EU Antitrust Rules Allow Sustainability-Based Justifications for Dominant Companies

The European Commission has revised its antitrust guidelines to allow dominant companies to justify certain business practices if they deliver sustainability benefits, including reduced raw material use, lower pollution, greater use of recyclable products and more resilient supply chains.

Under the revised guidelines, companies with a market share of more than 40% may be considered dominant. While using market power to restrict rivals can attract penalties, the Commission said such conduct could be acceptable if it generates environmental benefits or cost savings for consumers.

The guidelines relate to Article 102 of the Treaty on the Functioning of the European Union, a key competition tool that has resulted in substantial fines for major technology companies, including Apple, Google and Microsoft, over alleged abuse of market power.

The revised rules also aim to help companies assess whether they hold a dominant position and identify the relevant markets.

However, academics and economists have criticised the approach. In a joint letter, 28 experts warned that the guidelines could be exploited to justify unfair dominance. They said the rules may fail to properly distinguish anti-competitive conduct from legitimate business practices based on efficiency, innovation and superior performance.