1 Introduction
The prohibitions of cartels in art 101 of the Treaty on the Functioning of the European Union (TFEU) and of abusive behaviour by dominant firms in art 102 TFEU provide, along with the EU Merger Control and State Aid Regulation, the core of EU competition law. The primary aim of EU competition law is to preserve and promote economic efficiency and thereby foster consumer welfare by fighting conduct that is harmful to competition, whether static or dynamic (innovation driven).1 Moreover, competition is seen as necessary to fully implement the EU Internal Market (cf art 3(3) of the Treaty on European Union (TEU)). In spite of a focus over the last 25 years on economics, sustainability concerns are increasingly entering the equation of competition law.2
2 Definitions and Preliminary Considerations
2.1 Cartel Prohibition and Abuse of Dominance
The cartel prohibition of art 101 TFEU bans agreements and concerted practices among undertakings which restrict competition.3 In cases of by object restrictions such as horizontal price-fixing, a harm to competition is considered obvious based on the very nature and purpose of the agreement, so no detailed examination of anti-competitive effects is required. Restrictions by effect, in turn, require a full analysis of the likely consequences and proof by the competition authority that the agreement appreciably restricts competition for the cartel-prohibition of art 101(1) TFEU to be applied. In by object cases, harm to competition is presumed.4 A restrictive agreement might be granted an exemption on efficiency grounds pursuant to art 101(3) TFEU if it does not harm competition on balance due to its contribution to improving the production or distribution of products or to technical progress, provided that the affected consumers get a fair share of the benefits.5
The abuse of a dominant position6 prohibited by art 102 TFEU consists in particular in the conduct of a firm (or firms) with significant market power which restricts the capability of efficient rivals to compete.7
2.2 Environmental Sustainability
The idea of sustainability and the concept of sustainable development are typically considered to encompass an environmental, an economic and a social dimension. By promoting economic efficiency and consumer welfare (eg quality, lower prices, variety, and innovation), competition law favours economic sustainability. Insofar as competition law enforcement benefits consumers and safeguards the economic freedom of smaller market actors in the face of abusive conduct of powerful rivals, it also benefits social sustainability.8 Further, competition law naturally benefits environmental sustainability in several ways, in particular via technological developments or resource-efficiency, both of which are typical features of a well-functioning, undistorted competitive market. Some types of sustainability benefits of products or services can furthermore be something that firms directly compete about, provided that a sufficient number of customers values the characteristics in question.9 That said, until recently environmental sustainability has hardly ever been an explicit antitrust concern. That is likely to change, as discussed below:10
A typical feature of contemporary competition law is its quest for purity, which leaves it mostly unresponsive to expectations emanating from public interests unrelated to market efficiency.11 That is not unreasonable. It helps prevent a politicisation of antitrust law and mitigates the risk of over- and under-enforcement based on ideological grounds. There are several examples of noble-aimed restrictions of competition law which resulted in great damage
Such experiences illustrate why competition law’s quest for (economic) purity should not just be substituted by a balancing of all conceivable public benefits and detriments in the assessment of restrictions of competition or efficiency-based justifications thereof.17 However, even though sustainability as such is too broad and abstract a concept18 by itself to build the basis of a practicable exception to that rule, there are some environmental effects which should be taken into account.19 Those include reducing greenhouse gases (GHG) emissions and the prevention and removal of environmentally toxic waste (eg plastic in the oceans), tasks that deserve special consideration for three reasons. First, their impact can be measured objectively and ascribed an economic value.20 Second, they affect the conditions and the quality of (human) life more significantly than most other specific economic or non-economic outcomes of antitrust enforcement, due to the wide, sometimes global reach of environmental damages and in part their irreversibility.21 Third, the Treaty demands environmental considerations within competition law.22 Taking non-speculative and not merely symbolic sustainability benefits into account under art 101 or 102 TFEU23 therefore does not imply that all types of public interests should be balanced against economic effects and efficiencies,24 something most experts rightly and firmly oppose.25
2.3 Participation
Competition law protects efficient competition and the freedom to pursue professional activities (economic liberty), and thereby also promotes the participation of a plurality of market actors in economic life. In that sense, functioning, competitive markets are democratic institutions.26 Conversely, high concentrations of market power typically entail significant risks of restrictions of competition and thus of harm to consumer and social welfare.27 Competition authorities can mitigate such risks by obliging firms which control key infrastructure (including pipelines, electricity grids, and telecommunication networks) or widely indispensable platforms (eg Google’s Android)28 to grant smaller rivals access to fair and reasonable conditions. Moreover, citizen and consumer involvement in shaping market values can create incentives for sustainability efforts and thus increase the likelihood that a functioning, competitive market contributes to environmental sustainability.29
Political participation in its broad sense is also important as a legitimising basis of competition law.30 The need for legitimacy through public discourse
3 Sustainability through a Limitation of Article 101(1) TFEU?
3.1 Exemptions of Sustainability Agreements from Competition Law?
A radical proposal to boost the importance of environmental concerns in the context of antitrust enforcement consists in declaring art 101(1) TFEU (inherently) inapplicable to agreements that benefit environmental sustainability.36 The rationale of such an inherent limitation of art 101 (1) TFEU is often seen in a resolution of a conflict of Treaty objectives in favour of “a high level of protection and improvement of the quality of the environment” (art 3(3) TEU). Given the equal primary law basis37 and the potential weight of environmental damages, the idea of an inherent limitation of art 101 TFEU which could apply whenever38 competition law clashes with environmental objectives39 is no doubt tempting. The case law invoked in support of such a limitation-approach goes back to the Albany or Wouters decisions.40 In Albany, the Court admitted a limitation to antitrust law based on the indispensability of collective agreements for the pursuit of the Treaty’s social policy objectives. It found that an effective and consistent interpretation of the Treaty required that collective agreements between management and labour fell outside the scope of the Treaty’s prohibition of cartels.41 In Wouters, the Court excluded measures by legal professional bodies which restricted competition among lawyers from the EU cartel-prohibition on the grounds that such restrictions were inherent in or necessary for the pursuit of legitimate objectives, which in that case were related to the lawyers’ role in promoting the rule of law and facilitating the administration of justice. A core assumption of the Wouters doctrine is that some economic actors ought to be freed from the shackles of antitrust law for legitimate objectives to be satisfied.42 The Wouters doctrine was later referred
Limiting the scope of art 101 TFEU does have practical advantages for the promotion of environmental objectives within competition law. It removes the need to show that environmental benefits qualify as efficiencies which outweigh restrictive effects and that consumers affected by the agreement are compensated with a fair share of the resulting benefits, as art 101(3) TFEU requires. That is also the weakness of such an approach, one which is rejected by most experts:47 A transparent balancing of competing interests and objectives under art 101(3) TFEU provides more legitimacy to a possibly resulting prioritisation of sustainability concerns. If limiting the scope of art 101 TFEU does what art 101(3) TFEU could (at least praeter verba legis) do, then it is obsolete. If it does more, it lacks legitimacy and risks harming economic efficiency and environmental progress.48 In brief, such limitations to the scope of art 101 TFEU should only be admitted with the greatest of caution, for instance if an efficient sustainability initiative of great environmental benefit could not be
3.2 Lawful Sustainability Agreements and Enforcement Restraint
3.2.1 Existing Room for Lawful Sustainability Agreements (Block Exemptions)
Art 101(1) TFEU only applies if an agreement has appreciable anti-competitive effects. Some agreements will not raise competition concerns at all, including agreements to phase out single-use plastics in business premises or supermarkets, not to exceed certain temperature levels in buildings, establishing joint databases about sustainable suppliers, distributors or production processes, and coordinated industry-wide awareness campaigns.49 Other agreements are lawful under certain conditions based on the European Commission’s (the Commission) block exemption regulation under art 101(3) TFEU, including in areas relevant for sustainability-initiatives such as joint research and development efforts, standardisation agreements or some vertical agreements.50 There are also sector specific exemptions, notably a new derogation for sustainability agreements along the “farm to fork” supply-chain.51 Furthermore, agreements among smaller firms beneath certain market share thresholds, which are assumed to not restrict competition and which often enable competition (against stronger rivals) typically benefit from exemptions, provided that there is no hardcore restriction (eg price-fixing, limitation of output or market sharing).52
3.2.2 Enforcement Restraint within the Discretion of Competition Authorities
In 2011, the Dutch Authority for Consumers and Markets (ACM) decided not to investigate an arrangement by a fishing association which set out fishing quotas, as it found the arrangement necessary to prevent overfishing.55 In the beginning of 2022, the German competition authority greenlighted an initiative of major retailers for a gradual implementation of common standards on wages in the banana sector. It argued that the initiative did not raise competition concerns, due to the absence of hardcore restrictions and the fact that the retailers’ joint working group would not fix minimum prices or price mark-ups (the agreement was thus lucky to escape a difficult test of consumer-compensation).56
If the overall risks and benefits of an initiative are not obvious, a more participative approach to enforcement can yield reasonable results. Competition authorities can demand more information in the course of a preliminary investigation, and possibly seek to engage in an informal exchange and quest for solutions with the firms involved. This allows them to provide guidance on how to minimise harm to competition and possibly suggest minor modifications,61 or in some cases to make their restraint (informally) dependent on conditions such as an improvement of compliance efforts and periodical reports about the outcomes (which reduces the authority’s monitoring burden).62 The flexibility of what is a more participative approach allows for some “trial and error”
Enforcement restraint for green cartels which lack basic social support, such as a sudden tripling of fuel prices,64 is not advisable, as it could be seen as a means to circumvent the democratic process, which in turn would harm important institutional interests such as public trust and political support.65
4 Sustainability through Enforcement of Article 101 TFEU
The least controversial way for competition authorities to promote environmental sustainability is to fight cartels which are likely to harm both competition and environmental progress.66 In contrast to private agreements imposing sustainability standards in an industry, which often appear unnecessary (and thus disproportional) due to better regulatory alternatives, a vigorous enforcement against such cartels is indispensable.67
In its 8 July 2021 decision on the car emissions cleaning cartel the Commission found that five carmakers had agreed not to compete on cleaning better than to the minimum extent required by EU emission standards. It considered
For an agreement to harm competition and the environment, it must not necessarily be related to efforts at reducing such emissions. Other areas of interest for the fight against cartels which harm the environment might include markets for: energy, recycling and waste; plant protection products; electronic goods, where market leaders have incentives not to improve product longevity or repairability; and technologies of great potential for environmental sustainability (eg new gene-editing tools for agricultural uses)70 if limited access to foundational patents risks blocking technological advances.
