Sven Giegold

European Parliament demands fundamental overhaul of EU competition policy

Today the European Parliament adopted its annual own-initiative report on EU competition policy by a large cross-party majority. With this report, the European Parliament takes a stand on current developments in competition policy and calls for a fundamental overhaul of EU competition policy for the first time. The report was drafted by the Austrian Green rapporteur Michel Reimon. It focuses among other things on the consideration of sustainability factors in competition policy decisions. The report thus criticises mergers and acquisitions such as those of Bayer and Monsanto and the associated high market concentration in food supply chains. The report also calls for the possibility of cooperation between companies in a supply chain to introduce common fair trade standards. Other focal points include market power and taxation of the digital economy, state subsidies for nuclear power and fossil fuels, and the competition law implications of bailing out banks.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“It is high time for a fundamental overhaul of EU competition policy. Mergers and acquisitions decisions must finally take account of their impact on areas such as consumer protection and climate change. Only considering the impact on consumer prices is insufficient to assess the effect of market power on people, nature and the economy. State subsidies for nuclear energy and fossil fuels must finally be stopped, because they distort competition. We call on the EU Commission to investigate whether the horizontal ownership of large investors such as Blackrock weakens competition. An ever greater concentration of the ownership of large investors is a threat to the economy. Smaller companies in one supply chain or industry should in future be able to cooperate to establish common green and fair labour standards more easily without coming into conflict with competition law. This would enable companies to work together to counter the downward competition for low social and environmental standards.

We need new ways in the assessment of the effect of digital companies such as Facebook, Whatsapp and Google on competition. Internet giants exert considerable market power with their control of great amounts of user data and push competitors out of the market. The market power of internet giants is an immense distortion of competition that we can no longer stand idly by. The Commission, the Council and the European Parliament must also finally find a comprehensive solution for the taxation of digital companies. This is the only way to create competition on a level playing field between digital groups and traditional companies. Parliament is calling on the Commission to explain the contradictions of past bank bailouts paid for with taxpayers’ money. The Commission should also investigate whether banks benefited from implicit subsidies and staid aid during the crisis through the provision of liquidity support by the central bank.”


Link to the report (as put to vote):

List of key demands:

I. General Enforcement issues:

-Ask the Commission to consider environmental and social externalities in Competition law enforcement

-Call to the Commission to analyse consumer harm transcending  price centric- approaches

-Call for the incorporation of behavioural economics in the design of antitrust remedies


II. Environment/ Sustainability:

-The report asks the Commission to review the EU Merger regulation and analyse to what extent the European Commission can within the merger control adopt measures to protect the rights and principles of the TFEU and EU Charter of Fundamental Rights, including environmental protection. This means the DG Competition cannot approve mergers like Bayer/ Monsanto by hiding behind the argument that it has no competence to address the environmental concerns deriving from the merger.

-Criticism on the Bayer- Monsanto merger and on concentration in the food supply chain with special attention to issues related to biodiversity and incomes for small farmers.

-Inclusion of nuclear energy and extraction of fossil fuels in the Commission’s Energy and state aid guidelines (to be revised in 2020). Currently the Commission state aid guidelines cover infrastructure and operational aid to renewables subjecting such schemes to stricter and more detailed scrutiny in comparison to a direct assessment under the Treaty. On the contrary, aid to nuclear power plants, as seen in the Hickley Point case, is subject to an open-ended assessment under TFEU 107 that leads to more lenient results.

-The report criticises aid granted to capacity mechanisms and underlines that any aid approval on such schemes shall ensure these schemes are not open to polluting assets

-The Commission is asked to encourage within  competition policy cooperatives, that are made throughout the food supply chain for the purpose of sustainability and fair labour standard, given that its interpretation of TFEU 101 is stricter than the one followed by the ECJ, having a chilling effect on these collective associations


III. Digital Economy:

On digital economy, the report provides a very concrete list of recommendations to the EC for adapting competition tools to the digital era:

-Require interoperability between online platforms and social network providers

-Adjudge the control of data necessary for the creation and provision of services as a proxy for the existence of market power

-Revision of the thresholds that constitute the starting point of the merger control by the Commission and call for their adaptation to the number of consumers impacted by mergers rather than solely focusing on turnover.(See Facebook/ Whats’ up merger)

-Asks the Commission to monitor price caps in sectors such as online platforms for accommodation and tourism

-Require the Commission  to conduct a sector inquiry in the advertising sector

-Asks the Commission to facilitate the adoption of interim measures within a specified timeframe


IV: Financial Services:

-For the first time in an EP report, a call is made to the Commission to examine the discrepancies between the rules on state aid in the area of liquidation aid and BRRD and to revise its 2013 Banking Communication

-The Commission is asked to examine whether banking institutions have, since the onset of the crisis, benefited from implicit subsidies and state aid through the provision of liquidity support as well as examine possible distortions of competition arising from the ECB’s Corporate Sector Purchase Programme (ECB invests massively in brown assets) and to report back to the European Parliament.

-Underlines the hidden social cost and reduced product competition from higher levels of horizontal ownership concentration and calls the European Commission to consider revising the Merger regulation as well as provide guidelines on the use of Article 101 and 102 TFEU in such cases.

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