Antitrust Alert #5
The EU has officially welcomed a new competition chief. Following elections last June and confirmation in December, a new European Commission led by President Ursula von der Leyen has taken office. In the new cabinet sits Teresa Ribera, who will assume control of the competition portfolio from Margrethe Vestager.
Vestager, who held the position for nearly a decade, was an aggressive antitrust enforcer and notable critic of the tech industry. Ribera, on the other hand, has little experience in competition matters to date; her previous track record includes serving as the Minister for the Ecological Transition for Spain, where she focused on environmental and energy policy. While her new title, the Executive Vice-President for a Clean, Just and Competitive Transition, raised eyebrows for not including “competition” explicitly, her responsibilities will in fact focus on competition policy and state aid, as well as energy, sustainability and climate-related issues.
What does this mean for competition policy?
So far, Ribera has not expressly explained her approach to competition policy and antitrust enforcement. Still, many of the broad-brush policies she has mentioned in her public appearances seem lifted directly from Ursula von der Leyen’s mission letter. Based on this, we expect her competition agenda to be focused on:
Modernizing EU Competition Policy: Ursula von der Leyen has asked for Vice President Ribera to develop a new approach to competition policy that strengthens European competitiveness and innovative capacity while aligning with the European Green Deal.
State Aid: Ribera could seek to simplify the state aid regime, reduce red tape, and provide more guidance to Member States, all with the goal of facilitating investments in renewable energy, carbon-free industries, and clean technology.
Addressing Killer Acquisitions: Following the European Court of Justice’s judgement in Illumina/Grail, which ruled that the Commission lacked the legal basis to scrutinize transactions not meeting revenue thresholds, Ribera will need to find alternative methods to address “Killer acquisitions.” These transactions are instances where large corporations buy out smaller, innovative competitors in transactions below a value threshold, and are a highly politicized topic in Europe and among the individual Member States. Many states have developed their own policies, but for now, a Europe-wide solution is not evident. Potential measures Ribera could use to address this include amending Article 22 EUMR, introducing deal value thresholds (as seen in Germany and Austria), expanding national competition authorities’ powers, or applying Articles 101 or 102 TFEU to M&A transactions. While Ribera has vowed to explore all options without imposing unnecessary administrative burdens or legal uncertainties on companies, this inevitably leaves companies with a known unknown.
Continued Strong Competition Enforcement: While Ribera has not identified any strong position on competition enforcement, it is expected that she will follow in the footsteps of her predecessor Margrethe Vestager and continue to rigorously enforce competition rules, including the Digital Markets Act (DMA) and the Foreign Subsidies Regulation (FSR), to target aid and commercial practices that harm competition. This will keep large tech and pharmaceutical companies the focus of the EU Commission’s enforcement.
Aligning Competition Policy with EU Priorities:
Green Deal Industrial Plan of the EU Commission: Ribera's background in environmental policy combined with her antitrust responsibilities could mean a focus on promoting investment in strategic sectors related to the environment and net zero energy development.
Draghi and Letta Report: Following last year’s publication of the in-depth reports on Europe by Mario Letta (Much More Than a Market) and Mario Draghi (The Future of European Competitiveness), which emphasized furthering Europe’s competitiveness as a top priority, Ribera is expected to use competition policy to enhance this goal. The jury is still out on how she’ll achieve this, particularly the idea of creating “European Champions.” This will be a space to watch in the coming year(s).
Reviewing Horizontal Merger Guidelines: Ribera has said she will review the Horizontal Merger guidelines with "innovation, investment, and resilience among the core drivers." This review aims to modernize the guidelines to better address contemporary market dynamics such as globalization, digitalization, sustainability, and innovation. There will be a focus on ensuring that mergers and acquisitions do not hinder competition and that they contribute positively to the EU's economic and industrial objectives.
Managing Potential Resistance from DG COMP staff: Ribera's proposed changes are likely to face resistance from the Directorate-General for Competition (DG COMP) staff. Senior competition officials, such as Guillaume Loriot, have expressed a difference of opinion towards major reforms, emphasizing that the Commission already possesses the necessary tools to consider innovation, resilience, and sustainability in competition cases. They warn against overloading competition investigators with multiple goals or politicizing cases.
What’s next
It seems likely that Ribera’s main aims will be to reduce red tape and increase competitiveness in Europe, with a particular focus on state aid and the incorporation of the Clean Industrial Deal. At the same time, the EU as well as Member States’ competition authorities will look to strengthen merger control review powers – With all of this occurring against the backdrop of an unsettled global political climate, which saw the US block Nippon Steel’s bid for U.S. Steel and European companies facing a potential downturn of economic growth, the EU Commission will have its work cut out for it. Teresa Ribera will have some tough choices on policy ahead.
This article is part of a series examining Antitrust in the new administration. Read the previous editions here:
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