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Archive for May 16th, 2023

The New Geopolitical Dimension of EU Competition Law and Trade Policies, by Jean-François and Isabelle Van Damme (General Rapporteurs, XXX FIDE Congress)

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Now that the XXX FIDE Congress (Sofia, 31 May to 3 June 2023) is approaching, we are delighted to feature a guest contribution by the General Rapporteurs of the topic devoted to competition and trade-related matters.

Jean-François Bellis and Isabelle van Damme (Van Bael & Bellis), who need no introduction, will be coordinating rapporteurs’ efforts to understand how the shifting economic and geopolitical landscape is influencing the shaping and understanding of two policies that have been central to the project of European integration from the outset.

Enjoy the post (and if you are fortunate enough to attend it, the FIDE Congress)!

The looming threat of climate change has rekindled the debate on considering non-competition interests in legal instruments regulating the market. Competition law enforcers have also had to address the specific challenges raised by the development of the digital sector. Moreover, the subsidies granted to domestic production in the United States under the Inflation Reduction Act have exacerbated the concern that foreign investment would leave the European Union for more profitable locations abroad and might undermine the European Union’s Green Deal objectives. Those concerns have led the European Commission to develop the Green Deal Industrial Plan, which includes relaxing the State aid rules with a view to strengthening European industries. In fact, the concept of “industrial policy” which had largely disappeared from the vocabulary of EU policymakers in the last decades is making a comeback.

The discussions on Topic II “The new geopolitical dimensions of EU competition and trade policies” at the FIDE Sofia Conference, on 31 May 2023 – 3 June 2023, will explore how competition rules can be enforced—at both the national and the European levels—in this new geopolitical environment. As general rapporteurs for this topic, we look forward to debating this question with the institutional rapporteur, Mr Ben Smulders (DG Competition, European Commission), and the participants at the FIDE Sofia Conference.

Sustainability and competition

The question of whether non-competition interests, including sustainability, can be integrated in EU competition law enforcement has gained urgency. The FIDE Conference will review the practice of national competition authorities (NCAs) with respect to sustainability agreements and compare it with the approach outlined in the Commission’s Draft Horizontal Guidelines.

This question will be addressed in the context of both the assessment of sustainability agreements under Article 101 TFEU and merger control. More generally, there will also be a debate on how to balance the benefits of sustainability agreements against the harm that they might inflict on particular categories of consumers. There is already a significant body of experience with respect to this issue at the national level which will be discussed and compared with the Commission’s position as it can be distilled from, inter alia, the Draft Horizontal Guidelines.

Digital economy and competition

Making Europe fit for the digital age is the other objective pursued by the current Commission. In shaping Europe’s digital future, the European Commission has identified “a fair and competitive economy” as one of the key pillars of its strategy. The European Commission thus aims at ensuring competitive conditions and safeguarding the level-playing field in the digital Single Market while, at the same time, seeking to contribute to the global competitiveness of the European digital economy and to achieve “digital sovereignty”.

The FIDE Sofia Conference will discuss whether these two objectives are always aligned. “Digital competition enforcers” might take decisions that, at the surface, protect a European model of the digital market, while serving the European Union’s industrial policy objectives to become globally competitive.

To further the understanding of the interaction between “digital competition” and “digital sovereignty”, the following two specific issues will be discussed, namely (i) the cases against large digital US platforms, and (ii) the Digital Markets Act’s expected impact on national authorities’ competition enforcement.

Industrial policy and competition

Another element of the new geopolitical dimension of the policies which the current Commissionis promoting relates to what should be the role of industrial policy and its interplay with competition policy. Questions are being raised as to whether, in certain cases, industrial policy considerations should prevail over technical competition policy concerns in order to allow for the creation of “European champions”, able to compete with powerful non-European companies in international markets. This debate has intensified after the United States announced its new subsidies programme to promote green transport. In particular, it has caused the European Union and its Member States to intensely reflect on whether to enter a subsidies race, grant similar preferences and possibly loosen State aid control. At the centre of this discussion is the balance between responding to external threats to the competitiveness of the European Union and its green and digital agendas and preserving, at the internal level, the integrity of the internal market.

Two aspects of this sensitive interplay will be specifically discussed, namely (i) merger control and the thorny issues of “European champions” and “killer acquisitions” and (ii) State aid, including in the broader context of guaranteeing access to secure clean energy supply chains.

Impact of trade considerations on competition

Finally, the FIDE Sofia Conference will address the impact of trade considerations on competition policy.

In this respect, it is important to bear in mind that Topic II of this year’s FIDE Conference covers both competition and trade policies. Competition lawyers will benefit from a better understanding of the new trends in trade policy especially since, as illustrated by the recently adopted Foreign Subsidies Regulation, international trade law considerations will be injected in areas which were previously assessed solely on the basis of EU State aid and merger control rules.

Looking forward to seeing you in Sofia and benefiting from your contributions and insights in what promises to be a very topical debate.

Written by Pablo Ibanez Colomo

16 May 2023 at 11:29 am

Posted in Uncategorized