The return of the pre-Covid competition agenda for a post-Covid world

Bold and flexible moves to protect business during the crisis in order to avoid painful structural changes that would put the post crisis future at risk.  This is the objective for many companies in these unprecedented times.  But it also seems to capture the  Commission's approach to competition policy.  

We have seen significant flexibility for state aid (175 aid measures approved and about EUR 2 trillion aid committed so far) and crisis-related competitor cooperation.   The Commission has flexed its processes to provide guidance in ways that it had not used since 2003.  There was no significant movement in the last two months on work streams that were top priorities before the crisis.   All eyes have been on the Covid ball. 

But those who read the small print in the communications are always reminded that this world of enhanced flexibility to support broader objectives is not there to stay.  The Commission does not want this crisis to become a catalyst for the ongoing discussions on flexing competition law to better support goals that go beyond short term consumer welfare.  Industrial policy, the digital agenda, green objectives and ESG more generally have been the most prominent examples.  Others may well emerge as the economy is moving out of the Covid freeze.  A growing minority and some (large) Member States are advocating that traditional competition enforcement is more getting in the way than helping in these fields. The crisis is putting this into the spotlight again.  Remarkably, green conditions for state aid are not pushed at EU level but by some Member States, at the price of creating a handicap for "their" companies.  

The Commissioner's exchange with the European Parliament earlier this week firmly reiterates that she sees traditional competition enforcement only as part of the solution and not of the problem.  It brings a focus on efficiency and competitiveness that she thinks of as crucial to support Europe's post crisis recovery.  The Commission has never been an ally of those who would like to shape competition enforcement to serve new objectives.  The crisis has so far led to no change.

All tracks seem to me laid towards a return to strict enforcement that is very much in line with what we had seen until the crisis.  Digital platforms, tax rulings, strict merger control with no enhanced flexibility for potentially failing firms, significant uncertainty for any competitor cooperation that is off the beaten track of block exemptions or short term supply security in the crisis.  This is what the Commission seems to be aiming for and this is what stakeholders should expect.  As long as the Commission is holding the traditional enforcement fort, stakeholders would be misguided to take any comfort from the voices that advocate change.  In the EU, it is the Commission that owns both competition enforcement and the initiative for legislative change.  And it will want to keep it this way.