An air of gloom hangs over European companies. On the global stage, many are dwarfed by America’s tech titans and China’s industrial giants. The European Union is home to only three of the world’s top 50 tech firms, by market capitalisation; its largest bank ranks 16th globally. To dispel the misery, some think the bloc’s strict competition policy needs updating. The European Commission, which enforces antitrust rules, will soon publish draft guidelines that are expected to be more lenient. Encouraging firms to scale up is a laudable aim. Weaker competition policy would not achieve it.
The debate about the purpose of European competition policy is as old as the European project itself. The principled view, which came to dominate, is that a robust competition policy serves consumers, growth and innovation by ensuring that no firm achieves a controlling share of its market. A more political view is that it should serve wider goals, including national security and industrial policy.
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