On Wednesday, EU authorities blocked an agreement aimed at building a railway giant that could compete with China, which angered France and Germany so much that they vowed to change the way the EU regulates such mergers.
The decision raises some thorny questions about how to deal with China's growing economic strength.
Backed monopolies have the right to make deals around the world.
But the EU's antitrust commissioner, Margrethe Vestager, has been focusing on European customers.
The German merger will create a near monopoly in the region, stifle competition and lead to higher prices for travelers and companies.
Vestager said the merged company will be the largest player in Europe so far, adding that there is "no competition at all" in the railway signal market ".
Her office is responsible for ensuring that competition is fair and consumers have enough options.
In this case, the decision conflicts with the desire of France and Germany to keep up with China, which controls and actively supports many of its largest companies.
French Prime Minister Philip called it a "bad decision ".
This is a major setback for European industry and I think it is a wrong decision.
I can't figure it out anymore.
German Chancellor Angela Merkel's office has also expressed discontent.
"A globally competitive rail industry is an important industrial policy issue in Germany and Europe," said Merkel's spokesman Steffen Seibert . ".
This week, Germany came up with a variety of ideas on how to support its industry in an increasingly competitive global era. S.
And China is hitting each other through tariffs.
The German government says it may take a stake in companies to stop foreign acquisitions and protect technology development.
The company pointed out that in 2016, the Chinese home appliance manufacturer Midea made a hostile acquisition of the German robot manufacturer Kuka to show its concern.
Seibert said on Wednesday that regardless of the railway merger, the German government supported the idea of amending the EU's anti-monopoly law "for globalization.
Philip complained that Vestager did not fully consider the global market and said the EU law on the subject was "very outdated ".
"We must modernize and regain control," Philip said . "
Berenberg, head of the German Foreign Relations Commission's Asia program, said how to deal with global competition is a big problem.
"We helped build the Chinese economy . . . . . . Now they are completely
"In some areas, competitors are doing well and are not ready to respond," he said . ".
"This is a problem that has been oversleeping for many years.
Berger says it's time to have a calm discussion outside the political arena to find a strategy.
The German federation of industry this month called for a "coordinated Chinese strategy ".
"This may include applying EU restrictions on state aid to subsidies outside the EU, or allowing state aid from European countries in the event that State aid is distorted by competition.
Alstom is famous for its TGV in France and Siemens ICE in Germany. speed trains.
They face growing competition from Chinese car companies, which sold about $33 billion last year. Alstom had $9.
The railway sector of 4 billion and Siemens is about $10 billion.
France's finance minister, ire Le Maire, said Vestager's decision "will benefit China's economic and industrial interests ".
Vestager believes that the Chinese car is not an imminent threat because all of its businesses are in China.
"It's less successful outside of the local market.
"None of the Chinese suppliers have been involved in the signal bidding in Europe, and none of them are very high.
High speed rail outside China
China will not enter the European market in the foreseeable future . "
Vestager pointed out that in making the decision, she must also represent the interests of the other 26 EU countries, many of which will be lost due to the merger.
The EU's antitrust office rarely prevents mergers.
Over the past 30 years, the European Union has approved more than 6,000 deals and banned less than 30.
It has blocked only seven in the past decade.
Competition authorities in the UK, the Netherlands, Belgium and Spain are concerned that the new company will be in a dominant position and may overwhelm smaller rail manufacturers and increase market prices. ——
Reported from Paris.
Geir Moulson in Berlin and Dave mchough in Frankfurt, Germany, contributed to the report.