EU antitrust policy has long been lauded for protecting against abuses of market dominance and monopolistic price-gouging. But is it stifling the creation of European world-beaters? Sometimes it may be, according to the recent report on reviving EU competitiveness from former European Central Bank governor Mario Draghi. Spain’s Teresa Ribera, nominated as the EU’s new competition chief, has been told to develop an approach “more supportive of companies scaling up in global markets”. It is surely right to ensure EU antitrust regulations are keeping pace with dizzying changes in technology and the global economy. But the aim should be for evolution, not revolution.
Draghi argued competition policy should take greater account of the need to create businesses that can compete with US and Chinese giants, not just preserving competition within the EU market. Merger policy should also weigh whether tie-ups will stimulate innovation, and not focus only on price effects. An “innovation defence”, he suggested, could allow tech or other research-intensive companies to argue that by merging they could achieve the scale needed to plough more into innovation. The EU might switch to policing some such mergers post-approval — for example, by ensuring they stick to agreed investment targets.