On November 18, 2021, the Commission published its communication entitled “a competition policy fit for new challenges” (the “Communication”). The Communication identifies several areas where an adjusted competition policy could help overcome new challenges the European economy is facing. In particular, the Communication discusses competition policy’s role in Europe’s economic recovery from the COVID-19 pandemic, in supporting the European green and digital transition, and in strengthening the Single market’s resilience.
Competition policy and the COVID-19 pandemic
At the start of the COVID-19 pandemic, in March 2020, the Commission adopted the State Aid Temporary Framework (“State Aid Framework”) to mitigate the pandemic’s negative impact on the European economy. This framework has enabled Member States to use over three trillion euro of aid to support businesses across the EU.
The Communication announced an amendment of the State Aid Framework and its progressive phase-out over the next six months (until June 30, 2022). This strategy recognises the continued economic impact of the pandemic, as well as the need to accommodate different paces of economic recovery within specific sectors in different Member States.
The amendment also aims to attract private investments to facilitate a fast, green, and digital recovery. To that end, the amendment includes two new policies.
- The first policy encourages Member States to support investment in a sustainable recovery. The amendment outlines the circumstances in which the Commission will consider Member State supporting actions to be compatible with State aid rules at EU level. Member States can support private investment in the form of non- repayable grants, tax grants and subsidised interest rates on loan, but cannot grant more than ten million euro per undertaking. Member States can also support investment that overcomes an investment gap accumulated in the economy because of the COVID-19 crisis. Support is not limited to specific economic areas, but the amendment encourages the support of schemes related to environmental research
- The second new policy encourages Member States to strengthen the solvency of undertakings, particularly those whose debt levels have increased due to COVID-19’s economic To be considered compatible with State aid rules, support must provide an incentive for private investments into equity or subordinated debt and must be limited to small and medium enterprises.
Competition policy’s role in Europe’s green and digital transition
The Communication identifies competition law as an effective means to respond to new market challenges and to enhance the wider policy objectives of the EU. In particular, competition law enforcement will be used in support of two flagship policies of the current Commission: the green and the digital transitions.
In its Communication, the Commission explains that existing competition rules, such as Article 101(1) TFEU prohibiting anticompetitive agreements between undertakings, could be used to enforce the Green Deal objectives. In particular, otherwise prohibited agreements could be permitted if their anticompetitive effects are offset by environmental efficiencies stemming from those agreements, such as enabling the production of a more sustainable product.
In addition, State aid rules will also be used as a tool to foster EU policy goals. For example, one of the Commission’s policy objectives is to make the EU climate neutral by 2050. In furtherance of this objective, the Commission will allow Member States to support new environmental technologies using State aid by updating the existing Energy and Environmental State aid guidelines. The new guidelines aim to facilitate initiatives that are compliant with the EU’s decarbonisation objectives, and to phase out emission-intensive activities.
The Commission also emphasised the need to tackle the market power of large corporations, particularly in the tech sector. In particular, the Commission’s recent proposal for a Digital Markets Act aims at combating anticompetitive practices by large online platforms, especially those falling outside the scope of existing rules on abuse of market dominance. The proposed Act would also impose a new catalogue of specific obligations on online platforms having an entrenched gateway position between businesses active on the platform and final consumers (so called “online gatekeepers”).
Finally, the Commission will review its existing guidelines, such as the Market Definition Notice and the Horizontal and Vertical Block Exemption Regulation and Guidelines, to reflect the policy goals of the green and digital transitions.
Competition policy and the EU Single Market
The Commission also emphasised the importance of the EU Single Market, a trading area encompassing all EU Member States where goods and services can be traded freely and without barriers. The supply chains disruptions due the COVID-19 pandemic have shown that the Single Market is not sufficiently resilient in times of crisis.
The Communication therefore highlights the role of competition law in strengthening the Single Market and fostering economic growth. For instance, merger control enforcement will be used to preserve the diversification of supply chains and avoid bottlenecks in the production of crucial inputs. The impact of future mergers on reliability of supply and predictable lead times will become an important parameter in the Commission’s assessment of those transactions.
Furthermore, the Commission intends to promote the establishment of industrial alliances in key strategic sectors of the Single Market, such as batteries, semiconductors, and cloud and edge computing. These industrial alliances are forums in which business actors will collaborate and cooperate with each other to tackle future crisis affecting the Single Market. A specific compliance programme will ensure that this collaboration between undertakings remains within the boundaries of EU competition laws.
The Communication will undoubtedly disappoint those in hope of a relaxation on EU antitrust rules during times of crisis. According to the Commission, a successful recovery of the European economy will require a stronger enforcement of existing competition rules. On top of the rules, new legislative proposals and policy instruments will ensure that the EU antitrust framework remains in sync with the ever-evolving reality of the European markets.
Moreover, the Commission highlighted that antitrust enforcement does not exist in a vacuum: it must be aligned with—and provide support to—the Commission’s efforts in other strategic areas, including the green transition and the digital markets policy.
 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a Competition policy fit for new challenges, COM(2021) 713.
 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the European Green New Deal, COM/2019/640.
 Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act), COM/2020/842.
 Communication from the Commission on the Temporary Framework for State Aid measures to support the economy in the current COVID-19 outbreak, OJ 2020 C 91 I/1.
 For a detailed analysis, see our December 2020 EU Competition Law Newsletter.
 This position echoes recent statements by Commission’s officials. See mLex, “No competition enforcement let-up as Europe exits pandemic, Guersent says,” available at: https://mlexmarketinsight.com/news-hub/editors-picks/area-of-expertise/antitrust/no-competition-enforcement-let-up-as-europe-exits- pandemic-guersent-says.