Antitrust: Commission consults stakeholders on a possible new competition tool

Vice-President

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has published today an inception impact assessment as well as an open public consultation inviting comments on exploring the need for a possible new competition tool that would allow addressing structural competition problems in a timely and effective manner. Stakeholders can submit their views on the inception impact assessment until 30 June 2020 and respond to the open public consultation until 8 September 2020.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The world is changing fast and it is important that the competition rules are fit for that change. Our rules have an inbuilt flexibility which allows us to deal with a broad range of anti-competitive conduct across markets. We see, however, that there are certain structural risks for competition, such as tipping markets, which are not addressed by the current rules. We are seeking the views of stakeholders to explore the need for a possible new competition tool that would allow addressing such structural competition problems, in a timely and effective manner ensuring fair and competitive markets across the economy.”

The need for a new competition tool

Over the past years, the Commission has reflected on the role of competition policy and how it fits in a world that is changing fast, is increasingly digital and globalised, and must become greener. This reflection process is part of a broader policy debate about the need for changes to the current competition law framework so that enforcement agencies around the globe can continue to preserve the competitiveness of markets. Different stakeholders have engaged in this debate and contributed with reports and studies, making proposals on how to adapt or extend the competition law toolbox.

Against this background, the Commission has concluded that ensuring the contestability and fair functioning of markets across the economy is likely to require a holistic and comprehensive approach, with an emphasis on the following three pillars:

(1)  the continued vigorous enforcement of the existing competition rules making full use of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), including the use of interim measures and restorative remedies, where appropriate;

(2)  possible ex-ante regulation of digital platforms, including additional requirements for those that play a gatekeeper role; and

(3)  a possible new competition tool to deal with structural competition problems across markets which cannot be tackled or addressed in the most effective manner on the basis of the current competition rules (e.g. preventing markets from tipping).

The parallel impact assessment on platform-specific ex ante regulation, for which a separate stakeholder consultation has been launched today, covers the second pillar, while this stakeholder consultation deals with the third pillar.

The Commission’s experience with enforcing the EU competition rules in digital and other markets, as well as the reflection process on the fitness of the existing competition rules by the Commission and national competition authorities, have helped the Commission identify certain structural competition problems that the current rules cannot tackle or cannot address in the most effective manner.

The new competition tool should enable the Commission to address gaps in the current competition rules and to intervene against structural competition problems across markets in a timely and effective manner.

After establishing a structural competition problem through a rigorous market investigation during which rights of defence are fully respected, the new tool should allow the Commission to impose behavioural and where appropriate, structural remedies. However, there would be no finding of an infringement, nor would any fines be imposed on the market participants.

Next steps

The Commission is consulting stakeholders from the public and private sector, including competition authorities and government bodies, academia, as well as legal and economic practitioners. Respondents are invited to submit their views on the inception impact assessment until 30 June 2020 and to respond to the open public consultation until 8 September 2020 in any official EU language. Subject to the outcome of the impact assessment, a legislative proposal is scheduled for Q4/2020.

Background

EU competition law can address anti-competitive agreements and concerted practices between companies pursuant to Article 101 TFEU and the abuse by a company of a dominant position pursuant to Article 102 TFEU. However, some structural competition problems are outside the scope of the EU competition rules or cannot be addressed in the most effective manner.

Structural competition problems can arise in a broad range of different scenarios, however they can be grouped into two categories depending on whether harm is about to affect the market or has already affected the market.

  • Structural risks for competition: Certain market characteristics (e.g. network and scale effects, lack of multi-homing and lock-in effects) coupled with the conduct of the companies operating in those markets can create a threat to competition. This is particularly the case for markets at risk of “tipping”. The risks to competition arise through the creation of powerful market players with an entrenched market and/or gatekeeper position which could be prevented by early intervention. Other scenarios falling under this category include unilateral strategies by non-dominant companies to monopolise a market through anti-competitive means.
  • A structural lack of competition: Certain market structures do not deliver competitive outcomes (i.e. a structural market failure), even without companies acting anti-competitively. For example, markets may display systemic failures due to certain structural features, such as high concentration and entry barriers, consumer lock-in, lack of access to data or data accumulation. Similarly, oligopolistic market structures increase the risk of tacit collusion, including markets featuring increased transparency due to algorithm-based technological solutions, which are becoming increasingly prevalent across sectors.

