Chinese SOEs under EU Competition Law

Abstract

The treatment of state-owned enterprises (SOEs) under EU competition law is a complex and controversial topic. In particular, in order to determine whether the jurisdictional thresholds are met and what the competitive impact of the transaction would be, the Commission is tasked with assessing whether SOEs enjoy independent decision-making power from the State and vis-à-vis other SOEs. SOEs that lack such independent decision-making power are considered to form part of one ‘single economic unit’. The Commission has generally avoided making definite conclusions regarding the independence of SOEs. However, recent decision practice shows that the Commission is increasingly confident in concluding that various Chinese SOEs may form part of the same economic unit. This policy is likely to bring an increasing number of transactions involving Chinese SOEs under the scope of the EU Merger Regulation (EUMR). At the same time, however, the Commission’s decision practice and soft law instruments illustrate that concentrations between SOEs which form part of the same ‘economic unit’ fall outside the scope of the Merger Regulation and that agreements between such SOEs are not subject to Article 101 TFEU.