Reforming EU Competition Policy and Effective Reform Options

Reforming EU Competition Policy and Effective Reform Options

                                                                   Introduction           

Different government in the European Union (EU) for instance German, Polish plus French jointly recommended ways for modernizing and improving EU competition policy. In 2019, the French Minister for finance plus Economy, Bruno le Maire stated that the move is effective and calls for talks and meetings with various EU member states. Germany through her Economics Affairs Minister, Peter Altmaier also detailed 2030 Industrial manifesto thereby aligning with French’s minister’s idea of the necessity of EU competition policy. Moreover, there are several debates concerning the maternities of EU competition policy. Several challenges facing the policies brought by the rising digital economy thereby necessitating the challenges to be tackled head on. In addition, failures of particular merger schemes for instance Siemens lead to several questions pointed at the EU competition policy. As follows, the EU competition policy needs reformation to align with the contemporary digital market.

Meaning of EU Competition Policy

            EU is a political and economic regional block currently having 27 states as its members located in Europe. EU member countries covers an area of 4,233,255 km² having a population of over 447 million. EU competition policy is a law established to be applied within EU member states. Additionally, EU competition policy encourages maintenance of ethical trade deals within its member states.[1]Maintenance of these ethical trade considerations act as discouraging emergence of cartels and monopolies which would in return create unhealthy trade within EU countries. Currently, EU competition law originates from article 101 to 109 of Treaty on the Functioning of the European Union (TFEU). Correspondingly, it also derives from directives plus regulations. There are four main policies for instance;controlling of cartels, collusions and other anti-competitive practices detailed under article 101 of TFEU. Additionally, the second policy is dominance of the market detailed under article 102 of TFEU. The next policy is controlling of controlled mergers, acquisitions and joint ventures concerning nations having a particular outlined amount of turnover in EU. Last policy is the state aid. These are indirect plus direct assistance provided from EU member states to organizations detailed in article 107 under TFEU.

Objectives of EU competition Policy (120)

            Objectives of EU competition policy differs with each country over time depending on the country’s economic, political plus social obligations. Additionally, most of these policies associate with efficiency, innovation, consumer welfare and smaller firm defence. Every economic policy acts to address issues related to the particular region. For instance, American policy acts on solving the issue of racism, while African policy acts on improving lives of the majority into the economic mainstream.[2]EU completion policies therefore have the mandate to address issues affecting European nations. Until 1990s, the core objective of EU competition policy was for market integration. During this time, unification of the market was the main objective when drafting the policy. After reaching the goal of market unification, EU competition policy concentrated on preventing competition harm.[3]In addition, EU competition policy also had efforts to modernization which created notable alteration in trade industry for instance, free competition and reduced governmental regulation. Additionally, other reformation included short term financial competence plus consumer welfare.

Reasons for Reforming EU competition Policy and reform Options

As stated, EU competition policies need reformation. The first reason why EU competition policy needs reformation is that it only considers mergers through limited consumer-price lens and ignoring the wider public concern. For instance, in September 2016, Bayer and Monsanto merged thereby making the organization the world’s largest pesticide plus seeds supplier.[4]EU approved the merge despite harsh critics by the public and Non-Governmental Organizations (NGOs) that the merging of the organizations posed a threat to food security, environ and consumer protection. EU argued that some particular parts of the organization were to be sold to withstand the dominant innovation plus competition in the market. The commission did not consider food security, consumer protection and the environment while examining the impact on consumer prices. Therefore, EU applies consumer-welfare methodology to competition law. EU also focuses on price adeptness as the core measure regarding competition. For that reason, the stated example depict an exemplar of competition policy. Further, the commission infers merger guideline positioned at barring acquisitions that would greatly decrease competition in a market.[5]The key examination of the effect of mergers id that it reduces competition, however, merger probably also leads to increased costs to consumers due to dominant position of the new organization. The commission proves to be blind in its competition policy since manufacturing of all types of goods and provision of services have negative externalities not detailed in the price that consumers pay. This concept implies that companies and organizationsdepend on readily available resources, pollute the environmentor exploit inadequately safeguarded employees while paying no cost. Therefore, due to the stated instances, these organizations offer goods and services at a very lower price since part of the production cost is publicly borne. Competition only concerned with the upfront only favours those organizations that have the best ability to manipulate externalities to minimize their cost of production.[6]Thus, the competition law policy leads to the creation of locational pros for organizations having a lower protection ideals for the environment and people. There are different environmental and societal standards for EU member states, at the same time, companies have the freedom to freely trade within these states. The result of this is uneven operating ground for competition. Organizations do not compete on the basis of a common rule, but rather the competition becomes harmful among locations, having a race-to-the-bottom in safeguard pattern.

