Greening EU Competition Law: Commission Invites Comments On Draft Revised Rules On Horizontal Cooperation
By: Nicole Kar & Lauren O’Brien (Linking Competition)
Last week, the European Commission published its much-anticipated draft revised Horizontal Guidelines and two Horizontal Block Exemption Regulations (in respect of R&D agreements and specialisation agreements) for comments, in addition to five accompanying expert reports (read our client alert here). This follows a review and evaluation process launched in September 2019 and aims at adapting the current rules in specific areas where the evaluation found that they were not fully adjusted to the economic and societal developments, in particular the digital and green transition.
Why Sustainability?
The Guidelines contain nine sections devoted to different types of agreements between competitors. The final, and crucial for this blog, section is new and entirely devoted to sustainability agreements. It is only “new” since the last version of the guidance however, as the 2001 guidance also included a sustainability section (specifically in relation to environmental agreements).
The Commission recognises that sustainable development is a core principle of the EU Treaties and a policy priority for the EU. It also says that competition enforcement contributes to sustainable development by ensuring effective competition, which stimulates innovation and contributes to consumer welfare. However, the Commission recognises that there is a concern that individual production and consumption decisions can have negative effects on factors like the environment, that are not sufficiently taken into account by the entities that cause them. One way of addressing or mitigating such market failures is through collective action…
On the Article 102 TFEU Guidelines (V): Competition on The Merits as an Irritant
By: Pablo Ibañez Colomo (Chillin’ Competition)
In his article, Pablo Ibañez Colomo examines the recent push to operationalize “competition on the merits,” transitioning it from an abstract aspiration into a tool for assessing lawful versus abusive conduct under Article 102 TFEU.
One of the most notable developments in recent years is the revival of the concept of competition on the merits. For a long time—particularly over the past decade—competition on the merits remained little more than an abstract aspiration, a “general umbrella,” as Heike Schweitzer and Simon de Ridder aptly described it, with no concrete substantive content.
Recently, the author notes, there has been an effort to transform this abstract notion, which is difficult to disagree with, into a practical and operational concept. The goal was to move beyond the “general umbrella” and develop competition on the merits into a functional tool, enabling courts and authorities to delineate lawful from abusive conduct in specific cases.
The roots of this effort can be traced back to case law. Defendants in cases such as Google Shopping and Servizio Elettrico Nazionale invoked competition on the merits in hopes of (i) narrowing the scope of Article 102 TFEU and/or (ii) increasing the burden of proof for competition authorities.
However, these efforts have not yielded the desired results. Following the Google Shopping case, it has become evident that conduct not inherently inconsistent with competition on the merits can still fall within the scope of Article 102 TFEU, depending on the economic and legal context. Moreover, competition authorities are not universally required to demonstrate that the contested practice deviates from competition on the merits. Instead, where a legal test exists, showing that the conditions of that test are met suffices to establish abuse to the required legal standard.
The attempt to render competition on the merits an operational concept has failed and may have even backfired. This vague notion can now be weaponized against defendants, as portraying conduct as a departure from competition on the merits effectively implies abuse, even if only as a rhetorical strategy.
Although the effort to revive competition on the merits has fallen short, it has left a legacy of confusion for the competition law community to navigate. The Commission, for instance, has had to engage with the concept in its Draft Guidelines, dealing with a challenging and complex issue…
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