1 5/2/2020 (JAE) CLIMATE CHANGE, SUSTAINABILITY AND COMPETITION LAW Simon Holmes* * Judge (‘member’) at the UK’s Competition Appeal Tribunal, legal advisor to the environmental NGO, ClientEarth, academic visitor at the Centre for Competition Law and Policy, Oxford University, and Non Governmental Advisor to the European Commission for the International Competition Network (‘ICN’). (The views expressed here are personal and cannot be attributed to any institution with which Simon is connected) The author would like to thank Ariel Ezerachi, Julian Nowag, Michelle Meagher, Grant Murray, Mike Walker, Martijn Snoep, Vasslios Copetinas and Luc Peeperkorn for their helpful comments on an earlier draft of this article. More generally, thanks to everyone who sent supportive and encouraging emails and to all in the ‘Inclusive Competition Forum’, ‘We are Competition’ at Science Po,and to the Fair Trade Advocacy group in Brussels. If you would like to support those of us trying in our own small way to make competition law less ‘part of the problem’ and more ‘part of the solution’ do get in touch (comment and feedback welcome). My email address is: [email protected]. You may also like to join the Inclusive Competition Forum (of which I am a founder member). This is open to anyone with an interest in making competition law and policy more relevant to key environmental, economic and social issues that we face. [www.inclusivecompetition.org]
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CLIMATE CHANGE, SUSTAINABILITY AND COMPETITION LAW · 2020-02-18 · 1 5/2/2020 (JAE) CLIMATE CHANGE, SUSTAINABILITY AND COMPETITION LAW Simon Holmes* * Judge (‘member’) at the
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(LegalOpinionfortheFairWearFoundation)<https://api.fairwear.org/wp-content/uploads/2016/06/OpiniontoFWFTheApplicationofEUCompetitionLawtoFWFLivingWageStandardfinal1.pdf>accessed17January2020.5Manysharethisconcern.Eg,theCommitteeonEconomicandMonetaryAffairsoftheEuropeanParliament,Annual Report on Competition Policy 2018 (31 January 2018)<https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2018/2102(INI)>accessed17January2020(‘theParliamentaryReport’)notedthat‘thenarrowinterpretationofArticle101ofthe TFEU by the Commission’s horizontal guidelines has increasingly been considered an obstacle to thecollaborationofsmallermarketplayersfortheadoptionofhigherenvironmentalandsocialstandards’[48].SeealsoFairTradeFoundation,CompetitionLawandSustainability.AStudy into IndustryAttitudes towards
Multi-Stakeholder Collaboration in the UK Grocery Sector (Report) (February 2019),<https://www.fairtrade.org.uk/Download.ashx?id=%7BEE9F8B75-8FFA-4E38-B87B-82BBE23A3D7C%7D>accessed17January2020.Thisnotedthat:
• ‘market actors will not act unilaterally on sustainability issues due to a fear of competitivedisadvantagethatcouldresultfromanincreaseintheircostbase’.
• ‘fear of an unfavourable ruling under competition law is a deterrent to a significant number ofretailersfromcollaboratingonsustainability issues,particularlyonissuesof lowincomesandwagesinthesupplychain’.
• ‘there is likely to be direct, long-term consumer benefit from multi-stakeholder collaboration forsustainabilitypurposes,eg,byreducingtherisksofacollapseofproductionduetoextremeweather’.
8 The importance of this point is emphasised in paragraph 7 of the Parliamentary Report (n 3) which:‘underlinesthefactthatcompetitionrulesaretreatybasedand,asenshrinedinArticle7oftheTFEU,shouldbeseeninthelightofthewiderEuropeanvaluesunderpinningUnionlegislationregardingsocialaffairs,thesocialmarket economy, environmental standards, climate policy and consumer protection; takes the viewthattheapplicationofEUcompetitionlawshouldaddressallmarketdistortions, includingthosecreatedbynegativesocialandenvironmentalexternalities’.(emphasisadded).
While environmental and sustainability considerations must be taken into account inapplyingthetreatiesasawhole(andthecompetitionprovisions,inparticular)asamatterof law,theexistential threatthatclimatechangeposesforhumanity, introducesafurtherdimension–amoralimperativetotakethemintoaccounttothefullestextentthatislegallypossible.
Logically I would now turn to interpreting the competition law provisions in the light of these
the competition establishment has taken over the last 30 years or so – the so-called ‘consumer
welfare’detour11.
9ThiswasexplicitlyagreedbytheMemberStateswhendraftingArticle11:theword‘all’wasunderlinedinthedrafttext,see:JulianNowag,‘TheSkyistheLimit.OntheDraftingofArticle11TFEU’sIntegrationObligationsanditsIntendedReach’inSSjafjellandAWiesbrock(eds)TheGreeningofEuropeanBusinessUnderEULaw:Taking Article 11 TFEU Seriously (Routledge, 2014); While environmental and sustainability considerationsmustbetakenintoaccountinapplyingthetreatiesasawhole(andthecompetitionprovisions,inparticular)as a matter of law, the existential threat that climate change poses for humanity, introduces a furtherdimension–amoralimperativetotakethemintoaccounttothefullestextentthatislegallypossible.10TheMaastrichtTreatyof1992reinforcedearlierprovisionsonenvironmentalprotection(inthe1986‘SingleEuropeanAct’)sayingthatthese‘must’beintegratedintotheEUpolicies(ratherthanjustbea‘component’ofthem).TheAmsterdamTreatyof1999furtherstrengthenedthisexplicitlymakingthisprovisionapplicableinallareasofEUlawandaction(includingpolicy-making,regulations,directivesanddecisions)andintroducingthelinkagebetweenenvironmentalprotectionandsustainabledevelopment(whichisnowreflectedinArticle11TFEU).11AsCommissionerNeelieKroesputitinaspeechin2005(NeelieKroes,‘EuropeanCompetitionPolicy–DeliveringBetterMarketsandBetterChoices’(Speech,EuropeanConsumerandCompetitionDay,London,15September2015),<https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_05_512>accessed17
January2020):‘ConsumerwelfareisnowwellestablishedasthestandardtheCommissionapplieswhenassessingmergersandinfringementsoftheTreatyrulesoncartelsandmonopolies.Ouraimissimple:toprotectcompetitioninthemarketasameansofenhancingconsumerwelfareandensuringanefficientallocationofresources’,yes,butjustfinancialwelfare?Efficiencywhateverthecost?.12Mostleadingtextbooksincludeadiscussionofthegoalsofcompetitionlaw.See,egRWhishandDBailey,Competition Law (9th edition, Oxford University Press, 2018), 18-24; For a classic exposition of the ChicagoSchool of competition theory see RH Bork,The Antitrust Paradox: a Policy atWarWith Itself (Basic Books,1978);Borkreferstoarevolutioninantitrustlawthattransformeditfroma‘socialpolicy’to‘merelylaw’;Foramore recent discussion, see Ariel Ezerachi, ‘Sponge’, (2017) 5 JAE 49-75, and Ariel Ezerachi andMauriceStucke,‘TheFightOverAntitrust’sSoul’,(2017)9JournalofEuropeanCompetitionLaw&Practice1-2.13Onewayofdoingthisistotakeaccountofso-called‘externalities’whenapplyinganysortof‘welfare’standard(n31),(n133)andsectionVIII.vii.
