“European competition authorities have found a proven way to grab headlines: confronting American technology companies. Every new investigation generates headlines, political acclaim, and institutional prestige. However, the costs are not borne by Silicon Valley, but by European households.
Competition policy once pursued a modest goal. Authorities acted as referees; they protected the competitive process, allowing companies to vie for customers through lower prices and better products. This model worked because it eschewed grand ambitions. Regulators did not design markets; instead, they kept them open and allowed competition to take its course.
This restraint is fading. European enforcement efforts increasingly aim to engineer outcomes rather than preserve competition. Authorities now pursue objectives that properly belong to data protection law, industrial policy, or social regulation. They attempt to steer market evolution—at times even slowing down change to protect weaker companies. The name remains ‘competition policy,’ but its function has transformed.
Such a shift might be justifiable if it yielded clear benefits. However, this is not the case. Prices have not fallen as a result of these interventions, nor has innovation accelerated. Instead, national authorities are conducting overlapping proceedings based on divergent theories. Europe now faces a dense patchwork of regulations that vary from country to country yet target the very same companies.
Germany exemplifies this trend. The Federal Cartel Office recently took issue with Amazon over the design of its ‘Buy Box’—the feature that directs buyers to a selected offer. Amazon’s algorithm highlights price-competitive sellers. From an economic perspective, this system steers consumers toward lower-priced products.
The authority, however, interprets this same mechanism differently.” By demoting higher-priced offers—so the argument goes—Amazon discourages merchants from offering lower prices on competing platforms. It treats the ranking system as if it were a disguised "most-favored-nation clause."
This line of reasoning prioritizes theory over observable behavior. Steering buyers toward better offers typically intensifies platform competition and lowers prices. The German ruling, however, instead pressures Amazon to reduce the weight given to price in its rankings. The immediate result is clear: consumers are more frequently confronted with more expensive offers. A policy intended to protect buyers now threatens to harm them.
Germany is not alone in this regard. Authorities in Italy and France have also initiated proceedings against digital platforms, based on increasingly speculative assumptions of harm. Each individual case may appear limited in scope; taken together, however, they generate regulatory competition among national enforcement agencies, all of which claim jurisdiction over the same global services.
This pattern continues with the European Commission. It recently concluded that WhatsApp’s terms of service restricted competition from AI services. This assertion stands in tension with market reality. Meta remains a minor player in the field of generative AI, while companies such as OpenAI, Anthropic, Google, xAI, and numerous Chinese developers compete intensely with one another. The sector is evolving rapidly. Targeting a peripheral player ties up scarce enforcement resources and suggests a certain disconnect from actual market realities.
Companies clearly understand the signal. Innovation in Europe is fraught with legal uncertainty. Firms are responding by launching new services elsewhere first. Advanced features—ranging from AI assistants to autonomous driving systems—often appear months or even years earlier in the U.S. or Asia than in the European Union. This delay reflects regulatory risks, —not, for instance, technological capabilities.
The timing is unfavorable. Europe is already grappling with sluggish productivity growth and limited investment. The Draghi Report on European competitiveness calls for policy measures that foster innovation and scale. Current enforcement practices, however, are moving in the opposite direction. Authorities treat new technologies with suspicion from the outset, requiring companies to demonstrate regulatory compliance even before market launch.
The consequences extend beyond individual cases. Overlapping investigations and inconsistent remedies fragment the internal market. Compliance costs are rising. Smaller innovators, in particular—precisely those companies that policymakers aim to support—bear the heaviest burden.
None of this implies that competition law enforcement should be abandoned. Genuine abuses of market power warrant sanctions. However, effective enforcement requires restraint. Authorities must distinguish between conduct that harms competition and conduct that merely disadvantages competitors. Lower prices and superior products are, as a rule, signs of a functioning competitive market.
It is understandable that European regulators, in an era of digital disruption, seek to assert their influence. Yet, expanding their powers carries risks. When authorities attempt to engineer market outcomes, they substitute administrative control for competition. Consumers are thereby deprived of the benefits of experimentation and price competition.
Europe now faces a clear choice. It can continue to treat major technology firms as targets and markets as objects to be engineered. Alternatively, it can return to the original promise of competition policy: neutral rules, predictable enforcement, and open competition. Only the latter path fosters innovation and consumer welfare.
Competition policy should ensure that the best offerings prevail. If, instead, authorities penalize companies for providing superior offerings, the outcome is predictable: companies will adapt—but consumers will pay the price.
Dirk Auer is Director of Competition Policy at the International Center for Law & Economics in Portland, Oregon. He also serves as an Adjunct Professor at the University of Liège in Belgium, where he teaches competition law and the economics of antitrust.
“Competition policy should ensure that the best offerings prevail.” [1]
1. Für Europas Big-Tech-Regulierung zahlen die Verbraucher. Frankfurter Allgemeine Zeitung; Frankfurt. 19 Feb 2026: 18. Von Dirk Auer
Komentarų nėra:
Rašyti komentarą