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The Case Against Green Antitrust

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The case for a greener antitrust is weak and flawed. Its proponents claim that the European Commission’s enforcement of Article 101 TFEU blocks efficient industry-initiated cooperation to improve sustainability. But as is shown a more permissive approach will lead to increased market power, supra-competitive prices and greater industry profits, and is unlikely to achieve greater investment in and the faster adoption of green technologies than competition.  So where does this leave the case for green antitrust? 

First, the case for green antitrust is vastly exaggerated. It addresses the narrow question of whether firms in an oligopolistic industry with market power should be allowed to engage in anticompetitive cooperation over standards on sustainable products and processes. It is not about cooperation between firms which is perfectly legal provided it does not cross the line into price fixing and restricting competition.

Secondly, there is no evidence that EU antitrust has blocked or generally deterred industry-initiated sustainability efforts. The debate is largely abstract, hypothetical, legalistic, somewhat emotive, and lacks supporting evidence.

Thirdly, there is no evidence that oligopolies engaged in anticompetitive practices will generate more innovation and adopt sustainable technology and processes faster than when acting independently. The hard evidence suggests that sustainability is greater if there is competition.

Fourthly, a more permissive exemption regime is unlikely to generate significant increases in sustainability but will generate unnecessary inflationary price increases which are likely to affect the poorer sections of society the most.

Finally, what is needed is a more realistic approach to the issue of antitrust’ s contribution to the environment and sustainability. Declaring that we face an existential environmental and human crisis is not a licence to propose bad laws and bad policies.

Read full article in the SSRN Electronic Journal.


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