BRUSSELS, Oct. 14 (Xinhua) -- The European Union's executive arm said on Monday that it has opened an in-depth investigation to assess whether Hungary's plans to grant 108 million euros (119 million U.S. dollars) of public support to Samsung SDI for a battery plant meets certain conditions.
Samsung SDI, a manufacturer of the rechargeable batteries under the South Korean conglomerate, is investing in the expansion of its battery cell production facility in God, Hungary.
The EU has "state aid" rules that enables member states to give support to private companies, but that aid must meet requirements.
The European Commission said it has doubts at this stage that the planned aid support of 108 million euros to Samsung complies with the conditions, such as whether the public support may lead to the relocation of jobs from other EU member states to Hungary.
Samsung SDI is one of the main players in the fast growing market of lithium-ion battery market. The company is investing around 1.2 billion euros to expand the production capacity of lithium-ion cells and battery packs for electric vehicles in its existing plant located in God.
The work on the capacity expansion started in December 2017, and the implementation of the project is now well advanced.
"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," Margrethe Vestager, the European Commissioner in charge of competition policy, said in a statement.