European Union

Competition Law and Climate Change

Executive summary

Environmental sustainability is a central pillar of European Union (“EU”) policymaking. This includes integrating ecological considerations into various regulatory frameworks, including competition law. The European Commission (“EC”) has emphasised that protecting the environment and addressing climate change are not only long-term policy goals[1] but also legal obligations under EU treaties[2] and international commitments.[3]

Globally, the EU is at the forefront of aligning competition policy with climate objectives. Through recent initiatives, the EC has developed guidance to help businesses understand how competition law applies to competitor cooperation, also seeking to ensure that misperceptions about the application of competition law do not stand in the way of legitimate cooperation in pursuit of ESG goals.

This chapter focuses exclusively on the EU legal framework and does not address the specific approaches taken by individual national competition authorities (“NCAs”) from EU Member States, which may supplement the existing the guidelines set out by the EC.

How climate change is impacting competition law in the EU

Sustainability has become a strategic priority for the EC, and this shift is reflected in the evolution of EU competition law. In principle, competition law enforcement contributes to sustainable development by ensuring effective competition, leading to innovation, better quality and choice of products, efficient allocation of resources and production cost reduction, thereby contributing to consumer welfare.[4] However, the EC recognises that production and consumption actions taken by companies individually in relation to sustainable development can have negative effects on the environment, which can be mitigated or cured by collective collaboration, public policy (or sector-specific) regulation and cooperation agreements that promote sustainable production or consumption.[5]

Such cooperation will be governed by competition law to avoid hindering competition and reducing innovation which lead to the EC identifying several areas in its current competition law guidelines where rules were not sufficiently adapted to promote sustainability goals (among other issues). As a result, in July 2023 the EC updated its Horizontal Cooperation Guidelines clarifying how companies can enter into sustainability agreements without breaching antitrust rules.

These revised guidelines provide enhanced legal certainty and guidance for businesses engaging in joint efforts and emphasize that agreements must not unduly restrict competition and should deliver clear environmental benefits that outweigh any potential harm to market dynamics. In addition, the EC is also increasingly factoring in climate and environmental considerations when assessing mergers. For example, the EC may take into account customer preferences for sustainable products when defining markets and assessing closeness of competition between merging parties and their competitors. The following sections cover how climate change concerns are shaping all three pillars of competition law in the EU: horizontal agreements, abuse of dominance and merger control.

Article 101 TFEU Prohibition – Anticompetitive Agreements

The framework for assessing cooperation agreements under EU competition law is set out in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) and the Guidelines on the applicability of Article 101 TFEU to horizontal cooperation agreements (Horizontal Guidelines).

Cooperation between actual or potential competing companies in the same level of the supply chain – so-called “horizontal cooperation” – can lead to substantial economic benefits where it is a means of risk sharing, cost savings, know-how sharing, product quality enhancement and variety and launching innovation faster. However, horizontal cooperation can lead to competition issues where it causes negative market effects with respect to prices, output, innovation or the variety and quality of products. As a result, Article 101(1) TFEU prohibits agreements that have as their object or effect the restriction of competition. In the context of sustainable development, there have been instances where the EC has found parties’ behaviour was restrictive of competition and imposed elevated fines for a breach of Article 101(1) TFEU.

The 2021 Car Emissions case[6] was the first EU cartel case based solely on restricting technical development. In this case, the EC fined several major car manufacturers a total of EUR 875 million for entering into an anticompetitive agreement that restricted competition in the development of emission-reducing technologies for diesel cars. The companies involved deliberately avoided competing by not developing the full potential of AdBlue technology to make their diesel cars less harmful to the environment.

Another example is the End-of-Life Vehicles (ELV) recycling cartel case of 2025,[7] where the EC concluded that 15 major car manufacturers and the European Automobile Manufacturers’ Association (ACEA) colluded to prevent competition on recycling services. The EC imposed a total fine of EUR 458 million, evidencing the EC’s priority to tackle practices that undermine environmental sustainability. In this regard, the Executive Vice-President for Clean, Just and Competitive Transition stated that the EC “will not tolerate cartels of any kind, and that includes those that suppress customer awareness and demand for more environmental-friendly products. High quality recycling in key sectors such as automotive will be central to meeting our circular economy objectives, not only to cut waste and emissions, but also to reduce dependencies, lower production costs and create a more sustainable and competitive industrial model in Europe.”

