EU Competition Policy

BACKGROUND

Competition law has an important role to play in the imbalances of power in supply chains, which need to be addressed in order to give producers and workers a fair share of the benefits of trade.

Competition law had in the past a broader understanding of public interest objectives but is now becoming a hurdle for sustainability. The currently dominant interpretation of competition law does not take into account sustainability but rather focuses mainly on the lowest consumer prices in the short run. This results in social and environmental concerns currently not being part of the assessments for decisions on e.g. mergers or exemptions to sectoral collaborations for sustainability.

The latter has a chilling effect on the willingness of actors in a supply chain to discuss sustainability issues such as farmers’ incomes, as they fear persecution under competition law.

At the heart of the issue is a restrictive view of consumer welfare which is not in line with the Sustainable Development Goals (SDGs), the broader EU treaty provisions, and which, in the long run, will not be beneficial for EU consumers/citizens.


WHAT ARE THE FTAO’S VIEWS?

  • The EU should clarify the boundaries of competition law and provide guidelines for companies to discuss sustainability issues, such as living income for farmers.
  • The EU should expand the interpretation of consumer welfare, to take into account social and environmental sustainability dimensions and future consumers.
  • The EU and competition authorities should take systematic sustainability concerns into account in their decisions.

FURTHER READING

FTAO Report: EU Competition Law and Sustainability – Addressing the Broken Links, February 2019

FTAO Briefing Note: EU Competition Law and Sustainability – Addressing the Broken Links, February 2019

FTAO Competition Law and Sustainability Initiative Discussion Paper and Action Plan, December 2018

FTAO Report – Competition Law and Sustainability in the Netherlands, June 2016

Article – The Sustainability Dilemma in Competition Law, ECDPM – Great Insights, 2019 (p19.21) 

Fairtrade Foundation Blog – Does competition law serve consumer interest and future needs? 2017

Oxfam Germany Report – The Power or Corporations in the Digital World, 2019


You can find out how our work on EU policies links to our key topics here.