The European Union will not take action against Chinese mobile telecommunications product manufacturers, it announced Thursday.
In May 2013, the European Commission opened an investigation into "dumping"' practices that put products into the market at vastly reduced prices. The Commission was concerned that Chinese companies such as ZTE and Huawei Technologies, which make equipment used by mobile telecommunication carriers to transmit and receive voice and data, were flooding the EU market.
However, Trade Commissioner Karel De Gucht said Thursday that the investigation will not be pursued. Further analysis has shown that the essence of the problems posed by Chinese competition on the EU market lies in the subsidization of the mobile telecommunications networks, he said in a statement.
But the EU mobile telecommunications market should be reviewed in its entirety, he added.
The Commission launched the investigation on its own initiative without any complaints from the industry in an "ex officio" case. Last May, Huawei described this as an unprecedented move. But the Commission said that ex officio investigations are regularly carried out when the Commission believes there is a high risk of retaliation against European companies should they make an official complaint.
The decision to put the investigation on hold came after China decided not to impose taxes in the EU polysilicon and wine markets, prompting speculation of a quid pro quo deal.
China exports telecommunication network equipment to the EU market are valued at around €1 billion (US$1.4 billion) per year.