ICN 2024 WORKSHOP ON SUSTAINABILITY

[Music] [Music] [Music] [Music] good afternoon good morning and good evening it's a great pleasure for the Authority La concur to host this first ICN workshop on the role of competition in supporting sustainable development goals before I delve into substance I would like to express my sincere Gratitude to the ICN chair andreasm and to the ICN Steering group for giving us this outstanding opportunity and I would also like to extend my thanks to the organizing team here at the aor who worked hard to make it happen today uh I would like to wish a warm welcome

uh to all the ICN members both agencies and non-governmental advisors and to all the viewers following our stream from all over the world your participation demonstrates the high level of interest Of the international competition Community uh in this important matter so why a sustainability Workshop today's Workshop is indeed historic while the ICN has always touched upon the topic of sustainability in several occasions uh it is the first time that an ICN event is fully dedicated to the issue in this context I believe that I should start by saying a few words on why we felt

the need to further address this topic in the Framework of the ICM the obvious reason is that sustainable development represents both both a major and a pressing challenge for our societies the environmental transition impacts all sectors of the economy cutting through all choices made by policy makers as well as National boundaries against this background a growing emphasis has been placed on competition LW and on the path play to support environmental and climate Objectives an increasing number of competition enforcers from every part of the planet are taking up the issues associated with sustainable development looking at

it there are indeed compelling reasons why we should care about sustainability first the competitive process is a source of innovation quality and diversity of products and services and efficienty use of resources competition is therefore a necessary Condition for the transition to succeed second sustainable development can be integrated as a competition parameter through the traditional reasoning on diversity quality and Innovation and whenever consumers have a preference for sustainable products at the same time we should also accept that factoring sustainability considerations into competition is not self-evident and raises many questions on both competition policy and Enforcement levels

this is why we thought that today was the right time to deepen the dialogue at International level and engage into multilateral exchanges with our peers as well as representatives from the private sector to compare practices identify common challenges and discuss avenues for improvement spanning from antitrust and merger control to advocacy and soft law initiatives upon joining the French competition Authority authority concur I made sustainability one of our three priorities as enshrined in our yearly review this is not only a statement of intention we want to make sure that it materializes across all dimensions for our

action our first focus is of course antitrust I have outlined repeatedly how the authority like concurrence is mindful of in of in intervention having two sides let's call them the sck and The carrot on the one hand we want to uncover and punish the anti-competitive practices that are the most harmful sustainability so that's a stick on the other hand our aim is to support companies that in good faith wish to pursue sustainable development objectives and that's the car on the first aspect The Authority now has a proven track record of taking account of sustainability as

part of its competition analysis The Authority has Signed infringers for specifically restricting competition in relation with the environmental qualities of the products at stake The Landmark case dates back to 2017 when companies in the Floor Covering sector were found to have formally agreed not to advertise on the on the environmental performance of their respective products in 2021 The Authority ruled on a case of collective boycott of a rival digital platform in a Road H AG case where obstructing environmental efficiency was held to be an AG an aggravating circumstance even more recently in December 2023 we

find undertakings and associations of undertakings in the can food industry for conspiring to prevent manufacturers from competing on whether their food containers contained a chemical hazardous to human health by Bol are to the detriment of consumers in the meantime on a more Procedural note we've amended our notice on the calculation of fines in order to make it clear that the harm to environment may be taken into account when assessing the seriousness of anti-competitive practices now while competition enforcement is key the urgency of the ecological transition calls us to do more and make sure when possible

that competition does not stand in the way of business projects with a sustainability Objective such projects may include for example standardized ation agreements joint production and distribution information exchanges joint purchases or boycot of noncompliance suppliers these practices usually ring alarm Bells among competition enforcers and indeed there is a delicate balance to strike between on the one hand ensuring that their impact on sustainability is properly taken into account and on the other hand not Allowing industry to greenwash anti-competitive practices in this perspective we started our own open door policy to support companies uh that wish to

assess whether sustainability related projects are competition compliance to that end following in the footsteps of other competition authorities such as a Dutch ACM the UKC or the Japanese FTC we've published in May 2024 a notice on informal guidance in the area of Sustainability our first informal guidance letter regard ing a common methodology to assess greenhouse gas emissions in animal nutrition was published this morning and it can be found on our website alongside antitrust merger control is another key area in which sustainable development can be factored in the authority strives to adapt product Market delimitations to

the growing interest for sustainable Products and services for instance in 2021 we took the view that that the transport of refined petroleum products by Pipeline and by Lori were not substitutable because of interia the greater environmental footprint of the latter in the food distribution sector The Authority has identified a separate market for organic products reviewing efficiency defenses that include sustainability arguments remains a work in progress and I very Much hope that it will be discussed in the uh Workshop today finally The Advisory function is also an occasion for the authority to analyze the interplay between

competition roles and sustainability objectives the green transition has indeed prompted the adoption of new regulations in various sectors the French government regularly refers to us draft regulations that include interactions between sustainability and Competition we have provided recommendations on a wide range of sustainability related issues such as producer responsibility regarding used oils climate risk insurance and reinsurance in agriculture and the reorganization of the household packaging sector this consultative role is also carried out on our own initiative through ex official Market studies scanning new markets the most recent examples include a study of November 2023 on land

passenger transport and an opinion of June 2024 on the market for electric vehicle charging infrastructures we are currently inquiring ex official to analyze the competitive consequences of rating schemes which provide consumers and with information on the sustainability related characteristics of consumer products and services we expect the opinion to be published before the end of this Year so let me conclude common goals call for common action the climate transition will not succeed without joint action by policy makers enforcers and economic actors from all over the world your presence today acknowledges this commitment I am therefore pleased

to open today's Workshop which gathers highly qualified representatives of competition agencies and of the private sector not forgetting the oecd I would like to express my special thanks to all Of them for their previous their precious involvement today's discussion will be divided into two parts the first panel will address the issue of sustainability considerations in competition law assessments and where competition agencies should draw the line in view of their mandate the second panel will discuss how to effectively address behaviors that positively or negatively affect sustainability through advocacy Exante guidance and enforcement finally Andreas smun president

of the bundas Cel armed and ICN chair will do us the honor of providing the closing remarks I'm very much looking forward to the debates and without further Ado All That Remains for me is to wish you a great [Music] [Music] Workshop good morning good afternoon and good evening to our audience uh please Allow me to thank president Kur for his opening remarks and welcome you to the first panel on sustainability consideration in competition law assessments competition agencies mandate and where to draw the line climate change and more generally the need to adopt a more

sustainable way of living is arguably the most immense task of our times achieving Net Zero by 2050 uh seems like a goal that becomes more and more challenging with every day That passes one cannot help but wonder what if at all is the role of competition policy and competition enforcement in this transition this is one of these cases where the answer depends on the timing of the questions if asked 10 years ago the answer you would get from a mainstream competition expert either an enforcer or a practitioner would be at best a confused look when

we in the oecd Uh did the first paper our first paper on the topic in 2019 we could fight very little enforcement related materials and had to base mostly on Academia but things have changed in recent years as we just heard from president Kur uh more and more competition authorities have been taking active steps towards promoting sustainability goal the arena which is probably the most active and visible one is the Agreements one where actions by authorities seek to clarify mainly through guidelines and other means of soft law when and how cooperation between firms especially in

cases where they compete with each other are not likely to raise competitive concerns and hence not to bring about enforcement actions obviously the questions around these type of guidelines are many from both the Practical side but also from the legal and even the theoretical side Additional steps are considered or even taking on mergers and maybe even abuse of dominance uh only these and these questions only deepen uh only deepen the question marks above future activity are competition authorities going too far or perhaps not far enough should authorities adopt more ambitious involvement to support the sustainable

development or should they go back to policy makers and seek Guidance to answer these uh timely and complicated questions we have with us today a panel of five and please let me introduce them Olivier garan the director of general for competition in the European commission M K Deputy chair of the HC Australia har Nicolo vice president of the HCC Greece Grant Murray lawyer at Baker McKenzie and here with us today is an NGA from the UK and last but certainly not least Nicole rosenboom competition Economist at and NG from the Netherlands we will start by

hearing the speakers opening remarks and I would like to start with Olivier you have the floor very much Ori can you hear me yes we can oh very good so by means of introduction I'd like to say that well in Europe we have what we call the green deal which is a a very ambitious and comprehensive plan and set of measures to uh make us a carbon neutral by 2050 at the same time as increasing the competitiveness of our industry and Supporting the European green deal has been one of the objectives of the commission policy

under the current commission mandate um of course the uh the purpose of competition policy and competition enforcement is not to support the green deal but we also think in the EU that competent policy doesn't operate in a vacuum so while preserving the Comm dat so to to make it short and with many CS but uh trying to enhance consumer welfare uh we think that to the Extent we can we should contribute to uh to to other goals and actually um having a clean cleaner environment and fighting U uh uh uh global warming is is not

so far away from enhancing uh consumer welfare depending on the how narrow or how broad your definition of consumer welfare is so the question we had to ask ourselves in Europe meaning the commission but also the 27 colleagues in the 27 national competition authorities that together form with us the European Competition network was really are our rules fit for purpose uh are our rules adapted to us trying to Foster uh Pro competitive at the same time as uh Pro environmental agreements with with is uh efficiencies producing efficiencies but also how can we balance out some

possible restriction of competition uh with uh uh environmental U efficiencies and it's it's it's a debate that kept us busy uh for uh uh Almost two years uh we dedicated several round of discussions at at the level of heads of agencies so benoa Andreas all the other colleagues and myself uh before we agreed on uh new guidelines uh on uh uh horizontal cooperation that include for the first time a specific topic on uh on green externalities so these new guidelines have been adopted in 2023 um and as I just said has been done in very

close cooperation uh With the various national competition authorities in the EU our aim here is really to provide legal certainty to companies that want to contribute to advancing sustainability goals together with their competitors and in some cases you have no choice there's some things you cannot do but for if you team up together and that may include some more or less severe restriction to uh competition um the guidelines uh uh Review the various types of uh uh agreements uh they they include of course a number of examples of completely unpr problematic agreements uh they also

provide easy to assess criteria for a safe Arbor for sustainability standards so for when when no restriction is in principle meant to be restricted uh and in the guidelines we also make clear that genuine sustainability sustainability agreements Will be assessed based on their effects and not uh be seen as restrictive competition of competition by Nature what we restrictive by object and that is very important because this is what allows this Balancing Act between the positive and the negative um effects and finally the guidelines provide guidance on the type of sustainability efficiencies that can be redeemed

uh uh that can redeem Agreements sorry uh that restrict competition in the first place so this guidance was long negotiated we we need to find the right equilibrium it has been very much welcomed by stakeholders as a balanced approach even if a number of uh other agencies have decided to go further and uh approve U and Brace slightly more permissive uh uh approach the for me the defining Point here is in two very uh related uh uh issues first do you take Into account in this Balancing Act and how do you take it into account

so-call out of Market efficiencies so do you take into account environmental benefits that do not ACR to the same constituency of consumers than the one that suffer from the anti-competitive effects or only partially uh and if only partially uh what is the measurement of the overlap that you need to have in order to be able to take it into account and that Links to the second issue on which the there are discussions which is the full compensation uh of uh of consumers should we depart from the current standard in European law which is that in

order to be able to exempt an anti-competitive agreement uh the benefits enjoyed by the consumers should fully compensate the restrictions of competition well on this last point I have to say to me it has always seemed to be a largely theoretical questions Because what you are comparing usually is a relatively straightforward and shortterm uh uh restriction of competition that is most of the time uh on prices and therefore relatively measurable and you compare it to uh longer term benefits that are of a more qualitative nature like like clean air less carbon emission and that are

usually less uh uh maure measurable so In that context the concept of fully compensated is relative it what it means in in reality is that it is compensated well enough uh and that this is the Judgment call taken by the authority that has to judge the validity of the agreement under the control uh of the judges um but of course as the case will come the cases will come we will I'm sure uh have to Refine uh uh this approach but the signal is important because we know that Greening of our economy will need massive

