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SUMMARY

Looking at the Commission’s merger and antitrust case practice, there has been little impact from efficiencies related to sustainability and innovation. In the Netherlands, however, cases on topics like North Sea Shrimp fishermen, Friesian horse pedigrees, chicken farmers and the Dutch Energy Agreement (“Energieakkoord”), firms have claimed that their horizontal agreements promoted sustainability. What is more, some have claimed that the ecological benefits of these agreements would outweigh the anticompetitive effects. So the question is: Should antitrust authorities take broad public interest objectives, like sustainability, into consideration or should they only focus on competitive considerations?

Recent literature has looked at whether such cartels could be beneficial to consumers in a two-stage model where firms can coordinate on the amount invested in sustainability, on outputs, or on both. Although results depend on the degree of substitutability between the products and on the cost of investments, the counter-intuitive result is that the most beneficial option would be the cartel in which producers coordinate on production, rather than on sustainable investment level – the worst option. These results are in stark contrast with the Dutch Competition Authority’s consultation, which would allow for firms to coordinate only on sustainable investment levels.

When assessing these specific competition cases, one could consider the costs and benefits of such policies. Uncompetitive practices should not be allowed if the willingness to pay for the sustainable benefits provided is less than the implied increase in costs. Competition authorities impose that benefits have to be objective and clearly visible, and a fair share should go to the consumers.

Public goods are known to be under-provided by the private sector. Although consumer awareness and corporate social responsibility have bounds, private collaboration may help under appropriate regulation and if competition is preserved.

Green is beautiful but green players are bound by the same rules: they should not participate in cartels or abuse their dominance.  Finally, competition policy should also contribute to removing barriers to entry for new players in the green sector, enhancing competition.

Event summary by , research intern

Event materials

 | Maarten Pieter Schinkel and Yossi Spiegel

 | Maarten Pieter Schinkel and Lukas Toth