The impact assessment for a possible new competition tool initiative is without prejudice to existing sector-specific regulation and the existing competition tools currently available to the Commission and the national competition authorities of the EU Member States. It is also complementary to the Commission’s parallel impact assessment on platform-specific ex ante regulation, which is part of the Digital Services Act package announced in the “Shaping Europe’s digital future” Communication.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The impact of refugees on the European healthcare system

Fed and ECB prepare a new party for the financial sharks

Eurozone to enter the winter…

Quality Education on the table at the European Parliament

This man is helping explorers carry out scientific research at the ends of the Earth

Why tourism policy needs to use more imagination

UN team aids Samoa response to deadly measles epidemic

Aid Programme for the Turkish Cypriot community: Commission adopts second Action Programme for 2020

VP McGuinness on women’s rights: “Not an option, but a duty”

‘Intense zones of transmission’ in Central and South America; the ‘urgent challenge’ of antimicrobial resistance – WHO briefing

European Employment Forum 2013 and not European Unemployment Forum 2014

Pushing for tax fairness in a digital world

Sassoli to EU governments: Rise to the challenge. Find new shared ways to finance our recovery

Mine ban agreement ‘has saved countless lives’, but ‘accelerated efforts’ needed to end scourge for good: Guterres

These are the countries where most adults still don’t have a smartphone

Commission’s action against imports from China questioned

UN Human Rights Council stands firm on LGBTI violence, Syria detainees and Philippines ‘war on drugs’

UN human rights chief warns of women’s rights complacency

In Rome you can swap plastic bottles for metro tickets

EU Banks still get subsidies from impoverished citizens

Local innovation, international impact: SMEs and the ITU Telecom World Awards

Blockchain could boost global trade by $1 trillion

Should we be worried about third-hand smoke?

Here are six bold ideas to accelerate sustainable energy innovation

We generate 125,000 jumbo jets worth of e-waste every year. Here’s how we can tackle the problem

Food safety: more transparency, better risk prevention

The Changing Scope of International Economic Relations – Chinese Leadership in the 21st Century

This is the ever-changing state of the world’s top cities

Student Tutor Ratio: at a glance

Are we letting politicians play with migrants’ health?

The dangers of data: why the numbers never tell the full story

Climate change update: will the UN member states regain momentum despite the little progress at COP23?

WEF Davos 2016 LIVE: “If we do not do properly the Paris agreement, then all 16 remaining goals will be undermined”, UN Secretary General Ban Ki-moon cautions from Davos

15 years of risk: from economic collapse to planetary devastation

COVID-19, higher education and the impact on society: what we know so far and what could happen

Political consensus critical ahead of Somalia election: UN mission chief

Countries must up their game to reduce low birth weights, warns UN-backed report

What business leaders can learn from jazz

As children freeze to death in Syria, aid officials call for major cross-border delivery boost

Why the answer to a more sustainable future could lie within the platform economy

Why the World Cup is a bit like international trade

‘Nothing left to go back for’: UN News hears extraordinary stories of loss, and survival as Mozambique rebuilds from deadly cyclones

How AI can inspire doctors to be more inventive

EU to pay a dear price if the next crisis catches Eurozone stagnant and deflationary; dire statistics from Eurostat

Margrethe Vestager, EU Commissioner in charge of competition policy, during a recent press conference in Brussels / Berlaymont. (Copyright: EU, 2018 / Source: EC - Audiovisual Service / Photo: Jennifer Jacquemart)

EU opens investigation into Qatar Petroleum over potentially restrictive gas contracts

What are we actually working for?

American negotiators can’t pay for their trip to Brussels, EU-US trade agreement freezes

8 fascinating and fearsome frontiers of science you should know about

Training for staff in early childhood education and care must promote practices that foster children’s learning, development and well-being

EU investment budget for 2020: A boost for the climate

An open letter to Europe’s leaders

The mother of all fights about inflation, growth and banks

Migrants and refugees are being forgotten in the COVID-19 response. This has to change

Next six months crucial for the EU, says von der Leyen at the start of the German Presidency of the Council of the EU

Has the treacherous theory about the ‘French patient’ finally prevailed?

UN Chief says ending poverty ‘a question of justice’ on International Day

Coronavirus: Commission concludes exploratory talks with Valneva to secure a new potential vaccine

ECB offers plenty and cheap liquidity to support growth in all Eurozone countries

US pardons for accused war criminals, contrary to international law: UN rights office

Trump’s Syrian hit the softest option vis-a-vis Russia

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s