Investments and some of the in these investments will not be uh the firms will not be able to carry them out alone uh for some others they will need in order to bring it forward to team up uh and that may restrict their ability to uh to compete with each other and we need to be able to give a clear signal that uh we will carry a fair assessment Of the pros on on the cons in order to incentivize companies to come forward uh uh and disclose their projects so that we can work together with

them in order to try to minimize the restrictions of competitions uh uh while keeping uh the same same positive efficiencies maybe a word on uh two other topics very briefly merges some people say it's less relevant well it is true that in merges you do not well we do not in the you have the possibility of making this uh This Balancing Act um contrary to antitrust uh however what we see is a number of Mees that also bring about uh positive uh uh green efficiencies and we take into account these efficiencies just like we take

into account any other efficiencies and it's important in our decision uh eventually to clear uh the merger Whenever there are restrictions of competition as well finally uh we have just reviewed a market definition Notice uh and the new one was adopted on the 8th of February of this year and in this notice we identify sustainability as one of the nonprice parameters of competition that the commission may take into account when defining relevant markets so here as well we acknowledge the evolution uh of uh of the practice and the the fact that the world is moving

in this respect thank you or thank you very much Olivier and let me now give the floor to Hara hello thank you um uh thank you Ai and thank thank you to the conc for this invitation and for organizing this uh this workshop on such a an important and topical matter we of course um share the view that common goals require common action and this is why we are trying and have indeed Incorporated sustainability considerations into our law and uh practice uh to the extent of course that we can we believe that we must also

contribute to goals of uh the Paris Agreement the green deal uh the UN goals on sustainable development and our um our law has I Believe been uh recently amended uh to take into account these uh extremely important goals so the helenic competition commission has been doing two things um first of all we have uh I'd also like to say before the horizontal guid lines were uh adopted uh we amended our law to have um the possibility to issue a non action letter for sustainability reason reasons this Of course does not affect affect the self assessment

uh procedure by regulation 1 2003 and our national uh law uh but it means that companies can come to us with their uh plans and their agreement set out all the documentation the efficiencies the effects uh the compensation that they believe this agreement will uh bring about and this will be examined by um uh uh by the the commission and in case we find that this uh agreement supports sustainability Goal and does not have um support sustainability goal it may be cleared and we do not um proceed with enforcement uh in order to to incentivize

companies to come to us more with their um with these agreements we have created a sustainability sandbox um this is um a supervised regulatory environment uh where companies can come in and test their agreements it's um the communication within this sandbo is between the commission a Sustainability consultant and the company and this sandbox can um uh can help not only uh to for companies to test their agreements in terms of competition law but to um create imperfections in financial markets and the regulatory uncertainties that some sometimes small or especially small and mediumsized companies that wish

uh to collaborate and to attract investment may not be able to do so by off offing them a Protected uh regulatory environment where they can um propose and receive answers as to the compatibility of their proposals with the with the competition law um assessment these uh Financial Market imperfections and Regulatory uncertainty issues may also be overcome so our um in terms of supporting this common goal of sustainable development we of course we abide and we we follow the horizontal uh guidelines issued by the commission we Also have the ability to to issue the non-action letter

and we welcome companies that want to test their um their their plans in a sustainability sandbox the main issue that we're facing right now is that we believe that we have set up um the framework and the environment for companies to come to us so that we can actually see on a Case by case how much of out of Market efficiencies for example we want to take into consideration and how much of the Compensation will be enough an agreement to get uh clearance we have not had the feedback that we expected from companies in order

to see um how this system actually works and what we need to better to make it work in an even better way um so this is what we have been doing in terms of this sustainable development we we have of course issued uh guidelines we set the line which is uh green washing and a very careful examination of um agreements that may Have um sustainability as a just as a Forefront um but we need to to keep it to to actually have a lot of Enforcement cases to to to have a clear view as to

how much this is helping and what we need to do to make it better thank you very much Haram and move now to Nicole thank you so um let me give you some opening remarks from an economics perspective um so from that perspective There can be several reasons why firms and competitors want to corporate and where that Corporation can lead to environmental benefits and examples that have been discussed in the debate around this topic so far uh are for instance and I I'll give you three um the first mover disadvantage that causes firms to unilaterally

not engage in green activities but jointly they might and in the EC guidelines from 20123 this has been accepted as part of the reasons Under which an agreement could be considered indispensable as a second one other uh um reasons why uh an agreement can be indispensable is for instance if there are high risks and or high cost that firms do not take on unilaterally but could do so jointly and we have seen examples in this in the carbon capture and storage sphere where the ACM the Dutch competition Authority has assessed the pl the plans of

the Parties involved um and uh provided a letter to those parties and then third um one area that has had less attention in the debate so far is the role of positive spillovers between firms from their sustainability efforts so where these spillovers exist between firms efforts by one firm can also benefit another firm and in this case the level of sustainability efforts from other firms would actually have a positive effect on a firm achieving its own Objectives so allowing firms to coordinate the their sustainability efforts will then lead to higher overall effort levels and whether

this uh in fact is in play for specific green agreements needs to be assessed on a case-by casee basis because sector specific and agreement specific characteristics can impact the outcome of the assessment of the green agreement agement now let me give you two examples of what might drive these positive Sustainability spillovers between firms so the first one is improved industry reputation when an entire industry suffers from a poor reputation due to environmental damages resulting by its Collective Behavior any one firm May face insufficient incentives to try to improve the industry image by investing a significant

amount in sustainability and in such cases qu ordinating on improving sustainability can help to improve the overall industry Reputation uh and in turn this overall industry reputation can have many benefits to all firms involved including of course increased consument demand but also potentially better Capital Market access or an increased ability to attract talents to the firms and then the second example of um the positive spillovers that may be in play is in the case of reduced existential threat so a common assumption from an economic theory is That firms are profit maximizing entities and this impacts

the incentive to have to invest in what is often more expensive green initiatives so new technologies uh new product lines new packaging um but even with this profit maximation in mind firms can still be expected to care about the exential threat that climate change poses simply because any existential threat is bad for profit for for them and for the sector so competition can lead to an Overuse of scars resources particularly if for firms are to focus on short-term profits and so and display so-called myopic Behavior which means they neglect the impact of current actions on

profit uh from the future however the probability of actually abating the existential threat is not just a function of any one firms but involves the behavior of many and this again generates spillover effects that enable positive effects from Coordination to avoid free writing by firms that wish to benefit from the abatement cost of others without having to incore any cost firms may want to coordinate their efforts and as said when any of the above um examples the examples I just gave do in fact apply to a specific green agreements and indeed lead to benefits to

society needs to be assessed on a case-by Case basis and such an assessment either by the firms or by the competition Authority Often involves the quantification of environmental benefits and as we've heard before whether the these outweigh any POS potential negative effect from the agreement for instance higher prices and the fair share for consumers or the way in which consumers are compensated for those uh increased prices here we can rely on the economics quantification toolkit that depending on the type of environmental benefits the type of agreements and the product at play and Within the legal

framework can be applied to help in this Balancing Act thank you thank you very much Nicole we move now to Mick Mick you have the floor thank you thank you I'm delighted to join the discussion today and offer a few thoughts about the transition to a sustainable economy and some challenges it raises for competition Regulators competition Regulators exist to support competition to in turn Drive efficient outcomes and avoid market Failures the key market failures we focus on is Market power and we do this for the benefit of consumers and businesses much of the world has

enjoyed an extended period of economic growth since the Industrial Revolution however this growth has come at a very significant environmental cost and this arises because of market failure because of the failure to recognize and account for Market externalities the Common Thread here is Markets and market failure and so around the world competition agencies are considering and debating the extent to which these challenging issues intersect with their mandate to promote competition and Advance the interests of consumers in some instances Regulators are being asked to make difficult judgments that may involve weighing up sustainability benefits against for

example lower prices for consumers or improvements in service When faced with such challenging issues it's tempting to put our heads in the sand and focus only on our more traditional competition mandate I don't think this is the right approach and these are critical questions for us to be exploring for a number of reasons the first reason is that we must consider these tradeoffs because as Society transitions we recognize that there will be instances where exemptions to competition law are Necessary this is because collaboration between businesses can help address sustainability related market failures by removing commercial

disincentives or technical barriers that are stopping businesses from unilaterally taking action on sustainability in Australia we have an authorization regime that allows us to Grant exemptions to competition law if we form a view that a public benefit resulting from an agreement outweighs Public detriment which is typically harm to competition we have a clear legal mandate to take sustainability benefits into account as part of this process and there is no fair share requirement in Australia that the sustainability benefits must flow back proportionally to the impacted consumers we have given sustainability benefits including reduced greenhouse gas emissions

significant weight in past decisions we expect the number of Proposed sustainability collaborations that come through our authorization system to increase and the a c will need to consider new and challenging questions to properly scrutinize environmental benefits claimed and what they mean for consumers and how we should weigh them as part of our authorization test examples of some of the complex questions that arise in the context of sustainability include how do we Reconcile that only some consumers but not others are likely to Val value sustainability in their purchasing decisions despite the fact that the benefits of

Greater sustainability are experienced by all what regard should we have to environmental science principles of inter and intergenerational equity which relate to Notions of fairness and Justice both between and within Generations in the context of Sustainability it is the consumers today that benefit from cheaper prices because a business has not paid to address environmental harm however the people that will ultimately face the cost of these actions may be people in different countries and indeed people in future Generations not even alive today and how do we quantify sustainability benefits and extern externalities that we are not

used to valuing it isn't only exemptions from Competition law where competition and sustainability intersect there is also a broader mandate that requires competition Regulators to understand how markets will change as a result of sustainability drivers we're going through a period of unprecedented economic change new markets that financially value environment protection are being created existing markets such as energy markets are being transformed and there will Also be industries that may be completely phased out more broadly nearly every large business in the global economy is now having to think about measuring reporting and reducing its environmental impact

and the ability to do so has implications for attracting investment accessing overseas markets obtaining finance and insurance and winning Green consumer demand this very brief consideration of the challenges for competition Regulators arising from the sustainability transition leads me to a single a single key conclusion competition Regulators need to build expertise to understand these rapidly shifting market dynamics that flow from the transition to a sustainable econ we need to extend beyond legal and economic skills and bring appropriate scientific knowledge to our decision making Processes if we do this we can help ensure that well functioning Dynamic

and competitive markets help Drive The Innovation and solutions that Society needs to overcome environmental challenges thank you thank you very much mck and last but not least uh let me give the floor to Grant all right um well it's really fascinating to hear all of these um these views and um and and to hear from authorities of obviously been really Really active in the area as um as an NGA and someone who's been looking closely at what's happening around the world at a policy level but also talking to companies about their frustrations their Ambitions I

thought I'd just share some of my observations about the journey that we've been on I think I mean that for antitrust enforcers as well as as the business Community I think it is important to recognize that there is a journey here and it's Definitely not finished because in listening to the agencies that are presenting here I think well we're all in in violent agreement about the need to do something and the ability to do something with competition policy without subverting disabling the conventional aims of competitional in seeking consumer wealth but that's not always been the

