The European Parliament has adopted its position on the development of legislation to avoid distortions of competition in the internal market that are caused by foreign subsidies to companies operating in the EU.

The new tool gives the EU Commission the power to investigate and counteract market-distorting foreign subsidies granted to companies set to acquire EU businesses or take part in EU public procurement.

The goal is to ensure fair competition among firms active on the EU market by establishing equality of opportunity; while EU countries have to abide by state aid rules, so far there has been no comparable regime in place for support granted by non-EU countries.

With 627 votes for, eight against and 11 abstentions, Parliament agreed on Wednesday that the Commission must be able to investigate and mitigate the effects of such support that can take the form of foreign capital injections, loans, fiscal incentives, tax exemptions and debt forgiveness.