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EU Allows Companies To Team Up In Cartel-Like Coalitions On Green Initiatives

 |  June 4, 2023

The European Commission has revised antitrust guidelines for companies collaborating to address climate issues, in response to concerns regarding potential monopolistic green alliances causing an increase in energy costs.

Republican politicians in the US have raised concerns about antitrust rules being breached by initiatives advocating for a phaseout of fossil fuels. This has led to increased pressure on competition authorities globally to weigh in on the matter, reported Financial Times. 

Several major insurers recently withdrew from the Net-Zero Insurance Alliance due to concerns about potential violations of competition law, which is a significant setback for the climate coalition known as the Glasgow Financial Alliance for Net Zero.

Read more: The EU Foreign Subsidies Regulation: Green Subsidies Treading the Line Between the FSR, State Aid, and WTO Law

The EU commission said that from July 1 it would create a “safe harbor” from prosecution for groups of companies that enter into “standardization agreements” — for example, a boycott of plastics, fossil fuels or steel produced from coal-fired power plants — even if this pushes up prices.

Companies must not make up more than one-fifth of a given market, and must not exchange commercially sensitive information unless necessary, or prevent other companies from joining the agreement, under the guidelines.

The guidelines, published on Thursday, are not legally binding but designed to help the European Commission, the European Court of Justice and national regulators interpret a prohibition on cartels enshrined in the EU treaties.