Done 8 October 2020

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It is impossible to participate in the Annual Fordham Conference without reflecting on its history. It is the longest running forum for transatlantic cooperation and exchange in the field of competition law.

So long running, in fact, that the first one was held in the autumn of 1974, before the Department of Justice filed its historic antitrust suit against AT&T.

In those days, DG Competition – or DG IV, as we were called then – was a young and inexperienced competition authority, compared to our American counterparts. So we came to Fordham and we listened. And learned. We used this knowledge to develop our approach, often in concert with our transatlantic partners. That is particularly true, for example, for our merger policy, something that crystallised in 1990 with the entry into force of the EU Merger Regulation.

Today, EU competition policy has forged its path and is fully invested in shaping international discussions. Which is only natural, since we have seen first-hand the benefits of international cooperation.

And as the economy became more global, harmful practices of large market players extended more and more beyond the jurisdictional limits of any single competition enforcer.

Formally, governments signed cooperation agreements – the EU and US did so in 1991. But the informal networks behind them were forged long before, also thanks to forums like Fordham.

The Health Crisis

So, we are in the right place for serious discussion. And the extraordinary events of the last months bring up fresh challenges - challenges that call for serious discussion.

The corona crisis hit us hard and it hit us fast.

It is a crisis of profound human tragedy. It is a crisis that severely damaged our economies. It has forced workplaces to close and millions of workers into temporary unemployment or even redundancy.

Emergency measures taken around the globe helped lessen the immediate impact of lockdowns on workers and consumer demand. We can and should continue to intervene to reduce the harmful effects on the labour market and the economy as a whole.

But we also have another task: to ensure that the recovery and new growth is in line with our principles and our strategic priorities of a green and digital future.

For us in Europe, this will in the first place depend on a European Single Market that is unfragmented and functions properly.

We need fair and contestable markets because they make us better off. They signal where investment should flow, and they tell us who is creating value in the economy. A deep and unexpected crisis like this one doesn’t change any of that.

If anything, it only reinforces what we already knew. It’s precisely when things are changing fast that we need to rely on our fundamentals most. A crisis and recovery means winners and losers. That much is sure. But which firms will win and which will lose? That’s not a question politicians can answer – at least not well.

Which brings us back to the Single Market. The more competitive and contestable it remains, the better investment will flow where it is truly needed. The result will be a quicker, stronger and more sustainable recovery.

This will be our compass in the coming months and years. And we will need it to navigate through the stormy waters ahead.

Crisis Impacts on Antitrust

Our competition rules give us a formidable toolkit to defend the Single Market. Each of the three instruments – antitrust, mergers and state aid – has a role to play. And each will be challenged by this crisis.

For antitrust, a priority is to continue to pursue and unmask cartels. Collusion causes most harm to competition because it takes place behind a veil of dishonesty.  Collusion leads to artificially high prices and slows down innovation. Just last week, the Commission adopted a decision against three component manufacturers in the car industry, representing two separate cartels, with total fines of 18 million euros.

Part of the antitrust battle lies in being clear and transparent on what is and what isn’t allowed. To this end, at the very outset of the crisis, we offered guidance and provided an ad hoc comfort letter in relation to agreements to tackle shortages of essential products, due to the covid crisis.

The covid crisis is an unprecedented situation for many sectors, not just essential products. So we have been open to clarifying what kinds of cooperation are unproblematic, and identifying the necessary safeguards for cooperation to bring benefits without the risks of unwanted effects.  And we have done so through informal feedback to companies approaching us.  For example, we have had useful exchanges with representatives in the automotive sector.

We must also continue to fight abuse of dominance. Dominance is nothing new, but in times of crisis there is an added concern. When money is tight, having deep pockets matters. That heightens the risk posed by predatory pricing behaviour and other forms of exclusion.

Fighting dominance can also mean changing our enforcement approach. Only yesterday, we adopted our final decision on the Broadcom case, for which interim measures had been announced earlier in the year. This is the first time interim measures have been used in a case leading to commitments. But I doubt it will be the last: It’s when markets are moving rapidly that interim measures matter most. They can prevent irreparable harm to competition during the time it takes to reach the final decision. They do something else too. They create the right incentives for companies to work with enforcers towards reaching commitments.

Another key challenge in antitrust is in staying up to speed on new and emerging areas of business. In June, we launched a sector inquiry into the Internet of Things, to understand market dynamics for networked products and services, where data plays a big role. With markets shifting and new technologies emerging, it is likely we will be doing more sector inquiries in the near future.

Finally, we need to make sure our antitrust toolkit is up-to-date. That may mean new powers to enforce. What is currently missing in our toolbox is the possibility to carry market investigations into structural issues that create inefficiencies, in particular in digital markets.