Updated EC Horizontal Cooperation Guidance

In June 2023, the EC acknowledged that the Horizontal Guidelines were not addressing new challenges and updated its guidelines. This includes a new Chapter 9 covering specific guidance on the types of sustainability agreements that are unlikely to raise competition concerns, providing enhanced legal certainty to businesses interested in engaging with sustainability initiatives (2023 Horizontal Guidelines).

Under the new framework, the EC established that sustainability agreements are any type of collaborative structure designed to achieve objectives related to social, economic and environmental sustainability.[8] The 2023 Horizontal Cooperation Guidelines explain that sustainability objectives encompass a wide range of goals, including addressing climate change through the reduction of greenhouse gas emissions, reducing pollution, conserving natural resources, protecting human rights, ensuring a living income, fostering resilient infrastructure and innovation, reducing food waste, promoting healthy and nutritious food, and ensuring animal welfare.[9]

The 2023 Horizontal Guidelines also indicate that a detailed economic analysis may be required to evaluate sustainability agreements. This includes looking at how the agreement affects price, output, innovation, and market access. In addition, the analysis focuses on identifying efficiency gains, such as cost reductions, improved resource efficiency, and technological progress. Consumer welfare is prioritised, specifically requiring analysis of whether the agreement provides measurable benefits to consumers, for example, better product quality, enhanced sustainability, or improved services.

For sustainability agreements to be considered “beneficial” to consumers, businesses must fulfil specific criteria that show measurable environmental improvements, such as reduced emissions or efficient resource management.[10] In addition, any restrictions within the agreements must be proportional and necessary to achieve the stated sustainability goals, and transparency and cooperation between parties are important to ensure that they clearly define their goals and that outcomes align with both market and environmental priorities.[11]

By way of illustration, the 2023 Horizontal Guidelines include a non-exhaustive list of sustainability agreements that fall outside the scope of Article 101(1) TFEU and will generally not restrict competition. These are:

• agreements that aim solely to ensure compliance with sufficiently precise requirements or prohibitions in legally binding international treaties, agreements or conventions, whether or not they have been implemented in national law (e.g., compliance with fundamental social rights or prohibitions on the use of child labour, the logging of certain types of tropical wood or the use of certain pollutants) and which are not fully implemented or enforced by a signatory State;
  • agreements that do not concern the economic activity of undertakings, but their internal corporate conduct (e.g. being environmentally responsible, and for this purpose agree on measures to eliminate single-use plastics from their business premises; not to exceed a certain ambient temperature in their buildings, or to limit the volume of internal documents that they print);
  • agreements to set up a database containing general information about suppliers that have (un)sustainable value chains (for instance, suppliers that respect labour rights or pay living wages); use (un)sustainable production processes, or supply (un)sustainable inputs, or information about distributors that market products in a(n) (un)sustainable manner, but which do not forbid or oblige the parties to purchase from such suppliers or to sell to such distributors; and
  • agreements between competitors relating to the organisation of industry-wide awareness campaigns, or campaigns raising customer awareness of the environmental impact or other negative externalities of their consumption, provided that they do not amount to joint advertising of specific products.

These are only some examples of instances where business may cooperate in a lawful way in order to pursue sustainability objectives. For completeness, the 2023 Horizontal Guidelines also provide a “soft safe harbour” for sustainability standardisation agreements, i.e. agreements between competitors entered into to standardise certain practices for a specific environmental objective (such as quality marks or packaging labelling) if certain conditions are met.[12]

Exemptions

Agreements between competitors will be assessed under Article 101(1) TFEU to determine whether they restrict competition. However, they may also be addressed under Article 101(3) TFEU when considering whether their broader societal benefits justify an exemption from the prohibition.[13]

Article 101(3) TFEU will determine whether the benefits of an agreement outweigh the restrictive “effects” on competition. Even if an agreement restricts competition, it may still qualify for an exemption under Article 101(3) TFEU if all four cumulative conditions of the provision are met: (i) the agreement must lead to improvements in production or distribution or promote technical or economic progress; (ii) consumers must receive a fair share of the benefits; (iii) the restrictions imposed must be indispensable to achieving these benefits; and (iv) the agreement must not substantially eliminate competition.

This analysis is based on a self-assessment exercise where parties are responsible for determining whether the cooperation agreement is anticompetitive; however, in 2022 the EC adopted a revised Informal Guidance Notice[14] that allows businesses to seek informal guidance on the application of EU competition rules to novel or unresolved questions.