5 Environmental “Efficiencies” under Article 101(3) TFEU?
5.1 Legal Limitations, Cases and Challenges
Cases involving environmental efficiencies under art 101(3) TFEU are rare. Nevertheless, national competition authorities, the Commission and the courts have sometimes had the opportunity to deal with different types of environmental efficiencies.
In its older case law, the Court had repeatedly taken a wider view of the required ‘efficiencies’ under (now) art 101(3) TFEU. In CECED (1999)72 it approved an agreement among manufacturers of washing machines (covering 95 % of the market) to discontinue the production of less energy-efficient older machines, as it found that consumers would benefit from energy savings and that the agreement could result in an increased competition on prices. It also found that lower electricity usage and decrease in GHG emissions constituted relevant efficiencies. It is unclear whether the reduction in negative emissions was decisive or whether it merely reinforced the Court’s conclusion that the efficiencies outweighed the anti-competitive effects.
Other decisions admit environmental benefits as ‘efficiencies’ under art 101(3) TFEU even if the competition authority finally deems the grounds for an exemption to be insufficient. In a case concerning a sustainability initiative of three major consumer detergent manufacturers, the Commission found that the firms had restricted competition in the sense of art 101 TFEU by aiming at ensuring that none of them would try to use the environmental initiative to gain a competitive advantage over the others.73 They had agreed to keep the price of washing powder packages unchanged in spite of cost-savings due to
The Chicken of Tomorrow (2015) decision75 by the Dutch ACM regarded an industry-wide agreement among supermarkets, poultry farmers and broiler meat processors to promote the selling of chicken meat produced under more sustainable and animal welfare-friendly conditions. Under that agreement, regular chicken meat would have been removed from the shelves of the main Dutch supermarkets. The ACM found that the additional costs for consumers due to the agreement outweighed any resulting sustainability benefits. In order to compare economic and sustainability benefits, the ACM resorted to a consumer survey establishing the willingness to pay for sustainability improvements. This naturally had the effect of limiting the value of sustainability benefits to a subjective appreciation by present consumers.76 Consumers were prepared to pay more, the ACM found, but not enough to outweigh the costs of the agreement.
5.2 Necessity of Comparable (Measurable) Values
As illustrated by the Chicken of Tomorrow case, one of the difficulties in taking environmental benefits into account is that many of the benefits are not as simple to measure as most economic efficiencies for which the market sets a price. The environmental benefits of agreements can only be balanced with other effects and efficiencies if the different types of outcomes and objectives are essentially comparable.77 There are different plausible methods for
5.3 Steps towards a More Sustainability-Sensitive Approach
5.3.1 The Arguments in Favour of (more) “Sustainability Exemptions”
While it is not controversial that economically measurable environmental benefits such as energy-savings constitute efficiencies which can justify exemptions under art 101(3) TFEU,81 there exists increased support for other, more complex environmental costs and benefits to be taken into account as well.82 Support for such a broader approach is found in art 3 TEU (“high level of protection and improvement of the quality of the environment” as a fundamental objective of the Union), along with the integration principle of art 11 TFEU. According to art 11, the Treaty’s environmental protection requirements “must be”83 taken into account in the definition and implementation – of the Union’s
5.3.2 Current Evolution: Revised Block Exemptions and Horizontal Guidelines
The Commission’s 2004 Guidelines on art 101(3) TFEU and the 2011 Horizontal Cooperation Guidelines focused (restrictively) on “objective economic efficiencies” and required an agreement to result in gains in consumer welfare.89 This narrowed the room for justifications of sustainability agreements.90 On 1 March 2022, the Commission published its draft revised Horizontal Block Exemption Regulations (HBER) on research & development (R&D) and specialisation agreements for consultation, as well as its draft new Horizontal Cooperation Guidelines, which (like those from 2001) contain a chapter on the assessment
The revised block exemptions and draft revised Horizontal Cooperation Guidelines are expected to enter into force on 1 January 2023. They conclude a substantial effort by the Commission to gather and evaluate information, and to seek inputs from stakeholders and the interested public in order to ensure the legitimacy and effectiveness of its evolving regulations, guidelines and institutional practice. The evaluation of the R&D block exemption regulation published on 6 May 2021 had already led to the key finding that sustainability objectives needed to be better accommodated and that the scope of permissible ‘sustainability’ cooperation between competitors under art 101 TFEU should be further clarified.93 Likewise, in its 10 September 2021 Competition Policy Brief (the Policy Brief) published following public consultations on the Green New Deal, the Commission found that more guidance was necessary on the assessment of sustainability benefits and on how sustainability objectives could be pursued via different types of cooperation without restricting competition.94 Regarding efficiencies under art 101(3) TFEU, the Policy Brief notes that sustainability benefits could be assessed as qualitative efficiencies resulting in an increased quality or longevity of products (eg replacement of plastic with wood in toys or the use of recycled materials for clothing) or cost efficiencies (eg reduction of costs for materials, transport and storage). According to the Policy Brief, the assessment of such benefits should be limited to the same relevant market, an interpretation which limits the types of reductions
While the Commission has not gone as far as some of the Member States’ competition authorities have suggested, it does support taking a wider range of environmental benefits into account and to grant efficiency exemptions for certain sustainability agreements, provided that the requirements of art 101(3) TFEU are satisfied (ie efficiencies outweighing the harm to competition, a fair share of the gains passed over to the affected consumers, indispensability of the agreement to reap such efficiency-benefits, not affording undertakings the possibility of eliminating competition).96 It sees room for efficiency justifications inter alia in cases where a cooperation is necessary in order to “avoid free-riding on the investments required to promote a sustainable product and to educate consumers”, and thereby to overcome first mover disadvantages.97 The new sustainability-approach of the Commission will thus in particular depend on its interpretation of the (tricky) fair-share-requirement.
