Antitrust Chronicle® – Industrial Policy

Dear Readers,

This edition of the Chronicle gathers a set of contributions grappling with one of the most pressing economic governance questions of our time: how should competition policy respond to, align with, or constrain the resurgence of industrial policy? Amid geopolitical upheaval, technological flux, and mounting climate imperatives, governments are once again reaching for tools once thought passé. The articles in this volume illuminate the renewed relevance of industrial strategy and the critical tensions—and complementarities—that emerge in its interplay with competition law and policy. Taken together, they offer a pluralistic yet coherent portrait of an evolving global consensus: that neither market fundamentalism nor dirigisme alone can sustain democratic economic prosperity.

Audrey Stienon & Daniel A. Hanley contend that competition policy must be seen not as a foil to industrial policy but as its constitutional backbone in democratic economies. Their essay reconceives competition enforcement as a mechanism of democratic economic governance—one essential to structuring transitions in ways that preserve openness, resist capture, and distribute opportunity. Surveying five structural risks posed by industrial policy—ranging from monopoly power to incumbent entrenchment—they argue that without a robust competition framework, even well-intentioned industrial strategies may ultimately undermine their own societal aims.

Marcus Bokkerink draws on his experience at the helm of the UK’s Competition and Markets Authority to offer a practitioner’s lens on the formulation of industrial strategy. Arguing that all governments conduct industrial policy—whether explicitly or not—he suggests that they would do well to learn from how successful businesses set strategy: by defining ambition, choosing where (and where not) to compete, and aligning resources to win. Bokkerink cautions that industrial policy cannot succeed without healthy competition and warns against a return to scale-for-scale’s-sake interventions that history has shown to fail.

David S. Evans brings a critical perspective, urging caution about industrial policy’s potential to suppress innovation and saddle economies with politicized inefficiency. Drawing on decades of global economic trends, he argues that while market failures justify some interventions, competition authorities should focus on their core role as “cops on the beat.” Industrial policy, in his view, often suffers from false positives, poor execution, and capture. Instead of integrating the two policy spheres, Evans calls for preserving the predictability and independence of antitrust enforcement amid shifting political currents.

Antonio Capobianco & Beatriz Marques, writing from the OECD, articulate a vision of industrial policy that actively fosters competition rather than distorts it. They present a typology of tools—supply-side, demand-side, governance—and show how pro-competitive design, combined with competition advocacy and enforcement, can turn industrial policy into a catalyst for dynamic markets. With examples spanning digital infrastructure, climate transition, and standards-setting, the authors make a compelling case for structured coordination between regulators, guided by principles of neutrality, contestability, and strategic transparency.

Jasper P. Sluijs explores the re-emergence of state ownership as a policy lever, particularly in sectors central to strategic autonomy and the green transition. Focusing on State-Owned Enterprises (“SOEs”), he systematically analyzes the risks these entities pose to fair competition—especially in mixed markets where public and private actors co-exist. While acknowledging that SOEs can sometimes deter private collusion or serve social goals, the author also warns that abuse of dominance remains insufficiently theorized and enforced, and urges further research to inform more effective safeguards.

Philippe Aghion, Mathias Dewatripont & Patrick Legros advocate for what they term “competition-friendly industrial policy,” drawing on both theoretical modeling and empirical evidence from China. They argue that sectoral support can enhance innovation and productivity—but only when it is dispersed, contestable, and aligned with market incentives. The authors highlight the success of the U.S. ARPA agencies as examples of targeted, mission-oriented public investment that complements rather than displaces market competition, and propose that Europe adopt similar models to address its productivity lag.

None of these contributions purports to settle, on its own, the debate on the future of industrial policy. What they offer is a multi-dimensional reflection on how competition policy might evolve—not by retreating from its principles, but by reaffirming them within a changed policy landscape. If the market is to remain a servant of democratic ends rather than a master of technocratic inertia, it will be through precisely the kind of careful, critical engagement on display in these pages.

As always, many thanks to our great panel of authors.

Sincerely,

CPI Team

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