A growing number of studies and reports reveal the complex relationship between the existing competition rules and sustainability, arguing that Competition law as a product of the neoliberalism, based on the assumptions of rational self-interested individual agents seeking profit maximization: (i) has significantly shaped modern global supply chains and led to massive imbalance of power, that is now highly concentrated in hangs of a few large market players (mainly processing and retailing industries), (ii) encouraged creation of “cheap” products and led to narrow focus on the consumer wealth at the expense of environment, the well-being of primary producers (through suppressed income) and people’s livelihoods, and future generations and, ultimately, undermined social justice and ethical foundations of our society at large. Some scholars (Farah, Ötvös, 2019) admit that there is a contradiction between the principles
and rationales underlying competition rules, and sustainability: the spirit of competition law assumes “stand-alone model” of market behavior or acting in one’s own interest and pursuing profit maximization, whereas sustainability as a shared a societal collective goal for achieving common or public good requires a cooperative model of behavior, requires the actions that are contrary to the spirit of competition law.Other studies also contain similar conclusions about the contradictory nature of competition law and sustainability. The study by Fair Trade “EU Competition Law and Sustainability in food systems” (2019)argues that “a too strict interpretation of what is allowable through horizontal cooperation is having a chilling effect on industry actors wishing to join sustainability initiatives and collaborate. Competition law fails to explicitly acknowledge sustainability initiatives as a means towards efficiency that could outweigh, and possibly overcome, the anticompetitive aspects of collaboration, thereby preventing any such initiatives”.
The UNCTAD is less critical about the role of competition law in sustainable development and underscores, that all depends on the design of competition policy. If appropriately designed and effectively implemented according to the economic, social and environmental circumstances in a country, is expected to complement other government policies in achieving sustainable and inclusive growth and development, – says the UNCTAD Report. However, some of the fundamentals of competition law such as increasing competitive market pressures serve to eliminate monopolies and cartels, higher prices, lower quality products, and economic injustice and therefore protect the poorest or most vulnerable consumers and secure the provision of basic goods at affordable prices.
In order to support sustainable competition law must address social and environmental concerns and cannot focus solely on economic issues. The UNCTAD admits that competition law does not target environmental externalities but focuses on increased market performance. It seeks to establish certain redistribution mechanisms in the free market. Alike, in order to promote an environmental agenda, similar mechanisms will be used, – says to the UNCTAD. At the same time, the tools used to enforce and enact environmental policy may directly oppose competition policy, – underscores the UNCTAD.
The current academic and policy discussions are focused around two main questions: (i) what are the potential and limits of current competition law and how to use the potential of the existing competition rules in order to integrate social and environmental sustainability into the current structure of competition law; (ii) identify concrete possibilities of engagement and those areas of substantive and procedural competition law that could be leveraged in order to improve the social and environmental quality of the global food system. There is a growing number of policy developments such as the European Parliament Resolution of 31 January 2019 on the Annual Report on Competition Policy by the European Commission that made strong references to sustainability.
You are welcome to follow an amazing course by Francesco del Pozzo on Competition and Sustainability and deepen your expertise in the theme.