5.3.3 Consumer-compensation as the Main Challenge
Under art 101(3) TFEU, an individual exemption for a restrictive cooperation among competitors requires consumers to get a fair share of the benefits resulting from that cooperation. This criterion has been one of a number of focal points of the debate regarding environmental sustainability and competition law. Notably, it has been debated whether out of market efficiencies such as benefits that accrue to the environment and society at large can be taken into account. According to the traditional view based on the narrow
An approach which de facto amounts to the latter has recently been implemented by the Austrian legislator, through an amendment of the “fair share to consumer”-criterion under the exemption equivalent to art 101(3) TFEU in its antitrust law. The amendment sets an irrefutable legal presumption that the fair-share-criterion is met as soon as the efficiency benefits resulting from an agreement or cooperation “contribute substantially to an ecologically sustainable or climate-neutral economy”.102 Such a provision allows for justifications of agreements even when consumers affected by the restrictive effects such as higher prices do not directly benefit in any way from the environmental progress pursued.103
According to its January 2021 (revised) draft guidelines on sustainability initiatives, the Dutch ACM intends to relax the requirement of full compensation of the affected users for the harm caused by restricted competition by “environmental-damage agreements” if three criteria are met. First, the agreement must aim at preventing or limiting any “obvious environmental damage”.104 Second, it must help in an efficient way to comply with international or national standards to prevent environmental damage to which the
In contrast, the Commission’s sustainability chapter of the draft revised Horizontal Cooperation Guidelines sticks to the traditional framework in requiring compensation of consumers negatively affected by the agreement. The “fair share”-criterion of art 101(3) TFEU thus remains restrictive, due to the requirement of a substantial overlap between the group of affected consumers and those that benefit from the agreement for any “collective benefits” to be taken into account. Such an overlap might for instance be admitted in assessing drivers’ compensation for higher fuel prices by the benefit of cleaner air, given that most citizens are at least occasionally either drivers or car users affected by fuel prices.
In the author’s view, while the Commission’s draft revised Horizontal Cooperation Guidelines somewhat broaden the scope for sustainability agreements, its interpretation of the “fair share”-requirement of art 101(3) TFEU still fails to integrate environmental concerns to the extent warranted by art 11 TFEU.107 Two wider reaching, non-legislature dependent approaches which the Commission could consider will be discussed next.
5.3.4 Solutions (Taking Fairness Seriously)
One approach consists in taking into account the likelihood that the willingness-to-pay for sustainability improvements may be higher for future consumers than it is for current consumers.108 The more future consumers would be willing to pay for sustainability improvements related to certain products, the likelier it is that any environmental benefits contribute to a fair compensation of consumers as required under art 101(3) TFEU. Regarding the consumption of non-renewable natural resources in particular, the threat of scarcity and its impact on prices justifies the assumption that future consumers would be willing to pay significantly more for sustainability initiatives. Giving more weight to the expected perspective of future consumers would also correct the problem of “hyperbolic discounting” of future damages.109 That said, while the willingness to pay for efforts to protect the environment will likely increase over the years, this is not always the case, as it might also happen that technical improvements render earlier solutions obsolete (or much cheaper).
Another way would be to take into account whether the former prices paid by consumers were artificially low in the sense of being the result not only of supply and demand in a free market, but also the consequence of negative externalities not hitherto internalised, and thus of market failures.110 In the author’s view, the requirement to pass over a “fair share” of an agreement’s gains cannot imply that compensation for consumers is due even where an agreement’s restrictive effects (eg price increases) and its benefits both result from an effort to internalise costs of negative externalities such as plastic waste or GHG emissions which were not reflected in the original prices.111 In other
If the notion of zero gains being passed over to consumers appears counter-intuitive, one might consider a fictive case: Some firms have for years engaged in an ecologically destructive trade with wood from primary forests. They sold greater quantities of wood at low prices, in order to defend market shares against producers of less precious but more sustainably produced wood. The firms’ new directors intend to change the strategy in order to also protect their resources. In the absence of state measures to protect the forests, the major undertakings which engaged in the sale of precious wood agree to massively limit the quantities of wood sold and to increase prices to make their product unaffordable to most consumers, while maximising benefits from the limited remaining sales in order to ensure their economic survival along with the best possible protection of the forests concerned. Is there any doubt that consumers’ “fair share” of the benefits in that fictive case is zero (apart from general sustainability benefits), given that the former prices did not account for massive negative externalities?
6 Sustainability in the Context of Abuse Control (Article 102 TFEU)
The issue of abuses of a dominant position (art 102 TFEU) has so far received less attention than the cartel-prohibition (art 101 TFE) in the rich debate regarding sustainability and competition law. Hereafter, some selected issues shall briefly be discussed.
6.1 Abusive Restrictions of Economic Freedom and Participation
Art 102 TFEU inter alia entrusts competition authorities with the task of preventing dominant firms from (abusively) foreclosing reasonably efficient rivals and solidifying a position of dominance without having to compete on the merits. In protecting competition, including innovation-driven (dynamic) competition, abuse control also tends to benefit the environment.
The abusive (exclusionary or exploitative) conduct by dominant undertakings banned by art 102 TFEU evokes related abuses in the political sphere. If competition is a democratic institution,115 then abuses of a dominant (market) position are analogous to the manoeuvring of dominant political parties who use their might to restrict rivals’ access to public discourse and ability to participate in elections on an equal footing, in order to keep power without having to compete on the merits. There is a risk of self-perpetuation of abuses of a dominant position in the sense of art 102 TFEU, due to incentives to hide past abuses in order to prevent financial damage or political backlash (eg severe regulation) and due to the increased power-based ability to succeed in doing so. That, too, is reminiscent of abuses in the political sphere, where the fear by dominant political forces of getting caught for some initial acts of corruption encourages more corruption, deception and further abuses including attempts at clinging to power by all means.
It is therefore important that antitrust enforcement is not content with merely intervening against abuses of dominance, but that it also prevents firms from acquiring or strengthening a dominant position. It does so by prohibiting (abusive) exclusionary conduct which forecloses rivals and thus results in more dominance (art 102 TFEU), and through merger control.116
Antitrust efforts against abuses of dominant positions also serve environmental sustainability, due to the higher risk (compared with weaker rivals) that a dominant firm restricts competition in a way that also harms the environment.117 That risk is particularly significant if the dominant firm is not incentivised to increase its efficiency by fierce countervailing buyer power, challenges from substitute products or international market leaders.
6.2 Preventing Foreclosure of Reasonably Efficient Competitors
A more permissive enforcement of art 102 TFEU than the cartel-prohibition of art 101 TFEU would risk incentivising mergers.118 Competition authorities should seek to implement a severe enforcement against abuses of dominant positions generally, and in particular against abuses consisting in defending a dominant position by causing substantial negative externalities (pollution), thereby excluding rivals which want to (or must) account for their own negative externalities.119
One controversial question is whether and how to apply the ‘as efficient competitor’-test (the AEC-test) in the assessment of foreclosure effects, for instance in the analysis of rebate schemes where customers are granted significant rebates if they commit to only or mostly buying products from the dominant company. Such exclusionary conduct likely forecloses rivals and can thus constitute abusive conduct.120 In the ECJ’s 2017 Intel decision, concerning rebate schemes by the market leader for computer chips, the ECJ dismissed the lower court’s idea that rebate schemes were per se abusive. It held that efficiency defences by the dominant undertakings would have to be examined through a full market analysis if a defendant puts forward reasons as to why its rebate scheme would have no exclusionary effects. For the ECJ, rebate schemes are not abusive if they do not exclude (foreclose) competitors which are “as efficient as” the dominant company.121 The foreclosure of less efficient rivals is merely seen as a normal expression of the competitive process.122
Such a severe AEC-test risks rendering antitrust enforcement against dominant behaviour unreasonably burdensome. Neither the wording of art 102 TFEU nor its historical or teleological interpretation require a restriction of the definition of abuses to conduct which hurts equally efficient competitors. As under art 101 TFEU, the decisive question is whether the conduct in question harms competition. Rebate schemes, pricing below costs and other exclusionary conducts can significantly harm competition even when an “as efficient” competitor would have managed to resist foreclosure. This is due to the fact that a less efficient competitor can benefit competition by pressuring the market leader to maintain a minimum of efficiency. In particular, the foreclosure of a less efficient competitor in markets with limited remaining competition
For that reason, abuse control should focus on ensuring opportunities for all reasonably efficient undertakings to compete on the merits and to potentially become as or more efficient than the dominant firm. To require strictly equal efficiency would be unreasonable in view of the effects discussed and in the author’s view also contrary to the right to equal treatment and economic liberty. Given that dominant undertakings typically benefit from incumbency-related advantages, antitrust authorities ought to examine to what extent the dominant firm’s superior efficiency is power-based (eg economies of scale and scope, differences in fixed costs, name recognition, strong bargaining power, consumer apathy) and to what extent it is merit-based. The more efficiency is unrelated to the dominant firm’s productivity or innovation capacity, the harder it is for efficient rivals to be ‘as efficient’. Hence, dominant conduct with exclusionary effects in the sense of art 102 TFEU ought to be presumed to be unfair (lit a) or to cause prejudice to consumers (lit b) whenever it might result in the foreclosure of competitors which would arguably be as efficient if they enjoyed the incumbency-related advantages themselves.123 Such an approach to abuse control prevents a strengthening of dominant positions which would harm economic efficiency and (indirectly) environmental sustainability.