            Locational dissimilarities in environmental plus social patterns in one market will persists for the probable future. Thus, EU competition laws should be more all-inclusive.This concept implies that the policy should be able to take into account all the negative externalities present in the supply chain not detailed in consumer prices. Public interest issues for instance, environ degradation, data concentration control and violation of employee rights should be included in EU competition policy decisions. These public interest concerns are not signaled in good and service prices.

A study organized by NGO Fair Trade Advocacy Office, was conducted in 2018 to answer the question as to why EU competition policy, should move beyond consumer prices and cover public interest issues.[7]This study was also inspired by rising debates concerning holistic plus sustainable competition policy. Furthermore, the report was drafted by Austrain Green and Michael Reimon. In the report, even the parliament criticized some of the commission’sapproaches. For instance, the parliament criticizes how EU competition policy mishandles the merger between Bayer and Monsanto. Specifically, the parliament ignored that the commission overlooked some of the treaty requirements. Some of the principles ignored by the commission include, consumer protection plus food safety. There is a high attentiveness of food supply chain mainly in the oligopoly markets. Consequently, this trend is continually becoming harmful to biodiversity. Also, the trend also make farmers rely more on huge seed plus pesticide suppliers thus reducing innovation plus the quality of feeds. Moreover, another areas detailed in the report is fair trade plus sustainability pattern on the supply chain. Additionally, the report wants the commission to consider treaty policy addressing cooperation among organizations based on European values. The commission need also to consider other issues for instance, environ standards, consumer protection plus climate policy apart from just price proficiency. Revision of general rules concerning cooperation among market participators would lead to legal assurance for programs having aims of boosting social plus environmental patterns. Also, this trend will also encourage more players to join hands and work together towards protecting the environment and doing away with imbalanced working conditions. Correspondingly, the report also acknowledges shortcomings brought due to digital economy. For this instance, the report states that coming merger decisions should not only consider examination of price impacts. Therefore, the commission should also consider other factors for instance, anti-competitive behaviour. What is more, the commission should also account for breaches of policies governing data plus consumer shield. Some companies take advantage of ever increasing data flows to exclude competitors from a market. Examples of these companies include Google and Facebook. This trend thus is considered as exploitation of market-dominant site and, it negatively impacts the quality of services and products and user privacy.

To begin with, there are several issues not included in EU competition policy that affects the contemporary market. These issues range from data control, to biodiversity. Due to the issues stated, there is need to reform the commission’s policy which creates imbalanced trading pitch. Therefore, EU need to create more all way analysis of competition policies.[8] By doing this, the commission would consider general treaty requirements. Achieving this will necessitate renovating numerous regulation to rule application. The revised law would therefore detail legal assurance for individuals operating as one to create a more defensible economy. The eco-social market of Europe details a worldwide representationfor strengths to domesticate the damaging nature of capitalism. In addition, it also relieves its influence on nature plus people. EU should lead by an example, particularly when addressing the issue of establishment of all way interpretation that considers treaty principles aiming at protection of public interest. Europe happens to be the pioneer in the sector of sustainable economics by detailing sustainability into the financial scheme.[9]Together with enhancing the financial markets, EU commission need to develop an enhanced sustainable European match regulations. The aim of the step is to do away with anti-trust correlated obstacles to an enhanced equitable plus ecological economy.