Informal Guidance for Sustainability Agreements

Guidance letters are intended to help businesses undertake an informed assessment of their agreements or unilateral practices. While guidance letters will reflect the EC’s observations on the facts presented by the parties, the relevant companies remain responsible for self-assessment – i.e. assessing the applicability of the EU competition rules to their individual circumstances.[15]

In the context of sustainability agreements, in Q2 2025 the EC issued two guidance letters showcasing how this is implemented in practice:

• The EC issued an informal guidance letter on the compatibility with EU competition rules of a sustainability agreement for the joint purchasing and the setting of technical specifications for electric container-handling equipment used in port.[16] This agreement was intended to accelerate the shift from diesel to electric equipment in EU ports, contributing to reducing CO₂ emissions.
  • The EC found that the agreement did not raise concerns under Article 101 TFEU, provided it included certain safeguards, such as ensuring that the exchange of competitively sensitive information between participating terminal operators remains limited to what is strictly necessary for the functioning of the agreement.
  • The EC also issued an opinion that found that a sustainability agreement between wine producers and wine buyers to guide bulk wine transactions was compatible with competition law.[17] Although the opinion relied primarily on an existing exemption under agricultural regulations,[18] the EC also noted that the agreement was aimed at contributing to several sustainability objectives and at applying sustainability standards that are higher than what is mandated by Union or national law and any possible restriction of competition stemming from the agreement was indispensable for the attainment of those standards.
• This opinion shows that the EC welcomes corporate sustainability initiatives and seeks to provide clarity when required. As a result, the informal guidance is intended to increase legal certainty to the benefit of businesses seeking the guidance when assessing the legality of their actions under EU competition rules.
• While many companies will be able to take forward their ideas on how to work with competitors to make their industry more sustainable on the basis of the horizontal guidelines, those in doubt, should step up and seek guidance from either the EC or the most appropriate national competition authority.

Article 102 TFEU Prohibition: Abuse of Dominance

Introduction

Article 102 TFEU prohibits the abuse of a dominant position by an undertaking. From this provision, multiple cumulative requirements can be distilled for establishing an infringement of Article 102 TFEU: (1) an undertaking which is (2) dominant (3) in the internal market (4) abusing its dominant position which (5) affects trade. In the case law of the Court of Justice of the European Union (“CJEU”), (6) the lack of an objective justification was added to this list.[19] In August 2024, the EC published Draft Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings (“2024 Draft Guidelines”).[20]

There has been discussion regarding the potential role of Article 102 TFEU in relation to sustainability. The debate considers whether it could be applied to address unsustainable business practices (as a ‘sword’), or if sustainability objectives might serve as a basis for avoiding liability for conduct which might otherwise be wrongly classified as abusive, either through interpreting the concept of ‘abusive conduct’ or by providing objective justification (as a ‘shield’).[21] Although targeted policy making or clear-cut cases have not been developed so far, some cases with a link to sustainability goals have been brought by the EC.

Sword

Commentators have explored whether Article 102 TFEU covers unsustainable practices as abuses, such as when a dominant firm avoids responsible waste disposal costs – dumping waste instead – while smaller competitors bear those expenses and face unfair disadvantages. The 2024 Draft Guidelines set out the following cumulative two-limb test for showing whether conduct has the liability to be abusive, as developed in recent case law:[22] (i) does the conduct depart from competition on the merits?; and (ii) does the conduct have the capacity to produce exclusionary effects?[23]

Competition on the merits – The 2024 Draft Guidelines suggest that a dominant firm’s violation of other laws – such as data protection – may indicate a departure from competition on the merits if it affects competition factors like price, choice, quality, or innovation. For example, in the German NCA case, Meta’s breach of GDPR rules on data processing was found to be abusive due to the fact that access to and processing of personal data was deemed a significant parameter of competition in digital markets.[24] Similarly, an argument can be made that violating environmental laws could also constitute competition off the merits if sustainability influences consumer decisions or market conditions.

Exclusionary effects – Regarding the second prong, exclusionary effects may occur if consumers do not shift their purchases to competitors in response to non-sustainable behaviour. In such cases, consumers are not accounting for the negative externalities of the dominant firm’s practices, such as environmental impacts. Continued purchasing from the dominant firm under these circumstances can contribute to maintaining its market position and may present barriers to entry or growth for more sustainable competitors.

