Paris, 30
Check against delivery / seul le prononcé fait foi
Chers amis,
C’est un plaisir d’être parmi vous ce soir. Pour le bon déroulement de la soirée, je vais maintenant passer à l’anglais.
Thank you very much for organising this event. It is a great honour to be here.
First and foremost, allow me to congratulate Concurrences on their 20th anniversary. In 20 years, you have done so much to keep the conversation on competition policy moving forward. You have created a platform for discussion and reflection. You have given a visibility to what we do that did not exist before. This is an impressive achievement.
I want to start with the idea that having that discussion is important. It matters because discussions invite critical thinking – about principles and about practice.
And thinking critically about the goals of competition enforcement has been a constant theme in the past years. Of course, this includes Mario Draghi’s recent Report.
Indeed, there is a movement in competition policy. It is influenced by wider social and economic priorities. For some time now, competition policy has been supporting the twin green and digital transitions and in doing so, enhanced the Union’s competitiveness.
The debate is no longer about whether competition policy is opposed to industrial policy. Rather, we now focus on how to improve our competitiveness. How to enhance our resilience, our security, the integration of the Single Market, innovation in Europe. And pursuing these objectives is compatible with – and even dependent on – a rigorous competition enforcement.
To put it shortly, we seem to have settled on the principle that there is no competitiveness without competition.
Before the summer, DG COMP issued a Report where it examined the evolution of competition in the past 25 years. Across industries and sectors, we observe increasing concentration, markups, profits and barriers to entry. Market power is often entrenched and durable.
These trends have costs. Some costs are macro-economic: reduced GDP and lower productivity growth. Some costs are societal, because there is increasing wage inequality. And some costs are strategic, because dependence on few powerful firms is a risk for our resilience.
Small and medium-sized firms are hurt the most. The profit and productivity gap between industry leaders and other market players has increased. Smaller competitors and new entrants are not getting a fair shot. And this results in an economy with reduced contestability, dynamism and innovation.
As competition enforcers, we have a responsibility to tackle this. So we focus our efforts on innovation effects, on fighting the fragmentation of the Single Market, and on open and diverse supply chains.
Some of these objectives have a long tradition.
Fighting against the fragmentation of the Single Market is a historical focus of European antitrust enforcement. Our cases mainly concern consumer goods, where we have sanctioned major companies that supply beer (the 2019 AB InBev decision), chocolate, coffee and biscuits (the 2024 Mondelez decision), as well as video games (the 2021 Valve decision). And more such cases are in the pipeline (the Pierre Cardin investigation).
Other objectives have gained prominence more recently.
Think about the focus on innovation. Innovation is a key driver of competitiveness. In the past decade, it has also become a central point of attention in our investigations. In merger control, we scrutinize negative innovation effects in many forms. We work to prevent that overlapping pipelines are eliminated in pharmaceutical mergers. We intervene to preserve fundamental research in innovation spaces, at a stage where the research cannot yet be linked to a product market. We have done so in the agrochemical sector (Dow/Dupont and Bayer/Monsanto) and in financial services (Deutsche Börse/NYSE Euronext). And we are trying to capture “killer acquisitions” of disruptive targets that have low turnovers, but a strong innovation potential.
In antitrust enforcement, we fight conduct that obstructs innovation and market entry. We have intervened against ‘pay-for-delay’ agreements (Teva Cephalon case and the Servier case law), against disparagement (the Vifor case) and we are investigating the misuse of the patent system (the Teva Copaxone investigation).
I also think about resilience. Resilience is an emerging concept. And yet it is firmly built-in into our practice. Much of our action aims to preserve choice and diversity in supply chains. There is no greater risk to our resilience than having European companies depend on few powerful firms for their input or for access to the market. So when we intervene to protect the ability of European firms to multi-source, this action reinforces our resilience to shocks.
Antitrust enforcement also empowers consumers by preserving the very existence of choice in the marketplace. Many of our interventions in digital markets are precisely about that. We fought to allow consumers to retain a choice in their preferred search engine in Google Android. To be ranked fairly in Google Shopping. We took measures to prevent competitors from being foreclosed in Google/FitBit and Meta/Kustomer.
Those evolutions have been gradual. The focus on protecting innovation, choice and contestability has intensified in the last 10 years.
So, when Mario Draghi published his Report, he came with many valid recommendations. Some of them were familiar to us because they are already built-in in our practice. The Report brings something else. It puts the focus on competitiveness. And it brings forward a sense of urgency.
That sense of urgency is shared across institutions. Thankfully, we are well equipped to respond to it, because this mandate delivered the most consequential additions to the competition arsenal in decades:
- We understood that antitrust enforcement alone could not prevent the systemic aspects of gatekeepers’ harmful conduct. So the Digital Markets Act was adopted;
- We saw that competition in the Union was distorted by companies receiving foreign subsidies. So the Foreign Subsidies Regulation was adopted.
Each of these instruments was adopted by the co-legislators in record time. We created the DMA for two main reasons: to preserve market contestability and to ensure that markets remain fair:
- Making digital markets contestable ensures that large platforms feel pressure from potential competitors. If they don’t, innovation and growth will slow down, harming citizens and society.
