The Commission’s Communication “A competition policy fit for new challenges” (link) (the “Communication”) identifies key areas in which competition law and policy can support European efforts in dealing with the challenges of the green and digital transitions. The document covers all areas of competition law (antitrust, merger control, and State aid) and identifies various ways in which new and existing tools can contribute to addressing these challenges.
While the document does not break new ground, it provides a comprehensive overview of the Commission’s vision of competition law in these areas. Its principal contribution lies in clarifying rules for Covid-19 support mechanisms, facilitating investments into certain European key industries, and announcing antitrust guidance for digital and green industries.
As key documents are still in flux, companies need to familiarise themselves with these initiatives now to anticipate and prepare for future changes.
The document contains four main areas of intervention:
Accelerating the post-Covid recovery
As a first measure, the Commission has adopted an amendment to the State Aid Temporary Framework (see earlier Stibbe newsletter) which progressively phases out (temporary) measures by June 2022 to avoid distorting the recovering EU economy. At the same time, the amendment introduces two new tools to create incentives for private investments (e.g. in digital infrastructure, or more sustainable manufacturing), and provide solvency support for SMEs post-Covid.
Supporting the “Green Transition”
The second pillar of the Communication describes how competition law can support the Commission’s sustainability goals. A main lever is State aid. The Communication identifies in particular the upcoming Climate, Environmental Protection and Energy Aid Guidelines, as well as the General Block Exemption, as ways in which Member States can provide support to green initiatives.
The Commission does not however envision a radical overhaul of the existing rules; in particular it seems reluctant to expand a tool permitting initiatives allowing Member States across the EU to support companies in a specific industry (known as Important Projects of Common European Interest) beyond narrowly defined industries (for instance hydrogen energy or batteries).
On the much-discussed initiatives for competition law to support sustainability efforts (see our earlier newsletters here and here), the Commission highlights recent enforcement in relation to car manufacturers, and hints at potentially exempting certain agreements if they create certain environmental benefits under its review of the Horizontal Block Exemption and Guidelines (see also here). The Communication adds that the Commission is prepared to provide ad-hoc guidance for companies pursuing sustainability objectives.
Supporting the “Digital Transition”
Third, the Communication describes the Commission’s approach to tackling the “digital transition”, in which the document identifies two challenges: boosting investment and addressing the specific natures of platforms and digital markets.
With regard to the former, the Commission interestingly encourages private operators to cooperate in network-sharing, which it has viewed more critically in the past. With regard to the digital transition, the Commissions stresses recent efforts to review killer acquisitions and announces clarifications on data sharing and new online distribution models in the review of its Horizontal and Vertical Guidelines.
Increasing resilience of Single Market
Especially since the Covid-19 crisis, calls for a more resilient EU industrial policy have become louder. The Communication echoes this, announcing antitrust guidance for industrial alliances in key sectors such as batteries, semiconductors, and cloud computing. The Commission may also approve State aid schemes to boost the European semiconductor industry, and stresses the importance of addressing distortive foreign subsidies.
The document confirms the Commission’s increasingly confident role in tackling digital and green challenges. With key instruments currently in flux, the Communication’s main contribution is to provide a comprehensive overview and timeline of the Commission’s policy goals. Businesses should take note as fundamental rules across all areas of competition policy are amended.
This article was published in the Competition Newsletter of December 2021. Other articles in this newsletter: