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News

Tolerating Green Cartels – National Guidelines on Anticompetitive Agreements with Sustainability Aims

30.09.2022
Company: Bird & Bird s.r.o. advokátní kancelář

The interplay between sustainability and competition law remains a scarcely addressed area, despite its rising importance. Agreements between companies aimed at achieving sustainable growth carry an undeniable benefit to the public, but also a risk of colliding with competition norms. Given the absence of specific regulation, as well as little case law, some national competition authorities have begun publishing guidelines to address the issue.

Competitive Aspects of Sustainability

The topic raised here is significant, as it presents a trade-off between two public interests: the needs to restructure complex manufacturing processes to reduce their ecological burden, as well as investments into green technology and its adaptation call for cooperation between major corporate actors. Achieving such agreements while preserving competitive markets can, however, be difficult. As such, companies may be reluctant to enter into sustainability-aimed agreements if it is unclear whether they breach competition law.

As a soft-law instrument to provide basic clarity for companies, several national competition authorities are publishing guidelines on conditions when anticompetitive agreements may be tolerated if, for example, they are combating the climate crisis.

National guidelines on Sustainable Agreements

The Dutch competition authority (“ACM”) had published its guidelines on sustainability agreements already in July 2020 and has since been calling for a co-ordinated European approach to the matter.

With its guidelines, the ACM introduces a new method of weighing the advantages and disadvantages of anticompetitive agreements and maintains that their benefit for society as a whole must be equal to or greater than the disadvantages for individuals. The guidelines also include some simplified conditions for permissibility when it comes to sustainability agreements. Together with the Greek competition authority, the ACM also published a Technical Report on Sustainability and Competition. The Report is aimed at forming the scientific basis for a more open approach to sustainability agreements in competition policy.

Despite the evident advantages of this approach, further discussion should still be led about the extent to which selective leniency may give rise to weaker competition protection and “greenwashing” practices of anticompetitive behaviour. Transparent rules and consistent practices are key to correctly balancing objectives and avoiding detriment to consumers.

Sustainability Exception from Antitrust Ban

In Austria, both the legislator and the national competition authority (“ACFA”) have been active. The Austrian Cartel and Competition Act has been amended to include a new exception to the general ban on cartel agreements. The exception explicitly strengthens the position of agreements which “significantly contribute to an ecologically sustainable or climate-neutral economy”.

In June 2022, the ACFA also published guidelines on sustainability agreements, namely on how the ACFA interprets and intends to apply the new exception provision. A modified scheme of assessment is introduced for these agreements, consisting of five cumulative conditions. These consider the efficiency, sustainability aim, significance, necessity and absence of competition elimination resulting from the anticompetitive agreements genuinely falling under the exception.

Topic for a European Discussion

Aside from the above-mentioned, the Hungarian competition authority (“GVH”) also published the results of its international survey relating to sustainability and competition law in 2021, with many contributions from national competition authorities. In the Czech Republic, the topic has not yet been picked up by the Office for the Protection of Competition (“UOHS”), although UOHS did participate as one of the respondents in the international survey of the GVH.

Sustainability has also attracted the attention of national competition authorities in connection to “green claims”. Guidelines on how to communicate sustainable characteristics of products towards consumers have been published by, for example, the UK Competition Authority as the ‘Green Claims Code’, by the GVH as a ‘Green Marketing Guidance’ or the Danish Consumer Ombudsman in their guidance.

In the context of the above-mentioned, it is clear that sustainability is a relevant aspect of competition law. To ensure a fair balance of interests and lifting of potential barriers to sustainable development which competition law may present, activity from more national competition authorities would be welcome. These guidelines may then serve as basis for a European policy.

For more information, please contact Vojtech Chloupek or Martin Taimr.

 

Tags: Law | Sustainability |

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