surplus, appearsnowhere in the treaties andatmost shouldonlybepart of amuchwider set of
goals focusing on both the competitive process and the core goals of the treaty set out above,
includingforpresentpurposes,sustainability.24
19See,eg,Horton(n15)andCristopherTownley,‘IsThere(Still)RoomforNon-EconomicArgumentsinArticle101TFEUCases?’(2012)<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2162864>accessed17January2020.20See(n2);Foranaccountofhowtheoriginalandmoreholisticapproachtoeconomicshaschanged,seeJAldred,LicensetobeBad–HowEconomicsCorruptedUs(AllenLane,2019)egatChapter1.21OftentracedbacktotheMontPelerinSocietyinthelate1940s,MiltonFriedman,FriedrichHayekandrightwing free-market think-tanks such as theAmerican Enterprise Institute inWashington and the Institute forEconomicAffairsinLondon.22SeeVSmil,Growth:FromMicroorganismstoMegacities(MITPress,2019);--,‘TheLimitsofHumanity’,SpecialSerie,TheFinancialTimes(September14/152019),10.23DGBlanchflower,Notworking,WhereHaveAlltheGoodJobsGone?(PrincetonUniversityPress,2019).24Progressiveauthorshavearticulated this inslightlydiffering termsbut theseauthorswouldallagree thatthis goes beyondwhatMaurice Stucke calls the ‘mindless pursuit of accumulating cheap products’. Stuckefocuseson‘thehappinessliterature’and,whileacceptingthatthisdoesnotprovideananalyticalframeworkfor analysing routine antitrust issues he concludes that this ‘literature suggests that competition policy inindustrial wealthy countries would be more efficacious (in terms of increased well-being) in promotingeconomic,social,anddemocraticvalues,ratherthansimplypromotinganarrowlydefinedconsumerwelfareobjective’(n18);WhileStuckefocuseson‘happiness’andwell-being,others,suchasHorton,focuson‘fairness’concludingthat‘a workable antitrust fairness standard can be developed and applied’ (n 15). While not written intoCommissionguidelineshisworkfindsastrongechoinmultiplespeechesandpressreleasesbyCommissionerVestager.Afocusonfairness(at least intermsofoutcomes)alsohelpsensurethatthebusinesscommunityandthewiderpublicseesthecompetitionauthoritiesandtheirworkaslegitimate.Julian Nowag says ‘it would be a misunderstanding to see the requirement of Article 11 TFEU as makingsustainabilityagoalor,orevenaprimarygoal,ofcompetitionlaw’.Forhimitisakintotherightsofdefenceorotherfundamentalrights:somethingthatneedstobetakenintoaccount.Ihavenoviewseitherway.Formethe important thing is that sustainability is given due weight in the analysis in accordance with the law: JNowag; “Competition has a Sustainability Gap” (n25).). The European Commission in its 2004 Exemption
14
Rather than consider further the goals of competition in the abstract, I turn now inV. to amore
specific consideration of the competition provisions of the TFEU, particularly those dealing with
into account (‘Is it all too difficult’).Section IX. sets out some proposals for reform.
Guidelines says the ‘aimof the Community competition rules is to protect competition on themarket as ameansof enhancing consumerwelfare andof ensuring an efficient allocationof resources’ [35].Although Iwould object that consumer welfare is not in the treaties this seems reasonably workable so long as (a)‘consumerwelfare’isreadinitsnaturalmeaning(asdiscussedabove)and(b)theterm‘efficientallocationofresources’encompassessustainability(egtherenewabilityofthoseresources)asitwouldonanaturalreadingand,inparticular,wheninterpretedinthelightofthe‘constitutionalprovisions’consideredabove.
other EU policies (a ‘minimalist view’) rather than be interpreted in a way that maximises the
objectives of those other EU policies (‘the maximalist view’). Similarly, Julian Nowag draws a
distinctionbetween:
a) preventingconflictsbetweenthepolicytobeintegrated(eghere,environmentalpolicy)and
the relevant sectoral policy (here, competition policy) – which he calls the ‘first form of
integration’;and
b) integrating the twobymeansofabalancingexercise–whichhecalls the ‘second formof
integration’.
He draws a further distinction between ‘supportive’ and ‘preventative’ integration. Supportive
integrationmeans applying the sectoral rules so as to allowmeasures that are beneficial for the
policy which is to be integrated (here, environmental policy). Preventative integration means
application of the sectoral rules (here, competition policy) to avoid harm to the policy to be
integrated(here,environmentalpolicy).27
25Somegoodexamplesinclude:IoannisLianos,‘PolycentricCompetitionLaw’,(2018)71CurrentLegalProblems161-213;SKingston,GreeningEUCompetitionLawandPolicy(CambridgeUniversityPress,2012);JulienNowag;“Environmentalintegrationincompetitionandfreemarketlaws”(OxfordUniversityPress,2016).Townley(n19);AlexandraTeorell,‘ACompany’sGuidetoEnvironmentalAction’(MaterThesis,LundUniversity2019);CyrilRitter,‘TheInterfacebetweenCompetitionandRegulationinEULaw’(unpublished);OrBrook,‘StrugglingwithArticle101(3)TFEU:DivergingApproachesoftheCommission,EUCourtsandFiveCompetitionAuthorities’,(2019)56CMLR121-156;JulianNowag,‘CompetitionLaw’sSustainabilityGap?ToolsforanexemptionandBriefOverview’,(2019)LundUniversityLegalResearchPaperSeries,<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3484964>accessed17January2020;the2010OECDReport(n3);MauritsDolmans,”SustainableCompetitionPolicy”(tobepublished).26 European Commission, ‘Guidelines on the Application of Article 81(3) of the Treaty’ [2004]OJ C101/97 (‘2004ExemptionGuidelines’)andEuropeanCommission,‘GuidelinesontheapplicabilityofArticle101oftheTreatyontheFunctioningoftheEuropeanUniontohorizontalco-operationagreements’[2011]OJC11/1(the‘2010HorizontalGuidelines’).27See(n25).
on thebasis of costs that reflect the true costsof production. To theextent that this encourages
others to compete on this basis (ie on a fully cost or true cost basis) it can be seen as pro-
competitive, rather than restrictive of competition. Furthermore, the more these costs are
internalised, the greater the incentives for companies to lower these costs—a ‘win win’ for the
environmentandcompetition.