Enforcement action – The EC has taken some enforcement action, mainly addressing traditional abuse of dominance cases that included sustainability aspects, rather than developing new harm theories based on negative sustainability impacts:[25]

• Greek wholesale electricity market. In February 2024, the EC accused Greek electricity provider PPC of abusing its dominant position by selling electricity below cost in the wholesale market, allegedly sidelining competitors and discouraging investment in cleaner energy. The EC warned this could result in higher prices for consumers and increased emissions and pollution.[26]
• Czech waste collection. The EC has notified Czechia that appointing EKO_KOM as the sole company authorized to collect and recover packaging waste may not comply with Article 106 TFEU in conjunction with Article 102 TFEU. The established long-term monopoly is noted as potentially affecting competition in the Czech market for waste collection and recovery by creating entry barriers for other companies.[27]

Shield

Definition of abuse – Some commentators suggest that the sustainability of a practice may be relevant to whether it can be defined as abusive conduct. In the scenario where a dominant company charges different prices to customers based on factors such as the environmental impact of their use (e.g. whether products are recycled or the energy efficiency of downstream processes), such pricing should not necessarily be classified as illegal discriminatory pricing or constructive refusal to supply. The argument is that when a company’s actions are aimed at addressing climate change, reducing environmental harm, or supporting sustainable development, these actions may not align with the type of abuse typically prohibited by EU competition law.[28]

Objective justification – Alternatively, the sustainability benefits (such as economic efficiency gains) may offset the economic costs of reduced competition under Article 102 TFEU. As such, when a dominant company’s actions significantly address sustainability concerns and no less restrictive alternatives exist, restrictions on competition could be justified. For example, higher prices may be permissible if they cover environmental or broader sustainability costs, or support reinvestment in sustainability goals, provided these prices are not excessive.[29]

What lies ahead

The law on the prohibition of dominance in a sustainability context has been described as “underdeveloped” and “underexplored”, particularly if compared to the context of Article 101 TFEU (see above) or merger control rules (see below). The EC’s recent 2024 Draft Guidelines did not contain any specific section on sustainability (several public responses highlighted a need for further clarification on sustainability). Reference to sustainability was only made once in a footnote.[30] Moreover, there is currently no clear case law determining whether unsustainable conduct may be classified as abusive, or whether sustainability objectives could constitute an efficiency or objective necessity defence.

Nevertheless, there is no compelling reason why considerations of sustainability should not influence future assessments of abuse, or serve as objective justifications. As discussed above, there have been some cases, both at EC and national level, where sustainability considerations have been taken into account.

Mergers Regime

Introduction

The EUMR provides the EC with the framework to take sustainability into account when assessing a transaction. However, “[i]n the context of merger control, the Commission may consider environmental and sustainability concerns as long as they are linked to the competitive dynamics and market realities at play.”[31] In other words, sustainability does not get any special treatment under the EU merger control framework – the EC can only take sustainability into account to the extent that it is a parameter of competition in the markets where competition concerns may arise. Although “the Commission does not have a mandate to intervene in mergers for environmental reasons in the absence of harm to competition, in practice competitive markets often go hand-in-hand with efforts towards more sustainable market outcomes.”[32] The EC’s case practice does indeed reflect sustainability considerations – in particular, in respect of defining relevant markets and assessing closeness of competition.

Market definition

The EC’s Market Definition Notice provides that the EC may take into account various non-price parameters of competition – including sustainability – when defining the relevant market,[33] and the EC has done so in several occasions. In particular, the EC has taken into account customer preference for ‘green’ products in the assessment of demand-side substitutability – for example, in fair trade/organic vs. conventional bananas,[34] non-conventional (e.g. fair-trade, organic) vs. conventional coffee,[35] farming and primary processing of salmon in Scotland vs Norway,[36] aluminium vs. steel car parts,[37] zero-waste vs. non-zero-waste salt slag recycling services,[38] and low carbon vs. non-low carbon aluminium foundry alloys,[39] among others. The EC has also noted that environmental regulation can drive customer preferences, creating more demand for more environmentally friendly products.[40]

Customer preference has played a role in geographic markets as well, with the EC finding a smaller geographic market on the basis that some customers preferred not to have products shipped over long distances to keep CO₂ emissions lower.[41] Environmental regulation plays a role here as well, with the EC acknowledging that different regulations across countries and regions can create differentiated geographic demand.[42]

On the supply side, the EC has considered suppliers’ ability to produce sustainable products, discussing a potential separate product market for the supply of ‘green’ electricity through power purchase agreements given the higher costs of such supply as compared to other forms of ‘green’ electricity.[43]

Competitive assessment

In addition to market definition, sustainability plays a role in the EC’s competitive assessment, including the assessment of closeness of competition, innovation, vertical foreclosure and efficiencies.