6.3 Environmental Benefits through Dominant Behaviour?
Notwithstanding the above, a dominant firm might pursue sustainability objectives through exclusionary conduct which would typically fall under the scope of art 102 TFEU, such as the imposition of environment-sensitive trading conditions, or by limiting production to the prejudice of consumers.
That said, even in the case of a well-intentioned sustainability initiative by a dominant undertaking, a severe assessment of anti-competitive effects remains warranted, given that the foreclosure of any direct competitors would accentuate the risks related to a concentration of market power and likely eventually harm innovation and other parameters of competition which are important for environmental progress.130 Therefore, modest or short term sustainability benefits are unlikely to justify exclusionary conduct under art 102 TFEU.131 Exemptions should thus be handled more cautiously than under art 101 TFEU.
7 Sustainability and Merger Control Regulation
Unlike the prohibitions of cartels (art 101 TFEU) and dominant abuses (art 102 TFEU), which deal with present or past conduct, merger control under EU Merger Regulation (Council Regulation N°139/2004 of 20 January 2004 on the control of concentrations between undertakings) is concerned with assessing future changes in market structures. The relevant criteria in assessing restrictions of competition through agreements or other coordinated conduct under art 101 TFEU are similar to those applied under the EU Merger Regulation.132 Moreover, merger control also allows for a balancing of anti-competitive effects with efficiencies similar to the examination of exemptions under art 101(3) TFEU.
This brings us back to the issue of participation: There is little risk of competition being significantly impeded if the number of market actors which efficiently compete in the affected markets does not decrease post-merger.
In helping to prevent changes in market structures which would significantly harm static and in particular dynamic competition, merger control also benefits sustainability. When it cleared the Dow/DuPont-merger in March 2017, the Commission explained that pesticides were products that “matter […] to the environment”, and that effective competition was necessary to develop products ever safer for people and better for the environment. The Commission sought to ensure that the merger would not reduce “innovation for safer and better products in the future” by conditioning its approval in particular to the divestiture by DuPont of important parts of its global pesticide business.137 In August 2017, in the context of the Commission’s assessment of the Bayer
Typically, as said, a merger will raise environmental concerns if it also impedes efficient competition. The evidence indeed suggests that a reduction in the number of direct competitors is likely to restrict competition on quality, product choice and innovation, thereby harming not just economic efficiency, but indirectly also the environment.141 Conversely, a merger is unlikely to raise
8 Concluding Thoughts
There are several paths through which competition law enforcement can contribute to environmental sustainability. One path is by doing what it already does: enforce competition law against cartels (art 101 TFEU) and exclusionary or exploitative conduct of dominant undertakings (art 102 TFEU). This should be done vigorously, particularly in cases where anti-competitive conduct causes a significant harm to the environment (eg a cartel which hampers important technical progress, or a dominant undertaking which forecloses less polluting (indirect) competitors).
A second path consists in declaring art 101 (or art 102) TFEU inapplicable to conduct which serves sustainability objectives. That is a high-risk strategy, not just because of the anti-competitive behaviour it certainly invites, but also because of a likely encouragement of greenwashing and indirect harm to the environment resulting from reduced competition and increased concentrations of market power. Moreover, the second path does not appear necessary (proportional) at all, provided that the third path is taken seriously.
The third path consists in defining a broader range of environmental benefits as “efficiencies” under art 101(3) TFEU, and for defences against charges of abusive conduct under art 102 TFEU. That path, some details of which still need to be sorted out, enjoys wide support by scholars, competition lawyers and antitrust authorities. The author supports a bold departure from a narrow consumer-compensation requirement in cases where consumers have caused or significantly contributed to the negative externalities which a sustainability agreement aims at internalising.
A fourth path consists in resolving the challenge of sustainability and competition through decisions not to take up certain cases or to discontinue certain investigations. This is reasonable for instance if a competition authority is convinced that objective and measurable sustainability benefits (eg reductions of emissions, imposition of cleaner production standards) outweigh any
Participation is important to the well-functioning of all of those solutions. Participation as economic freedom is the very foundation of competition. In the absence of a possibility for all able undertakings to compete on the merits and to challenge market leaders, there is only distorted competition. Economic participation aside, democratic participation in its broadest sense is of similar importance: participation helps reaffirm the legitimacy of an (evolving) competition law enforcement, not just through democratic legislation (which is the exception), but for instance also through public discourse, reports by competition authorities, detailed consultation procedures, informal exchanges of authorities with undertakings (rather than a command-approach), assessment of social support for certain measures.
Cf Svend Albæk, ‘Consumer Welfare in EU Competition policy’ in Caroline Heide-Jørgensen et al (eds), Aims and Values in Competition Law (DJØF Publishing 2013); Joaquín Almunia, ‘Competition and consumers: the future of EU competition policy’ (SPEECH/10/233,European Competition Day, Madrid, 12 May 2010) <https://ec.europa.eu/commission/presscorner/api/files/document/print/en/speech_10_233/SPEECH_10_233_EN.pdf> last accessed 26 September 2022; Marino Baldi and Felix Schraner, ‘20 Jahre – und kein bisschen weiter? Zum wettbewerbspolitischen Verständnis von Art. 5 Kartellgesetz’ (2015) 11 AJP 1529.
Giorgio Monti, ‘Four options for a greener competition law’ (2020) 11 Journal of European Competition Law & Practice 124; Murco Mijnlieff, ‘Draft Guidelines on Sustainability Agreements – Opportunities within competition law’, (Autoriteit Consument & Markt (ACM), 26 January 2021) <www.acm.nl/en/publications/guidelines-sustainability-agreements-are-ready-further-european-coordination> last accessed 20 August 2022), regarding proposals by the Dutch competition authority; cf Studienvereinigung Kartellrecht, ‘Stellungnahme der Studienvereinigung Kartellrecht e.V. im Rahmen der Öffentlichen Konsultation der Europäischen Kommission über “Wettbewerbspolitik des Grünen Deals” (20 November 2020) <www.studienvereinigung.de/publikationen/stellungnahmen> last accessed 20 August 2022; Suzanne Kingston, ‘Integrating environmental protection and EU competition law: Why competition isn’t special’ (2010) 16 ELJ 780; Andreas Heinemann, ‘Nachhaltigkeitsvereinbarungen’ (2021) 5 sic! Zeitschrift für Immaterialgüter-, Informations- und Wettbewerbsrecht 213; Mathias Kyrklund, ‘EU Competition Policy and the Environment: The Role of Environmental considerations under Article 101 TFEU’ (Thesis in Competition Law, Uppsala Universitet 2020) <www.diva-portal.org/smash/get/diva2:1387072/FULLTEXT01.pdf> last accessed 1 August 2022; Andrea Pezza, ‘The European Green Deal: shaping environmentally friendly policies under Article 101 TFEU’ (2020) 4 M & CLR 139; cf also OECD Roundtable, ‘Sustainability and Competition’ (OECD December 2020), documents available under: <www.oecd.org/daf/competition/sustainability-and-competition.htm> last accessed 20 August 2022; Maarten Pieter Schinkel and Lukas Toth, ‘Balancing the Public Interest-Defense in Cartel Offenses’ (2017) Amsterdam Law School Legal Studies Research Paper No. 2016-05.
