In today’s globalised economy, companies operate increasingly across national borders. A growing number of merger transactions have an international dimension, affecting markets in several countries.The integration of national economies also enables companies to organise cartels and anti-competitive practices on an international basis. An effective enforcement of EU competition policy in a global environment therefore requires intensive cooperation with competition authorities outside the EU.
The European Commission cooperates closely with competition authorities of countries outside the EU, both on policy and enforcement issues. Our main objective is to promote convergence of competition policy instruments and practices across jurisdictions and to facilitate cooperation with competition authorities in other jurisdictions in enforcement activities.
Cooperation with other competition authorities takes place at two levels – bilateral and multilateral. At bilateral level, the Commission has engaged in a wide range of cooperation activities with competition authorities in a number of third countries on the basis of bilateral agreements or memoranda of understanding. The nature of the cooperation activity varies between countries and can cover coordination of enforcement actions, sharing of information on cases of mutual interest, dialogue on competition policy issues and, in some cases, also capacity building support. A special aspect in this context is our cooperation with enlargement countries.
As well, the Commission participates actively in the competition-related activities of a number of multilateral organisations such as the International Competition Network (ICN), the Organisation for Economic Cooperation and Development (OECD), UNCTAD and the World Trade Organisation (WTO).
Our international subsidies policy
Improving international subsidy rules is one of the priorities of the Commission. Early 2020, the Commission agreed with the US and Japan on ways to improve the WTO rules against harmful subsidies. The Commission’s new communication on the Trade Policy Review from February 2021 sets out an ambitious WTO reform agenda, including further work on subsidies and market-distorting practices more broadly. The Commission also undertakes subsidies-related work in the OECD, such as on competitive neutrality.
Subsidies granted by non-EU governments to companies active in the EU may have a distortive effect on the Single Market. Through the subsidy provisions laid down in Free Trade Agreements, the Union is seeking to achieve a level playing field between all companies that operate within the Single Market. Subsidy provisions vary from FTA to FTA and they are adjusted to the trade relationship with the third country in question. Whereas some bilateral agreements seek approximation with the EU State aid acquis with enhanced enforcement mechanisms (e.g. independent state aid authority, recovery, unilateral measures, etc.), other bilateral agreements provide for the prohibition of the most distortive type of subsidies as well as more limited enforcement mechanisms, like transparency, consultations and a dispute settlement mechanism.
The EU has tools at its disposal to address some, but not all, of the distortions on the Single market caused by foreign subsidies. This results in a regulatory gap, whereby subsidies granted by non-EU governments go currently unchecked, while subsidies granted by Member States are subject to close scrutiny. The Commission has, therefore, recently adopted a legislative proposal to effectively tackle foreign subsidies that cause distortions and undermine the level playing field in the Single market.