The EU Commission is set to carry out tougher checks on foreign subsidies to protect European companies from unfair competition and foreign takeovers.
As part of that strategy, a EU investment agency could stop foreign investors from taking over strategically important European tech firms through the use of so-called 'golden shares'.
The move comes as the EU is seeking "strategic autonomy" from China and the US, while defending its own economic interests.
Jean-David Malo, director of the European Innovation Council, said his agency when co-funding European tech firms "will have the possibility not only to invest in the company, but also to take golden shares" - a type of share that gives the holder veto power over certain transactions, such as mergers. This could happen he said, if the EIC believes a firm's work is of strategic importance to Europe in, for example, sensitive fields such as cybersecurity or quantum computing, Science Business first reported.
The EIC has an "absolutely obvious role" to play in establishing "tech sovereignty," developing key technologies domestically and relying less on suppliers outside Europe. "It is absolutely vital that we keep in Europe a number of technologies on our own, because otherwise we will be in the hands of other countries," such as the U.S. and China, said Malo.
In a report on EU competition policy, MEPs underlined the need to safeguard critical EU companies and assets from hostile takeovers. Some MEPs called for strengthening the rules on screening foreign direct investment in the EU.
The EU adopted a legal framework on this in 2019. The aim is to make sure that investment does not pose a threat to critical infrastructure or allow access to sensitive information or key technologies. The rules will come into force next month.
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