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BWB publishes position paper on debate about European champions and the call to relax EU merger control

There have been heated debates since February 2019 about realigning competition policy and industrial policy in Europe. Against the backdrop of a supposed rise in competition pressure from the USA and China, one of the proposals is that it should be possible for anti-competitive mergers to be cleared by EU merger control if such mergers improve competitiveness. The BWB has looked into the effects of such a “European champions” policy in great detail, and is now publishing its findings in a position paper.


In February 2019 the European Commission blocked the planned acquisition of Alstom by Siemens as the merger would have harmed competition. Soon afterwards the economy ministers of Germany and France published a manifesto for a European industrial policy. They are calling for EU merger control to be relaxed, by allowing the approval of potentially anti-competitive mergers in individual cases to enable the creation of European champions. The idea is that this would help maintain European competitiveness in the face of competition from China and other nations. Numerous academics, competition experts and company associations were critical of this call to relax EU merger control since it would not solve the problems of European companies on international markets. The BWB took this opportunity to examine the impact on the economy of Europe and Austria if EU merger control were to be relaxed and politicised.

Competition lowers prices and increases economic growth

It is the role of competition authorities to protect competition and to prevent market concentration. To achieve this aim, the BWB works closely with the European Commission and other national authorities. Competition means having a choice between several competing offers. Where there is no longer any choice, because there is just one supplier left, for instance, price increases and a reduction in quality are the rule. A protectionist form of merger control is therefore particularly detrimental to European consumers.

In contrast, well-functioning competition has many economic advantages: it has been scientifically proven that competition leads to more innovation and higher productivity. Companies do not become global market leaders because states have decided to shield them against competition, but because they know they have to stay innovative in an internationally competitive environment. As individual companies in an economy become more and more efficient, economic growth and employment also grow.

The creation of champions, by relaxing EU merger control, would lead to less innovation and therefore have a negative impact overall on the economic development of a country.

Disadvantages for Austrian SMEs likely

Introducing the possibility of political intervention in European merger control would severely limit companies’ legal certainty and means of legal protection. In addition, studies have shown that political intervention usually only favours big players in large Member States. SMEs and companies from smaller Member States are usually not given preferential treatment, but then have to compete against those preferred champions or pay higher prices as their customers.

The BWB advocates a transparent and non-discriminatory approach, one that does not favour individual topical interests but that keeps the effects for competition and consumers in mind when deciding on whether a merger should be approved or not.

Industrial policy should focus on competition and Europe

In the BWB’s opinion, initiatives in other areas, such as in relation to trade policy or state aid, would be far more appropriate to protect European companies from unfair competition by state-subsidised companies. It has been the long-term goal, and should continue to be so, to establish tried-and-tested European competition rules and standards among the EU’s trading partners as well, creating a truly level playing field for all.

Theodor Thanner, Director General of the BWB: “A forward-looking industrial policy should focus on protecting competition. It is competition, and not a monopoly, that induces companies to come up with innovative ideas and thus secures their international success. A protectionist form of merger control would be harmful to smaller companies, and open the floodgates to arbitrariness.”

Position Paper on National and European Champions in Merger Control