Closeness of competition. The EC has taken sustainability into account when assessing how closely merging firms compete, such as in markets for gas turbines,[44] sustainable admixture innovation,[45] vessel technology innovation,[46] the retail supply of electricity to household customers,[47] sorting of lightweight packaging[48] and the development of hybrid and electric reach stackers.[49] The EC has also discussed how customers that value the sustainability of the steel products produced by the merging parties would have limited ability to switch to alternative materials.[50]

Vertical foreclosure. Where one merging party had a significant upstream market position in recycled aluminium as well as dross and salt slag recycling services and the other merging party was active downstream in the production of recycled aluminium and flat rolled aluminium products, the EC found that post-merger, the parties would have the ability and incentive to foreclose competitors’ access to those products and services which are critical inputs in the aluminium recycling chain.[51] In the corresponding press release, the EC noted that “[a]ccess to recycled aluminium is important to achieve the objectives of the circular economy and green transition”.[52]

Innovation. The development of greener technologies relies on innovation, and the EC has stated that it will “go on vigorously defending” green innovation in its merger investigations.[53] Despite these public statements, although the EC has discussed innovation and sustainability – e.g. finding that merging parties compete closely in innovation for greener products (among other products)[54] – it has yet to articulate an innovation theory of harm where the focus is the development of greener products.

Efficiencies. The EC’s Horizontal Merger Guidelines allow that “[i]t is possible that efficiencies brought about by a merger counteract the effects on competition”; however, “the efficiencies have to benefit consumers, be merger-specific and be verifiable”.[55] Furthermore, “when efficiencies do not arise in the affected market, the Commission may take them into account only if the benefits cover substantially the same customers otherwise harmed by the merger”.[56] This is a very high legal bar, and where merging parties have claimed environmental efficiencies, the EC has rejected them as insufficiently substantiated.[57]

(Green) Killer acquisitions

As small players often have little or zero turnover, their acquisition by larger players may not be caught by EU or national merger control thresholds. However, the EC has adopted a new approach to Article 22 of the EUMR intended to close a perceived enforcement gap whereby it can accept a referral request from an NCAto investigate a transaction even where the NCA does not have jurisdiction to review the transaction.[58] Although the EC has yet to review a “green” killer acquisition under this Article 22 mechanism, it has stated that there is a “need to stay vigilant with regard to ‘green’ killer acquisitions, especially given the fact that ‘green’ innovation is often carried out by smaller players representing a threat for incumbent companies and that such concentrations may well fall below the notification thresholds at EU and national levels”.[59]

It is also possible that Article 102 may be used to tackle “acquisitions” as the EU Court of Justice has confirmed that deals that escape national merger control may still be the subject of ex post review under Article 102.[60]

Remedies

Sustainability issues have featured in the EC’s remedy decisions as well. Under the EU legal framework, “the Commission only has power to accept commitments that are deemed capable of rendering the concentration compatible with the common market so that they will prevent a significant impediment of effective competition”.[61] Furthermore, the EC considers that commitments must “eliminate the competition concerns entirely”, among other requirements.[62] In other words, merging parties cannot offer a remedy that does not entirely eliminate the competition concern on the basis that the offered remedy is “greener” than an alternative remedy or that it addresses a potential environmental harm not related to the competitive harm. Within this limited framework, sustainability has been reflected in the remedies accepted by the EC.[63]

What lies ahead

The current legal framework limits the EC’s review to the impact of the merger on specific markets, and sustainability can only be taken into account to the extent that it is a parameter of competition in the markets where the competition concerns arise. However, many stakeholders have called for this framework to be expanded to allow the EC to look beyond the potential harm and benefits of a proposed merger on specific markets to the wider impact of the merger on the environment – i.e. to take into account externalities.[64] Such an approach might allow the EC to, e.g., clear a transaction that might result in competitive harm in one specific market but have a positive impact on sustainability more broadly, benefiting consumers overall – not just direct consumers. The EC’s merger guidelines are currently under review, and the EC has requested input specifically on “sustainability and clean technologies”,[65] among other topics – so watch this space!

