EU competition reform needed to stop increasing inequality

Responding to the review of competition policy launched today by the European Commission, ETUC Confederal Secretary Isabelle Schömann said:
“A reform of the EU’s competition policy is badly needed. The current rules and approach to competition enforcement are increasing inequality by helping to further concentrate economic power into the hands of a few major companies while undermining collective bargaining and workplace democracy.

“To tackle market concentrations and abuses of dominance, the Commission needs to broaden its market assessments to also take into account capital ownership, ecosystems, globalisation, data concentrations and impacts on the labour market.
“The Commission also needs to look beyond the interests of individual consumers to achieve a more inclusive policy. Achieving the lowest price can no longer outweigh wider societal benefits, such as the promotion of human rights, decent working conditions and a healthy environment – in Europe or across the world. The political backlash to globalisation over recent decades has shown clearly that people want fair markets, not free markets at any cost.
“A new EU competition policy should rebalance power and move towards sustainable development by putting high standards and workers’ rights ahead of high profits at any price. The Commission must also finally make clear that collective bargaining agreements for self-employed workers are fully excluded from the scope of competition law - wage-setting is not price-fixing, trade unions are not cartels.
“Competitiveness should never be built on exploitation of people or the planet. In the absence of a global level playing field, the EU must take action against unfair competition practices from non-EU countries. To enhance the resilience and strategic autonomy of the EU, we need to ensure that competition law is compatible with the growth of strong and sustainable European companies in key sectors, but also prevent negative impact on workers’ rights, consumer and environment standards or innovation.”

Three changes needed to the EU’s competition policy
More emphasis should be put on behavioural remedies, to safeguard workers’ rights and prevent employer monopsony power, which can result in a downward pressure on wages and working conditions. To counteract incontestable market concentrations in digital markets, structural remedies such as the breaking up of a dominant player must be a real and not only a theoretic possibility.
The Commission should issue guidelines to promote a restrictive and human right compliant interpretation of Article 101 TFEU, clarifying that collective bargaining agreements are fully excluded from the scope of competition law, regardless of whether they protect employees, self-employed or other non-standard workers. Self-employed and freelance workers are not allowed to collectively bargain in many EU countries because of incorrect interpretations of  EU competition law.

State aid
The objective of –55% GHG emissions by 2030 and carbon neutrality by 2050 requires massive changes in technologies and industrial processes. EU rules on State aid must align with the objectives of the Green Deal and the new Industrial Strategy for Europe, promoting green solutions, quality jobs and just transition. State aid control must support Member States in ensuring a phase out of environmentally harmful subsidies, while making sure not to deepen regional inequalities depending on countries’ capacities to generate public funding.

The Commission should also set out the conditions for a sustainable exit path from the Temporary State Aid Framework for Covid-19, ensuring that receiving businesses contribute to a fair and inclusive recovery for workers.
Read more: ETUC Resolution for a More Sustainable and Inclusive Competition Policy