28Subjectalwaystothequalificationssetoutwithinthecompetitionprovisionsthemselves–notablythethirdandfourthconditionsofArticle101(3).SeefurtherdiscussionoftheseconditionsinsectionV.iv.29AsSuzanneKingstonhasconcluded,‘overalltheCJEUhasdemonstrateditselftobeaconstitutionalistactorwhich is seriousabout the requirement toachieve real, substantive integrationofenvironmentalprotectionrequirements intotheEU’seconomicpolicies,as requiredbyArticle11’. Ithas“usedwhatcanbetermeda‘close lookproportionalityanalysis’closelyexamining[that]thepurportedenvironmentalaimswereactuallybeingrealised,andintheleastrestrictivemanner”,SuzanneKingston,“TheUneasyRelationshipbetweenEUEnvironmental and Economic Policies, and the Role of the CJEU”, (2015) UCD Working Paper in LawCriminology&Socio-LegalStudies,<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2686526>accessed17January2020.30Manyotherssharemyconcern.See,egtheconcernsexpressedbytheEconomicandSocialCommitteeoftheEuropeanParliamentandinthestudyintoindustryattitudestomulti-stakeholdercollaborationreferredtoin(n5).31So-called‘externalcosts’are,eg,coststhatariseduringtheproductionofaproductwhich,insteadofbeingbornebytheproducer,consumersorotherbuyers,areborneeitherbyidentifiablethirdparties(suchaunderpaidworkersinoff-shorefactories);thetaxpayer(egwherethegovernmentbearsthecostofcleaningupapollutedriver);bysocietyasawhole(eginthecaseofairpollution)orfuturegenerations(eginthecaseoftheproductionofgreenhousegases).Agoodexampleofthe“firstmoverdisadvantage”isthedecisionofGermandiscountretailer,LidlonlytosellFairtradebananasinGermany.CompetitorsdidnotfollowandLidllostsalesresultinginareluctantreversalofthedecisiononly8monthslater:https://bananalink.org.uk/news/Lidl-backs-away-from-fairtrade-bananas/
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Furthermore, just as sustainability is an essential (and recognised) part of European Competition
policy, awell-functioning competitionpolicy can contribute to sustainabilitybyencouraginggreen
a) itdoesnotplaceanyindividualobligationontheparties,orifpartiesonlycommitlooselyto
contributingtoasector-wideenvironmentaltarget,
32 Paragraph 179 of the European Commission’s 2001 Horizontal Guidelines defined environmentalagreements as ‘agreements by which parties undertake to achieve pollution abatement, as defined inenvironmentallaw,orotherenvironmentalobjectives…inparticularthosesetoutinArticle174oftheTreaty[oftheEC]’.ThisprovisionisnowArticle191oftheTFEUandstatesthatUnionpolicyontheenvironmentshallcontributetothepursuitofthefollowingobjectives:
- preserving,protectingandimprovingthequalityoftheenvironment;- protectinghumanhealth;- prudentandrationalutilisationofnaturalresources;- promoting measures at international level to deal with regional or worldwide environmental
problems,andinparticularcombattingclimatechange’.I am not aware of a definition of ‘sustainability agreements’ and am aware that for some sustainabilityagreementsmightincludeawiderrangeofissues(eg,reflectingtheUNSustainableDevelopmentGoals).Forme, a sustainability agreement is one that contributes to sustainable development. The BrundtlandCommissiondefinedsustainabledevelopmentasdevelopmentthat ‘meetstheneedsofthepresentwithoutcompromisingtheabilityof futuregenerationstomeettheirownneeds’.This isabroadconceptbut inthispaper I am generally using the terms environmental and sustainability agreements interchangeably;BrundtlandCommission,OurCommonFuture(Report)(OxfordUniversityPress,1987).
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b) the agreement stipulates environmental performance with no effect on product and
productiondiversity,or
c) itgivesrisetogenuinemarketcreation.
Although the 2001 Horizontal Guidelines have been replaced by the 2010 Horizontal Guidelines,
arguably theycanbeusedto interpret the latterwheretheydonotcontainsufficientguidance. If
33 This would be consistent with the request by the Economic and Social Committee of the EuropeanParliament in its 2018 Annual Report on Competition Policy (n 5) where, at paragraph 48 it says that ‘theCommission should create legal certainty on the conditions underwhich collective arrangements… for thepurposeof sustainability…wouldbeassessedundercompetition law,andencouragesuch initiativeswithincompetitionpolicy’.34 JAMA and KAMA XXVIII the Report on Competition Policy (1998). Another example is the DSD Caseconcerning the collectionofplasticwastewherebecause theagreement gave rise to anewmarket (plasticwastemanagement),theCommissiontooktheviewthattheagreementfurtheredcompetition,despitesettingpricesandestablishingexclusivity:DSDcase(COMP/34493).35AgoodexampleisgivenbytheOFTinitssubmissiontothe2010OECDReport,p100(n3).ThisconcernedanagreementbetweenmajorproducersofYoghurtwhichagreedwithmajorpackagingsupplierstodevelopand implementavoluntary initiative tomakeyoghurtpots fromrecycledplastic. TheOFTexplainswhy thiswould not fall within Article 101(1).Most of these agreementswill understandably avoid any reference toprice. However, it is worth recalling that even agreements between competitors concerning price are notnecessarilycaughtbyArticle101(1).Eg,anagreementbetweenpurchaserstopaya‘fair’or‘reasonable’pricetofarmersmightescapeArticle101(1)if(a)themarketshareofthepurchaserswassmalland/or(b)thecostofproductwasa smallpercentageof thepriceof theirdownstreamproduct.Consider, eg, a cupof coffee.Suppose this costs£2.50on thehigh street,of thisabout10p is for thecoffee itself (4%).Of this10p,onlyabout 1p (10%) typically goes to the grower - ie 0.4% of the cost of the cup of coffee on the high street(ChelseaBruce-LockhartandEmikoTerazono, ‘FromBeantoCup,WhatGoes intotheCostofyourCoffee?’,FinancialTimes(3June,2019).However,theseissuesneedtobeanalysedcarefullyonacasebycasebasis.ThedifficultiesareillustratedbyvariousattemptsovertheyearstopayadecentpricetoEUfarmersformilk.Eg, anMoU involving French cooperatives, farmers and retailerswhich included aminimum andmaximumpricewasnotchallengedby theFrenchcompetitionauthorities (but it concernedonlyone typeofmilkandonesupermarket).UndertheCommonAgriculturalPolicytherearegeneralexemptionsinArticles39-42TFEUandanumberofsector specific derogations fromcompetition law. Eg,Article 149&150of theCMORegulation allows jointnegotiations in the supplyofmilkbyproducers,provided that thisdoesnot concernmore than33%of thetotalnationalproduction;see:FairTradeAdvocacy,‘EUCompetitionLawandSustainabilityinFoodSystems.Addressing the Broken Links’ (Brussels, February 2019)<http://www.responsibleglobalvaluechains.org/images/PDF/FTAO_-_EU_Competition_Law_and_Sustainability_in_Food_Systems_Addressing_the_Broken_Links_2019.pdf>accessed17January2020,p48.
to include public health requirements, then why should it not be extended to environmental andsustainability issues?Bothhavea similar statuson the ‘constitutional’ provisionsof the treaty (seesectionIV.).
also cost €1,000? Inmy view, yes – and it is not necessary to establish that, but for the
agreement, the less polluting enginewould have cost €2,00044 (in any case, this is clearly
‘technical’progress).