We’re working on a new legislative proposal focussed on digital markets, which would feature two complementary pillars, a combination of ex ante regulation and case-by-case enforcement. The regulation side will be targeted at a small number of large digital gatekeepers, setting out a clear list of dos and don’ts. Yes, you should make certain data accessible to platform users. No, you should not engage in proven forms of harmful self-preferencing. The case-by-case enforcement side would allow us to investigate digital markets and intervene, including by imposing remedies, where we identify structural market issues or failures.

Of course, the reach of these markets means this is a shared challenge for competition enforcers everywhere. I was pleased to see the report just published by the House Judiciary Committee covers many of the same issues we are facing in Europe.

Crisis Impacts on Mergers

As regards mergers, we have seen a temporary reduction in notifications, although the decline has been small. There have also been delays in responses to questions. But merger enforcement never stopped. 

In the near future, we expect to see consolidations. This is often the case after a crisis, as industry tends to reorganize itself following a shock. The biggest issue for us will be avoiding excessive concentration that adversely affects EU businesses and consumers.

The crisis may also form the background for more recourse to the ‘failing firm’ defence, in cases where companies buy weakened rivals. That makes our criteria in this area more important than ever – the failing firm’s future in the market; the availability of other options that harm competition less; and the final fate of the assets if the firm were to fail. Any departure from these criteria would mean falling into the trap of allowing the crisis to lead us away from our objective, which is to preserve open and competitive markets.

Crisis Impacts on State Aid

The final instrument is State aid, something uniquely European. State aid control is there to ensure companies compete on equal terms, also when it comes to subsidies from Member States. It also helps Member States do more with less, by using competition to drive down costs and by making best use of limited public and private resources.

Now, State aid control is more relevant than ever. At the start of the crisis, we adopted temporary rules to enable Member States to support businesses suffering from the extraordinary restrictions taken to contain the virus. This response was necessary to preserve value and jobs, and also set conditions to protect fair competition.

Given the continued economic uncertainty, we are in the process of prolonging and adapting these rules until mid-next year. But temporary rules must remain temporary. And we are at the same time thinking about the right conditions to enable much needed forward-looking investments, while preserving the level playing field.

Fair Taxation

Which also brings me to another point: State aid control’s contribution to fighting tax avoidance.

Subsidies can come in many forms – as a favourable loan, as a piece of land, or as tax advantages given selectively to a company. If Member States allow a handful of companies to pay a lot less tax than their rivals, that undermines fair competition, and it also deprives the public purse of funds for much needed investments.  

Before the summer, the General Court – which for a case like this is the first instance - annulled the Commission’s State aid decision. In the decision, we had found that Apple received illegal tax advantages in Ireland. After carefully reviewing the judgment, we believe the court has made certain errors in law. That’s why we have appealed the judgment to the higher instance, the European Court of Justice.

For example, we are seeking clarity on a legal issue concerning the treatment of the different companies within a group for tax purposes. It is a well-established principle that for tax purposes, companies within a group should be treated as if they were separate entities, operating independently from each other.

However, the judgment seems to imply that, when assessing the tax treatment of Apple group companies in Ireland, the Commission should have taken into account the role of employees and directors of Apple Inc. in the US in managing the Apple intellectual property. Although these were separate and distinct companies. And although Apple Inc. was paid billions of euros for its management services through a cost sharing agreement.

This has far-reaching consequences: it’s undisputed that Apple’s Irish group companies recorded almost all profits generated by sales of Apple products outside the Americas. They were able to do so because they owned a licence to use Apple's intellectual property outside the Americas. And they obtained this licence by making annual payments to Apple Inc. in the US under the cost sharing agremeent.

Unless parent and group companies are treated as separate entities, companies can have their cake and eat it: they can reduce their taxable profits by paying for a licence, while at the same time claim that the profits resulting from the licence should be taxed elsewhere. In the case of Apple that meant that for the year of 2011, 16 billion euros of profits recorded in Ireland, of which only around 50 million euros were considered taxable in Ireland. And the remainder was taxable nowhere.

We now have to wait for the European Court of Justice to deliver its judgment. But two things are already clear. First, we will continue our efforts to make sure that selective tax advantages do not undermine fair competition. And second, we need to push ahead to put in place the right legislation to address tax loopholes and ensure transparency.


I have said a lot, though really it is only scratching the surface. I’m sure in the course of this conference we will have a chance to hear many more perspectives on the crisis and where we are headed.

It is a crisis which has kept us apart. At times, I have found it very hard to manage the lack of face-to-face.

I think though that it has also brought us closer together, in some ways. For competition policy, it crystallises what we share in common, as practitioners and as policy makers.

Thank you.