The European Union filed a legal action against China at the World Trade Organization, accusing Beijing of undermining the intellectual property rights of European companies.
The EU alleged that legislation requiring European companies to grant ownership or usage rights of their technology to domestic Chinese entities violates the companies' rights under WTO rules. The bloc said China also strips European companies of the freedom to negotiate market-based terms in technology transfer agreements.
At issue are Chinese regulations on the import and export of technologies and rules on Chinese-foreign joint ventures that "discriminate against non-Chinese companies," the EU said in a statement.
"These provisions violate WTO obligations to treat foreign companies on an equal footing with domestic ones, and to protect intellectual property like patents and undisclosed business information."
The bloc's move follows a similar action by the U.S. at the WTO against China in March, charging that the Asian nation's "unfair technology practices" violate WTO rules and discriminate against imported foreign technology.
"We cannot let any country force our companies to surrender this hard-earned knowledge at its border," EU Trade Commissioner Cecilia Malmström said in the statement. "This is against international rules that we have all agreed upon in the WTO. If the main players don't stick to the rulebook, the whole system might collapse."