Art 101 (1) TFEU also requires that the agreement is capable of appreciably affecting trade within the EEA, a criterion delimiting its application from otherwise equivalent national provisions; moreover, the provision also explicitly bans “decisions by associations of undertakings” with such effects.
Cf Case C-226/11 Expedia Inc. v Autorité de la concurrence and Others (2012) OJ C 38/6.
Cf Case 27/76 United Brands Co and United Brands Continental BV v Commission (1978) 1 CMLR 429: a “dominant position” according to Article 102 TFEU is a “position of economic strength
enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers”. Cf Kyrklund, n 2, at 59; Heinemann, n 2, at 215, pointing out that there can only be a presumption of a nexus between the price-damping function of competition and harm to the environment if no price is paid for the consumption of environmental goods; Lars Lundgren, ‘A competitive environment? Articles 101 and 102 TFEU and the European Green Deal’ (Uppsala Universitet 2021) Master’s Thesis; Cento Veljanovski, ‘The Case against Green Antitrust’ (2022) European Competition Journal, <https://doi.org/10.1080/17441056.2022.2056346> last accessed 26 September 2022; Katharina Biely and Steven van Passel, ‘Market power and sustainability: a new research agenda’ (2022) 3 Discover Sustainability, <https://link.springer.com/article/10.1007/s43621-022-00073-y> last accessed 26 September 2022.
Heinemann, n 2, at 215; Jeffrey G York, ‘Pragmatic Sustainability: Translating Environmental Ethics into Competitive Advantage’ (2009) 85 Journal of Business Ethics 97.
Cf for instance Rupprecht Podszun, ‘Ausserwettbewerbliche Interessen im Kartellrecht und ihre Grenzen’ in Juliane Kokott, Petra Pohlmann, Romina Polley (eds), Europäisches, deutsches und internationales Kartellrecht - Festschrift Dirk Schroeder (Otto Schmidt 2018); Schinkel and Toth, n 2.
John D Harkrider, ‘Lessons from the Great Depression’ (2009) 23 Antitrust 6; cf Veljanovski, n 8 with further reference.
The opposite is true: Competition would have increased incentives to diversify suppliers, which would have kept prices lower and Europe safer.
C 128/15 Polskie Górnictwo Naftowe i Gazownictwo v Commission (Commitments by Gazprom) (2022) OJ C 128/15, The EU General Court dismisses the action brought against the Commission’s decision to make a gas company’s commitments binding in order to address competition concerns in relation to the national markets for the upstream wholesale supply of gas in eastern and central Europe (Gazprom), (a years-long investigation ended in 2018 with a commitment decision)
The latter because of the theory that gas could become a driver of the transition towards a climate-neutral economy through its possible role in the scaling up of hydrogen.
Der Spiegel, 4.7.2002, Herbe Kritik an der Ministererlaubnis; cf. FAZ, 1.5.2022, Gazprom: Fusion von Eon und Ruhrgas und die Folgen, <www.faz.net/aktuell/wirtschaft/gazprom-fusion-von-eon-und-ruhrgas-und-die-folgen-17990639.html> last accessed 1 August 2022.
Cf Podszun, n 11, at 628.
Schinkel and Toth, n 2, at 5.
Cf Kyrklund,n 2, at 69–101; Suzanne Kingston, Greening EU Competition Law and Policy (CUP 2011); Pezza, n 2, at 140.
That is, they can be (Pezza, n 2, at 157) “translated into economic efficiencies” which makes them usable in determining consumer welfare, i.e. through an “economisation of environmental benefits” (Hans Vedder, Competition Law and Environmental Protection in Europe: Towards Sustainability? The Netherlands, Europa Law Publishing, 2003, 321).
Cf Kingston, n 19.
Cf Uffer, n 5, sec 4.3.1.
Cf Heinemann, n 2, at 218; Ernst-Joachim Mestmäcker und Heike Schweitzer, Europäisches Wettbewerbsrecht (C.H. Beck 2014).
Legal uncertainty and political discretion are the main concerns, cf Okeoghene Odudu, ‘The Boundaries of EC Competition Law: The Scope of Article 81’ (OUP 2006); Schinkel and Toth, n 2, at 26 (also arguing in p5 that a broad public interest-defence would impose an excessive burden on competition authorities, which would have to engage in a “complex monitoring and balancing task”); Podszun n 11, at 622; Baldi and Schraner, n 1, at 1535; Heinemann, n 2, at 222, 225.
Podszun, n 11, at 632, stating that the markets themselves are democratic institutions, and competition law protects their functioning. Cf, regarding the importance of market access and market power in antitrust assessments, Carles Esteva Mosso, ‘The Contribution of Merger Control to the Definition of Harm to Competition’ (March 2016) <https://ec.europa.eu/competition/speeches/text/sp2016_03_en.pdf> last accessed 1 August 2022).
That assumption is largely consistent with the competition law theory of the Harvard School, which unlike its more intervention-sceptic rival (Chicago School) argues that there is a necessity to preserve certain market structures which it sees as per se pro-competitive, and thus to limit tendencies of increased market concentration cf Carl Baudenbacher, ‘Markt und Wettbewerb in der Rechtsprechung des EFTA-Gerichtshofs’, in Juliane Kokott, Petra Pohlmann and Romina Polley (eds), Europäisches, deutsches und internationals Kartellrecht – Festschrift für Dirk Schroeder (Otto Schmidt 2018).
Cf Bundeskartellamt, ‘Google: Feststellung der überragenden marktübergreifenden Bedeutung für den Wettbewerb‘ (Fallbericht, 5 January 2022) <www.bundeskartellamt.de/SharedDocs/Entscheidung/DE/Fallberichte/Missbrauchsaufsicht/2022/B7-61-21.pdf?__blob=publicationFile&v=7> last accessed 10 October 2022, declares Android […], as “Infrastrukturcharakter”.
Alex Bruce and Thomas Faunce, ‘Sustainable fuel, food, fertilizer and ecosystems through a global artificial photosynthetic system: overcoming anticompetitive barriers’ (2015) 5 Interface Focus, http://dx.doi.org/10.1098/rsfs.2015.0011 last accessed 1 August 2022.
Cf Bruno S Frey and Gebhard Kirchgässner, Demokratische Wirtschaftspolitik (Vahlen 2002); Sarah Beeston, ‘Competition Law and Sustainability Initiatives’, in Juliane Kokott, Petra Pohlmann and Romina Polley (eds), Europäisches, deutsches und internationals Kartellrecht – Festschrift für Dirk Schroeder (Otto Schmidt 2018), referring to the evolution of the Dutch competition law, which is much committed to the “ideal of social participation and social responsibility” (ibid, at 125); Aandreas Glaser, Nachhaltige Entwicklung und Demokratie, (Mohr Siebeck 2006).
Cf Podszun, n 11, at 622–623; Baudenbacher, n 27, at 78.
Pezza, n 2, at 139–141; Kyrklund, n 2, at 54, 57, 61; cf Podszun, n 11, at 624.
A case in point is Austria’s recent (2021) amendment to its cartel act, which widened the possibilities of justifications for sustainability agreements by introducing a presumption of consumer compensation by agreements which “contribute substantially to an ecologically sustainable or climate-neutral economy” (cf Uffer, n 5, sec 4.2.3), see: Federal Law amending the Cartel Act 2005 and the Competition Act, BGBl. I No. 176/2021 (KaWeRÄG); cf also Austria’s written note on ‘Environmental Considerations in Competition Enforcement’ submitted on behalf of the 136th OECD Competition Committee meeting on 1–3 December 2021, available on www.oecd.org/daf/competition/environmental-considerations-in-competition-enforcement.htm last accessed 10 October 2022. Cf Austrian Federal Competition Authority (FCA), ‘Draft Sustainability Guidelines’, 1 June 2022, <www.bwb.gv.at/en/news/news-2022/detail/afca-publishes-draft-guidelines-on-the-application-sustainability-agreements-asking-for-comments> last accessed 10 October 2022.