Sector Inquiries Regime

Under Article 17(1) of Regulation (EC) 1/2003, the EC has the power to conduct an inquiry into a particular sector of the economy or into particular types of agreements across various sectors, when it suspects competition may be restricted or distorted in the internal EU single market and will gather information to understand better market dynamics and identify potential violations of the competition rules. During a sector inquiry, the EC may make requests for information from companies or business associations in relation to any agreements, decisions, or concerted practices the EC suspects may have caused a market distortion.

Once an inquiry is complete, the EC will issue its findings in a report, which may lead to enforcement actions (i.e. full antitrust investigation under Article 101 or 102 TFEU) or policy recommendations or legislative proposals, for example in markets where sustainability goals may be hindered by anticompetitive practices. However, the EC has no power to adopt measures such as remedies (either structural or behavioural) to address the competition concerns following the conclusion of a sector inquiry.

To date, the EC has published 11 reports following inquiries in a number of sectors.[66] These reports do not address environmental issues per se, however the EC has recognised that sustainability is a core pillar of EU energy policy. For example, in its inquiry final report regarding the Energy Sector (2007), the EC stated that “the introduction of competition in Europe’s gas and electricity markets is an integral part of European energy policy which is directed at achieving the three closely related objectives of: a competitive and efficient energy sector, security of supply and sustainability”.[67]

How EU Competition Law Can Help Address Climate Change

As set out above, the EC has made numerous changes to its competition law guidelines that may facilitate action to address climate change. This is particularly evident in relation to horizontal agreements, where guidelines have been updated to provide more certainty for parties entering into agreements with green objectives. If the EC is able to revise EU competition law guidelines (and potentially laws) to take into account negative externalities, it will be an even more effective force to combat climate change.

[1] E.g. Clean Industrial Deal, European Green Deal.

[2] Article 2 and Article 6 of the Treaty Establishing the European Community (Consolidated version 2022). OJ C325. Link; Article 3(3) and 3(5) of the Treaty on European Union (Consolidated version). OJ C326/13. Link. Article 11 of the Treaty on the Functioning of the European Union (Consolidated version). OJ C236. Link.

[3] Article 37 of the Charter of Fundamental Rights of the European Union (Consolidated version). OJ C 326. Link.

[4] 2023 Horizontal Guidelines, para. 518.

[5] 2023 Horizontal Guidelines, para. 519.

[6] Summary of EC Decision of 8 July 2021 relating to Case AT.40178 – Car Emissions, link.

[7] Summary of EC Decision of 1 April 2025 relating to Case AT.40669 – End-of-life vehicle recycling, link.

[8] EC, ‘Questions and Answers on Adoption of the New Horizontal Block Exemption Regulations and Horizontal Guidelines’ (EC, 21 July 2023).

[9] EC, ‘Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Cooperation Agreements’, para 517. [2023] OJ C259/1.

[10] Keskin, İremsu. Sustainability Agreements and EU Competition Law: A Critical Analysis of Article 101 TFEU and the 2023 Horizontal Cooperation Guidelines. Stanford-Vienna European Union Law Working Paper No. 107, 2025, available at: https://www.law.stanford.edu/wp-content/uploads/2025/04/EU-Law-WP-107-Keskin.pdf.

[11] EC, ‘Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Cooperation Agreements’ [2023] OJ C259/1.

[12] Ibid.

[13] Ibid.

[14] EC Notice on informal guidance relating to novel or unresolved questions concerning Articles 101 and 102 of the TFEU that arise in individual cases (guidance letters). Link: EUR-Lex – 52022XC1004(02) – EN – EUR-Lex.

[15] Ibid, para. 23.

[16] Accessible here: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1769.

[17] Accessible here: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1832. Under the envisaged agreement, to incentivise producers to keep producing sustainably, the orientation prices will be set at a level covering the costs of producing in accordance with one of the two relevant sustainability standards (organic or HVE), in addition to a profit margin of up to 20% of such costs.