case I mean even in um in Europe not that long ago there were voices that would say well actually yes We hear the desire for more sustainable outcomes and we hear an appetite for businesses to do more but as an authority the best way for us to help that is just to do business as usual after all competition law is about dynamism and it's about protecting Innovation if that's what consumers want then they'll get it so we will just carry on enforcing competition law but things have changed that there's been real Evolution over the last

few years So authorities have said as we've we've heard the evidence of that they no longer take the view certainly in in Europe and and and notable other agencies around the world they no longer take the view that there's no need for some tailored um guidance here I think we've we've heard Snippets of this in the introduct remarks that there is now this recognition that yes companies can do things on their own and should do of course competition uh individually new Sustainable Brands Etc is always going to be the first thing that a company is

focused on and then there is regulation for other matters and there's no shortage of of environmental regulation in Europe right now but authorities have realized and recognized acknowledged this Gap in between unilateral acts and Regulation and recognize that peer collaboration a companies working together to address first move disadvantage to do things faster and on A scale that would otherwise not be possible is is is right there is this room there is a gap that can be filled with private collaboration um but you don't need to disable competition law you don't need um outrageous woke uh

um unrecognizable safe harbors and concessions in order to do that there's a way of using competition law and the existing tools uh in order uh to get there and that's really important because businesses are Trying to do more I I see that they are moving out from really like Ultra cautious spaces to wanting to do more to because they are faced with so many pressures from 360 degree array of stakeholders there's the financial Community there's the legislative and Regulatory Community this there's sh shareholder activists who are obviously bringing around and um more uh Greener outcomes

there's consumers and there's employees they all they're all Contributing to a pressure that companies feel in order to do something so that's where the collaboration is coming in competition authorities are facilitating that collaboration as I say without subverting competition La so just kind of concretely how are they doing it well we've heard about the the guidelines that are being produced very often you know really pragmatic I think sometimes author and I'm sure there's authorities Listening who will be in this position they won't really be comfortable in producing guidance on a particular area unless they already

have a lot of experience like decade of experience of advising on that particular issue but I think recognizing that this is quite tricky uh it's controversial in areas perhaps it shouldn't be and there's an urgency authorities have have moved and have begun to explain very helpful ways uh from and it's the agencies we've Heard from France um the Netherlands the EU that the UK Singapore others they've begun to explain um what can be done without infringing the rules and then many are now following up and that's why I think we're on a journey a journey

where we've we've moved from an era at least in Europe I think of of policy and and thinking and reflection to an Era of action and that action is actually putting pan to paper and providing guidance to companies that Come forward you know using um the sandbox using the open door policy that is offered by um the the commission to degree and and by the CMA even more so because companies will be protected uh um from uh enforcement action if they follow the guidance um or consult with the authority so the agencies are following through

and providing that um informal guidance to companies that have projects very very helpful and actually you know looking around the world There's a lot out there now we did a survey and looked at the amount of collaborative um agreements that are now being looked at and there are many authorities um such as Germany for example Belgium um who have not produced guidance but has not prevented them from using um all of their skills and their toolbox in order to uh provide guidance to companies on what is okay and what isn't and the what is not

okay is really important and um just because I come From a private practitioner background I am not here to campaign for concessions or uh lening treatment where it's not due we applaud and call out the agency such as the EU and France others for tackling green blocking Arrangements which is not we're not they're not sustainability Arrangements they are Arrangements which are really about stabilizing uh competition and and avoiding competition on um sustainability is a parameter of Competition so absolutely green conduct which is um cartels masquerading as sustainability agreements need to be treated as as cartels

quite rightly so so just want to say one thing I give it a spotlight on the UK which is that the CMA produced guidance back in October and it's extremely helpful I think if authorities are interested in doing more in this area then I'm going to call out the UK uh the the advice the the guidance rather from October last year Is concise it's pragmatic uh it is actually written for a legal but also a non-legal community and I think already uh non-governmental organizations have been able to um use this guidance to come forward uh

it sets out a whole um list of very very helpful guidance on what um companies can do together in order to advance sustainability goals including methodologies On Target setting and Frameworks for reporting on those be Very careful to say what needs to continue to happen unilaterally uh and I think what really shows that this is successful is that even within six months we have seen two examples of uh Arrangements coalitions coming forward to the CMA and getting positive uh feedback on what they what they can do so it's been I think the proof is in

the pudding as we say there that already um it's been used and that pragmatism is coming out I just or if I Can just want to say one thing because um misson did mention externalities and and out of Market benefits and I think this is it has to be it is an important Point uh after all any sustainability um cooperation any sustainability guidance that doesn't deal with externalities is going to have a limited effect on addressing uh Arrangements which are seeking to to address climate Change um so it is important essentially if you ignore externalities

and out of Market benefits you are essentially tat to ignoring scope 3 emissions um which would not be good or logical and there has been a technical debate the technical debate in Europe particularly um about whether the consumer the constituents uh as missas mentioned need to be fully or or just fairly compensated fully compensated be more akin to a kind of pollut must Benefit um approach I would say but actually what's really encouraging I think is to hear the the pragmatic uh reality in the end which is that in the end you could be looking

at um very very obvious environmental benefits and therefore there is no need for a no place for a mathematical um weighing it can be done in in a in a much more pragmatic way and that is actually evident in one of the the most Recent UK guidance where there was an ability to actually quantify the um the benefits of avoided greenhouse gas emissions and comparing that to potential increases in price well it was clear that the the benefits would outweigh the costs so there is a way to do it I don't think it's radical to

say that um producers and consumers have got no right to impose costs on others and if you've got agreements between private companies that seek to address that in a Balanced way um then that is something that authorities can take on and in fact the UK have done exactly that so I will finish there thanks for thank you thank you very much to to all of you if I can uh maybe Briefly summarize what we've heard so far is that we heard from the enforcers from from olier from harab from meek uh that they've been doing

quite a lot on this front and it seems that uh from Nicole and from Grant we heard that there's a Lot of need and support for everything that has happened so far my next question will be more forward-looking so basically where are we in this process should we a lot has been done so maybe we should adopt kind of a wait and see Approach at this point just consider the market Market's reaction or we should we already take additional steps looking forward and to kick us off with this question let me give the Flor to

Mick uh thank you for the question um The A C under its law has had uh what we call a public benefits test associated with authorizations or exemptions from competition law and also associated with consider consideration of mergers for quite some time in fact we've had roughly 180 matters over the last five or six years and about a quarter of them have involved claims of sustainability benefits as part of the justification uh for the transaction or for the collaboration that might be Occurring so we actually have quite a long history of uh decision making that

involves consideration and weighing of sustainability and we actually have uh Court decisions as well uh to provide guidance on that so um we we haven't seen a great number of businesses come to us very specifically on sustainability issues and seeking exemptions or authorizations um but uh we will be issuing some guidance later this year And uh in fact when we look as I said at a portfolio um there's already considerable uh precedent and U past decisions there that involve the weighing of those considerations so um we we we certainly have reached out in terms of

issuing guidance and engaging on new guidance but uh our exemption process does um and has in the past for quite some time allowed us uh to consideration to consider these issues so I'm not sure we'll be going more Proactive than that at this stage uh Grant will you like to go next yeah sure so I think if if the question Orie is like should we now sit and wait and see what what happens I would say no I'd say like keep up the momentum there's a lot of great work that's already happening um and I

may I've just been to a music festival so maybe that's why I think of Freddy Mercury Don't Stop Me Now um that's that's what uh we need to channel and Maybe avoid uh 200° Mr Fahrenheit that wouldn't be good but certainly we're on the right trajectory this is the journey and continue and so with M what momentum do I mean I think globally so geographically continue like there's great precedents out there there's there's a great amount of consensus on this call as I said it's not always been straightforward I think these discussions about what can

be done without subversion without um making it Look as if competition has being weakened are really important but even if we do get wonderful National guidance around the world then there is still this risk I think of a patchwork approach and that of course like everything uh interferes with and reduces legal certainty and it's going to mean that there are less chance of the really sort of game-changing really important uh larger sustainability Cooperation agreements coming forward there are going to be major blind spse as well to the extent that we have regions authorities that are

not vocal on this even saying what is okay um what is really not restrictive of competition is is a is a problem and I I I personally don't think it's a coincidence that of the agreements and and you know wonderful things that we've seen being cleared um um that have been put in front of competition authorities Around the world for guidance they have not touched on the US there hasn't been a US Nexus as far as I can see and I think even if you have a European wide Arrangement then you couldn't really be sure

that there wouldn't be some us Nexus there so I think that um continuing the debate and widening the debate I think encouraging International organizations like oecd ICN to think about what can be done um in terms of of this area is is really really important And then I would just say a word on like the um keeping the momentum up technically so I don't think there's a need to change the law I think that it's a case of just applying the law properly I think that some of the guidance I've already touched in it in

the EU and the UK is extremely helpful because there has been this really helpful elaboration of the kind of conduct that is horizontal uh but should benefit from a Rule of Reason effects analysis it shouldn't be characterized as a cartel so in the EU and UK that includes we heard um I think Olivia referred to sustainability standards fine but there's also there more um I think more helpful areas which is the where the guidance explains that uh in the UK for example uh joint agreements to collectively withdraw uh products that are harmful to the market

or agreements um where companies um agree to buy only From um suppliers with a particular you know sustainability footprint envir environmental footprint that these will not be treated as as collective boycotts very very helpful so I think just having guidance which looks forward which provides Clarity on what will be a rule of reason as opposed to cartel conduct um is is extremely helpful um and then I think that the open door policy is we've heard about that a bit already but that's that's extremely helpful to Business businesses be able to come in not to have

all the facts at your fingertips we can see from the the most recent UK informal guidance that there was a lot of uncertainty in certain places but that did not prevent the organization coming in and seeking guidance and it did not prevent the CMA from actually um giving it a very very helpful steer so that open door policy on the back of guidance is is really just I think the way to keep going Thank you very much Grant uh so har should we adopt the wait and see approach or should we follow Freddy Mercury's advice

well I I very much agree with what has been said I think that the basic point is we need to keep on promoting our position that we as competition agencies we are part of this discussion uh we are not going about business as usual with the same standards and with the same approach Because we have Incorporated sustainability in um our assessments uh that this is something that we all need to do and we are going to play our part to the extent of course that we can um we have actually tried to promote sustainability as

part of our advocacy efforts so we also have a guidance on Farmers collaboration which has a lot to do with sustainability we also have uh a sector inquiry on Waste Management which which of course has a lot to do with Sustainability so we are trying trying through other ways through advocacy efforts and through sector inquiries to um to promote our position that we are part of this discussion and I think that a very important part of this it has already been said is keep on discussing the issue in um in fora uh search yesterday that's

why this Workshop today is so important because it keeps the discussion going on and uh it helps us have um uh an approach which is to the Extent possible harmonized because uh when we do not have I think it was grant that said Patchwork of approaches when we have a um a similar approach um then that increases incentives for companies to come forward with agreements that may not be just National but supernational in their effects and um it uh uh will increase their legal certainty that they will have a similar approach in various jurisdictions so

two things uh enforcement is one part of course but we Can um we should continue to put ourselves on the map of this discussion and we should make this discussion an international one a prominent International uh one uh and in this way I think that um uh we can uh wait for the market to react but we can incentivize it to react thank you AR what's your take on this yeah well several considerations maybe we we so far we have had no Case um although the commissioner Mrs vayer publicized this new approach already in 2020

uh we have had several discussions uh for large International alliances uh which that a point that Grant was making have been dropped uh because of fear of uh not getting antitrust exemption in other jurisdictions um well I think we would have been prepared to Grant it uh Secondly um it seems that what we have at the moment in Europe is more more local or strictly National types of cooperation I mean the colleagues in in in Germany in the Netherlands in Greece have a few cases uh but they all are restricted to the member states or

are actually a part of that member State um which is maybe not so surprising so at the one end we have large International cooperation but Then because of the lack of imagin at International level uh with the way how to approach this this issue issues uh do not necessarily go through uh and at the other end we have we have more local or inational corporations but more generally I have to say I said it in my introduction most pro-environmental agreements do not unil any restriction of competition and and I must say that I am Still

to to see the first case where there is a genuine restrictive of restriction of competition with a real potential impact on the ground you know not some kind of lawyer elaborations of what could be a restriction of uh the freedom to uh of behavior but a real restriction of competition with a real potential economic impact on the ground that would be really indispensable to attain really tangible and measur able beneficial Effects I don't rule out that such a case exists but I I've never seen one that's the only thing I can say um so I'm

