Sustainability Under Article 101 (3) TFEU

By: Thomas Lübbig (D’Kart)

Sustainability – More than a Weasel Word?

Executive Vice President Margrethe Vestager delivered her keynote address at the European Commission’s Young Experts conference in Brussels. In response to questions from the audience, she expressed a skeptical view as to whether out-of-market sustainability benefits would be good enough to compensate consumer harm possibly caused by an ESG agreement specific to the market where the agreement deploys its effects. Charley Connor of GCR reported from this conference on 3 February 2022. Also, Commissioner Vestager expressed a preference for the legislator to address issues such as animal welfare and emission standards with a view to competition policy acting as a “subcontractor” in achieving these goals. The legislator should set the standards and then ask companies to “go compete” within this framework. The livestream of the conference has been recorded by the European Commission and the relevant comments can be found at around minutes 13/14/15 of the recording.

This is an approach by and large also taken by Andreas Mundt, the President of the German competition authority, and if this anticipates the gist of the much-expected EU guidelines on ESG cooperation in horizontal and vertical agreements, parts of the interested community may remain a trifle disappointed. 

The statements made by the Executive Vice President can be understood more generally as replies to two pivotal questions widely discussed in this debate: What can private companies do to outperform the legislator if Governments and Parliaments are not ambitious enough in setting higher ESG goals (except for jointly lobbying the legislator to step up)? And to what extent can sustainability benefits (such as cleaner air) which accrue to the whole community, a group in many cases wider than the customers of the products, made under the ESG agreement outweigh likely price increases and therefore measurable consumer harm inherent in producing more sustainably albeit at a possibly higher cost…

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