Consistentwith this, the OECD has recognised ‘cost savings, innovation, improved quality
andefficiency’as ‘directeconomicbenefits’whichare ‘typically recognised in competition
lawanalysis’ 45.Many,or evenmost, environmental benefits are likely to fall underoneor
moreoftheaboveheads.46
42 This is not to suggest that such an approach is fatal to the argument for a proper and expansiveinterpretationofArticle101(3) (mypoint is: it isnotnecessary to take thisapproach). Eg, theCFI (now theGeneralCourt)heldintheMétropolecasethat:‘theCommissionisentitledtobaseitselfonallconsiderationsconnectedwiththepursuitofthepublicinterestinordertograntexemptionunderArticle85(3)oftheTreaty’,MétropoleTélévisionv.Commission[1996]T-528/93ECRII-649,[118].43SeefurthersectionVIII.vii.7‘Isitalltoodifficult’.44ThesamelogicledtheCommissiontoconcludeintheCECEDDecision(n48)that;‘thefutureoperationofthetotalofinstalledmachinesprovidingthesameservicewithlessindirectpollutionismoreeconomically
account.Thiswouldreducethelikelihoodofcompetitionpolicybeingablockonpotentiallygovernmentsponsoredinitiativesandwouldensureconsistencywithstandardcost-benefitanalysis’.Exactly!(emphasisadded).Iwouldacknowledge(andindeedagree)withmostofthepointsmadebytheOFTundertheheading‘argumentsagainstincludingindirectandnon-economicenvironmentalbenefits’(p106to108).However,Iseethesemainlyasdifficultiestobeovercomenotasreasonsnottoincludeenvironmentalbenefits(and,indeed,costs)intheanalysis(seealsosectionVIII.vii.:‘Isitalltoodifficult’).Itisnotaquestionofwhattypesofenvironmentalbenefits(andcosts)shouldbetakenintoaccount:itisaquestionastotheweightweshouldplaceonthem.47EuropeanCommission,‘XXVReportonCompetitionPolicy’(Brussels/Luxembourg,1995).Interestingly,thisstatement was made in 1996. If this was the position in 1996, before the current environmental‘constitutional’provisionswereincludedinthetreatiesintheircurrentform,thenlogicallythisisevenmorethecasenow.48CECED(CECED[1999]L187/47OJ2000]).Inthiscase,theCommissiongrantedanexemptiontoanagreementbetweenproducersandimportersofwashingmachines(accountingforsome95%ofEuropeansales)whichinvolveddiscontinuingtheleastenergyefficientmachinesandpursuingjointenergyefficienttargetsanddevelopingmoreenvironmentallyfriendlymachines.Despiteincreasingprices(byupto19%)andremovingcompetitionononeelementofcompetition,theCommissionacceptedthatthecollectivebenefitsforsociety(ieareductioninenergyconsumption)outweighedthesecosts.
iv) If there were any doubt about this then one should yet again recall the constitutionalrequirement that ‘environmental protection requirementsmust be integrated into the …
implementation of [all] the Union policies and activities’ (Article 11). To interpret the
concept of ‘consumers’ narrowly would run counter to this. Not only does this mean it
cannot be correct as amatter of law, itwould be contrary to the political, economic and
moral imperative todoeverythingwe (lawfully) can to combat climate change (let usnot
56Seeparagraphs87and88oftheseguidelines(n26).Indiscountingforfuturebenefitsweshouldbecarefulnottodiscountfuturecostswhichmaybegoingupandwhichareoftenunderestimated(seetheSternReportonhowfutureclimatechangecostsareunderestimated(n1)).57 In this context see Ioannis Lianos and Amber Darr, ‘Hunger Games: Connecting the Right to Food andCompetition Law’, (2019) CLES Research Papers Series, <file://sann-ad-02.st-annes.ox.ac.uk/MemberData$/sann5572/Downloads/SSRN-id3414032.pdf>accessed18January2020.58Untilrecently,Iwouldhavesaid(withregret)thatitwasprobablynotpossibletotakeintoaccountconsumersoutsidetheEU.However,inthelightoftherecentdecisionoftheDutchSupremeCourtintheUrgendacasethereisanargumentthattheEUauthoritiesareobligedtotakeintoaccounttheeffectsonconsumersbeyondtheEU’sborders.IntheUrgendacasethecourtheld:“stateshave…theresponsibilitytoensurethatactivitieswithintheirjurisdictionorcontroldonotcausedamagetotheenvironmentbeyondthelimitsofnationaljurisdiction.Thisjudgmentwasbased(toagreatextent)ontheUNClimateChangeConventionandontheECHR-towhichtheEU,liketheNetherlands,isbound[Urgenda,DutchSupremeCourtpressreleaseof20,December,2019}.However,eveniftheviewistakenthattheeffectsonconsumersoutsidetheEUcannotbetakenintoaccountunder101(3),thatwouldnotmeanthatweshouldnotbeconcernedabouttheextra-territorialeffectofpollution(orsocialharms)generatedwithintheEU,orenvironmentaldamageeffectivelyoff-shoredby
(v) Thequestionalsoariseswhetheritisjustthesubjectiveperceptionofaparticulargroupofconsumers of the environmental/sustainable benefits that needs to be assessed (the
approachtaken in the ‘ChickenofTomorrow’case–see (n136).While this is superficially
101(3). For example, agreements to pass on environmental charges to consumers would almost
63See(n1).64SeeJoshuaBecker,‘9ReasonsBuyingStuffWillNeverMakeYouHappy’,BecomingMinimalist(March2014),<https://www.becomingminimalist.com/buying-stuff-wont-make-you-happy/>accessed18January2020.65ApoignantillustrationofthisisperhapsanexamplegivenbytheOFTonp114ofitssubmissionforthe2010OECDreport(n3).TheUKgovernmentwantedtodevelopavoluntaryindustryagreementtoreducetheuseofsingle–usecarrierbagsinsupermarkets.TheOFTgaveadviseand,followingthis,insteadofsettingupavoluntaryagreement,thegovernment,merelyaskedindustrytoconsiderhowtheycouldencourageconsumerstoreducetheiruseofsingleuseplasticcarrierbags(whichprovedtobeprettyineffectiveandlegislationwasintroducedin2015imposinga5pperbagcharge).IamnotprivytotheOFT’sadvisebutIdowonderwhether,ifmoreweighthadbeenputontheenvironmentalbenefitsofthelevy,theoutcomewouldhavebeendifferentandwewouldhaveachievedthebenefitsmanyyearsearlier?IwouldalsohopetheCMAwouldbeabletogiverobustadvicenowifasimilarquestionwasputtothem(afterallmostofficialswillhavewatchedDavidAttenborough’s‘BluePlanet’!).66ThethirdconditioninArticle101(3)isthattheagreementmustnot‘imposeontheundertakingsconcernedrestrictions which are not indispensable to the attainment of those objectives’ (ie the improvements andprogress referred to in the first condition for the applicability of Article 101(3) and discussed earlier underCondition 1 above). In paragraph 73 of its 2004 Exemption Guidelines, the Commission suggests that this‘implies a two-fold test. First, the restrictive agreement as suchmust be reasonably necessary in order toachievetheefficiencies.Second,theindividualrestrictionsofcompetitionthatflowfromtheagreementmustalsobereasonablynecessaryfortheattainmentoftheefficiencies’.67Foradiscussionofthesecasessee,eg,Kingston(n25),p280-287.Foragoodexampleofanenvironmentalagreement(whichincludedrestrictionsonbothpriceandconsumerchoice)seetheCECEDDecision(n48),[58]-[63].
