Remarks by Executive Vice-President Vestager on the Communication on a competition policy fit for new challenges

“Check against delivery”

Today, the European Commission has adopted a Communication on a competition policy fit for new challenges.

The Communication frames the important role of competition policy for Europe’s path towards recovery, the green and digital transitions, and for a resilient Single Market.

It passes two key messages:

First, strong competition enforcement is fundamental for businesses and consumers to reap the full benefits of our Single Market. It gives businesses of all sizes a fair chance to compete. It makes sure businesses are challenged to deliver the best, most innovative solutions for consumers. And it gives customers a choice of products and services, contributing to reliable and diverse supply chains. That’s why effective competition policy is needed now, more than ever, to give the European economy the agility and drive to overcome the challenges it faces.

Second, competition rules have an in-built flexibility to adapt. Also today, we have adopted the sixth amendment of the State aid Temporary Framework that has enabled Member States to provide necessary support to businesses during the pandemic. And we are in the middle of a review of competition policy with unprecedented scope and ambition: to make sure all competition instruments remain fit for purpose – namely merger, antitrust and State aid control. And to complement the toolbox with new instruments to tackle foreign subsidies or digital gatekeepers.

Let me start with the State aid Temporary Framework.

When the pandemic hit in March last year, our lives changed almost overnight. We were asked to stay home, shops and offices closed, factories stopped operating. Without extraordinary public support, otherwise viable companies would not have survived.

That’s why the Commission put in place the Temporary Framework using the full flexibility of State aid rules. That happened within weeks. It enabled targeted and proportionate support to businesses in need, while putting in place safeguards to preserve the level playing field in the Single Market. Since then, in close cooperation with Member States, we adopted more than 670 decisions and approved over 3.1 trillion euros of State aid across the Union.

Today, we have prolonged the application of the Temporary Framework for six months, until the end of June next year. This reflects the feedback received from the majority of Member States.

On the one hand, the limited prolongation gives the opportunity for a progressive and coordinated phase-out of crisis measures, without creating cliff-edge effects. This reflects the projected strong recovery of the European economy overall.

On the other hand, we will continue to closely monitor the worrying rise in COVID-19 infections and other risks to the economic recovery.

And to further support the recovery, we introduce two new tools to kick-start the economy and crowd-in private investment for a faster, greener and more digital recovery. They will have a longer duration than the crisis measures.

First, enabling Member States to create direct incentives for private investments. This can give a push to companies to start filling the investment gap left by the crisis. The tool provides flexibility based on the specific needs of Member States. For example, it can support re-tooling of production lines in view of current supply shortages. It may also be used for investments to further improve energy efficiency, or to upgrade the digital equipment companies need today and in the future. In order to avoid undue competition distortions, the support must be widely available to a significant number of companies.

Second, we introduce a solvency support measure to improve access to equity finance for smaller companies. It enables Member States to give guarantees to dedicated investment funds. This will make it more attractive to invest in these companies, because it reduces the risks for private investors.

Europe can only recover strongly, if we recover together. This is also true when it comes to tackling the challenges of the green and digital transition. Profound changes are required to make sure our economies are future-proof.

Also here competition policy has a role to play. With this in mind, we are currently reviewing more than 20 sets of competition rules and guidelines, across all competition instruments.

For example, the new Climate, Environmental Protection and Energy Aid Guidelineswill support the decarbonisation of production processes of industry in line with Green Deal objectives. And it will facilitate support for clean mobility and energy efficiency of buildings, as well as a sustainable use of resources in an increasingly circular economy.

For competitors that cooperate to develop more sustainable or more innovative digital products, we will provide guidance and legal certainty through the ongoing review of the Horizontal Block Exemption Regulations and Guidelines.

And as always, the proof of the pudding is in the eating. Enforcing antitrust rules is at the core of what we do. We are investigating one Facebook, another Google, two Amazon and three Apple cases. It was good news that the EU courts last week upheld the Commission’s 2017 decision that Google abused its market dominance, by favouring its own shopping comparison service.

This experience from competition enforcement feeds into our legislative work, such as the Digital Markets Act. Once adopted, it will set the do’s and don’ts for large digital platforms.

I would now like to turn to the contribution of competition policy to a resilient Single Market. It won’t surprise you that I firmly believe that resilience is based on open and competitive markets. They provide for predictable market conditions for companies to thrive in, by offering innovative products and services at affordable prices. Open and competitive markets work in favour of strong and diversified supply chains, and prevent fragmentation of the Single Market.

And where the market alone does not deliver, because the risks are too large for a single Member State or company to take, our State aid rules can offer solutions. For example, the rules on Important Projects of Common European Interest – the so-called IPCEIs – enable Member States and industry to jointly invest in breakthrough innovation and infrastructure. At the same time, they ensure positive spill-over effects for the EU economy at large.

The ongoing review of these rules will maintain its existing scope. We are just making targeted changes, for example to improve the openness of IPCEIs and further facilitate the participation of small and medium-sized enterprises. On this basis, we will continue to actively support Member States. They are designing additional IPCEIs in the areas of microelectronics, hydrogen, cloud and health.

Finally, a few words on microchips. They are currently in the spotlight due to several extraordinary factors.

The global shortage has exposed the importance of this industry across a broad spectrum of the European economy, from automotive to consumer electronics to pharma. This is complicated by a very concentrated market with high barriers to enter, and a specific geopolitical context. This is the background against which the President in her State of the Union speech announced the European Chips Act.

In light of all these factors, the Commission will consider approving support to fill possible funding gaps in the semiconductor ecosystem, in particular for European first-of-a-kind facilities. That can be as regards the scale of chips or other parameters.  This assessment will be based on the EU Treaty, which is what we always do, if there are no State aid guidelines that cover such measures.

There are strong safeguards to ensure such aid is necessary, appropriate and proportionate, and undue competition distortions are minimised. Benefits must be shared widely and without discrimination across the European economy. And each case for the supply of semiconductors will be rigorously assessed based on their own respective merits. So as to ensure that projects have a European nature and avoid a subsidy race within the Union and beyond.

Indeed, self-sufficiency is an illusion. When you think about the scale of what is needed, it is clear that no country and no company can do it alone. But we cannot rely on one country or one company alone, either. That’s why the aim should be diversification among like-minded partners, to build resilient supply chains, and avoid single points of failure.

To conclude, competition policy remains a tool that serves the needs of European citizens – as consumers who benefit from lower prices, wider choice and higher quality; as workers who benefit from a vibrant labour market; and as business owners who benefit from innovative, diverse and reliable inputs, and a level playing field.

Thank you.