Cf Schinkel and Toth, n 2, at 27.
Christopher Townley, Article 81 EC and Public Policy (Hart Publishing 2010); Pezza, n 2, at 146.
Kingston, n 21, at 236–237; discussed with further references in Pezza, n 2, at 147–152, in support of a cautious exclusion of some sustainability agreements from the scope of competition law, based on a balancing of the objectives involved; cf Christopher Townley, ‘Is anything more important than consumer welfare (in Article 81 EC)? Reflections of a Community lawyer’ (2008) 10 Cambridge Yearbook of European Legal Studies 345.
That same art 3 (3) TEU considers “a highly competitive social market economy” to be one of the other fundamental objectives.
Kingston, n 19, at 113–114; cf Lundgren, n 8.
Pezza, n 2, at 151.
Cf references in Kyrklund, n 2, at 62–68.
Cf Kyrklund, n 2, at 40.
Cf Podszun, n 11, at 627 f; Alexander Merkulov, ‘European Union Competition Law and Environmental Policy’ (2021) Maastricht Center for European Law, Master Working Paper 2021/2 <www.maastrichtuniversity.nl/sites/default/files/mcel_mwp_2021-2.pdf> last accessed 10 October 2022.
Case C-1/12 Ordem dos Téchnicos Oficiais de Contas (OTOC) v Autoridade da Concorrencia [2013] EU:C:2013:127; [2013] 4 C.M.L.R. 20.
Case C-136/12 Consiglio Nazionale dei Geologi (CNG) v Autorita Garante della Concorrenza e del Mercato [2013] EU:C:2013:489; [2013] 5 C.M.L.R. 40.
C-184/13 API - Anonima Petroli Italiana SpA v Ministero delle Infrastrutture e dei Trasporti [2014] EU:C:2014:2147; [2014] 5 C.M.L.R. 21.
Cf Kyrklund, n 2, at 40; Merkulov, n 44, at 31; Pezza, n 2, at 147.
Cf Podszun, n 11, at 625; Baldi and Schraner, n 1, at 1529–1537, referring to analogous Swiss cartel law and not specifically to sustainability-based limitations; cf Heinemann, n 2, at 222.
The Commission, ‘Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-Operation Agreements’ (2011) OJ C 11/1 (para 548) (the Commission’s horizontal Guideline) itself seems to reject the reasoning from Albany or Wouters: “agreements that restrict competition cannot escape the prohibition of Article 101(1) for the sole reason that they are necessary for the pursuit of a sustainability objective”.
Ibid, at para 551.
Cf the Commission, ‘Antitrust: Commission adopts new Vertical Block Exemption Regulation (VBER) and vertical guidelines (VGL)’, published on 10 May 2022 in Brussels, which entered into force on 1 June 2022.
The derogation was adopted through art 210a of Regulation 2021/2117, amending the CMO Regulation 1308/2013 by the European Parliament and Council of the EU. After current consultations of stakeholders, the Commission is set to issue draft guidelines on the application of that derogation.
Cf C 291/1 Communication from the Commission, ‘Notice on agreements of minor importance which do not appreciably restrict competition under Article 101(1) of the Treaty on the Functioning of the European Union (De Minimis Notice) [2014] OJ C 291/1, which clarifies that the safe harbour will not apply to any restrictions of competition by “object” or restrictions listed as “hardcore” in any current or future block exemption; cf Baldi and Schraner, n 1, at 1535. For hardcore restrictions in vertical agreements, cf art 4 of Commission Regulation (EU) No 330/2010 of 20 April 2010 [2010] OJ L 102/1 (imposing of minimum sales price, customer or territory restriction clauses). For horizontal agreements, art 5 Commission Regulation (EU) No 1217/2010 of 14 December 2010 on research and development agreements [2010] OJ L 335/36, and art 4 Commission Regulation (EU) No 1218/2010 of 14 December 2010 on specialization agreements[2010] OJ L 335/43.
In that sense, Veljanovski, n 8, at 3; Schinkel and Toth, n 2, at 15, which describe how incentives for firms to engage in sustainability initiatives require that each firm’s costs of contributing to sustainability progress cannot exceed the extra profits it yields by the higher price charged on consumers.
Cf Heinemann, n 2, at 216.
Or Brook, ‘Struggling with Article 101(3) TFEU: Diverging Approaches of the Commission, EU Courts, and five Competition Authorities’ (2019) 56 Common Market Law Review 121; cf Authority for Consumers and Markets, ‘NMa [Netherlands Competition Authority] is positive towards Dutch shrimp-fishing industry’s plans to make shrimp-fishing sustainable’, <www.acm.nl/en/publications/publication/6535/NMa-is-positive-towardsDutch-shrimp-fishing-industrys-plans-to-make-shrimp-fishing-sustainable>, last accessed 19 July 2022; critical Schinkel and Toth, at 2 and 5.
Cf BananaLink, ‘Living wages initiative given anti-trust green light’ (21 January 2022) www.bananalink.org.uk/news/living-wages-initiative-given-anti-trust-green-light/ last acces-sed 1 August 2022); in an earlier case regarding a fairtrade-system the Bundeskartellamt refrained from undertaking an antitrust investigation even though it involved fixed minimum prices (that initiative however involved small overall market shares, cf Bundeskartellamt, ‘Tätigkeitsbericht 2017/2018’ (19 June 2019) Bundestags-Drucksache 19/10900, at 52; cf Felix Engelsing and Moritz Jakobs, ‘Nachhaltigkeit und Wettbewerb’ (2019) 69 WuW 16; Heinemann, n 2, at 220).
Heinemann, n 2, at 220.
Cf ECN (European Competition Network), ‘ECN Recommendation on the Power to set Priorities’, at para 3, <https://ec.europa.eu/competition/ecn/recommendation_priority_09122013_en.pdf> last accessed 10 October 2022: “Prioritisation criteria used by the Authorities may include, among others, public interest […], or other substantive, institutional or procedural considerations. […] Although in different degrees, most [national] Authorities already have the ability to set priorities in their enforcement activities”.
Sarah Beeston, n 30, at 115–125, with detailed discussion of the Dutch competition authority’s “turn a blind eye”-commitment.
Cf Veljanovski, n 8, at 3.
Cf The Netherlands Authority for Consumers and Markets (ACM), ‘Draft guidelines on sustainability agreements’ (9 July 2020) (ACM, Draft guidelines 7/2020), at para 61: “If undertakings are unsure about the reliability of their self-assessments, they are invited to contact ACM and to discuss their agreements, preferably at an early stage. ACM will then indicate what concerns it may have, and it will help find possible solutions.”; for an example of non-investigation following a minor change to the agreement the German case about an animal welfare initiative is relevant, where the firms agreed to add a label to the products concerned, thus increasing consumer choice: Bundeskartellamt, n 60.
Transparency and strong compliance efforts are recommended by experts as a strategy to reduce antitrust-risks: cf Heinemann, n 2, at218; egarding the fear of such a burden, see: Schinkel and Toth, n 2, at 5 and 7: “The information requirements for a competition agency […] seem prohibitively large”.
Podszun, n 11, at 620.
Cf Heinemann, n 2, at 216.
Cf ACM, ‘Draft guidelines on sustainability agreements’ (26 January 2021’ (ACM, Draft guidelines 1/2021), at para 75–76, <www.acm.nl/en/publications/second-draft-version-guidelines-sustainability-agreements-opportunities-within-competition-law> last accessed 30 August 2022; ACM, n 65, at para 65, regarding the requirement of showing support for the initiative among those affected by its rules. Cf Beeston, n 30, at 115–116 and 124, referring to the ACM’s policy of requiring the sustainability agreement to enjoy broad social support for it to refrain from performing any enforcement actions.
Cf Lundgren, n 8, at 84, 85: “The fact that the Commission indeed does consider limiting environmental protection as an issue under Article 101 TFEU is hopeful from the European Green Deal perspective, as it also indicates that an agreement creates efficiencies if it leads to increased environmental protection under Article 101 TFEU. Thus, the application of Article 101 TFEU as a sword may clarify the state of the law even as regards the Article’s application as a shield, and be beneficial to the development of the law as regards antitrust as a whole”; Schinkel and Toth, n 2, at25.
