Executive Summary
Competition policy and antitrust law are experiencing a global renaissance. New market realities such as digital market gatekeepers, the financialization of firms, highly concentrated markets, a rising labor movement, industrial policy, and trade wars, among others, are radically reshaping how this policy area is understood and applied.
Sustainability concerns have also been a driving force for reconstituting antitrust to meet twenty-first century challenges. It is now widely accepted that competition policy – both its aims and its enforcement – has wider societal impacts beyond competition, including effects on democracy, economic inequality, growth and innovation, racial and gender imbalances, privacy, geopolitical implications and more. Its effects on the environment can also no longer be ignored.
Increasingly, private-sector firms say that antitrust is chilling the mobilization of non-state actors to address climate change and other sustainability challenges. Activities such as joint standard-setting, industry-wide competitor collaborations, and information sharing have raised new questions and controversies. Coordinated engagement by investors and financial institutions has become a particular target of politicized attack in the United States, further muddying the waters. These trends have generated confusion among private actors regarding permissible behavior, which has prompted many international competition agencies to issue updated guidelines.
Although a common narrative emphasizes that antitrust law is getting in the way of coordination, antitrust law is, fundamentally, an allocator of coordination rights. It defines what kind of market coordination is pro-social or benign, and where private actor coordination becomes anti-social (for example, cartel behavior). Competition agencies, since their inception, have wrestled with how to define what constitutes pro-social coordination, and how to measure any anti-competitive harms against other social and economic benefits.
For these reasons, competition policy is a profound shaper of markets. Competition enforcers and regulators must grapple with the role that it can play in advancing or hindering sustainability objectives. Various competition agencies define the scope of sustainability considerations differently, but broadly they can include: mitigating environmental impacts, accelerating the energy transition to clean energy, protecting human rights, and advancing worker rights and prosperity.
