The environmental and economic transition largely depends on the ability of companies to combine their efforts, to work together, sector by sector, and throughout their supply chains to create economies of scale in common infrastructure, technologies, practices, R&D… Finding new solutions, particularly for carbon-free energy, waste collection and recycling, water treatment, implementing reuse, developing repair… In all these areas, alone we may sometimes go faster, but together we certainly go further!
Many companies have understood this, but others are only entering into it reluctantly, driven by old habits but also by a fear with a terrible name: "competition law"! Indeed, groups working together, meeting, agreeing on certain technical solutions, or on factories to be built can resemble practices long prohibited, known as "cartels," "trusts," or others.
Solutions exist. Making highly competitive entities work together, as has been successfully done, for example, in the cosmetics sector, involves creating consortia, sometimes called coalitions, that bring together sector leaders, large or small. This enters the realm of "coopetition," particularly suited to the complex demands of the green transition. This "coopetition" is now, rightly, valued to a certain extent. At least in Europe, regulations and administrations are proposing to establish roadmaps, coordinated plans, in short, to act as a pack!
The European Commission published in June of this year its new guidelines, with a title not easily accessible to the average person: "Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements." This 167-page report is valuable. As its name does not indicate, it specifies under what circumstances and limitations competing companies can work together in apparent contradiction with the usual rules of competition law, provided it is "for the good cause." That is, to promote sustainable development, the transition, the fight against pollution or global warming, circularity in general, and ultimately, the consumer. Because that has always been the purpose of competition law, at least in Europe: consumer protection and the pursuit of his interest. Dare we say that there is therefore no real contradiction between the principles guiding the transition and those of competition law? It is up to you, readers, to judge!
The appointment in September 2022 within the Competition Authority of a "sustainable development network manager," Elise Provost, to facilitate the adaptation of competition analysis to new challenges, testifies to this. If the Authority still pays particular attention to the most damaging anti-competitive practices in environmental matters and to "greenwashing" behaviors, it also now ensures it supports companies wishing to promote virtuous behaviors, in line with the spirit of the new horizontal guidelines of the European Commission.
Since prevention is better than cure, the Competition Authority now practices an "open door" policy, allowing for "ex ante" referral to verify in advance that a project for pooling efforts with a real impact on the transition does not contravene competition law rules. In case of doubt, it is better to contact this new "desk" rather than give up on a virtuous project! A public consultation is open by the Authority until February 24 if you wish to give your opinion on the method.
Organizational models (consortia), legal reassurances (Competition Authority), companies would be wrong not to allow themselves to invest in "coopetition." The deterrent could be the American model which, in the name of competition, aims to slow down cooperation. Recently, a new step was taken by the Judiciary Committee of the House of Representatives, which issued subpoenas to two organizations – the Glasgow Financial Alliance for Net Zero (GFANZ) and As You Sow – suspected of "potentially violating" antitrust law by encouraging corporate collusion to achieve carbon neutrality… We can see the divergence in approach on both sides of the Atlantic: in Brussels, the sacrosanct rules of competition are being relaxed to favor the transition, for the benefit of the end consumer, and incidentally the planet, while in Washington, the opposite is being done by attempting to strengthen antitrust laws or something approaching them to better protect competition between companies…. Or more cynically, to slow down the transition?
But beware, there is no naivety in the European approach or in these lines… On a daily basis, creating a consortium requires very detailed contracts, experienced lawyers, flawless management of confidential information, votes that are not necessarily unanimous, facilitation that respects sometimes contradictory requirements of each party, unprecedented intellectual property rules, open source testing standards… Pure and perfect competition had better watch out: competition law, in France and the EU, is not, or is no longer, an obstacle. It remains to be made known!
Géraldine Poivert, President and co-founder of (RE)SET, an integrated consulting firm dedicated to economic and environmental transition, France 2030 Ambassador, member of the National Council for the Circular Economy, and member of the Board of Directors of INEC.