I'm not sure what to do I mean we have numerous cases uh uh promoted that companies can come in confidence on this close and it will not be held against them they know what is a standard because we have published the guidelines uh and we're still face with the situation that I just described and I'm not sure lowering standards for example would be the the the Right Way Forward certainly not as long as we do not have uh more practical experience the last consideration is that or policy vis a green well Greening of the economy

let's call it that way or decarbonation decarbonization of the economy uh works on two legs I mean on the one hand we are will to favor agreements that are beneficial As I just explained on the other hand what you see is more and more anti- competitive practices that are actually in that field cartels because of course uh firms have already detected that it may be easier less detectable and just as effective to collude not to roll out new technologies that are very closely in order to combat uh climate change uh or lower Emissions uh than

simply colluding on prices and that was very much what was at the core of our German uh uh emission uh cutle between German German carmakers in in in in 2021 uh where there was a illusion in order to delay the roll out of efficient Technologies for emission cleaning for diesel cars but this year uh we have issued a statement of objection to a company producing and selling electricity in Gree for a suspected abuse of dominant position between 2013 and 2019 and what was the alleged abuse is that the company has sold electricity generated via thermal

plants uh essentially digite so very uh carbon emitting at prices that were below variable cost such making it uneconomical to produce or actually deploy wind Mills and solar power p panel Farms so and this is this is really extremely detrimental to to the Decarbonization of the economy uh and finally uh we continue to investigate a string of cels in that field in particular one that concerns the recycling of of Life V which all uh manufacturers of cars uh present in Europe are involved thank you thank you very much Olivia Nicole yes thank you um I

really like what Grant said about the the journey because indeed we've this this debate Has been going on for two or three years now I think and um as a as a private practioner the initially at the start of of that period the hesitation was that it is so intangible so there all environmental benefits there may be a price increase how do you weigh those against each other if one of them is in monetary terms and one of them is in cleaner air or less water or higher recycle rates or anything like that how do

you weigh that if you can't like um Quantify properly um I think that sort of blackbox um uh characteristics of the debate has been reduced significantly and and to the benefit and with with a a lot of thanks to the guidance that's that has been put out by competition authorities I think that really helped a lot in the debates so uh initiatives such as the the technical paper that has been commissioned by the helenic competition Authority and the Dutch Competition Authority together it's very helpful the guidelines for the different member states and other countries uh

outside Europe are very helpful in that regard um I would also applaud the sort of the the breakdown of the three different types of benefits in the EC guidelines so the individual use benefits individual nonuse benefits and the collective benefits I think those are very helpful um and we have those now and it gets more tangible for firms Uh how to quantify it and and their advice um I think there's still room for improvement and I fully appreciate that that room for improvement is depending on actual cases coming forward and authorities and firms and their

advises also learning in that sense um and uh also reflecting on what what Olivier just said about more practical experience uh I think we can still give more guidance in in Practical Terms of to how to use the economic toolkit how to use the quantification toolkit and this also goes to the point of of out of Market efficiencies um and uh in which situations and to what extent uh this can be taken into consideration um and then as a last Point indeed I I can Echo fully what what my my former uh what the panel

members before me have said about the international Patchwork um I would have Loved to see more International firms coming forward and asking for clear or asking in the open door policy uh whether their U proposed agreement is is okay or in line with competition law um I do worry that F International firms may not do that or may not go through with their uh initiative globally because out of fear of uh some jurisdictions that are less um far advanced in a journey is maybe the best way to put it Um uh and and that also

means that a firm has to decide am I going to do this locally in thosea in those countries where it is allowed knowing that I won't reap the all benefits to the environment I can reap or am I just going to hold off and do and do nothing or something else in the local area and I think that that's a l opportunity for those companies but also for uh consumers living in the different areas around the world thank You thank you thank you very much uh we'll move to the next question and if I may

ask you to keep it concise we are a bit running out of time uh so please uh keep your answers short on this one uh so some of you have already mentioned the issue of efficiency measurement is a potentially an obstacle but at least a challenge that authorities need to face and also private sector need to face when when trying to assess the competitive harms against the Sustainability on the environment type of agreements and my question here is do you think that we have a good enough methodology to measure efficiencies and uh Nicole let me

go immediately back to you thank you um I think in in a very short way yes I think we do have the economic toolkit to quantify environmental effects and the implications for different groups so that is consumers and out of Market efficiencies um I think it depends Mostly on the legal framework that is at play in a given jurisdiction whether or not you can weigh those out of Market efficiencies Into The Balancing Act um and you can imagine that whether or not you do so has can have quite a impact on the outcome of of

that balancing act so I I really like the um the the difference between what I've heard today from Australia but also what I know from from the UK system in the in the context of the climate change agreement so the Ccas where if the agreement leads to a lower CO2 emissions the UK UK can take into account um the benefits of all UK consumers and not only the consumers of the products and depending on the product in question you can imagine that that may tip the balance compared to a situation where only the consumers uh

are at play now when it comes to the different methods uh of quantifying environmental harm uh there are several and my take would be that the method can Be um chosen depending on what type of environmental benefits you need to measure is or is at play for the agreement and not so much the legal framework or the way that market uh or out of Market efficiencies are considered I think every method can be uh applied irrespective of that framework and then what comes out of that method when you apply it to the case at hand

you either take the totality of the environmental benefits Uh if that's allowed under the legal framework or you um take only the pro rate part that belongs to the consumers and there are two broad different methods that is the sort of the social cost method so the damage cost method or the batement cost method where we can rely on um Shadow pricing for emissions which quantify as the name res suest the benefits for society uh which then is sort of the 100% bit which needs to be carved out for the Consumers or if you go

uh to another type of methods which is more the the private value for instance a higher recyclability rate or um lower electricity use or anything like that uh and you can t that to the consumers of the product itself um then that can be used in jurisdiction uh where the out of Market efficiencies are not allowed or it can used in a jurisdiction where they are allowed and then you need to uh proo Increase the benefits to get to the 100% of society so irrespective of um the legal framework on this matter you can use

the wide range of economic tools to quantify the effects uh and potentially break it down to Consumers and out of Market deficiencies thank you very much uh Olivier I'm not so sure I I could be as positive as ni is sure you can quantify positive externalities when it comes take take Carbon uh emission because it's in a way the most simple in that respect because if you move to biodiversity uh or um recycling uh certainly bi diversity it's it's much more complicated and the methodology is not so so clear um but that's not really my

point so my point is more than U the characteristic of these efficiencies we're talking about is that there are Externalities in other words that they they cannot be appropriated by The Firm individually and that is a very big difference with the way we treat efficiencies normally because the efficiency think about mejor control for example well in efficiency are gains in efficiency is that will make it that although uh the mer entity will G will gain some market power the efficiency will lead it to uh uh uh uh set its Price or fix it quantities uh

uh in know in a way that it will profit maximize but at a lower price because of the efficiencies or at at higher output uh that's not the type of efficiencies we have here and I think we shouldn't do as if it were because it's not uh we have efficiencies here that are real well assume they're real uh but they do not impact the cost curve of the firm uh and for that reason uh basically The Balancing Act is a different one and That is why the question of out of market and compensation of the

consumer becomes important because you cannot deal with this efficiencies the same way as you would do in a merger context that's also why the question of how do you take a pro environmental stance in in in meor control is is a more complex one uh I I think this is something that is really important to to keep in mind the nature of these efficiencies is different they're Essentially positive externalities um and uh and that makes it more complicated and that makes it in my view still important to care about the compensation of in Market consumers

uh but keeping in mind that what we're talking about because of the nature of these efficiencies are collective Goods so what I mean non-exclusive consumption Goods you know like the sun well the fact that I benefit from the Rays of the sun doesn't Take out anything from my neighbor because it just benefit just as well so and lowering of carbon emission is of the same nature so I'm not sure it's so sound to to to to try to apportion it to some consist because there is no apportionment to be doing because we all benefit equally

and actually if you want to push it further we all benefit equally uh from a reduction of emissions say in ch China or in India we benefit In Europe just equally uh everybody benefits actually does that mean anything about how we can make The Balancing Act well I'm not sure so for as much as I think this is something we have to do I I think I would slightly disagree with Nicole that it is so straightforward thank you Olivia uh Grant where do you stand on this um well I think first of all maybe take

a step back because you your Question was about efficiencies which sounds quite narrow but the law at least in the in the EU and the UK is really about benefits which is broader so it can be in the environmental context we can be talking about improvements to the the process you know quality more Innovation cleaner processes uh other other ways in which that we see economic progress so it is wider and I think the certainly there's complexity here But the way that uh the horizontal guidelines are level in the UK as well map out that

methodology of direct consumer benefits indirect and Collective is is really a good road map I think other agencies that are trying to tackle this area I think will find that interesting um so you know there's qualitative benefits here and again I point to the UK uh informal guidance this is the first one from it was November last year where in fact the Authority was not too worried about restrictive effects but acknowledged that the arrangement would actually result in more choice for consumers so you know qualitative benefits should not be overlooked we shouldn't take a very

you know narrow View and and only talk about the quantitative efficiencies and when it comes to those qualitative things I mean competition authorities have got vast amounts of experience in Checking the veracity of what uh producers say and also bring in experts to help if they need um some assistance with with that that verification so that's the first point yes on quantative I it it's been a a drawn out um debate here about out of Market uh efficiencies there are challenges but again the UK guidance I think puts forward a a pragmatic approach it is

going to be much easier to uh to quantify effects if you could look out Of market now of course the fact that it's expedience to do so doesn't um mean that that that's why it should happen but I already talked to my opening remarks about why I don't think it's radical to say that producers and consumers do not have a right to impose costs uh on others and if there are Arrangements that they seek to address those those externalities then they should be they should be looked at and Olivia talked about pragmatism in his Opening

remarks I think that's where that's that's where it comes out on the on the really you know the really um big big picture stuff of climate change again the UK was was not able to to uh really quantify the restrictive effects it couldn't be assured that there were not any because of the the lack of specific information that was available but because it it was able to look at the carbon a abatement values using UK government guidance it could actually Put a number on expected benefits and so when you when you do that kind of

assessment I think it's it that that that is one that other agencies can um can follow so I'll just leave it at that thank you grant then har over to you thank you um well I think um that indeed uh there is an economic tokit in place uh in the technical report that we published together with our um with our Dutch colleagues there is a range of um methods that can be used for Environmental evaluation so we have methods based on Market choices on hypothetical choices on um valuation derived from stated policy objectives or from

ex existing studies and databases I think this this technical report is quite detailed on the the toit that available to actually um quantify effects uh however I'm not quite sure that we do have a solid methodology in place right now and I think that part of this is because we do not have a big um Base case cases to actually test these valuations and how we can quantify effects so um I think that a lot of it's something that we obviously can do and the tools are there but it's definitely something that we need to