31
invariably be considered unlawful even if it could be argued that such pass on might motivate
68Seethe2010OECDReport(n3),p12.Encouraginglythisalsonotesthatcertainjurisdictionshaveallowedagreementstopassonenvironmentalchargesinnarrowlydefinedcircumstances.Theexamplegivenconcernedwholesalersagreeingtopassonrecyclingchargesforpackagingmaterialstotheproducersresponsibleforproducingthepackaginginthefirstplace(consistentwiththefundamental‘polluterpays’principle).69ThefourthconditionofArticle101(3)isthattheagreementmustnot‘affordsuchundertakingthepossibilityofeliminatingcompetitioninrespectofasubstantialpartoftheproductsinquestion’.70Foradiscussionofthis,seeKingston(n25),p287-292foranexampleofanenvironmentalagreementwheretheCommissionwassatisfiedthattherewasno‘eliminationofcompetition’see[64]-[66]oftheCECEDDecision(n48).71Paragraph252of theCommission’s2010HorizontalGuidelinessays: ‘standardisationagreementshaveastheir primary objective the definition of technical or quality requirements with which current or futureproducts,productionprocesses,servicesormethodsmaycomply’.
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(i) Many sustainability agreements take (or could take) the form of standardisation
(iv) Several commentators have suggested that environmental agreements have a greater
chance of complying with Article 101 if constructed and assessed as standardisation
agreements.73
72Note,eg,thefollowingcommentsinibid:Paragraph258:‘Standardisationagreementsgenerallyhaveapositiveeconomiceffect’;Paragraph277:‘Whereparticipationinstandard-setting,aswellastheprocedureforadoptingthestandardinquestion,isunrestrictedandtransparent,standardisationagreementswhichsetnoobligationtocomplywiththestandardandprovideaccesstothestandardonfair,reasonableandnon-discriminatoryterms,donotrestrictcompetitionwithinthemeaningofArticle101(1)’;Paragraph290:‘Astheeffectivenessofstandardisationagreementsisoftenproportionaltotheshareoftheindustryinvolvedinsettingand/orapplyingthestandard,highmarketsharesheldbythepartiesinthemarket(s)affectedbythestandardwillnotnecessarilyleadtotheconclusionthatthestandardislikelytogiverisetorestrictiveeffectsoncompetition’;Paragraph300:‘Standardisationagreementscangiverisetosignificantefficiencygains’.‘Standardson,forinstance,quality,safetyandenvironmentalaspectsofaproductmayinadditionfacilitateconsumerchoiceandcanleadtoincreasedproductquality’.73Agoodexample isTeorell’sdissertation (n25);Consistentwith theargument in thispapersheconcludesthat‘environmentalagreementscanformasolutionfortacklingclimatechange’.Anotherexampleisaspeechby a senior DG Competition Official, Luc Peeperkorn, ‘Sustainability Agreements: an EU Competition LawPerspective’ (unpublished): ‘Sustainability agreements are a form of standard-setting agreement. Whenassessing these agreements, the rules developed for standard-setting agreements provide a first point of
producefoodonasustainablebasis).75Forafascinatingdiscussionofthewiderproblemswithbigcompaniesandaneloquentpleafor‘stakeholderantitrust’seeMeagher(n2).ForafullerdiscussionofArticle102andenvironmentalissues,seeChapter5ofKingston(n25).76SeeegAstraZenecaABandAstraZenecaplcvEuropeanCommission[2012]C-457/10P.77Sometimes(butnotalways)thereareshort-termcostsassociatedwithmoresustainablelandusepractices.Lowpricescanpushproducerstoswitchtolesssustainablepracticeswithlowershort-termcosts.78Thelinkbetweenabuseofpowerandadequatefoodwasshownclearlyin2010byOlivierdeSchutterwhofounda ‘direct linkbetweentheabilityofcompetitionregimes toaddressabusesofpower insupplychainsand the enjoyment of the right to adequate food’, Olivier de Schutter, ‘Addressing Concentration in FoodSupply Chains’, Briefing Note 03, (2010),<https://www.ohchr.org/Documents/Issues/Food/BN3_SRRTF_Competition_ENGLISH.pdf> accessed 18January2020,p1.
79See(n76).80Eg, theconceptof fairnessand faircompetitionwasamajordriverof theUSShermanActof1890.ForadiscussionoffairnessandantitrustseeHorton(n15)andseesectionVIII.ix.‘Isitalltoodifficult?’and(n137).81https://www3.fairwear.org.82Eg,NappPharmaceuticalsHoldingsvDGofFairTrading[2002]EWCACiV796.83ForanexampleofpredatorypricingseeAkzoNobelvEuropeanCommission[2010]C-550/07PandIntelforanexampleofexclusionarypricingIntelvCommission[2017]C-413/14P.84EconomistsandaccountantswouldnodoubtplayamajorroleinthisbutIwouldanticipatethatthestartingpointwould be somemeasure of total costs up the production and shipping chain and some concept of areasonableprofit.Ideally,theseshouldreflectcoststhatareoftentermed‘externalities’(egtheenvironmentaldamagecausedbytheproduct)butitmaybethatthiselementisbestdealtwithbymeansofregulation(eganobligationtoincludeitinaspecifiedwayinpurchasecosts)ratherthandealtwithonanadhocex-postwayunderArticle102.