Conclusion

            European Union is made up of 21 countries in Europe. European Union competition policy therefore exists to moderate and create a fair trade relationship among the member countries. The Union’s policy also acts to minimize trade cartels. However, countries such as Germany and France have tabled their debates concerning reformation of EU competition policy to make it adjustable o the current world issues. Additionally, the policy mainly concentrates on price issues. However, the commission neglects other issues relating to individual’s concerns like work quality and environmental conservation. The commission also ignores some of the treaty principles. EU also needs to create several means of analyzing competition laws. By engaging in this process, EU will consider general treaty necessities.

Bibliography

Avdagic, Sabina. “When are concerted reforms feasible? Explaining the emergence of social pacts in Western Europe.” Comparative political studies 43, no. 5 (2010): 628-657.

Aydin, Umut, and Kenneth P. Thomas. “The challenges and trajectories of EU competition policy in the twenty-first century.” Journal of European Integration 34, no. 6 (2012): 531-547.

Eggertsson, Gauti, Andrea Ferrero, and Andrea Raffo. “Can structural reforms help Europe?.” Journal of Monetary Economics 61 (2014): 2-22.

De Ville, Ferdi, and Gabriel Siles-Brügge. “The role of ideas in legitimating EU trade policy: from the Single Market Programme to the Transatlantic Trade and Investment Partnership.” In Handbook on the eu and International Trade. Edward Elgar Publishing, 2018.

Hamann, Kerstin, and John Kelly. “Parties, elections and policy reforms in Western Europe.” Voting For Social Pacts, London (2011).

McCann, Philip, and Raquel Ortega-Argilés. “Transforming European regional policy: a results-driven agenda and smart specialization.” Oxford Review of Economic Policy 29, no. 2 (2013): 405-431.

Morgan, Bronwen. Social citizenship in the shadow of competition: the bureaucratic politics of regulatory justification. Routledge, 2017.

Schmidt, Hedvig, and Steven Anderman. EU competition law and intellectual property rights, the regulation of innovation. Oxford University Press, 2011.

Turner, Jonathan. Intellectual Property and EU Competition Law, 2 u. Oxford University Press, Oxford, 2015.

REFORMING EU COMPETITION POLICY AND EFFECTIVE REFORM OPTIONS

[1]Aydin, Umut, and Kenneth P. Thomas. “The challenges and trajectories of EU competition policy in the twenty-first century.” Journal of European Integration 34, no. 6 (2012): 531-547.

[2]Schmidt, Hedvig, and Steven Anderman. EU competition law and intellectual property rights, the regulation of innovation. Oxford University Press, 2011.

[3]Turner, Jonathan. Intellectual Property and EU Competition Law, 2 u. Oxford University Press, Oxford, 2015.

[4]Morgan, Bronwen. Social citizenship in the shadow of competition: the bureaucratic politics of regulatory justification. Routledge, 2017.

[5]Eggertsson, Gauti, Andrea Ferrero, and Andrea Raffo. “Can structural reforms help Europe?.” Journal of Monetary Economics 61 (2014): 2-22.

[6]McCann, Philip, and Raquel Ortega-Argilés. “Transforming European regional policy: a results-driven agenda and smart specialization.” Oxford Review of Economic Policy 29, no. 2 (2013): 405-431.

[7]De Ville, Ferdi, and Gabriel Siles-Brügge. “The role of ideas in legitimating EU trade policy: from the Single Market Programme to the Transatlantic Trade and Investment Partnership.” In Handbook on the eu and International Trade. Edward Elgar Publishing, 2018.

[8]Avdagic, Sabina. “When are concerted reforms feasible? Explaining the emergence of social pacts in Western Europe.” Comparative political studies 43, no. 5 (2010): 628-657.

[9]Hamann, Kerstin, and John Kelly. “Parties, elections and policy reforms in Western Europe.” Voting For Social Pacts, London (2011).