build on and I don't think it's at this point solid enough to uh to be able to be um applied with some legal certainty so as cases grow uh this um uh the way we're using a toolkit will also grow that's what I think thank you very much And Mick over to to you uh thanks uh and our consideration of this issues is is Guided by our law which which has what's called a public benefits test so that the law says um we have to consider uh the claimed public benefits and weigh them against uh

the detriment which can include detriment to competition and often does um and our courts have said uh that it's not a an arithmetic or an accounting exercise that it's a it's a a method a matter of Arguing logic and consideration and bringing the factors to bear in the weight of arguments so um we we have some precedent now uh going back quite a few years of that approach so uh it's a pragmatic approach yes it doesn't uh bring the same level of legal certainty um but on the other hand it doesn't mean um the consideration

is constricted by uh models or methodologies that uh aren't appropriate to particular situations so um in some respects uh That that precedent that we have in front of us uh adopts uh leads us to adopt that more pragmatic uh and and broadly consideration of potential benefits potential harms including harms to competition and weighing that so uh uh we we don't go down the quantification path as such thank you very very much uh if I can quickly wrap up it seems that there's a consensus regarding the importance and The significance of the steps that were already

that have already taken place and there's a also an agreement on the need to take further steps but this is where things get maybe a bit more complicated and more diverse uh only to underscore the importance of this init initiative taken by the I let me thank the ICN for this initiative and for the invitation and also to it it chair Andreas M and of course to The Authority for organizing uh this event thank you Very much and with that let me give the floor to the moderator of the next panel Andrea marvan chair of

kof thank you [Music] [Music] hello good morning or or good afternoon to everyone uh wherever you are in the world uh Welcome to our panel on how to effectively uh address behaviors that can posibly positively or negatively uh affect sustainability through advocacy exanti guidance and uh the suitability Of of traditional enforcement Tools in in these topics um first uh I would like to congratulate the the fror for for organizing this very important uh Workshop uh and also acknowledging the the ICN for for continuing to to tackle issues that are that are key in within the

competition Community uh as as we all know there has been an an ongoing and expand in discussion of the intersection between competition policy and environmental sustainability uh These uh this of course reflects uh uh the growing recognition of the need to align market dynamics with uh ecological objectives we are in the phase of unprecedented uh environmental changes it is clear that us competition a agencies have to play a role in promoting sustainability uh uh and sustainable practices while the at the same time ensuring uh Fair uh and competitive markets uh as competition agencies uh Are

trying to Grapple all of these issues there is an ongoing debate on how to address and balance competition object uh objectives with sustainability goals in in that regard there are many jurisdictions who have already taken steps uh some of them we already heard uh in in the first panel and in different approaches uh first of all uh most jurisdictions uh or many jurisdictions uh have issued guidelines on how to apply competition law to Sustainability agreements and others are working on aligning their competition policies with environmental objectives there's also agencies who have already undertaken merger analysis

uh and while anal analizing a merger uh to understand the effects of sustainability and the benefits that it could uh that those could have income uh in comparison to the possible risks from of competition um it's it's also it seems intuitive that uh competitive markets have long Shown its capacity to Foster businesses to innovate and set themselves apart from others um uh in that regard there is there is a growing demand uh for for products from consumers consumers are not given importance to products that minimize their e logical footprint uh and so companies are also

trying to win consumer preference by incorporating sustainability um factors and that to me is competition at it finest um in cofes one of our of our main objectives um When thinking about competition and and other emerging issues such as sustainability uh we want to join efforts with other jurisdictions and recognize the link between competition and sustain sustainability uh which will be a key area in our future currently in KES we are working in a document which we hope it will be published this year which explores the relationship between competition and sustainability this is our first

step uh uh what we did is we Embarked in a uh uh in a survey uh to be answered by consumers uh by companies by uh um the Civil Society by by governments to understand what is the relationship between competition and sustainability within the Mexican uh context our goal is to understand how sustainable practices uh can impact both supply and demand and to hear from concerns from all of the stakeholders stakeholders in in these markets uh recently I was I was appointed uh Vice Chair of the ICN for emerging competition issues I firmly believe that

sustainability should be one of the areas in which these uh uh efforts of the ICM should focus uh we have to learn from the experiences of other jurisdictions uh their lessons and what they have done and the taken the steps they have taken uh to to tackle these this these issues so undoubtedly uh workshops like uh the one that we are living uh today or we are having today Uh H give uh jurisdictions and inval valuable opportunity to share our experiences build capacities and Implement best practices across all countries uh that form part of the

ICN I am confident that that this Workshop will be crucial in diversifying the icn's work agenda and the fostering meaningful discussions uh to find comprehensive Solutions today uh we have an amazing panel of experts uh first of all we have commissioner riko ioki from The Japan Fair Trade Commission we also have Patrick kov who is a partner at agon legal Partners from Switzerland uh we have Nuno kuna Rodriguez who's the president of the Portugal auor conc we have fabrio card ala who is a partner at Melo Torres from Brazil and we have elizabeta yosa who's

commissioner from the Italian competition Authority thank you uh very much uh to all of you for your participation today I I'm really looking forward to hearing from your Experiences and we will start with the first round of of opening remarks which will be five minutes each uh I remind you all I think we're already learning uh a little bit late of time so I would kindly ask you to uh to keep to to those minutes and for this round we will uh begin with commissioner ioki from Japan Reiko please the floor is the floor is

yours thank you uh chair M and I also like to join you in thanking the and the I for organizing this Workshop on something that requires Global and immediate action and I'd like to share with you three initiatives by the jftc to complement or support the realization of the green Society effort the first initiative is the green guidelines climate change is a pressing issue for all countries as been mentioned before in this Workshop irres of the stage of Economic Development green transformation are initiatives to address climate change and strives to Achieve both reduction of environmental

burdens and economic growth We Believe promoting competition in the relevant markets along with regulation is essential for successful green transformation competition assists with efficient resource allocation and provides incentives to innovate to this end jftc has resorted to various advocacy tools such as publication of green guidelines guidelines makes clear Jeff TC's reasoning when applying the Anti- monthly act improving transparency and predictability for businesses engaged in gr green transformation specific Al the jftc published The Green Line guidelines in March 2023 which was to the best of my knowledge the first of its kind of its kind in

the guidelines the afdc made clear to businesses relevant Ministries and consumers that Green Transportation initiatives do not reach competition law As long as they do not restrict competition by for instance by creating new technologies after the publication based on dialogue with businesses and one prior consultation case which I'll talk about in a minute the jftc revised the guidelines in April 2024 to accommodate Speedy implementation of the green initiatives the green guidelines covers not only joint activities but critical restraints And mergers providing a One-Stop reference to businesses the guidelines include 86 hypothetical cases to make the

important points points easily understood by businesses second initiative is prior consultation prior consultation refers to confidential consultations businesses can engage with the jfd shec should they have any competitional concerns with actions they're taking or contemplating taking you could say it is our version Of the open policy open door policy which also has been mentioned by civil enforcers the jefc has expanded the unit dedicated to Prior consultation and set up a contact Point specifically for green initiative consultations with this framework the jec has provided a guide on how to proceed with green initiatives and have publish

the outlines of the consultation cases after appropriate measures to preserve confidentiality for public Reference a prior consultation from a petrochemical complex is one example the jftc made public the outlines of the case to make clear that even conduct that includes sensitive information Exchange in this case for critical which were critical for a green initiative will pose no problem under the Japanese anti Monopoly act third initiative is Market studies the jftc has been conducting Market studies are markets relevant for reducing environmental Burdens of climate change one electric Vehicles EV related markets and two Recycling services of

used plastic bottles the JFC published the market study report regarding EV charging Services twice July 2023 and may 2024 jfgc felt it necessary to publish inide short succession because the market environment of EV charging Service as well as the governmental regulations associated with them were Evolving quickly and dramatically for this kind of Market the best time to publish a complete and comprehensive Market study may never arrive accordingly the Jeff DC gave recommendations once the competition concerns were identified even before the details of the whole Market became evident this s child approach led to two rep

reports within one year the jefc also published a report on Market study regarding the recycling s of recycling Service of used plastic bottles with a very similar background with respect to Market and regulation the reports have demonstrated that promoting competition for efficient use of resources and fostering Innovation crucial for reducing environmental burden of climate change furthermore by taking into account So-Cal green washing made clear that the jdc puts priority on appropriate enforcement by traditional tools even with green initiatives in Conclusion I think these examples demonstrates that jec has success succeeded in shaking off the belief

that competition law prohibits any form of horizontal collaboration s including those necessary to achieve zerocarb emissions and that the jftc has fostered public understanding that competition is not a barrier to being trans transformation but that in fact competition law support initiative green transformation is still Its early phase JFC needs to continually review the green guidelines in step with evolving environment and concerns jftc is aware that need to keep her breast on new cases by encouraging the use a prior consultation system our engagement is particularly important since many business seem to be intimidated by the jftc

jftc also scanning the market and be ready to compile more Market studies in a timely manner thank you back to you chair thank you commissioner uh Aoki now For for the next opening uh uh remark we we have Patrick kov uh who's a partner at agon legal Partners from Switzerland Patrick please yeah dear chairwoman sh thank you very much for organizing this Workshop first of all as a former chairman for vice chairman of the SS competition agency I I will welcome uh that the Swiss competition agency has put together committee dealing with topics we are

about to discuss today and Just give me a short overview on what's ongoing in Switzerland first of all our competition act uh is applicable as everywhere else to any agreement competition agreements which have a positive ecological effect and in Switzerland as many jurisdictions know we have a list exhaustive list of efficiency reasons and by this list and the wording is formulated quite openly so the the wording would give enough room for sustainability consideration But the topic or the the the the the word sustainability is not explicit mention in our code however a case law indicates

in Switzerland that uh environmental considerations may fall within the scope of justification under the just present Ed efficiency grounds listed in our current law so and the one thing which is the one efficiency reasons which is can be used or is being used by the Swiss competition agency in its case law it's a broad interpretation Of the wording rational use of resources and indeed our our government uh when um when Pro putting together the materials uh presented by the SS Parliament said and stated that Environmental Protection reasons such energy consumption or disposal problems might be

uh might be a ground of justification but they always have to prove in the previous uh Workshop showed it you always see to to show a positive impact immediate impact being realized By the uh by the by the stakeholders uh within a certain laps of time and even our Supreme Court in Switzerland has stated that uh public goods and natural resources could also under certain con circumstances fall under the concept of resources rational use of resources mentioned in the law and even uh the improving of products uh leading to to to an to positive environmental

uh uh compatibility of products could also Fall within the scope of uh uh of U of justification and itself the Swiss competition agency has also mentioned in several several cases that in general they could imagine that uh sustainability environment arguments uh could constitute an efficieny ground however and this is I guess the problem from a now as a professor at the University teaching my students and as a other lawyer today it's quite difficult uh to to to give it advice to companies Because still we don't have any provision in our in our in our in

our law and still we are missing a little bit of clear guidelines and so we have for for the private sector still uncertainties which remains and uh so this and the reason is basically if you enter into a cooperation agreement with your main competitor other competitors that could lead to to to sanctions and this may prevent this uncertainty basically uh prevents companies of even Thinking sometimes about uh possible sustainability uh cooperation and so in Switzerland as in Germany uh we have the possibility of of asking the government the the the minister of economic Affairs to

say yes for for for for public interest reasons uh we asking you to authorize uh the certain Behavior but you know this is only possible if previously the competition agency has issued a decision of it of and forbidding and and even sanctioning the Companies so as a as as a company in the private sector you are you are fearing this outcome you know first you're engaging in something s you think which this could uh this could benefit uh the the environment however comco might see this in another way so you're getting a fine and going

afterwards after three four five years of investigating asking this withs government for an extraordinary permission of this cooperation is still too risky so and Let me just make a comparison between Environmental Protection uh laws on the one and side in competition law and usually in Switzerland at least Environmental Protection laws they just put a minimum minimum standards being being which companies had to follow and in an ideal world what would we like to have this that the private sector companies undertakings could go beyond This legal minimum standards putting in place even perhaps by thinking about