85 Eg, it is unlikely to reduce the difficulty of low prices paid by supermarkets in the UK for milk or bypurchasersgloballyforbananas,coffeeorcocoa.Onthisseealso(n35).86See,eg,UKCompetitionAppealCourt’sjudgementin‘FlynnPharmaLtdandFlynnPharma(Holdings)Ltdv
CMA[2018]CAT11.87 A clear example of this is the EU’s recent directive on unfair trading practices in business to businessrelationships in the agricultural and food supply chain. This contains new rules that ban, for the first time,certain unfair trading practices imposed unilaterally by one trading partner on another (Directive (EU)2019/633onUnfairTradingPracticesinBusiness-to-BusinessRelationshipsintheAgriculturalandFoodSupplyChain (2019) OJ L111/59). In addition, many (most?) EU member states have legislation on unfair tradingpractices(egtheUKandItaly).Furthermore,somecountries(egGermany)havelawsanalogoustoEUlawonabuseofdominancewhichdealwithbehaviourwhereonecompanyhassignificantmarketpowerrelativetoothers.88See(n83).Seealsothediscussionof‘TrueCosts’(n133).
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(viii) It isalsoworthnotingthatnationalcompetitionregimeshaveacknowledgedtheneedto
89Article62oftheLaw27/2012.90cFAstraZeneca(n76).This,ofcourse,worksbothwaysandArticle102could(andshould)alsobeusedtoattack“greenwashing”.ForexampletheItaliancompetitionauthorityrecentlyfoundENIguiltyof“greenwashing”whenitmademisleadingenvironmentalclaimsaboutitsdieselfuel.Thepracticewasfoundtobean“unfaircommercialpractice”but,potentially,Article102(oritsnationalequivalents)couldbeinvoked.https://mlexmarketinsight.com/insights-center/editors-picks/energy-and-climate-change/europe/eni-fined-by-antitrust-watchdog-in-italys-first-greenwashing-case.91 For a discussionof these issues seeChapter 9 of Kingston (n 25) – particularly, p 304-312; She identifiesthreecategoriesof‘objectivejustification’:(1)whereadominantcompanytakes‘reasonablesteps’toprotectits commercial interests; (2) if the efficiencies justify the conduct such that there is ‘no net harm toconsumers’;and(3)legitimatepublicinterestgrounds.
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Although thereare fewdecidedcasesofdirect relevance, the followingmightbe instanceswhere
environmental considerations might provide an ‘objective justification’ for conduct that might
(v) Refusingtograntaccesstoanessentialfacilitytoauserwhointendstousethefacilityforenvironmentally unfriendly purposes (eg denying access to diesel vehicles – provided this
was done on a non-discriminatory basis): ie as a defence to an allegation of refusal to
supply.94
What I hope the above examples illustrate is that it should not be necessary for a dominant
company to justify its actions on the basis of its own commercial (ie profit seeking) interests.
Providing the usual principles for an objective justification aremet (notably that there is no less
restrictive way of achieving the objective in question) it should be sufficient to show a genuine
environmental(orothersustainability)objective.
Dominant companies should not be discouraged from ‘doing the right thing’ or trying tomake a
contribution to combat climate change for fear of the competition law consequences. This is
important as dominant companies are often (not always) large multinationals which have the
economicclouttomakearealdifference.95
92 This approach would be consistent, not only with the ‘polluter pays’ principle, but also the approachsuggested above in relation to challenging abusively low prices for failing to properly reflect environmentalcosts(seesectionVI.i.).93Althoughitwouldbenecessarytoshowthattherewasnolessrestrictivesolution.Forexample,thismightmeanrequiringthattheenvironmentallyfriendlyproductwasboughtbutnotnecessarilyfromthedominantcompany.94ForafurtherdiscussionofhowenvironmentalconsiderationsmayberelevanttoindividualabusesseeKingston(n25),p312-326.95 Note, eg, Business Roundtable, ‘Statement on the Purpose of a Corporation’ (August 2019),<https://opportunity.businessroundtable.org/wp-content/uploads/2019/12/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf> accessed 18 January 2020 (Business Roundtable represents UScompanieswithamarketcapoftrillionsofdollars).Theirstatementincludesacommitmentto:
Initselfthisistobecommended.Thatsaid,thelatest‘ResponsibleBusinessTracker’ofUKcompaniesfoundthatwhile86%ofthosesurveyedhada‘purposestatement’only17%hadaplantomakesureitwaspractisedateverylevel[“BusinessintheCommunity:responsiblebusinesstracker”].Anotherexampleistheso-called‘BCorps’, companies which have made a legal commitment to maintain certain minimum social andenvironmentalstandards(certifiedby‘BLab’,aglobalnotforprofitorganisation).AsofJune2019therewereover2,750certifiedBCorporationsacross64countries.Foradiscussionastowhether‘companies[are]right
98 Under Article 2(2) and 2(3) of the EUMR, the Commission must determine whether the merger is‘compatible with the Common Market’. This, in turn, depends on whether or not the merger (or‘concentration’)would‘significantlyimpedeeffectivecompetition’(‘SIEC’).99See(n98).100EuropeanCommission, ‘GuidelinesontheAssessmentofHorizontalMergersunderCouncilRegulationontheControlofConcentrationsbetweenUndertakings’[2004]C31/03.101OnthisseethediscussionsectionV.ivCondition2atB(ii).102TherewaswidespreadoppositiontotheBayer/MonsantodealbyenvironmentalNGOsandawiderpublicon the basis of environmental and climate change concerns. Commissioner Vestager responded that ‘whiletheseconcernsareofgreatimportance,theydonotformthebasisofamergerassessment’,arguingthatsuchconcerns ‘are handled bymy colleagues and national authorities and are subject to European and nationalrulestoprotectfoodsafety,consumersandtheenvironmentandclimate’,MargetheVestager, ‘CommissionLetter on Monsanto/Bayer’ (Brussels, 22 August 2017)<https://ec.europa.eu/competition/mergers/cases/additional_data/m8084_4719_6.pdf> accessed 18 January2020. Imakenocommentastowhether, inthisparticularcase,shewasrightthatthesematterswerebestdealtwithbyothermeansbut,asshownabove, the idea that risks to theenvironmentandclimate ‘donotform [part of] the basis of a merger assessment’ is contrary to Article 2 of the EUMR – especially whenproperly read in the lightof the constitutional provisionsof the treaties (see IV.).Bayer /Monsanto [2018]M.8084. For a Commission perspective on this case, see European Commission, ‘CompetitionMerger Brief’(2018)2/20186, <https://ec.europa.eu/competition/publications/cmb/2018/kdal18002enn.pdf>accessed18January2020.Foracriticalviewofthedeal,seeIoannisLianosandDmitryKatalevsky,‘MergerActivityinthe
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Theabovesaid, there isconsiderableevidencesuggestingthatmergersrarelyachievetheclaimed
Factors of Production Segments of the Food Value Chain: A Critical Assessment of the Bayer / MonsantoMerger’ (2017) Policy Paper Series (or its summary here:<https://www.ucl.ac.uk/laws/sites/laws/files/redrafted-baysanto-report-summary_final.pdf>).103 See,eg,BruceABlonigenand JustinRPierce, ‘Evidenceof theEffectsofMergersonMarketPowerandEfficiency’ (2016) National Bureau of Economic Research, No w22750<https://dx.doi.org/10.17016/FEDS.2016.082>accessed19January2020.ThisfoundMergersandAcquisitions‘significantlyincreasemark-upsonaveragebuthavenostatisticallysignificantaverageeffectonproductivity’.Otherstudieshaverepeatedlyshownthatmergersarevaluedestroyingfromtheperspectiveoftheacquiringstakeholders.104See,eg,JanDeLoeckerandothers‘TheRiseofMarketPowerandtheMacroeconomicImplications’(2017)NBERWorkingPaperNow23687,<https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3023087>accessed19January2020.105Ietheprohibitionofamergerthatisnotanti-competitive.106 Eg, over the period 21 September 1990 to 31 July 2019 (over 29 years) the Commission received some7,414notificationsofmergersofwhichonly30(or0.04%)wereprohibitedunderArticle8.3EUMR.Afurther447(or6%)wereclearedsubjecttoremediesineitherphase1orphase2(source:EuropeanCommission).Fortheavoidanceofdoubt,IwouldemphasizethatIaminnoway‘anti-merger’Thisisdespitetheargumentthatmergersleadingtolowerpricesarelikelytoleadtomoreconsumptionandtheuseofmoreresources-partlyreflectingmyscepticismastowhethermergersdoinfactleadtolowerprices(n103).Lowerprices,inandofthemselves,goontheplussideoftheequation.Mypointissimplythatoverenforcementissimplynotasignificantriskincurrentmergercontrol.107SeeRecital23oftheEUMR.108Forafurtherdiscussionofthese,seeKingston(n25),p332-340.109Paragraphs79to84oftheHorizontalMergerGuidelines.