Schinkel and Toth, n 2, at 27; cf Heinemann, n 2, at 223–225.
Cf European Commission, ‘Statement by Executive Vice-President Vestager on the Commission decision to fine car manufacturers €875 million for restricting competition in emission cleaning for new diesel passenger cars’ (8 July 2021, Brussels) STATEMENT/21/3583.
Cf Schinkel and Toth, n 2, at 4.
Cf regarding the rising levels of concentration in the agrochemical markets and challenges related to new gene-editing technologies, Ioannis Lianos, ‘Agro-chemical Mega-mergers and Innovation, Between Competition Law, Regulation and IP Rights’, in Gabriella Muscolo and Marina Tavassi (eds.), The interplay between competition law and intellectual property: an international perspective (Alphen aan den Rijn 2019), CLES Research Paper Series 7/2018 <www.ucl.ac.uk/cles/research-papers> last accessed 30 August 2022.
Webtaxi S.à.r.l. Decision of Conseil de la Concurrence No. 2018-FO-01 of 7 June 2018.
European Commission 2000/475/EC Decision of 24 January 1999 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case IV.F.1/36.718.CECED)[1999] OJ L 187/47.
Consumer Detergents (Case COMP/39579) Commission Decision of 13 April 2011 [2011] OJ C 193/13.
Veljanovski, n 8, at 5; cf Jurgita Malinauskaite, ‘Competition Law and Sustainability: EU and National Perspectives’ (2022) 13 Journal of European Competition Law & Practice 336 <https://doi.org/10.1093/jeclap/lpac003> last accessed 1 August 2022; Heinemann, n 2, at 218.
ACM, ‘Industry-wide arrangements for the so-called Chicken of Tomorrow restrict competition’ (26.1.2015) case number 13.0195.66, <www.acm.nl/en/publications/publication/13761/Industrywide-arrangements-for-the-so-called-Chicken-of-Tomorrow-restrict-competition> last accessed 20 August 2022; cf Beeston, n 30, at 114.
As pointed out by Schinkel and Toth, n 2, 25, another problem of the ACM’s “willingness to pay”-test is that it is vegetarians who are most likely to have the highest willingness to pay, not consumers of cheap chicken meat, which are most affected by anti-competitive effects on prices and choice and for which the improvements in animal-welfare and meat quality are not of any significant compensating value.
ACM,Draft guidelines 1/2021, n 65, at 53: “the pros and cons of an agreement can only be compared if the same measurement unit is used, which is done by expressing them in monetary terms”; cf. Podszun, n 11, at 629.
Cf Roman Inderst, Eftichios Sartzetakis, Anastasios Xepapadeas, ‘Technical Report on Sustainability and Competition’ (Athens University of Economics and Business 2021) DEOS Working Papers 2103 jointly commissioned by the Hellenic Competition Commission (HCC) and the Netherlands Authority for Consumers and Markets (ACM) on the methods to quantify the efficiency gains of environmental sustainability initiatives. Cf Eva van der Zee, ‘Quantifying Benefits of Sustainability Agreements under Article 101 TFEU in terms of Human Well-Being’ (University Hamburg 2020) Working Paper 2020 No. 31, at 12–15 (capability approach).
Cf. Pezza, n 2, at 157–158, with further references.
Heinemann, n 2, at 225; Theon van Dijk, ‘A New Approach to Assess Certain Sustainability Agreements under Competition Law’, in Simon Holmes, Dirk Middelschulte and Martijn Snoep (eds) Competition Law, Climate Change and Environmental Stability (Concurrences 2021); ACM, Draft guidelines 1/2021, n 65, at para 53–56.
A position shared by sceptics of a greener competition law, cf. Podszun, n 11, at 627–628.
Simon Holmes, ‘Climate change, sustainability and competition law’ (2020) 8 Journal of Antitrust Enforcement 354; Pezza, n 2, at 139.
As pointed out by Ludwig Krämer, ‘Giving a voice to the environment by challenging the practice of integrating environmental requirements into other EU policies’, in Suzanne Kingston (ed), European Perspectives on Environmental Law and Governance (Routledge 2012) and Pezza, n 2, at 145, that is a stronger wording than the usual “shall be” of the Treaty’s other policy linking clauses.
Suzanne Kingston, n 2; Julian Nowag, Environmental Integration in Competition and Free Movement Laws (OUP 2016); Pezza, n 2, at 144–146; Maurits Dolmans, ‘Sustainable Competition Policy’ (2020) 5 and 6 Competition Law and Policy Debate 4; cf Kingston, n 21, at 108; Giorgio Monti, ‘Article 81 EC and public policy’(2002) 39 Common Market Law Review 1057; Heinemann, n 2, at 218.
Case C-487/06P British Aggregates v Commission [2008] ECR 2008 I-10515, para 73 (State Aid); Case C-513/99 Concordia Bus v. Helsingin kaupunki [2002] ECR 2002 I-07213, para 57 (public procurement); Case C-2/90 Walloon Waste, Commission of the European Communities v. Kingdom of Belgium [1992] ECR 1992 I-04431 (free movement of goods); cf Pezza, n 2, at 144–149 with further references.
Julian Nowag, Environmental Integration in Competition and Free Movement Laws (OUP 2016); Pezza, n 2, at 144–145, 153; cf Odudu, n 27, at 160.
Pezza, n 2, at 151 (cf at 146 note 29); in favour of systematically giving more weight to environmental concerns in turn Kingston, n 21, at 113–114.
Kyrklund, n 2, at 78–95.
See Commission’s Guidelines, n 51; unlike the preceding 2001 Horizontal Guidelines, they no longer specifically dealt with sustainability agreements.
Cf Akman, p 115; Heinemann, n 2, at 217.
EC Communication Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, Case C 164/1 Commission Decision C/2022/1159 [2022] OJ C 164/1, draft 1 March 2022 (Commission, Draft revised Horizontal Guidelines 3/2022), EC draft revised Horizontal Block Exemption Regulations on Research & Development (R&D BER) and on Specialisation agreements (Specialisation BER; together HBER s); both draft revised regulations and the draft guidelines are available under <https://competition-policy.ec.europa.eu/public-consultations/2022-hbers_en> last accessed 30 August 2022.
Cf Heinemann, n 2, at 223.
Inception Impact Assessment and Staff Working Document (SWD), discussed in Malinauskaite, n 74.
Directorate- General for Competition (European Commission), ‘Competition Policy in Support of Europe’s Green Ambition’ (2021), Competition policy brief Issue 2021-01, <https://competition-policy.ec.europa.eu/publications/competition-policy-briefs_en> last accessed 30 August 2022, (Policy Brief Issue 2021-01).
Ibid, at 5; cf Malinauskaite, n 74.
Cf. Heinemann, n 2, at 218.
Commission, Draft revised Horizontal Guidelines 3/2022, n 51, at para 584.
ACM, Draft guidelines 1/2021, n 65, at 36.
Pezza, n 2, at161, with further references.
ACM, Draft guidelines 1/2021, n 65, at 36, 43 and 61; Schinkel and Toth, n 2, 26; future consumers are already to be taken into account according to Communication from the Commission Notice 2004/C 101/08 of 27 April 2004, Guidelines on the application of Article 81 (3) of the Treaty [2004] OJ C 101/97 (hereafter: Guidelines on the Application of 101 (3) TFEU), marginals 43 and 85), but their interests are typically discounted to an important extent due to future uncertainties.
Cf Pezza, n 2, at 158–162.
KaWeRäG, n 33.
In its result, the Austrian law now resembles its Swiss counterpart, which never explicitly required consumer-compensation; cf Heinemann, n 2, at 222–224.
ACM, Draft guidelines 1/2021, n 65, at point 38–39.
Ibid.
Cf ibid, at 40; cf also Economist, ‘ESG should be boiled down to one simple measure: emissions’ (21 July 2022) <www.economist.com/leaders/2022/07/21/esg-should-be-boiled-down-to-one-simple-measure-emissions> last accessed 17 October 2022.