Self-regulations uh but again um if companies would like to enter into Corporation among competitors um they would have to to to overcome certain challenges jointly and the one of of the challenges you know you you have to show uh in front of the competition agency agency that uh together with your business partners that uh your cooperation is meeting certain criteria of sustainability and those they have to outweigh the Anti-competitive uh uh effects of what you are uh you're doing so in the end and I will stick to my five minutes competition law can play and

should play a complimentary role to a traditional envir Environmental Protection Law in especially in promoting a sustainability Corporation agreements and not hindering companies to enter into sustainability Corporation and uh so I guess we have to be a little bit careful and um perhaps compet in Switzerland at least the comco Could give a fill the the term of sustainability or the efficiency use of resources give give a little bit of guidelines and I guess uh everybody would benefit about on this because our economy at the very end relies on uh a functioning ecosystem and intact natural

resources if we are losing uh our ecosystem and have if we are destroying our natural resources I guess uh everybody would be pretty much uh this would harm pretty much everybody So in a in in a summary yeah yes uh competition law should play a role in promoting sustainability however the the question is how to do that thank you thank you Patrick I think uh um that is the key question uh and I'm glad that we're gathered here I think I I hope we can uh uh collect some ideas on how on how to tackle

that um next for for the opening remarks uh we have President uh Nuno Kunes for from K from the ADC Portugal no no Please thank you Andrea and thank you to the French competition Authority and the ICN for the invitation and for the opportunity to share the views of the ADC on how to use competition policy to help fostering sustainability the transition to a sustainable economy has undoubtedly one of the fundamental challenges facing our society achieving this challenge is successfully and in a lasting way involves a multitude of initiative and instruments in most cases Competition

policy is likely not the appropriate tool to address these challenges however it can play a complimentary and relevant role this involves for instance advocating for pro competitive public policies and after all ensuring that green public policies are competition friendly can be key to achieve a transition to a sustainable economy in the most cost efficient and Innovative way it also implies helping firms to avoid infringing compan Competition law rules when establishing agreements with sustainability proposes as well as providing information on exemption safeguards and capabilities so this is precisely what the ADC has done in its best

practices guide on sustainability agreements that went through the public consultation process and received contributions from the government consumer and business associations as well as the antitrust Community this guide is aimed at raising Awareness of comp companies with a less complex language it also provides examples and cases to which companies can relate to it is also consistent with the various European commission guidelines such as the guidelines on horizontal agreements and this is in our perspective importance given that we do not aim to substitute those guidelines but rather to advocate for their use and raise awareness if

we move to slide two we can See that the G guide is structur to help companies determining whether the agreement is compatible with competition law in order to provide a clearer picture of the process and simplify some of the complexity inherent to this exercise we start the guide with this flowchart then throughout the guide we follow the structure of the flowchart and its key questions first the guide explains when sustainability Agreements are clearly not covered by competition Law and provides examples second it explains when sustainability agreements May breach competition law and refers to decisional practices

of the commission and member states third the guide goes through each each of the exemptions safeguards and conditions for an efficiency assessment with detailed but simplified explanation supported in examples we finish the guide with a checklist aim at being a helpful list of Assessments that companies should carry Out to check if their agreements comply with competition law or can be Exempted or excluded from the application of competition law the idea of the checklist we have another one in consorti in public tenders and the flowchart is helping firms in self in their self assessment of their

agreements now moving to slide three our aim with the best practice guide is to raise awareness of companies to better understand what can be done in terms of Coordination involving sustainability goals this was also our approach when we issued two opinions concerning governmental proposals for strategic plans namely regarding first non Urban waste and secondly circular economy in both documents the ADC raised awareness to the commission guidelines on horizontal agreements when voluntary agreements between competitors are envisaged as it was the case in both strategic plans After all we don't not we do not want to be

in a way of cooperation amongst firms that can truly make a difference for achieving a sustainable economy but we also want to make sure that horizontal agreements do not significantly harm consumers for example through green washing cartels so the interaction between sustainability and competition is not limited to sustainability agreements the ADC has has also been Active in ensuring competition in newer markets that involve green products an example is our recent Market studied on competition in the electric vehicle recharging sector in fact transport is the sector that contributes the most greenhouse gas emissions in the EU

which is why electric vehicles have been identified as one of the key Technologies for the carbonizing the economy ensuring an Innovative dance competitive and efficient Network we Likely boost demand for electric vehicles and help replacing non non-renewable energy sources thus the ADC put forward in a public consultation a set of recommendations that aim at promoting competition in this market and which can make a difference in reaching the so-called carbon neutrality and we will soon publish the final version of these Market studies and to conclude my five minutes I'll say that competition Agencies should be vocal

in highlight ing to decision makers the importance of competition friendly Green public policies it is also important to raise awareness among firms regarding the assessment that needs to be done when establishing sust sustainability agreements with competitors and this is all from my side back to you Andrea thank you so much thank you Nuno I think you put an an interesting perspective especially of How to address it not just with guidelines and Market studies but also on coordinating and and taking action or or issuing opinion about other government proposals and other policy proposals that might have

um competition issues as as well so thank you for your opening statements uh next uh we have fabito cardim from from Brazil rabitu please the floor is yours thank you chair Andrea um i' would like to start by saying how important The topic on competition and sustainability is for the global agenda and particular to Brazil and then provide a few examples of legislation in place and enforcement actions taken by Kaji which contribute to Foster the promote sustainability goals while preserving the concerns over competition in the marketplace uh as you are probably aware Brazil has 58%

of its Continental territory covered by Forest Brazil Contains the Earth Earth's largest area of tropical rainforest 2third of the whole Amazon for for Forest is in its territory and the Amazon forest itself is home to 10% of all plant and animal species known in the worth as it's considered the most biodiverse place in the world uh with a population of over 200 million people and as the eighth largest economy in the world any efforts to develop Brazil has to be balanced to promote growth while preserving the Environment and free market and competition which I'll call

here sustainable growth uh that is why the Brazilian Federal Constitution in its article 170 refers both to free competition and environment protection as equally important among other social values uh article one of the Brazilian competition act also sets forth the economic order shall be guided by constitutional principles of free competition freedom Of initiative social role of property consumer protection and prevention of abuse of economic power uh these are all principles of the economic order in place in Brazil which shall be balanced to promote sustainable growth once settled the ESG and competition legal framework in Brazil

I would like to give two examples of enforcement actions taken by Kaji and one specific legislation passed by the Brazilian Congress uh which illustrate These ideas above the first case in 2008 Kaji has ously approved upon the execution of a merger control agreement the constitution of kol limo a joint venture created by 32 largest manufacturers of crop protection products in Brazil to operate in the recycling and transformation of PL Plastics from the packaging used by the industry uh through this murder control agreement executed with Kaji the company committed Itself to adopt several Behavior remedies in

2010 uh the Brazil National Congress approved the so-called National solid waste policy which among other Provisions established direct or indirect responsibility of all agents in the chain for the generation of solid waste uh the law also provides for the possibility of sectorial agreements which are acts of a contractual nature signed between government and Manufacturers importers Distributors and Traders sometime even direct competitors with a view to implementing the shared responsibility of the product life cycle for last last year C's tribunal approved uh without restrictions the formation of joint venture to develop and operate a software to

standardize sustainability measur in the food and agriculture supply chain in Brazil according to Kaji the possible exchange of competitively sensitive information Belonging to platform users and the joint venture Partners themselves raise competition concerns however the risks of using such information to obtain comp competitive advantages were mitigated due to the commitment set forth by the companies through contractor instruments and guidelines to comply with competition laws those examples illustrate how enforcement actions taken by the anti authorities as well as legislative Initiative by Congress can balance competition and environmental goals among other social values in order to promote

sustainable growth whenever competition and sustainability can be equally preserved that should be the decision by the antitrust authorities of course there might be also hard cases where different principles May Clash against each other on those circumstances it might not be a good idea for anti authori to take the Decision to promote other go instead of the consumer welfare as they might not have all the necessary tools to make such a balanced decision on such cases courts the executive and all legislative branches depend on the circumstances on the case might be called to act if they

had the right TOS to balance and take a more motivated decision than the antitrust authori I stop it here now but I'll be available for the followup questions thank you chair and dra Fa I think I think an interesting point that hasn't been raised out is is merger analysis so I find those those examples very very useful and then uh for for this uh first round uh last but definitely not least we have uh commissioner elizabetha elizabeta please thank you Andreas and thank you to the French Authority and the ICN for the kind invitation I'm

really happy to share the experience of the Italian antitrust Authority conc on these issues um and I I think I would like first of all you know as an economist to to sort of think of uh a theoretical perspective so theoretically the relationship between competition and sustainability can be either one of uh substitutability so a kind of conflict the more competition the less sustainability and vice versa or one of complementarities where you promote OTE competition and by doing so you Incentivize and promote sustainability I think the experience of the Italian antitrust Authority which as you

know is extremely active and does a lot of cases all the time is mainly one of complementarities I have prepared these slides which shows how over the years and the slides is just the recent years we have really used all our tools to look very carefully at issues and markets where sustainability was uh A relevant aspect and by using all the tools I think we have given an important contribution to sustainability because by promoting competition you can achieve uh uh more sustainable markets incentivizing firms to invest in new technologies ensuring that the new products and

services are offered on the market at prices that reflect consumers and ensure that the direction of the innovation in terms of Technologies is The one that benefits consumers and society as a whole so the slide here is a slide to me that makes it very clear how we really have a lot of tools available I think it's great that the commission and the member states in Europe have Dow themselves with the horizontal guidelines dedicating a section on sustainability agreements providing guidance uh Clarity and uh uh you know uh explaining how to tackle uh sustainability issues

when there is a Conflict between sustainability and competition at the same time I really believe that there is a lot we are doing and we can continue to do in exploiting the complementarities so very briefly for example in our antitrust cases we have addressed sustainability by uh focusing a lot of our attention on key sectors for a sustainable economy we've had the number of cases on The circular economy and in particular on the waste management sector and again this is a very important sector because if you can sorry not waste management waste recycling if you

can recycling waste effectively then you can ensure that producers will pay lower environmental contributions and users will pay lower prices thanks to the pass through of these cost savings and at the same time that there are incentives for new Entrance to come and provide Technologies which make the process more and more sustainable so the products overall will be more sustainable so we've had number of cases uh which uh so in the involvement of the consorta that were in charge of managing this recycling process and by intervening we've helped a liberalization process that in Italy took

place around 2005 in various markets so as to ensure that this sector Will work better than better but we have also intervened in the immobility sector by doing case two cases at the moment one which is a margin squeeze case and the other is a leveraging case or exclusionary abuse by incumbent um dominant firms we have also three excessive pricing cases in a again a key sector for sustainability which is District heating when the heat is produced by renewable or waste as this is a clean source of energy And we're looking at whether the pricing

formulas which are instead based on gas prices are generating excessive pricing we also have an ongoing case on bioplastic uh which sees uh a firm um signing a number of uh uh exclusive agreements with producers and Distributors and retailers at the same time we've had also uh the possibility to to take into account sustainability issues in our merger control I think uh um the Commission in A competition policy brief made it very clear something we we sort of agree with upon uh completely and that is that we already have uh our in a number of

instruments in merger control to take into account sustainability as sustainability is simply another nonprice parameter and we can take it into account when we Define markets when we look at the uh competition among firms in the market the barriers to entry when we receive efficiency defense By firms and when we submit remedies and in fact the authority also has a new power which is a call-in power for mergers below thresholds which allows us to ask companies to notify a merger even if the merger does not um meet both thresholds for the um compul notification and

