Goodbye competition. Hello industrial strategy.

Paris and Berlin want strategy to prioritize industrial ‘champions’ over antitrust rulebook.

 
Europe’s cozy competition bubble is about to be burst by politics.

Brussels is the global capital of competition law and for decades it has been a relatively safe pond for thousands of slow-swimming lawyers and officials. While politics has intermittently invaded their technocratic realm, they have largely lived in peaceful isolation, protected by their encyclopedic knowledge of the EU antitrust rulebook.

That pond is no longer so tranquil, however. Big member countries France and Germany say they have had enough of the EU’s meddlesome rulebook. Politicians looking for ways to fight populism at home and looking to create “European champions” are fed up with eurocrats dragging their feet on the break-up of Big Tech and telling them that they cannot conduct mega-mergers.

On March 10, Brussels launches an industrial strategy — with a key role going to French Internal Market Commissioner Thierry Breton — and it’s widely seen as a moment where Paris will attempt to tug Europe in a more dirigiste economic direction on bulking up home-grown giants that can tackle China and the United States. Member countries want competition policy to march more in step with their overarching industrial goals. They want more lenience on mergers and more state subsidies for strategic projects — anathema to the competition purists.

“Competition policy has moved to the center of political debate in the U.S., in Europe, everywhere. We had the impression for 30 years that [competition policy] was a purely technocratic exercise and it is clear that it becomes political,” said Adam Jasser, a former head of Poland’s competition authority.

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