The European Commission has opened investigations into two Chinese solar panel manufacturers that are suspected of undercutting local suppliers.

Two international consortiums had applied to design, construct and operate a 110-megawatt solar farm in Romania that was partly financed by the EU modernization fund.

But authorities suspect that they received subsidies in China that breach the EU's policies on fair competition.

"The two new in-depth investigations on foreign subsidies in the solar panel sector aim to preserve Europe's economic security and competitiveness by ensuring that companies in our single market are truly competitive and play fair," the EU's internal market commissioner Thierry Breton said Wednesday.

What companies are under investigation?

One consortium was comprised of Romania's Enevo Group plus a German subsidy of China's Longi Green Energy Technology, which is the world's biggest solar panel manufacturer.

The other consortium was made up of two subsidiaries of Chinese state-owned company Shanghai Electric.

"The (European) Commission will assess whether the economic operators concerned did benefit from an unfair advantage to win public contracts in the EU," the bloc's antitrust regulator said.

What are the EU's rules about foreign subsidies?

Companies that submit public tenders in the EU must abide by new regulations that came into force in July 2023.

Bidding companies must notify the European Commission if their public procurement tenders are worth more than €250 million euros ($270 million) and if they have also received at least €4 million in foreign financial contributions in the past three years.

Wednesday's announcement is not the first time the the EU has investigated suspected undisclosed subsidies from China.

In February, the EU opened an investigation into Chinese rail giant CRRC. That investigation was closed after the CRRC subsidiary withdrew last week from a tender in Bulgaria to supply electric trains.

zc/lo (Reuters, AP)