Business Groups Warn of Negative Impact of EU Subsidies Rules on Global Companies

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Business groups have raised the alarm over a draft European Union rule that would have a “chilling effect” on foreign businesses operating in the bloc. The ruling imposes unfamiliar requirements and would require complex compliance mechanisms that don’t currently exist. It would impose restrictions on foreign firms receiving more than €50 million in foreign state support and the EU revenue of the tie-up would be at least €500 million.

The American Chamber of Commerce in the EU and the Japan Business Council in Europe have expressed deep concern over the rules and have expressed the need for provisions that would decrease the administrative burden, such as the removal of the need to report immaterial contributions and exemption of the disclosure of confidential information.

At present, the regulation is being implemented to level the playing field for businesses across Europe and counterbalance US legislation that would provide special state subsidies to domestic companies. European Commission President Ursula von der Leyen has warned President Joe Biden that any government actions that privilege US companies over European-based firms would not be acceptable.

EU antitrust chief Margrethe Vestager commented, “The EU is leveling the playing field and, in 2023, the commission will start implementing and enforcing the regulation. This will preserve an open single market — one in which all businesses compete on fair and equal terms, wherever they come from.”

The American Chamber of Commerce in the EU and the Japan Business Council in Europe have been vocal opponents of the regulation and have been pressing the executive arm of the EU to refine the draft accordingly.

Margrethe Vestager is one of the highest-ranking politicians in the European Union, currently serving as the EU Commissioner for Competition. She is a Danish politician and member of the Danish Social Liberal Party who has been involved in European politics since 2001. In her current role, she is tasked with monitoring mergers and acquisitions to ensure fair competition in the European market and ensure companies adhere to rules prohibiting state subsidies and unfair trade practices.

The American Chamber of Commerce in the EU (AmCham EU) is a nonprofit organization that represents the interests of US companies doing business in the EU. AmCham EU works to facilitate integration between the two markets and ensure US firms in Europe have a fair and competitive foothold. The organization provides a platform for government affairs dialogue on topics such as taxation, trade, data privacy, and policy direction.

The Japan Business Council in Europe (JBCE) is a nonprofit organization that works to support Japanese businesses in Europe. The JBCE works to provide research and policy consultation in such topics as growth strategies, sustainability, tax, trade, and industry regulation. The organization also provides services to facilitate international business collaboration and economic relations between Japan and the EU.