I mention this colim power because again this is a power which we can use by directing our attention or being very careful when there is aerg below threshold they might Have implications on sustainability in one of the merges I mentioned here we analyzed looking at demand and supply side um uh characteristics whether for example a household green product was at the time we're talking about 2022 a uh um uh um a product in the same Market as the traditional product at that time we concluded that it was not but it's clear that as preference of

consumers evolve you know we may find more and more that Markets will be defined more narrowly with Greener products standing on their own let me before concluding just mention something which we see as we are in authority that also can run consumer protection cases um sanction firms or accept commitments and we do more than 80 cases a year and I think consumer protection again is another complementary tool that we must use and we use the reason being that in order to achieve sustainability you need to Induce firms to invest in sustainable products in sustainable processes

and communicate these to firms so as to get you know in a sense a return in terms of more sales but that communication needs to be um truthful if firms engage in green claims and they can mislead consumers there is going to be inevitably a lack of trust from consumers which may slow down this process where consumers are showing increasingly willingness to pay for Green products and in turn this is going to weaken the incentives for firms to invest in new technologies and in new sustainable products so the authority over the years has tackled Glen

claims in a number of cases and he also tackled which is re very relevant also now that were're talking about finally right to repair and early obsolesence the issue of early obsolescence in some of its cases back in 2018 not all these cases were uh uh um confirmed in court uh but uh again we continue to try to push boundaries using all our tools to give a contribution also on sustainability setting priorities in the sense of really looking very carefully at markets where sustainability is an important nonprice parameter and I think this is an important

way forward thank you um elizabeta uh um I think it's it's an interesting point to See uh as an a competition and Consumer Protection Agency how those issues can merge and also thank you for the um uh comprehensive approach or the overview of how the Italian competition has has approached it I I will now continue uh with you uh for the questions um as as we have seen from your from your uh opening remarks and and as we have also read the Italian competition Authority has also has actually addressed quite a Lot sustainability in several

cases and in fact uh as far as I understand sustainability is is listed as one of its main action lines in its latest annual report um Absolut uh highlighting the the close compliment complimentarity between competition and environmental uh protection um can you please tell us a little bit more about those cases and the approach that the the commission has fed to take into account uh these issues right yes um um so um as I Mentioned um for example let maybe let me talk about mergers in uh um in this merger involved a clean uh uh

a green product we looked at um the market definition to try to assess whether there was uh a separate market for the green product so we uh through surveys we looked at the um sub substitutability between the Green product and traditional product so as to make assessment on demand side um effects demand side characteristics and also we Looked at the supply side characteristic of the market uh where for example at that time we found that they were using a traditional products and green products were using exactly the same uh production plants so at that time

we concluded that they were not separate markets but as I mentioned it's a nonprice assessment which I can do and I which we can do and I think over uh the next few months we may see other merges where the um markets instead might be Defined more narrowly precisely because consumer preferences are evolving and the willingness to pay for consumers which is the driver the pull factor in all this will be higher perhaps therefore we might be able to dentify markets for sustainable product or green products more than we can do now in terms of

antitrust cases Andreas these were standard antitrust cases the issues we looked where like exclusionary abuses Rising rival costs excluded dealing Abuse of rights as as exclusionary abuses or exploitative abuses like excessive pricing so it was the not the day-to-day business but it's clear that if the markets which is uh um offering a a product or uh is recycling products that uh uh gives an important contribution to sustainability and I think Nuno and REO made this point very clearly when they talked about EV uh recharging then the your day-to-day action Can have an important impact and

in fact I'm pleased to see that we're all looking at recharging over electric vehicle they're doing it as advocacy we are doing it as cases but I think all the instruments all the tools should be used placing particular attention when the market is relevant to sustainability but otherwise it's just a business as usual although it is not as usual usual the fact that we place a lot of attention as you mentioned Sustainability is one of the things we report upon in our annual reports to the parliament as we place a lot of attention to markets

or products W which have positive implications on sustainability thank you uh elizabeta I I'm afraid we have to change a little bit uh the order that uh in which we were uh agreed uh because because I think uh Patrick has um uh a little Logistics uh problem so Patrick I will start the the second question uh the Second question will now go to you uh uh the this you you mentioned something uh um you gave us an introduction of what's been happening uh in the Swiss author but um the Swiss competition commission has publicly advocated

for Sustainable Solutions that comply with competition rules uh such as the case of the review uh I think the Swiss Bankers Association ESG documents in March 2023 this is just something that uh I was reading and I found quite interesting but from your Perspective how can competition law complement traditional Environmental Protection Law to enable economic uh selfregulation can you maybe provide us with an example of where this approach has been successful yeah thank you very much uh for uh your uh giving me the floor I'm sorry I I'm at the airport and as scheduled uh

that we have our Workshop until uh 3:15 and um so what can uh competition Agency what can they do in uh worldwide I I say it's as as a the chairwoman of the Italian competition agency said in a very clear way I guess it's a combination of advocacy on the one hand side and exan guidance which this could be the most fruitful uh way of of of work right now before having clean case laws uh in Europe and in Switzerland and uh such a such a mix of of of advocacy and other tools could eliminate

some fears of of of the Economy of private sector regarding sustainability initiatives and so on so such guidelines by competition authorities can help undertakings to evaluate a little bit the planned initiatives and to assess the the the legal risk just give me just just an example of one case we had uh recently uh it's it's it's it's a undertaking in in dominating the market and they wanted to implement a a bonus Milo system regarding uh requirement of Sustainability and they wanted to reward business partners if they cause less uh less emissions by using e Transportation

uh compared to to to to to the traditional way of transporting and um at the very end you know uh when the agen is telling you yes we need to have a clearer look uh what are the anti competitive effects of this is yes we see the pro competitive effects and I guess with the with the kind of this was what what was told the company and at The very end uh the company said no the risk is too great we don't run as a dominating comp company dominating the market we are not going to

make the first step we leave it to this to the government ments deciding what they want as a minimal requirement so and the other one the other example which is known by all my panelists today the Uno United Nation initiative Net Zero Insurance Alliance where several insurance Companies aim to go beyond minimal standards collectively but at the very end couple of of states in the United States they they fight a claim and and and saying it's an anti-competitive initiative and then the one after the other insurance just left left these initiatives I guess as as

the chairwoman said I guess it's it's it's uh basically advocacy taking away the fear and and and and and promoting that uh the willingness of a competition authority To really have a an open approach to such initiatives and not to say you if we are not sure the if you're not sure about about about uh about what you do just drop it I guess the competition Authority in advoca advocating should say do it and and if if if if there's no clear violation and obviously large companies make a proper assessment if there are not clear

violation or if there are not not if if there any doubts we are not Going to punish you afterwards if you have a little bit of doubts uh about the weighing anti-competitive effects on the one hand side and and sustainability effects on the other hand side because this is what the private sector would like to happen uh thank you thank you pck thank you for giving us uh the the perspective of the private sector we hope you have a safe flight uh and we're sorry for running a Little a little bit out of time thank

you uh and now uh going about to to our original original programming fabrio Fabo uh um you you mentioned in your in your first intervention some quite interesting cases regarding merger review uh or joint ventur that that can touch upon the intersection between competition and and sustainability uh uh can you can you please uh tell us a little bit more you you mentioned the campino case which was A collaboration between uh competitors in the agrochemical sector can you tell us a little bit more about uh this presedent uh and there there any lessons for other

jurisdictions that we uh should take from from this experience sure thank you uh chair Andrea so as I mentioned before uh the KOLO Case established the K's first precedent regarding collaboration between competitors for the adoption of joint measures in favor of sustainability and Environmental Protection in Brazil uh throughout the merger review of the case uh the antitrust authorities in Brazil raised concerns uh on the the merger based on the fact that for out of the 32 shareholders at kulo namely they were buyers inenta Millennia and Bas in Brazil they would control the company and together

they held 49% of the National Market of crop protection products in Brazil so according to that view there would be an increase in the Coordination incentives between these companies uh however uh K's tribunal in its final decision consider that the minority shareholders of company uh would have uh sufficient defensive mechanisms protected by corporate laws in Brazil to control any abuse of power by the these men shareholders of the company uh in addition K tribuno considered also that the corporate governance set by Theo company including the implementation of a compliance Program as set in the merger

control agreement was robust enough to mitigate the competitive concerns that were indentified during the mer reval um when I was working for for the merging parties on that case uh I remember many of the shareholders saying that the deal was being made exclusively to protect the environment and never to violate in the TR laws and for that reason they were really open to take any commitments that kaj deem necessary at The time uh fortunately for the reasons explained before we were able to convince Kaji that all the corporate governance created the uh was good enough

uh this was the case a case in which one could clearly see that all stakeholders shareholders the agency the de agents lawyers Consultants were all working hard to make the deal happen due to its social environmental impact and willing to take any measures necessary to preserve competition Conditions in the markets involved uh I think this is a key and important lesson that other jurisdictions could could learn from this experience uh and after this precedent there were several other joint ventures or even sectorial agreements under the national solid waste policy in Brazil which were scrutinized by

Kaji under the same legal framework uh I think they all influence to the same uh sustainability Focus initiatives in Brazil uh thank you chair Andre thank you facio uh and thank you for for giving us more detail on on this on this this interesting case uh and now I I will go back to to Nuno um uh Nuno you you mentioned in your first intervention uh the the recently um submitted best practices on sustainability agreements guide to to public consultation um which as you mentioned competition uh is seen as an essential tool for incentivizing companies

to promote more sustainable Products or production processes um uh you also mentioned uh uh the the work that you're doing on on Electric Mobility could you please elaborate a little bit more more um on that and and also how did the ADC identify and engage with relevant stakeholders and how have uh the recommendations been been received by them yeah thank you Andre for the question uh the adc's recent public consultation into the market study on Competition in the electric field C recharging sector was our most participate public consultation so in addition to the opinion that

came from the energy regulator s we received 183 contributions from different types of stakeholders so this participation illustrates the high level of interest in this sector indeed sales of electrical vehicles in Portugal continues to rise in the first quarter of 2024 electric vehicles represented Around 28% of the total sales and so so we need to make sure that there are no unnecessary barriers that limit a swifter adoption of this technology by the consumer so one of the barriers that was identified by the ADC studies is the difficulty users have in making payments and comparing prices

in in charging of electrical Vehicles these difficulties were also signaled by various consumers and associations that took part in the public Consultation in fact in Portugal users have a contractual relationship with the retailers of electricity for Electric Mobility and that limits the ability to compete for users of charging Point operators so accordingly in this study the ADC recommended speeding up the process of implement implementing adoc recharging this system would allow consumers to pay in an easier way without having to sign a prior contract With the Electric Mobility supplier while ensuring greater price transparency these difficulties

