Commission opens investigation into proposed public support for Samsung plant in Hungary

The European Commission has opened an in-depth investigation to assess whether Hungary’s plans to grant €108 million of public support to Samsung SDI for investing in the expansion of its battery cell production facility in Göd (Hungary) is in line with EU rules on regional State aid.

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Samsung SDI is investing around €1.2 billion to expand the production capacity of lithium-ion cells and battery packs for electric vehicles in its existing plant located in Göd. In 2018, Hungary notified the Commission of its plans to grant €108 million of public support for the project.

The Commission has doubts at this stage that the planned aid support of complies with all relevant criteria of the Commission’s 2014 Regional State Aid Guidelines. In particular:

• The Commission has doubts whether the measure has an “incentive effect”. It will investigate whether the decision by Samsung SDI to invest in Hungary was directly triggered by the Hungarian public support or whether the investment would have been carried out in Göd, even absent the public support.
• The Commission also has doubts in relation to the public support’s contribution to regional development and on its appropriateness and proportionality.
• Finally, it cannot exclude at this stage that the public support may lead to the relocation of jobs from other EU Member States to Hungary.

State of the matter

The Commission will now investigate further to determine whether or not the initial concerns are confirmed. The opening of an in-depth investigation provides Hungary and interested third parties with an opportunity to comment on the measure. It does not prejudge in any way the outcome of the investigation.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Public investment is important to foster economic growth in disadvantaged regions in Europe. But public support should only be given if it’s necessary to trigger private investment in the disadvantaged region concerned. Otherwise, it only gives the beneficiary an unfair advantage over its competitors, at the expense of taxpayers. The Commission will carefully investigate whether Hungary’s planned support is really necessary for Samsung SDI to invest in Göd, is kept to the minimum necessary and does not distort competition or harm cohesion in the EU.”

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