Cf Holmes, ‘Preface: How Sustainability Can Be Taken Into Account in Every Area of Competition Law’ in Simon Holmes, Dirk Middelschulte and Martijn Snoep (eds) Competition Law, Climate Change and Environmental Stability (Concurrences 2021), p 9: “There is no basis for the adoption of a narrow ‘consumer welfare’ test anywhere in the Treaties – and therefore in EU law (or the analogous national competition regimes in Europe)”.
Stefan Thomas and Roman Inderst, ‘Integrating Benefits from Sustainability into the Competitive Assessment - How Can We Measure Them?’ (2021) 12 Journal of European Competition Law & Practice 705.
Regarding hyperbolic discounting, cf Nick Wilkinson and Matthias Klaes (eds), An Introduction to Behavioral Economics, (Palgrave 2012).
Cf Kingston, n 2, at para 801; extensively on the problematic of market failures and their internalisation, see: Michael Fritsch, Marktversagen und Wirtschaftspolitik, (Vahlen 2018); cf Heinemann, n 2, at 215–216.
Cf Martijn Snoep, ‘Keynote speech for IBA 2020 - 24th Annual Competition Virtual Conference’ (9 September 2020) <www.acm.nl/nl/publicaties/keynote-speech-martijn-snoep-voor-iba-annual-competition-conference> last accessed 17 October 2022: “The counterfactual of this situation is that non-users carry the burden of the externalities that users create, without having the advantages of lower prices that are the result of competition. That is neither fair nor efficient.”; ACM, Draft guidelines 1/2021, n 69,at para 39–42, in particular 41: “it can be fair not to compensate users fully for the harm that the agreement causes because their demand for the products in question essentially creates the problem for which society needs to find solutions”.
Cf Dolmans, n 84, at para 20.
Cf Schinkel and Toth, n 2, at 6–8.
That is, aside from environmental benefits, which are “by their (open and diffusive) nature – always passed onto consumers in significant quantities” (Pezza, n 2, at 159).
Podszun, n 11, at 632 Competition democratic institution, cf above.
See Council Regulation No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (EC Merger Regulation) [2004] OJ L 024/1; Uffer, n 5, sec 6.
Lundgren, n 8, at para85: “there appears to be a connection between market power and unsustainable conduct insofar as it is easier for a dominant undertaking to act unsustainably.”; cf Heinemann, n 2, at 215: “die Verfolgung von Sozial- und Nachhaltigkeitszielen [ist] für eine Vielzahl von Unternehmen eine Voraussetzung für wirtschaftlichen Erfolg geworden”.
Cf Michael Funk, Christian Jaag and Samuel Rutz, ‘Gefährdete Kohärenz im Kartellrecht’ (2018) Swiss Economics Working Paper 0061 <www.swiss-economics.ch/RePEc/files/0061FunkJaagRutz.pdf> last accessed 17 October 2022.
Cf Lundgren, n 8, at para 86.
Case C-413/13 P Intel Corp. v European Commission [2017], ECLI:EU:C:2017:632, para 137.
Ibid, paras 138–140.
Ibid, paras 133–134.
Cf comments under Alfonso Lamadrid and Pablo Ibàñez Colomo, ‘Why Article 102 TFEU is about equally efficiant rivals: legal certainty, causality and competition on the merits’ (Chillin’Competition, May 2021) <https://chillingcompetition.com/2021/05/10/why-article-102-tfeu-is-about-equally-efficient-rivals-legal-certainty-causality-and-competition-on-the-merits/> last accessed 1 August 2022).
See ‘Wal-Mart Takes Lead On Supporting Sustainable Fisheries’ (Wal-Mart, 5 February 2006) <https://corporate.walmart.com/newsroom/2006/02/05/wal-mart-takes-lead-on-supporting-sustainable-fisheries> last accessed 1 August 2022.
While art 102 TFEU does not have an explicit exemption clause, cases of alleged abuse of dominance are regularly assessed based on an effects based approach similar to that under art 101/3 TFEU, rather than through the figure of per se illegal behaviour. A successful defence requires that it be shown that exclusionary conduct described in art 102 TFEU is either objectively necessary for legitimate objectives or that it creates efficiencies which outweigh any anti-competitive effects; Communication from the Commission 2009/C 45/02 of 24 February 2009 Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings [2009] OJ C 45/7.
Cf Schinkel and Toth, n 2, at 26.
Cf Dolmans, n 84, at 20, rightly stressing that this is consistent with the polluter pays principle.
Cf Boris p Paal, ‘Gutachten zu Rechtsfragen im Zusammenhang mit der Berücksichtigung(sfähigkeit) von außer-ökonomischen Zielen auf der Grundlage und am Massstab der europäischen Fusionskontrollverordnung in dem Kartellverfahren betreffend das Zusammenschlussvorhaben von Bayer AG und Monsanto Co’ (23 April 2017); cf also Heinemann, n 2, at 221; Marco Fetz and Marc Steiner, ‘Öffentliches Beschaffungsrecht des Bundes’, in Thomas Cottier, Matthias Oesch, Remo Arpagaus et al (eds) Schweizerisches Aussenwirtschafts- und Binnenmarktrecht (Helbing and Lichtenhahn 2020); Marc Steiner, ‘Ein interdisziplinärer Blick auf Wettbewerb und Nachhaltigkeit’ (22 October 2021) Speech at the work session of the Studienvereinigung Kartellrecht in Bern/Center for the Law of Innovation and Competition <www.studienvereinigung-kartellrecht.de> last accessed 5 May 2022.
On the limits of that principle, cf Matthias Uffer, Die Grundrechtskollision (Nomos 2021).
Cf Schinkel and Toth, n 2, at 25.
Cf Kyrklund, n 2.
Mosso, n 26,at 8.
Cf Lars-Hedrik Röller and Miguel de la Mano, ‘The Impact of the new substantive test in European merger control’ (2006) 2 European Competition Journal 9–28.
Cf Baldi and Schraner, n 1, at 1535; a merger which leads to better and a broader range of products and services might for instance enable the new firm to submit tenders in public procurement procedures.
Mosso, n 26, at 4–5, 7.
Röller and de la Mano, n 141, at 10.
Case M.7932 Dow/DuPont [2017] Commission Decision declaring a concentration to be compatible with the internal market and the EEA Agreement press release; Podszun, n 11, at623 f.
Case M.8084 Bayer/Monsanto [2018] Commission Decision declaring a concentration to be compatible with the internal market and the EEA Agreement, OJ C 459/10.
Cf Statement by Commissioner Vestager on Commission decision to give conditional approval to the merger (European Commission, 21 March 2018) <https://ec.europa.eu/commission/presscorner/detail/en/IP_18_2322> last accessed 1 July 2022; cf Podszun, n 11, at 613.
Cf Daniel Simon and Jeffrey Prince, ‘The Effect of Competition on Toxic Pollution Releases’(2016) 79 J. Environ. Econ. & Management 40; Andreas Heinemann, ‘Business Enterprises in Public International Law’, in Ulrich Fastenrath, Rudolf Geiger, Daniel-Erasmus Khan et al (eds), From Bilateralism to Community Interest – Essays in Honour of Judge Bruno Simma (OUP 2011); Maarten Pieter Schinkel and Leonard Treuren, Corporate Social Responsibility by Joint Agreement (2021) Tinbergen Institute Discussion Paper No. TI 2021-063/VII <https://ssrn.com/abstract=3878784> last accessed 17 October 2022; Daniel Fernández-Kranz and Juan Santaló, ‘When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility’ (2010)19 J. Econ. & Management Strategy 453; cf Veljanovski, n 8, at 8 with further references; European Commission, European Competitiveness Report 2008, SEC (2008) 2853, 118: “for an increasing number of enterprises in a growing number of industries, CSR [corporate social responsibility] is becoming a competitive necessity – it is something that they cannot afford not to do”; Philippe Aghion, Roland Bénabou, Ralf Martin and Alexandra Roulet, ‘Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty?’ (2021) Harvard University <https://scholar.harvard.edu/aghion/publications/environmental-preferences-and-technological-choices-market-competition-clean-or> last accessed 20 August 2021.
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