110Paragraph85oftheHorizontalMergerGuidelines.111SeesectionViv.Condition3above.112Paragraphs86to88oftheHorizontalMergerGuidelines.113SeethediscussionatsectionV.iv,Condition2re:consumersreceivinga‘fairshareoftheresultingbenefit’and, in particular, the extracts from the Commission’s ‘2004 Exemption Guidelines’ (n 26). Note also thediscussion ‘is it all toodifficult?’ in sectionVIII and the reference there tomodernenvironmental valuationtechniques(atVIII.vii).114Paragraph87oftheHorizontalMergerGuidelines.115See,eg,EDPv.Commission[2005]T-87/052005II-03745.116SeeArticle6(2)andArticle8(2)oftheEUMR.117Onremediesgenerally,seeEuropeanCommission,‘NoticeonRemediesAcceptableunderCouncilRegulation(EC)No139/2004andunderCommissionRegulations’[2008]C267/01.
118AnexampleofacasewhereamergerhasbeenallowedbutonlysubjecttobehaviouralremediestodealwiththepotentialadverseeffectsofthemergeristhemergerbetweenMidKentWaterandSouthEastWaterwhichwasreviewedbytheUK’s(then)CompetitionCommission.Thebehaviouralremedywasdesignedtopreservethe‘waterresource’benefitsarisingfromthemerger.119See,eg,[69]oftheCommission’sRemediesNotice(n117).120Eg,PernodRicard/Diageo/SeagramSpirits[2001]Comp/M.2268].121 The CJEU has repeatedly stated that ‘behavioural commitments are not by their nature insufficient toprevent thecreationorstrengtheningofadominantposition,andtheymustbeassessedonacase-by-casebasis in thesamewayasstructuralcommitments’,eg inEDPvCommission [2005]T-87/05 II-03745at [100]andcasescitedthere.
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appraisal takes proper account of environmental and sustainability considerations (in
accordance with the constitutional provisions of the treaties), themore likely it is that a
more extensive than those whichmight have been considered necessary at the end of a
phase2.Whereappropriate, thesecould includeremedies to removeany ‘seriousdoubts’
abouttheenvironmental(orother)impactofthedeal.
122Paragraphs9to14oftheRemediesNoticediscussesthe‘basicconditionsforacceptablecommitments’.123See[6]oftheRemediesNotice.124 Iamnotawareofanyjudgementofthecourtonthispoint.Thereare,however,somecommentsbytheCJEUwhichcouldbereadtosuggestthattheremedycanbenomoreextensivethannecessarytoremedythecompetitionconcernsidentified,see,eg,paragraphs93and95ofEDPvCommission(n121).However,(i)thepartieshadacceptedinthatcasethattherewasaSIECsothecourtdidnothavetodecidewhetheraSIECwasapre-condition toa remedy;and (ii)anycommentsonArticle2andremedieswereobiteras thequestionsasked of the court concerned an alleged ‘abuse of power’ and not an alleged breach of Article 2. In thiscontext, I also note that the CJEU (and its predecessor) has expressly confirmed in antitrust cases that theCommissionisentitledtoaccept‘commitments’underArticle9ofRegulation1/2003incircumstanceswhereitwouldnothavebeenentitledtoimposesuchmeasuresunderArticle7ofRegulation1/2003(egCommission
vAlrosa[2010]C-441/07P,paragraphs46and48-50).ApossibleobjectiontothisanalogyisthatthepurposeofArticle7 is tobringan infringement toanend,whereasadecisionunderArticle9 is intendedtoaddressconcernstheCommissionhasraisedfollowinga(so-called)‘preliminaryassessment’arguablyanalogoustothe‘seriousdoubts’whichtheCommissionmayhaveattheendofaphase1reviewundertheEUMR–seesectionVII.iii(iii)above.Itisnoteworthy,however,thatcommitmentsacceptedunderArticle9ofRegulation1/2003(whicheffectively‘clear’arrangementsbeinglookedatunderArticle101or102)areoftensimilartoremedieswhicheffectively‘clear’adealundertheEUMR.125SeeArticle6(2)oftheEUMRandparagraph6andfn4oftheRemediesNotice.
EUMR. Itdoesnotprovideanybasis foramember state toapproveadeal that isblockedby theCommission. In this sense it is a potential complement to Article 2 of the EUMR which I have
126Inthiscontextitisnoteworthythatinitssubmissiontothe2010OECDReport(n3),p112theOFTnotedthat,althoughtheUKmergerregimeprovidesforministerstointerveneinmergerstoprotectcertainpublicinterestissues,thecurrentlistofissuesdoesnotincludeenvironmentalconcernsbutthatthese‘couldbeaddedtothelistbylegislation’.127 The EU Merger Working Group, ‘Public Interest Regimes in the European Union – Differences andSimilarities in Approach’ (Report), 10 March 2016,(<https://ec.europa.eu/competition/ecn/mwg_public_interest_regimes_en.pdf>, accessed 19 January 2020,foundthattherewere‘12jurisdictions[intheEU]wherewiderpublicinterestconsiderationscaneitherformpart of the merger control assessment or can otherwise feature in the overall business decision makingprocess’.
