Competition law enforcement in the EU: What will the next five years bring

September 26, 2024

The European Union's ("EU") competition policy is destined to undergo updates that support innovation, sustainability, and European competitiveness. The European Commission ("EC") envisions changes to the existing State Aid frameworks, merger control rules, and antitrust enforcement priorities - all that could impact companies across strategic sectors.

The latest source of such adjustments are the likely influential report from Mario Draghi and the EC president's mission letters, in particular, the mission letter to Executive Vice-President-designate for a Clean, Just and Competitive Transition Teresa Ribera Rodríguez, who is set to take on the mantle of competition commissioner. Likewise, Dan Jørgensen, Commissioner-designate for Energy and Housing, will also likely have to work in a more investment-friendly state aid environment for European companies, specifically when it comes to energy efficient and social housing.

Finally, Executive Vice-President-designate for Prosperity and Industrial Strategy Stéphane Séjourné's numerous tasks - holder of the other possibly influential portfolio - include requests for better coordination of industrial strategies, competition policy, the new European Competitiveness Fund and state aid policy.

The European Commission president's mission letters outline her vision for the commissioners' roles, responsibilities and main priorities for the next five years.

President von der Leyen's mission letters: Key points

State aid: new state aid framework, faster and simpler procedures, support for housing projects and scaling up investments

As part of the envisioned Clean Industrial Deal, the European Commission will (i) modify the existing state aid framework to accelerate deployment of renewable energy, (ii) advance industrial decarbonization, (iii) support affordable and sustainable housing and (iv) expand manufacturing capacity for clean technologies. Furthermore, state aid procedures should be further simplified and accelerated, with an emphasis on prioritizing efforts targeting "the most distortive aid." Targeted investments will include deep tech, clean tech and dual-use companies, with a potential to grow - such public money will be expected to help companies through the full lifecycle. Funds will be created at the European level, and existing financing mechanisms will be made simpler, and perhaps more risk prone. In consequence, this means more responsibility on companies for self-assessment, evaluation and risk-taking.

Merger control: review of the Horizontal Merger Control Guidelines, focus on the so-called killer acquisitions.

Von der Leyen's mission letters also call for a review of the Horizontal Merger Control Guidelines. Such evaluation would consider the needs of the European economy's resilience, efficiency and innovation. The review should focus on strategic sectors where competition is shaped by long-term investment and the evolving security environment, aiming to better reflect the challenges these industries face. The president's concerns over "killer acquisitions"- where foreign companies acquire SMEs or mid-cap firms to eliminate future competition - are apparent. These acquisitions will be scrutinized thoroughly, while cross-border acquisitions with the object of creating European champions are going to be more recognized.

Anticompetitive practices: time to test the developments of the last five years

The mission letter to Executive Vice President-designate Ribera highlights the need to "strengthen and speed up enforcement of competition rules" and calls for swift and effective implementation of the Digital Markets Act. It also emphasizes the importance of incorporating sector-specific policies into competition policy, particularly within the context of a competitive and sustainable food and agriculture sector. At the same time, other objectives, such as the drafting of a "new industrial strategy" and "competitiveness coordination tool" are likely to bring along changes especially to the capital and investment markets.

Competition enforcement is undergoing a re-evaluation and a repositioning. How competition policy will best serve the multilayered EU trade, competitiveness and industrial policies, remains to be seen. Companies, in particular non-European ones, should be looking forward to an electric period ahead.

If you have any questions about the upcoming changes to EU competition policy, don't hesitate to contact us here. Our professionals are ready to assist you.