[18] In the context of the Common Agricultural Policy, in 2021 the European Parliament and the Council of the EU adopted an exclusion to the prohibition in Article 101(1) for agricultural products via Article 210a of the Regulation (EU) No 1308/2013 establishing a common organisation of markets in agricultural products (“CMO Regulation”).

^[19] The Draft Guidelines set out the following two possible routes for objective justifications:

• Objective necessity: where the dominant undertaking is able to evidence that its behaviour was objectively necessary to achieve a certain aim. These defences are only acceptable where the exclusionary effects are proportionate to the necessary aim.
• Efficiency defence: where the exclusionary effects are counterbalanced, or outweighed, by advantages in efficiency that benefit consumers.

[20] EC (2024), ‘Draft Guidelines on the application of Article 102 of the Treaty on the Functioning of the European Union to abusive exclusionary conduct by dominant undertakings’,(‘Draft Guidelines’).

[21] See Simon Holmes, “A Sword and a Shield: Using our laws on abuse of dominance to tackle climate change and unsustainable practice”, available here; Simon Holmes, “Climate Change, Sustainability and Competition Law” (2020) 8(2) Journal of Antitrust Enforcement 254-405; Julian Nowag, Environmental Integration in Competition and Free Market Laws (OUP 2016); Timo Klein, “Grey or Green Giants? Sustainability and (Exclusionary Abuse of) Dominance under Article 102 TFEU”, available here.

[22] See, European Superleague Company SL v Fédération internationale de football association (FIFA) & Anr, C-333/21, judgment of the Court of Justice, 21 December 2023, paras 129–131; and Servizio Elettrico Nazionale & Others v Autorità Garante della Concorrenza e del Mercato & Others, C-377/20, judgment of the Court of Justice, 12 May 2022, paras 68 and 103.

[23] The 2024 Draft Guidelines focus on ‘exclusionary’ abuses, and not on so-called ‘exploitative abuses’. Unsustainable behaviour by dominant companies could be argued to be exploitative, as well as exclusionary. The reason given by the EC for the lack of guidelines on this aspect is that cases for ‘exclusionary’ abuse have been particularly rare so far.

[24] Meta Platforms Inc. & Others v Bundeskartellamt (General terms of use of a social network), C-252/21, judgment of the Court of Justice, 4 July 2023, paras 47 and 51.

[25] At Member State level, the Italian competition authority (“ICA”) has investigated several cases of abuse of dominance with sustainability links in recent years. These include:

• Novamont: Alleged exclusivity agreements in the bioplastic bag sector that may have hindered more efficient alternatives (ICA press release, 9 April 2024).
• Corepla: A EUR 27 million fine for abuse in the plastic packaging recycling market. The ICA emphasized that competition enforcement also supported environmental goals (ICA press release, 10 November 2020).
• Google/Enel X: A EUR 100 million fine for refusing interoperability with an electric vehicle charging app. The ICA considered the impact on eco-mobility and clean energy adoption when assessing the seriousness of the conduct (ICA press release, 13 May 2021).
• See further in: “Sustainability and competition policy in Europe: recent developments”, 21 October, 2024. https://academic.oup.com/jeclap/advance-article/doi/10.1093/jeclap/lpae063/7828941?searchresult=1Sustainability and Competition Policy in Europe: recent developments, August, 2023.https://academic.oup.com/jeclap/advance-article/doi/10.1093/jeclap/lpad032/7240479.

[26] EU Case AT.402478 – Greek wholesale electricity market. See, Commission Press release of 7 February (IP/24/672).

[27] EU Case AT.40775 – Czech waste collection.See, Commission Press release of 11 June, 2024 (IP/24/3188).

[28] See Holmes, “A Sword and a Shield”, above, at footnote 21.

[29] As discussed by a staff working paper of the Greek NCA, available here.

[30] 2024 Draft Guidelines, fn. 4. This note is, however, helpful. It confirms that the term “quality” (a clear parameter of competition) covers all aspects related to the quality of a given product, such as sustainability, resource efficiency, durability and the residence of supply chains.

[31] EC’s Review of the Merger Guidelines, Topic D: Sustainability and Clean Technologies, paragraph 73; see also M.8084 Bayer/Monsanto, paragraph 3017.

[32] EC “Competition merger brief”, 2/2023.

[33] Commission Notice on the definition of the relevant market for the purposes of Union competition law, C/2023/6789, paragraphs 3, 15 & 50.

