said in the letter, seen by CNBC.

A spokesperson for the European Commission told CNBC Thursday: "We confirm receipt of the letter and we will take into account all contributions to the ongoing debate."

Margrethe Vestager, who leads the EU's competition portfolio, said in December that a review of antitrust rules and agreements between competitors had already began. She also said that another review on defining the EU's market would begin. This is set to look at the boundaries of the EU market, which at the moment assesses harmful competition on European consumers.

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"We want to be sure that the guidance it gives is accurate and up to date, and sets out a clear and consistent approach to both antitrust and merger cases across different industries, in a way that's easily accessible," Vestager told an event in Brussels.

Time is of essence and certain European governments want to see a proposal in the coming weeks.

In the letter to Vestager, the four European countries said the "Commission should also provide greater clarity on the efficiencies brought about by a merger and on the evaluation of the competitiveness industry in the appraisal of mergers: specific guidelines, drafted in the forthcoming weeks, could develop the range of efficiencies taken into account in the competitive analysis."

Vestager has not yet provided a timeline for her market definition review.