Policy brief

Can EU competition law address market distortions caused by state-controlled enterprises?

The distortive effects that foreign state-owned or state-supported companies can have on European markets and on the European Union’s economic autonom

Publishing date
18 December 2019
Mathew Heim

This Policy Contribution considers whether European competition law could be applied more directly to state owned enterprises that create an unlevel playing field in Europe due to the support they receive from their home governments. This issue is now a priority for many Member States and the European Commission given the impact on European economic autonomy. Competition law may not be the appropriate tool for addressing the granting of illegal subsidies or other forms of support in third countries but it may be more effective than previously thought in dealing with the effect of state-owned entities that distort the internal market. If SOEs are not be resource-constrained or even profit maximising, such SOEs could be unconstrained by competitive pressures and therefore possess a de facto level of market power. By evolving existing exclusionary antitrust theories of harm, such as predatory pricing, to fit the specificities of SOEs, this Policy Contribution argues that it should be possible to add further tools to the EU’s toolbox. In any event, as part of its efforts to address the distortive effects of foreign state ownership and subsidies in the internal market, the Commission should develop a coherent and proactive competition policy to provide guidance to the market.

About the authors

  • Mathew Heim

    Mathew Heim is a Visiting Fellow at Bruegel focusing on Competition Policy. He also works as an independent consultant advising clients on managing the political, policy or communications angle of complex legal matters, notably in the competition enforcement sphere.

    Most recently Mathew was Vice President at Qualcomm, where for almost a decade he advised the company on competition policy, intellectual property rights, industrial policy and regulation.

    Prior to his in-house experience, Mathew spent over a decade advising on European political, regulatory and legal matters, notably unilateral or joint conduct cases, merger cases and litigation in sectors such as varied as telecommunications, online advertising, software, audio-visual content, chemicals, ship-building, raw materials and bananas.

    Mathew is also active at the OECD Competition Committee and is a Non-Governmental Advisor to the International Competition Network. He is also a Committee Member of the EU Law Group of the Honourable Society of Lincoln’s Inn and member of the Editorial Board of the IBA’s Competition Law International.

    He was awarded degrees from both the universities of Bristol and Exeter before being called to the Bar of England and Wales. He is fluent in English, French, German and Spanish.

    Declaration of interests 2018

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