128Theroleofpublic interest factorshasrecentlybeenstrengthenedastheywillnowbeacoreassessmentarea in merger control – whereas public interest was previously only a secondary area of assessment(CompetitionAmendmentBillB23B–2018).129MaximilianKonrad,‘MinisterialApprovalMiba/Zollern:AGreenIndustrialPolicyForMedium-SizedCompanies’(D’KartAntitrustBlog,20August2019)<https://www.d-kart.de/en/blog/2019/08/20/ministererlaubnis-miba-zollern-gruene-industriepolitik-fuer-den-mittelstand/>accessed19January2020.
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VIII. Isitalltoodifficult?Itissometimessuggestedthatitistoodifficulttotakeintoaccountwiderissuesthannarrowshort-
130AsMaurice Stuckehasnoted: ‘antitrust analysis over thepast thirty years overstated the importanceofcompetitive dynamics that were easier to assess (productive efficiencies and short-term price effects) andmarginalisedor ignoredwhatwasharder to assess (dynamic efficiencies; systemic risk; andpolitical, social,and moral implications of concentrated economic power)’, Maurice Stucke, ‘Should Competition PolicyPromoteHappiness?’ (2012) 81 FordhamLawReview2575, <https://ssrn.com/abstract=2203533>, accessed19 January2020. Similarly, CommissionerKroeshasnoted ‘we cannot justwashourhandsof responsibilityand say that competition lawcannotor shouldnotprotect theconsumeragainstnegativemediumto long-term effects just because it is difficult to assess’ (Neelie Kroes, ‘Preliminary Thoughts on Policy Review ofArticle 82’, Speech, Fordham Corporate Law Institute, New York, 23 September 2005,<https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_05_537> accessed 19 January 2020).Furthermore, just because something is less certain does not mean that it can’t be taken into account.Uncertaintymayplayintothenatureoftheevidencerequiredinrelationtoit,butnotonlycanit,butitmust,betaken intoaccount intheanalysis.AstheChiefEconomistattheUK’sCMA,MikeWalker,hasnoted ‘thecurrentapproachseems tobe that it isbetter tobeexactlywrong thanroughly right. Ifwe treatconsumerwelfareinthewaythatyouwantto(whichmakessensetome)thenthebalanceofprobabilitiestestdoesnotallowustoavoidmakinglong-termuncertaindecisions.Competitionauthoritiesneedtobeclearaboutthis’(MikeWalker in correspondence with the author). He is right and this view is consistent with the helpfulcommentsbytheCommission inthe2004ExemptionGuidelinesreferredto insection V.ivunderCondition2(B)‘FairShareoftheResultingBenefits’atpoint(ii).131SeethediscussionofCondition3inV.Interestingly,theEuropeanCommissionitselfsaidinasubmissiontotheOECDin1966that:‘strikingabalancebetweencompetitionandenvironmentalpolicywas:
(See,inparticular,IV.ofthepaperanditsappendix).134ForaninterestingdiscussionoftheseissuesseeChapter5inKingston(n25).135See(n48).136 In the Chicken of Tomorrow case chicken producers came to an agreement to improve the welfare ofchickens(andtoreplace‘regular’chickenswiththe‘chickenoftomorrow’).TheDutchCompetitionAuthority(theACM)attemptedtoquantifythebenefitsoftheseimprovements(basedonaconsumersurvey)andfoundthattheimprovementscameatahighercost(1.45eurocentsperkilo)thanacombinationofwhatconsumerswerewillingtopay(68eurocentsperkilo)andthepositiveenvironmentaleffects(14eurocentsperkilo)(ieatotal of 82 eurocents). They therefore concluded that the potential advantages to animal welfare did notoutweighthereductionofconsumerchoiceandpotentialpriceincreasesandtheinitiativewasabandoned.Iwouldmakeoneobservation.Inthecaseofimprovementsinanimalwelfare,awillingnesstopaytestmaybethebestquantitativetestavailableinthecontextofanArticle103(3)analysis.However,whereclimatechange(andperhapsotherenvironmentalorsocial issues)areatstake, it isnecessarytoconsiderdynamicandlongterm effects-particularly future benefits to consumers and society (on which I note the comments of theEuropean Commission at paragraphs 87 and 88 of its 2004 Exemption Guidelines and its approach in theCECEDcasereferredtoin(n48).ForfurtherdiscussionsoftheChickenofTomorrowcaseseeLianos(n25),p26-28.
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The above said, while there is a place for quantitative techniques, there is no
139PrincipallybytheMaastrichtTreatyof1992andtheTreatyofAmsterdam1999.SeetheresultingprovisionsposttheTreatyofLisbon2009setoutinIV.140SeeIV.141Again,seeIV.142SeeegthecommentbytheUK’sOFTinthe2010OECDPaper(n3),p103:‘TheOFThasnotopenedanyinvestigationsintohorizontalagreementsincludingenvironmentalagreements’.143See,eg,the‘ConclusionsandPracticalSolutions’setoutin‘AddressingtheBrokenLinks’(n35)p50-54.Inparticular, this includes eight points which ‘recommend some practical solutions on how to embedsustainabilityconcernsintocompetitionlawfromaregulatoryandenforcementperspective’.Thesefallunder3headings: ‘interpretativechanges’; ‘institutional changes’;and ‘regulatorychanges’ (seep52-54).Seealso
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1. PositiveStatementsbyCompetitionAuthorities.
Topofmy list ismorepositivestatements fromthecompetitionauthoritiesastowhatcanbe
have often been very good at looking at the treaties as a coherent whole and interpreting the
competitionprovisions accordingly (consider, for example cases such asAlbany, and FNVKunsten
discussedinsectionV.iiaboveandinn36).144
(3) PublicationofLegalOpinions.
Companies receiving,or lawyersgiving,positiveadviceabout initiatives to combat climatechange
(orother issuesconcerning theenvironmentoreconomic/social injustices) could seek topublicise
thefourrecommendationsoftheFairtradeFoundationpaperon‘CompetitionLawandSustainability.AStudyinto Industry Attitudes towards Multi-Stakeholder Collaboration in the UK Grocery Sector’ (2019), p 19<https://www.fairtrade.org.uk/Download.ashx?id=%7BEE9F8B75-8FFA-4E38-B87B-82BBE23A3D7C%7D>accessed19January2020.144FortheapproachoftheCJEUsee(n29).
150SeesectionVIII.151SeesectionVII.iv.152 Nothing here is intended to detract from the need to introduce legislation on the environment,sustainabilityandclimatechange.Competitionlawisnopanaceaandcertainlynosubstituteforlegislativeandotheradministrativeaction.Indeed,whenit isclearthatcompetitionlawisnottheproblem(ortheanswer,evenafterall changesdiscussedhere), thiscanactasacatalyst for legislativeaction (anexamplebeing theEU’snewrulesonunfairtradingpractices–see(n87)).