are also associated with the complexity of the Portuguese organization model which is quite unique in Europe so while the Portuguese model presents advantages such as interoperability given that all electric vehicle users can recharge their car in any charging station it comes at the cost of complexity for the system and Users so the implementation of adoc recharging will be an important way to to make the sector more attractive and simpler while main maintaining interoperability for charging Point operators to be able to offer a range of variet offers directly to Consumers and with incentives for Innovation it

would be important also to follow closely the European model where it is possible to choose the supplier on an adak basis similar to the way gas stations operate This was in fact the most debated recommendation in the public consultation and in in our view it will bring the Portuguese model closer to the predominant model at European level because we all know that the European model is established in the alternative Fels infrastructure regulating regulation sorry concerning recharging stations with the consumer benefiting from the advantage of a greater variety of offers still as the European Regulation has

a phase implementation period the ADC is recommending its application as soon as possible another barrier we have identified relates to the legislative framework in force which has made it possible to extend the scope of subc concession contracts for Motorway service or refueling areas in order to cover also the installation and operation of charging points knowing this we recommended that at the term of these contracts there should be separate Public tenders just for the installation and operation of charging points of on motorways differently from refilling erors in order to open up those markets to competition our

recommendation is aimed at the future contracts and will likely boost competition in motorways the majority of the respondents did not raise specific issues in this regard but it is not sufficient to have an Innovative competitive and efficient Network it is also necessary to ensure that charging infrastructure is available throughout the country where consumers need it to do this we need to mitigate the geographical symmetries in network coverage and here municipalities have a very important role to play and this was another recommendation from the ADC that was generally well received emphasizing the importance of intermunicipal mechanisms

that make the entry of Operators simpler and clearer these were just some of our recommendations and the feedback we received from the public consultation was very good and we will publish in the short term the final versions of the study so back to you Andrea thank you Nuno uh I think we're looking forward uh to to reading to the final version of of of the study and uh and now we will we will wrap up the last question with with commissioner uh Reiko U commissioner AI the jftc as as you mentioned already has been very

active on the sustainability fromont from from issuing guidelines to Market studies uh and already reviewing your your your guidelines can you can you please give us some some insights uh from the J FC's experience with the green guidelines and the market study on EV related cases and maybe you can you can tell us a little bit of how these initiatives have influenced the jftc approach to Sustainability and competition policy thank you Andrea for the question uh you said uh Jeff J's experience now GRE guines and E Market study have giving has hided to us we

have learned in other words that identifying and understanding the real needs of businesses is very important and to this end engaging in constant dialogue with business and trade Association was critical for the as a result of the dialogue with the businesses we revised It in our a very prompt manner as I already mentioned and we also increased the number of hypothetical uh cases to from 76 to 84 and this was appreciated by the Japanese business uh Community immensely and for the market study on EV related markets it was also important and the real market conditions

which was possible only by talking to the businesses involved I was listening to a nuno's um answer answer to your question just now About the E markets and realize how the mark different from what the Japanese Market looks like although some of the problems like method of payment and long-term contracts is the same and I uh also learn family said that there an ongoing case against uh even charging stations in Italy and I I'm quite sure that gas stations petrolum refueling stations in all three countries are very very similar but the EV Market charging Markets

are very because the Technologies are still still developing and the market structure is still uh developing including the the supply and supply of charging stations and in order to understand what's going on it really is important to listen to the stakeholders to understand their uh real uh needs of uh as well and this is not a trivial matter it's easier than that precisely because the technology and the market is still evolving and this is Something that we learn JF learned from its own experience of publishing guidelines and Market studies and also from this Workshop thank

you thank you uh thank you Reiko for your very uh I would say precise uh comments and time uh brief because we are running a little bit late and out of uh and and out of time uh I would I would again like to uh thank you all for your for your participation I think this panel managed to give uh again a Comprehensive approach uh from guidelines or or advocacy point of view to Market studies to uh JVS and and and merger analysis and also include the the perspective from the private sector which as as

I think Reiko pointed out it is key to listen to All of the stakeholders so I will I will wrap it up uh given that um we are uh running actually quite late and thank you thank all of you thank the ICN and and again thank the the auor of of the concr for Organizing this panel I will now uh pass the floor to the chair of the ICN to to andreasm uh who will give us some closing remarks thank you [Music] [Music] yes hello everybody warm welcome uh for the final for the final speech

today first of all of course I would like to thank benoir and the aor for organizing this great event on on sustainability this great Workshop we have had great we Have seen two great panels um and we have lot we have learned a lot about how competition agencies worldwide uh and legislators by the way are dealing with this topic with regard to competition law um the topic remains important and we should not uh have any false conclusions from the fact that the topic maybe is a little bit less in the public ey today the outcoming

EU commission has been focused on sustainability um Olivier said a lot About that already with regard to the green deal the new period the new commission will focus on competitiveness but I firmly believe that this shift of focus does not mean that the topic is of the agenda we see this environmental changes around the world the US finance ministry called in a emergency meeting last week together with development Banks from the Americas from Asia from Africa and Europe it was truly Global to disc discuss the devastating heat waves In many parts of the world especially

in poor ones but also others to provide Financial Resources to these countries to protect people from the heat to adjust to the Heat and to reduce the damage that is done by the heat there are heat waves from the east coast of the US uh to India and it is not only that this issue is not going away it is becoming increasingly important in all policy areas and of course it is also becoming more Important in the area of competition law and policy and this is why we really need to deal with the topic at

the global scale in the ICN this is by no means the first session that we have in the ICN on sustainability and we are by far not the only International Organization uh that is dealing uh with that with that topic anet is active it has published the report competition and consumer protection policies for sustainability In 2023 and also the oecd is dealing with it in roundtables in hearings in papers uh from 2020 until today AI has reported on that and we in the ICN we've been dealing with the topic since 2021 we did a survey

and a report on environmental sustainability and competition policy led by our Hungarian colleagues for the annual conference in 2021 we had an head of agency session in the ICM conference in Barcelona in 2023 Which led exactly uh to the workshop that B and his team are hosting today and I think it is so important that we deal with it because one thing is for certain achieving sustainable de velopment that is really protecting the planet we live on requires a global effort no country can do that alone I would say I would go further not even

a continent uh can do this alone and this is maybe why the ICN with its 140 members is prone to deal With the question of sustainability um with all our eyes on sustainability we must not lose out of sight also to enforce competition it must go hand in hand and I think this is the key message from the event we're in today first competition does not only not stand in the way of sustainability I think effective competition is the key part of the solution because sustainable ability needs and requires Innovation it Cannot be achieved without

it and Innovation only emerges from competitive environment the second factor is it is not just price or quality That Matters to Consumers it's also more and more sustain sustainability sustainability is something that consumers want and more and more consumers are willing to pay pay a premium for that and this development that there is a certain willingness to pay and to change among consumers it may be too slow it may be Not far-reaching enough for many consumers the premium should be low it is not everyone who's paying for everything but things have started to change so

sustainability is moving into a competition parameter and we have to take account of it in our daily work so where does sustainability play a role in our day-to-day cases in fact in all areas look at merger control maybe the most difficult area uh where to include sustainability in our assessment but I Remember the Takeover of Monsanto by buyer in 2018 18 and myself um was at a hearing then in German Parliament on that case uh the European commission had considered the potential impact of a possible reduction in competition on Environmental Protection and the climate but

the commission also had stated by then I quote other concerns raised by petitioners relate to European and National rules to protect food safety Consumers the environment and the climate while these concerns are of great importance they cannot be the basis of our merger assessment I still do believe to a certain point this is State the still State ofthe art I personally believe that sustainability is not easy to include in merger assessment because this is exactly about the increase of Market power and thus on competition issues there is room for environmental Effect efficiencies maybe to a

certain extent and I think to which extent will still be the subject of further uh of further studies sustainability and that has become also clear today in in our event play a greater role in the assessment of Corporations indeed uh green agreements need to be assessed on the case by case basis uh there are many ways to reach the goal uh at the EU level the commission applies article 1013 sustainability is part of the horizontal guidelines of DG comp there is a new soft Harbor it works with criteria like openness nondiscrimination no exchange of sensitive

information no significant price increase criteria that have been applied by the bundes celant and many other competition agencies worldwide since a long time uh the EU is taking an approach that looks at efficiencies at different Layers they are the classical in Market efficiencies consumers get better and cheaper products they look at the higher willingness to pay as consumers get more sustainable products and it looks at Collective benefits so to say a new type of out of Market efficiencies decoupled from Individual products consumers only profit as a larger part of the group there has been a

strong call today by by many I heard during the uh the panels that companies need guidance by Competition agencies we at the bundus catelan we do not have guidelines yet but what we do is we give advice to companies coming in asking us is this project in line with competition law because I want to set up something that is promoting sustainability we give exact advice to these companies so I can only call on everyone who wants to talk to us in Germany please come in um we give you advice if you can do certain projects

uh with regard to establish Sustainability secondly we have had many cases in Germany maybe um no maybe we have had many many let's leave it to that you can read about them in press releases you can read about them in case reports um we we are very active in advocating that sustainability is a part of our assessment to a certain uh degree and we try to to to promote and to make advocacy for companies that we are very much willing to give guidelines in Individual cases there have been no formal EX exemptions uh that have

been granted so far based on efficiencies um but we do a thorough review within our discretion if or not we want to take up a case or not and thus we try to provide guidance in individual cases based on De deliberations that are very similar to the horizontal guidelines of the European commission the key case in Germany just To give an example was an initiative on Animal Welfare it was an alliance of Agriculture companies the meat industry and food retailers the goal was to reward companies for improving animal welfare and the core element was a

payment of the uniform price premium per kilogram of meat sold the so-called Animal Welfare fee you see all Market participants had to pay an additional fee so if you look at it at first glance it looks very much Like a very broad catel agreement and to a certain extent it is but it has been tolerated by the monus catel um for over 10 years despite our competition concerns and it was necessary in our assessment to design a future competitive financing model also in order to achieve sufficient Market coverage which was and that is the good

and excellent message about this case which was finally accomplished and therefore the mandatory Price surch charge was given up at the end of 2023 an excellent example for avoiding a first mover disadvantage another case example was the agricultural policy project dialogue on milk here Farmers dairies and food retailers came to us and asked for advice advice because they had agreed to pay premiums on the price charged by raw milk producers the aim was to generate a higher income to invest more in sustainability in that case uh the Agreement was rejected by the bundas catell for

us it was too vague too AAR there was no guarantee that there was really a link between a higher income and a higher green investment and we even raised here the question of green washing so what you see from the two cases competition law Works um meaningful and truly sustainable projects are feasible and we are able to differentiate them projects of which we think they might liely in the line of Green washing what now come now comes on top of the EU there are some new regulations in the agricultur area um that hasn't developed its

full force yet there is a new regulation in the common market organization of agriculture products a blanket exception from article 101 for producers of uh agriculture products for agreements that are indispensable to meet certain sustainable ability standards like Environmental Protection Animal Welfare Or the reduction of pesticides um the consumer is not mentioned uh in this regulation competition is not mentioned in this uh regulation it's in Star contrast of article 101 and it allows for uh agreements hardcore agreements in all sense and we will see where uh this will take take that so to conclude I

I would like to emphasize again it is very important that we continue to deal with Sustainability that we deepen the international Dialogue on this because we have complex questions at at hand in some cases and I think it's best to deal with them together in order also um to to uh to make sure that we do not have have what I think Olivia has alluded to a mismatch of ideas of approaches of cases and that it is not clear for companies what they really can do in the name of sustainability and what they should not

do and secondly very Important we must leave room for competition have the Innovation we need that is sustainability thank you very much P thank you uh again to you and your team and thanks for having me today [Music] [Music]