Competition lawyers and economists from across the EU – including partners at magic circle firms Allen & Overy (A&O), Linklaters and Slaughter and May - have warned against proposals for reforming competition law which they say could ’soften or politicise’ enforcement.
In an open letter published today more than 90 signatories warn that companies value the fairness and predictability of the current EU system and that any change could weaken the system.
The suggested changes, in a manifesto published by German and French ministers last month, were sparked by the European Commission’s decision in March to block Siemens’ proposed acquisition of engineering giant Alstom under the EU Merger Regulation. The commission said the merger would have harmed competition in markets for railway signalling systems and very high-speed trains.
After the block, German and French ministers set out a 14-point manifesto for a European policy they said would be ‘fit for the 21st century’. Proposals included updating merger guidelines based on a global rather than the European level and giving the European Council the right to override some competition decisions by the commission.
The open letter notes that the European Council has suggested that ‘some, as yet unclear’, changes will be included in future competition policy and warns that the proposals risk benefiting only a small number of larger EU companies, would undermine competitive markets in the EU and put legal certainty at risk.
The letter says: ‘Improving European competition law should not mean abandoning tried and tested sound legal and economic analysis. Weakening this system — a system that has been admired and copied by many newer competition regimes around the world — will not lead to “a fairer and more effective global level playing field”. We do not believe that shifting the emphasis of European competition law bargaining power away from European consumers and other economic operators and applying different rules to European champions is the right policy or economic approach.’
It adds: ‘The undersigned are all lawyers or economists, many practising competition law and advising companies — national, EU and global — on merger enforcement. While no system is perfect, and updates to improve any system must be considered, companies value the fairness and predictability of the current EU system.’
The letter was coordinated by Vanessa Turner, partner at A&O. Other signatories include partners at international firms White & Case, Hogan Lovells and Dechert.