On 14 July 2022, the European Commission (“EC”) published the Annual Report on Competition Policy of 2021 (available in all EU languages here).
In line with a practice followed by most national competition authorities, every year, the EC publishes its report taking stock of progress made in EU competition policy and identifying strategic priorities for the year ahead.
Year-in-review: continued impact of COVID-19, digital, green and inclusive single market, and the war in Ukraine
The EC’s 2021 report is again marked by the post-pandemic recovery of the EU economy. While noting some promising signs of a return to normality in the first months of 2022, the EU economy has again come under unexpected stress due to Russia’s invasion of Ukraine.
In the current climate, competition policy enforcement fosters competition towards a post-pandemic, greener, digitally focused, resilient, and inclusive Single Market. Now more than ever, competition policy plays a crucial role in providing European businesses and consumers with choice, innovation, and competitive prices.
Setting of strategic priorities for 2022
The report focuses on five key priority areas for the EC:
- Ensuring that competition rules remain fit for the future;
- The digital transition and a strong and resilient Single Market;
- Contributing to the green transition;
- Contributing to an economy that works for everyone; and
- Global competition policy and cohesion.
Further to the general policy review, there have been some significant developments in the competition law framework over the last year, with reviews being undertaken or completed on the Vertical Block Exemption Regulation (“VBER”), Horizontal Block Exemption Regulation (“HBER”), and the general antitrust procedural rules. See related updates on the VBER from Bird & Bird here and here.
Ensuring that competition rules remain fit for the future
The EC aims to ensure that competition policy can address the changing digital landscape. The report discusses the introduction of the Digital Services Act and the Digital Markets Act and the aims of the legislation, which include to tackle systemic digital challenges such as the spread of cyber threats, hate speech, disinformation, limited competition and fairness in digital markets. This section of the report also discussed the VBER, HBER and the market definition reviews as part of the strategy to ensure that competition policy is dynamic and effective.
The digital transition and a strong and resilient Single Market
Effective enforcement of the EU competition rules and regulatory reforms are of vital importance for the digital transformation of the EU economy, for the recovery from the COVID-19 pandemic and for strengthening the resilience of the Single Market. This section of the report highlights the EC’s main recent enforcement actions targeting some of the digital players it will earmark as digital gatekeepers under the DMA. The EC also reviews its merger control practice in various sectors and the role State aid is playing in meeting objectives.
Competition policy and the green transition
Competition measures and tools, such as state aid contributions, encourage the green transition in the EU economy. There is funding for projects which work to solve the climate crisis, such as the European Battery Innovation project. The project will receive up to 2.9 EUR billion from Member State contributions. There are multiple examples mentioned in the report of State aid funding green energy or solutions to climate change, demonstrating that competition can be a powerful tool to drive this policy change. Furthermore, DG Competition published in September 2021 a Competition Policy Brief on how competition policy can and will support the Green Deal objectives (available here).
Competition policy and an economy that works for everyone
Competition policy in the EU seeks to support the social market economy. Competition policy and law interacts with many different sectors. Some examples the report highlighted included enforcement in financial services, where many institutions have received fines for cartelist behaviour, which ultimately impacts consumers. The report also highlighted the benefits of the flexibility of the state aid regime to respond to the COVID-19 crisis and provide support for Europeans and businesses in a difficult period.
Global competition policy and cohesion
The ECN+ directive was a key achievement in competition policy to ensure the coherent and cohesive application of Articles 101 and 102 across Member States. The EC has continued its engagement with global competition fora, such as the OECD Competition Committee, the International Competition Network (ICN), and United Nations Conference on Trade and Development (UNCTAD). There have been further bilateral treaties and relationships developed between the EU, the USA and Japan, particularly in relation to technology and competition enforcement.
Conclusions
The report provides a clear summary of how busy DG Comp and the EC have been over the last year in driving forward competition policy. They are showing no signs of stopping, with multiple dawn raids and investigations announced and NCAs following suit with their new ECN+ powers. It will be interesting to see the developments over the coming year.
For further information, please contact:
Hein Hobbelen, Partner, Bird & Bird
hein.hobbelen@twobirds.com
