A PYMNTS Company

The World’s First Green Antitrust Provision Shows That Climate Action Is The Newest Antitrust Frontier

 |  March 21, 2022

By: Victoria H.S.E. Robertson (ProMarket)

Late last year, Austria became the first country to enact a green antitrust provision—an exemption shielding corporate agreements related to environmental sustainability initiatives from antitrust laws, further intensifying a debate among policymakers and enforcers in the European Union regarding the goals of competition law. 

In late 2019, the European Commission announced its European Green Deal, an ambitious initiative that aims at establishing the European Union as a resource-efficient yet competitive economy that is both carbon-neutral and does not rely on the use of natural resources for economic growth, while at the same time leaving no one behind.

Ever since the Green Deal, the European antitrust community has been debating whether green antitrust is a viable way to fight climate change, with voices weighing the arguments pro and con green antitrust. As I discuss in a recent podcast, the Green Deal drove an important realization home: In order to fight climate change and save planet Earth, it is not enough that governments commit to those goals—businesses must play their part, too. And in order to do so, businesses must inevitably come together, start sustainability initiatives, and cooperate to that end. 

Businesses, however, are often reluctant to engage in conduct that could be interpreted as an anticompetitive agreement or cartel, as hefty fines loom. This has only recently been discussed in the framework of the Net Zero Insurance Alliance, a joint pledge by some of the world’s largest insurance companies to reach net-zero emissions by 2050. Green antitrust faces the task of carving out the ways in which businesses can cooperate in order to create a more environmentally sustainable economy. While green antitrust can have a bearing on all aspects of competition law, including anti-competitive agreements, unilateral conduct and mergers, the debate is most advanced in relation to anti-competitive agreements. Here, the question arises whether there should be an exemption for corporate collaborative sustainability initiatives from the antitrust laws…