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Ribera’s New Competition Mandate – A rebirth of (green) European Champions?
Ribera’s New Competition Mandate – A rebirth of (green) European Champions?
21 November 2024
Series
Blogs
21 November 2024
The Parliament has spoken: the new Commission can start its work in December 2024. This post looks at what this may mean for competition policy under Teresa Ribera, the new Commissioner for competition and Executive Vice President for Clean, Just and Competitive Transition.
European Commission President Ursula von der Leyen has made it clear that the EC should be pursuing changes to competition policy. Her Mission Letter to Ribera notes that "Europe needs a new approach to competition policy" and that she plans to “ensure competition policy keeps pace with evolving global markets” (see our earlier blog). Ribera presented herself to Parliament fully aligned with her mission.
Ribera has signalled agreement with the Draghi Report’s suggestions for changing aspects of merger control enforcement. Specifically:
Policy forecast: Horizontal Merger Guidelines revision is expected to start early in Ribera’s mandate. Even if not a substantial overhaul, it will be a lengthy process, and could see the introduction of an innovation defence and more focus on other efficiency related benefits.
State Aid – a swifter approval of ‘green’ aid
Energy is seen as a key driver of the EU’s competitiveness gap vis-à-vis other regions. The Draghi Report explicitly pointed to the EU’s dependency on gas imports and exposure to spot markets as causing a “cascading effect” of high prices across all sectors in the EU.
Ribera echoed these concerns, noting that “decarbonisation and competitiveness are inseparable objectives” and expressing plans to develop a new State aid framework that is faster and simpler. These rules will support the EU’s ambitions to accelerate the roll-out of renewable energy and decarbonisation. She also committed to supporting more State aid to foster (cross-border) innovation.
But disagreement between Member States in this area is likely, especially over how public funds should be spent, what sectors to target, whether this is the ‘right’ way to spend taxpayers’ money, and who gets what. It also remains to be seen how Ribera will address the risk of subsidy races between Member States. This constant headache for State aid policy is something Ribera is certainly aware of, noting that “Member States have varying fiscal capacities, making State aid control crucial for fair competition.”
Policy forecast: Significant developments in State aid are likely during Ribera’s mandate. This opens the door to financing opportunities for companies with respect to decarbonisation, clean energy transition, and innovative products required for a successful tech sector.
One of the key themes that will be driving the EC’s policy and priorities is promoting the competitiveness of EU businesses, against global counterparts, as a way of protecting Europe’s security and prosperity.
Ribera has emphasised the need to adapt merger control enforcement so that EU companies remain competitive “in global markets [when] global players start to penetrate European markets.” She also pledged that DG COMP will do its best to ensure that EU companies benefit from a level playing field in the Single Market – and will not be disadvantaged by exposure to heavily subsidised third-country companies competing in the block.
‘European champions’ was also a hot topic during the Hearing, and Ribera was asked how she would balance the conflicting interests of creating European champions that can compete on the global stage whilst safeguarding EU consumers against harmful European monopolies. She noted that her aim is to reduce dependence on third countries while increasing jobs, wealth, security and competitiveness in Europe and stressed that “we do not want Trojan horses that challenge the existing European businesses that compete on a level playing field”.
Policy Forecast: Expect the EC to make full use of the legislative tools it already has (FSR and FDI) and potentially merger control reforms (discussed above) to ensure a level playing field. We may also see a more protectionist mandate – this will be a space to watch.
Ribera’s views give more insight into what shape ‘stronger and faster’ competition enforcement may take, specifically:
Policy forecast: Expect to see continued vigorous enforcement not just of the DMA and FSR, but also under Articles 101 and 102. There may also be a new competition tool coming our way, although if that were too happen, it would likely take more time.
The new Commission will be officially appointed by the European Council and is expected to start on 1 December 2024 for a five-year term.