US competition policy aligns with that of Europe, and further cooperation could follow


The European Union’s main antitrust regulator plans greater alignment with the United States on competition enforcement, particularly in the tech sector, as part of a broader policy shift under the Biden administration.

EU Executive Vice President Margrethe Vestager, the bloc’s competition commissioner, said she expects “much more intense work on technology and the digital market” between her team and Washington.

President Biden’s political statements and appointments, as well as legislative proposals from Congress, indicate that the United States is moving closer to long-held positions in the EU regarding internet giants, pharmaceutical companies and other industries where competition decreases.

As the two most powerful antitrust regulators in the world, the US and the EU can shape the global competition narrative and hold back many of the world’s biggest companies, so increased cooperation could have a significant impact.

For supporters of aggressive enforcement, “it will definitely be a marriage made in heaven,” said Jeffrey Jacobovitz, a Washington-based antitrust lawyer with Arnall Golden Gregory LLP. “I think they will work hand in hand. Increased coordination strengthens law enforcement.

This alignment will further force companies in the crosshairs to develop broad, transatlantic strategies on how to respond to this review, Jacobovitz said.

While tech companies say similar policies in multiple jurisdictions can simplify operations, some fear the United States is taking some of Europe’s most aggressive positions.

“The United States should be wary of copying experimental regulation the EU way,” said Christian Borggreen, vice president and head of the Brussels office at the Computer & Communications Industry Association, which represents companies including Amazon .com Inc.,

Facebook Inc.

and Google. “As a leader in technological innovation, the United States would have a lot more to lose if it got it wrong.”

Mr. Biden’s appointments of high-profile American progressives who have criticized tech giants – Lina Khan for leading the Federal Trade Commission and Tim Wu for the White House Economic Council – have been widely seen as indicating that Mr. Biden plans to raise the heat on Internet conglomerates. Companies such as Microsoft Corp.

, Apple Inc.

and Google’s parent alphabet Inc.

had previously felt little pressure from Democrats, including former President Barack Obama, who criticized the EU’s past efforts to curb US tech companies.

Ms Vestager held a first meeting with Ms Khan via videoconference on July 2. Mr Biden has yet to appoint someone to lead antitrust law enforcement at the Justice Department. This appointment could provide further clues as to his administration’s approach.

In addition to the tech sector, EU Competition Commissioner Margrethe Vestager has expressed concern about pharmaceutical deals.


Photo:

Associated press

At the same time, House Democrats recently introduced a package of bills with bipartisan support that target the practices of big tech companies seen by critics as anti-competitive. The proposed legislation could go so far as to shatter, or at least reduce, Amazon and other tech companies.

New York State could go further with a proposed antitrust law that would prohibit companies from abusing a dominant position in the market, a ban at the heart of EU competition regulation that is much more strict than US federal antitrust rules.

Mr Biden last week issued an executive order aimed at restricting the power of companies in the U.S. economy that dominate their markets.

The search for new policy approaches comes as policymakers on both continents have faced application challenges to limit the activities of digital giants. Ms Vestager has imposed billions of dollars in penalties on U.S. tech companies, but had little impact on their ability to control markets, according to critics, including consumer advocates and some smaller competitors.

In the United States, a federal judge last month dismissed cases brought by the FTC and most of the United States against Facebook, although the FTC is expected to try again with an amended lawsuit.

“I think there is a greater consensus that competition enforcement has not always delivered on its promises,” said Ariel Ezrachi, professor of law at the University of Oxford, director of the Center. for Competition Law and Policy of Oxford. He said the new American approach is “a real tectonic shift”.

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As a sign of the new alignment, the US and the EU, during Mr Biden’s trip to Brussels last month, announced the creation of a joint dialogue on technology competition policy alongside their new EU-Council. United States on Commerce and Technology.

Coordinated application plans go beyond technology. The FTC announced in March the formation of an international task force to share best practices on pharmaceutical mergers that will include competition authorities from the EU, UK, Canada and several US states. Ms Vestager, who voiced concerns about agreements in the sector, welcomed the FTC’s initiative, which came before Ms Khan took office.

The FTC also recently cited an EU antitrust review of life science company Illumina. Inc.

the planned acquisition of Grail Inc. by persuading a judge to reject the companies’ offer for a speedy hearing in a US court.

US and European authorities will not always align, given their different markets and different laws. The proposed merger of insurance brokers Aon PLC and Willis Towers Watson PLC, for example, gained EU approval last week, even as it faces a US Department of Justice lawsuit.

National competition regulators in the EU and Europe are already working closely with the Department of Justice, the FTC and US states, officials on both sides of the Atlantic said. Cooperation has deepened in recent years, even amid wider friction between the US and the EU under former President Donald Trump, as US authorities have begun to pursue long-standing targets of the ‘EU such as Google and Facebook.

Transatlantic cooperation “obviously becomes even more intense when the DOJ and the FTC have their own technology cases,” Ms Vestager said in an interview. Some cases require the targeted companies to grant exemptions to the authorities to cooperate. With the waivers, case teams discuss their work in seminars or weekly calls, becoming “really specific and concrete,” Ms Vestager said.

European Competition Commission Director General Olivier Guersent, the top antitrust regulator under Ms Vestager’s leadership, said her team had advised his US state and federal counterparts on the cases they had opened Last year.

“When the GM decided to move, we explained the pitfalls we fell into and the problems we encountered, so that they benefit from our learning curve and save time,” said Guersent.

The narrowing gap in approaches transcends “some deeply ingrained differences in philosophy,” Guersent said. The United States, he said, has traditionally relied more on the power of markets – such as the rise of new entrants – to hold back companies that have developed disproportionate competitive strength.

“We are less confident [so] we tend to be more interventionist, ”he said, attributing the difference to culture. “The question is how long are you prepared to suffer loss of consumer welfare due to excessive market power.”

Mr Guersent said: “In a way, the risk has also become too great by American standards, and that is why we are converging, in my opinion.”

Write to Daniel Michaels at [email protected] and Brent Kendall at [email protected]

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