- And fairness means that everyone can have their fair chance to make it. In digital markets, the bigger players should not push their own offers on their platforms and at the same time make it difficult for consumers to access rival offers. This is unfair on smaller players that try to reach consumers. And it diminishes the contribution of SMEs to our economy.
The Foreign Subsidies Regulation was adopted to fill a regulatory gap:
- Internally, the State aid control system ensures a level playing field across Member States. At the same time, subsidies granted by non-EU governments to companies active in the EU were able to roam free. The goal of the Foreign Subsidies Regulation is to address distortions caused by these foreign subsidies.
- The Regulation entered into force one year ago, in July 2023. We have already accomplished so much! The Regulation is a powerful deterrent. Every company that has been put under scrutiny for suspicious bids in public procurement has simply withdrawn its bid. Foreign investment is welcome, the Regulation simply creates a framework to prevent distortions. We recently adopted our first reasoned decision, which is the conditional clearance of a merger by the Emirates’ telecommunications group.
So the sense of urgency must drive our work in the implementation and enforcement of these instruments. And this is actively ongoing and we have already seen the first results.
We also need to lift our gaze outside Europe, at the state of the world and beyond competition policy.
Some key supply chains will need our specific attention when they are in the focus of geopolitical competition. We are working with our G7 and other like-minded partners to develop economic security standards for key supply chains. The idea that I have put forward at the G7 is simple. If trade partners agree on standards, we would create a market for trustworthy products. As we do so, we would address shared concerns to our resilience, to our security and to unfair competition. If we do this together, we can create a premium market that’s innovative, open and competitive.
The best way forward is to build on our international partnerships, especially with the countries that share our values. That means dialogue, something we have stepped up with the United States through the Trade and Technology Council, and with many other partners across the globe. We need to recalibrate globalisation and that is best done with dialogue.
We do this because we believe in fundamental principles: liberty, democracy and human rights. And obviously in the rule of law. Because markets must serve the values and principles of a free and just society. Making markets work for people must be a fundamental and ongoing effort.
These reflections and trends affect most of our partners in similar ways.
Within the EU, this is a common effort shared across the Commission and National Competition Authorities. To give one example, national authorities have made incredible efforts to consider sustainability goals in competition enforcement. And since we are in Paris, it is only fitting that I pay homage to the Autorité’s work in this area. I was very proud that we introduced a chapter on sustainability agreements in the new Guidelines on Horizontal Agreements. But the French Authority was the first to actually use it. Last June, the Autorité issued an Informal Guidance Letter on a standardization agreement in the animal nutrition sector. Its assessment relies on the Guidelines.
Now, I am very happy that the French got to do this, also if it meant doing it before we could. It shows the complementarity between sister agencies in Europe.
Outside of the EU, there is an unprecedented level of convergence with US enforcers. The industries we are mutually concerned with spill out beyond jurisdictional boundaries. We are all concerned by the market power accrued by the same companies that often act as gatekeepers. That means that efficient enforcement will depend, more and more, on the quality of our cooperation. Given the different legal systems and traditions, full procedural alignment will never be possible. But we have achieved a high degree of convergence.
I am very encouraged to see the attention US enforcers and policymakers are now paying to the problem of gatekeeper power in the digital economy. I am also inspired by the cross-sectoral approach America is now taking to protecting competition. The 2021 Executive Order sets an example. If we want to change the game on market concentration, we have to reach across government and promote rules that prevent abusive behaviour.
And just yesterday we announced that we have reached a technical agreement on a new cooperation agreement with the United Kingdom.
So there are a lot of reasons to be optimistic. But keep in mind that independent competition enforcement is more fragile than it seems. I am alarmed by the indifference concerning the fate of the Mexican Authority. The Mexican Federal Economic Competition Commission is a strong and active agency. But Mexico is undergoing a legal reform that risks destroying the Authority’s independence. This should be of great concern to all of us. After all, there is an international consensus in favour of rigorous and independent competition enforcement. But its existence is not a given.
Make no mistake – if that is allowed to happen in one country, the price will not only be paid by the consumers and businesses of that country. Over time, the politicisation of competition enforcement will threaten our work everywhere, precisely because our economies have all become so connected.
We live in a world marked by great geo-political tensions. We have wars raging at our doorstep. We witness the resurgence of protectionism and trade wars. Within our own sphere of work, we have to deal with increasing concentration trends, and entrenched market power.
But the solution is not to succumb to fear. The solution is to remember and practice the principles that have served us well so far: to avoid the creation and misuse of excessive power. Citizens should be empowered, rather than their freedoms curbed. Politicians should compete for votes, not for patronage. Companies should compete for customers and consumers. We must empower citizens. And competition policy is a key tool to achieving this goal, to ensure that everyone has a fair chance to make it, to protect our democracies. Competition agencies around the world are here to ensure that this freedom is not hindered.
The good news is that our economies are not the only thing that has become more connected. We have also become more connected, as a community. A community of enforcers, of practitioners, of academics. And I am truly honoured for the part I have been able to play in all this.