A Central Pillar of the EU Is Under Threat
The European Union prides itself on its tough antitrust regime. It is one of the pillars of the single market. But a recent court ruling, which overturned a Brussels decision to block a British telecoms merger, has put this at risk.
At the same time, some of the EU’s most powerful states are pushing to create “European champions” in certain industries by combining companies to better compete with global rivals such as the Chinese. Meanwhile, the Covid-19 pandemic is encouraging a more relaxed attitude toward industrial consolidation because of the fear of companies going bust. Taken together, this confluence of events means Europe’s commitment to protecting competition is wavering.
Unfortunately, there’s precious little evidence that mergers will boost efficiency, as their champions claim. Indeed, they may hurt consumers by raising prices and limiting choice.
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