[34] M.7220 Chiquita/Fyffes, paragraphs 66-73; M.8829 Total Produce/Dole Food Company, paragraphs 34-37.

[35] M.7292 DEMB/Mondelez/Charger Opco, paragraphs 55-59.

[36] M.6850 Marine Harvest/Morpol, paragraph 42 (noting that “United Kingdom retailers in particular appear to favour Scottish salmon because of geographic proximity, which allows for […] increased control on the management of the farms with respect to sustainability and environmental standards during the production process”, among other things).

[37] M.9076 Novelis/Aleris, paragraphs 138 et seq.

[38] M.10702 KPS Capital Partners/Real Alloy Europe, paragraphs 56-61.

[39] M.10658 Norsk Hydro/Alumetal, section 8.2.1.3.3.

[40] M.9076 Novelis/Aleris, paragraphs 138 et seq.

[41] M.10047 Schwarz Group/Suez Waste Management Companies, paragraphs 44, 56-58; see also M.9623 AMG/Shell/JV, paragraphs 51‒52; M.9014 PKN Orlen/Grupa Lotos, paragraph 1048.

[42] M.7278 GE/Alstom, section 7.3.3.5; M.9730 FCA/PSA, paragraph 156; M.9623 AMG/Shell/JV, paragraph 51.

[43] M.10212 Andel/Energi Danmark, paragraphs 16-20.

[44] M.7278 GE/Alstom, paragraphs 1376-79 (noting that GE and Alstom had developed products that were relatively close in terms of efficiency and emissions).

[45] M.10560 Sika/MBCC, section 6.1.1.4.

[46] M.9343 Hyundai Heavy Industries/Daewoo Shipbuilding & Marine Engineering, section 8.3.3.

[47] M. 8870 E.ON/Innogy, paragraph 278.

[48] M.10047 Schwarz Group/Suez Waste Management Companies, paragraph 118.

[49] M.10078 Cargotec/Konecranes, paragraphs 1401‒1416.

[50] M.8713 TataSteel/thyssenkrupp/JV, paragraphs 1381-1382.

[51] M.10702 KPS Capital Partners/Real Alloy Europe, sections 7.3-7.6.

[52] M.10702 KPS Capital Partners/Real Alloy Europe, press release of 19 October 2022, available at https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6274.

[53] “Competition policy in support of the Green Deal”, Executive Vice-President Vestager’s keynote speech at the 25th IBA Competition Conference, delivered by Inge Bernaerts, Director, DG Competition, 10 September 2021, available at ec.europa.eu/commission/presscorner/detail/en/speech_21_7754.

[54] M.10560 Sika/MBCC, section 6.1.1.4; M.9343 Hyundai Heavy Industries/Daewoo Shipbuilding & Marine Engineering, section 8.3.3; M.10078 Cargotec/Konecranes, paragraphs 1401‒1416.

[55] Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, paragraphs 77-78.

[56] EC Competition merger brief, 2/2023 (citing T-111/08, Mastercard v Commission, paragraph 228).

[57] See M.9409 Aurubis/Metallo, paragraphs 831 et seq.; M.9076 Novelis/Aleris, paragraphs 1012-17; M.9014 PKN Orlen/Grupa Lotos, paragraphs 2007-61.

[58] Communication from the Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases 2021/C 113/01, available at EUR-Lex – 52021XC0331(01) – EN – EUR-Lex.

[59] EC “Competition merger brief”, 2/2023.

[60] Towercast SASU v Autorité de la concurrence (Case C-449/21, ECLI:EU:C:2023:207).

[61] Commission notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 (“Remedies Notice”), paragraph 9.

[62] Remedies Notice, paragraph 9.

[63] See, e.g., Sika/MBCC; KPS Capital Partners/Real Alloy Europe.

[64] See, for example, Simon Holmes and Michelle Meagher, “A Sustainable future: how can control of monopoly power play a part?” at Part III re mergers [(2023) 44 ECLR, Issue No 4].

[65] The landing page for the Commission’s review of its merger guidelines can be found here: Review of the Merger Guidelines – European Commission.

[66] These are Consumer Internet of Things, E-Commerce, Pharmaceuticals, Business insurance and retail banking, Energy, State aid to secure electricity supplies, Local Loop, Leased lines, Roaming and 3G. Available here: Sector inquiries – European Commission.

[67] Link to DG Competition report on energy sector inquiry SEC(2006)1724, 10 January 2007.