EU antitrust update allows sustainability defence for dominant companies

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EU antitrust sustainability defence

Highlights

The European Commission updated Article 102 guidance allowing companies with over 40% market share to justify potentially anti-competitive conduct if linked to sustainability objectives.
New guidelines permit dominant firms to defend rival-squeezing practices when these reduce raw material use, pollution, or strengthen supply chain resilience, with consumer cost savings considered.
Twenty-eight academics and economists, including former senior Commission officials, publicly warn that the revised approach risks enabling dominant firms to misuse sustainability justifications and erode antitrust enforcement.

Revised Article 102 guidance

As reported by Reuters, the Commission says on Thursday that companies with more than a 40% market share may in some cases justify conduct that would otherwise raise anti-competition concerns if their business practices are sustainable.

The updated guidelines relate to Article 102, one of the European Union's main antitrust tools, and are intended to help businesses assess whether they are dominant and in which markets that status applies. The Commission says conduct that squeezes rivals could be acceptable if it reduces raw material use, cuts pollution, increases the use of recyclable products or strengthens supply chain resilience.

The revised framework also says consumer cost savings are taken into account. The changes come as Brussels continues to define how competition policy should treat environmental and efficiency claims made by large companies.

Debate over enforcement risks

Article 102 has been used in recent years to impose heavy fines on Apple, Google and Microsoft after EU authorities found they had used market power to thwart rivals. The latest guidance therefore has implications for how dominant companies frame compliance strategies and defend commercial practices in future cases.

Academics and analysts criticize the new approach, warning that broader room for justification could be misused. In a joint open letter to Commission President Ursula von der Leyen and EU antitrust chief Teresa Ribera, 28 academics and economists, including former senior Commission economists, say the rules may be exploited to justify unfair dominance.

The letter says the guidelines introduce presumptions and analytical shortcuts that do not properly distinguish between anti-competitive conduct and pro-competitive behaviour based on business acumen, superior skill or efficiency by dominant firms. That criticism points to a potential tension between sustainability policy goals and traditional competition enforcement in the EU.

Our earlier report on Apple’s App Tracking Transparency rules covered a £2 billion private damages claim filed in London, with app developers alleging the policy unfairly restricted third-party advertising while favoring Apple’s own ad ecosystem. We also noted that the same framework has been under competition investigation in several European countries, keeping pressure on how dominant platforms set rules that can squeeze rivals.

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