EMERGING CHALLENGES IN COMPETITION LAW ENFORCEMENT

Σελ. 1

Competition and sustainability – friends or foes?

Rupprecht Podszun

Professor of Competition Law, Chair for Civil Law, German and European Competition Law at Heinrich Heine University, Düsseldorf (Germany), Μember of the German Monopolies Commission

If the urgent problems with planetary boundaries are to be solved, this cannot be done without private businesses: Reducing CO2 emissions means that most industries face a challenging transformation. Business models of companies that heavily relied on fossil fuels become outdated, traffic will change, buildings are to be constructed more sustainably. CO2-emissions are the most burning issue in terms of sustainability. But other goals, including non-environmental ones, have also come to the forefront: Can companies contribute to biodiversity? Can textile traders organise their supply chains in such a way that child labour is prevented? Can supplier companies from the Global South pay fair wages to employees? The answers to some of these questions will influence competition.

Competition law, as we know it, was built in a European context when coal and steel determined the fate of the economy. In the 1950s environmental concerns were far away. Today, we are confronted with a competition law that was designed for times when worrying about the “limits to growth” was not a priority: For a long time, our economic policies, including competition

law, were employed in a framework to induce growth, not looking at the expenses of uncontrolled growth. The costs of more prosperity in member states were externalised. The internal market was tied to a growth agenda – more cars, more industrial plants, more chemicals. This growth transformed into higher standards of living for European consumers. The link between growth, externalities and prosperity makes it difficult to entangle the three.

The tectonic shift in this programme came with the realisation that ever more growth based on fossil fuel does not work: Climate activists and scientists showed what a rise in temperature may mean for the planet. In addition, the geopolitical situation with the war against Ukraine shattered the belief that prosperity can be built on cheap Russian gas. The EU has since reacted with a far-reaching sustainability agenda and ambitious climate goals. In this contribution, I try to answer the question in how far this agenda impacts competition law. Or put differently: Are competition and sustainability friends or foes?

Politics are volatile. Ever since Donald Trump took over in the United States again and the economic crisis was felt in Europe, climate policies and the sustainability agenda find a more difficult environment. There is a backlash against sustainability projects. Yet, the transformation is inevitable. The laws of nature cannot be repealed by politicians. What is more important, the renewed growth agenda may even use sustainability as a tool to allow companies cooperation agreements that others reject.

I cover these aspects in five steps. Part 1 introduces a case study to illustrate the typical characteristics of sustainability initiatives. In part 2, I present the basics of this debate before turning to the legal debate in part 3. In part 4, I sketch patterns of rethinking antitrust if it is embedded in a different economic order. Finally, the concluding part 5 offers a comment on the geopolitical turmoil.

1. Characteristics of sustainability cases

Cases that deal with sustainability cooperations are far rarer than the lively public debate may suggest. The German Bundeskartellamt investigated a case, Living Wages (on better conditions in the banana trade), that may serve as an example for the issues coming up in such cases.

i. The example of the Living Wages case

The German competition authority published a case summary on Living Wages in 2022. It dealt with a private, voluntarily organised retailers’ initiative to promote better wages for workers in the banana supply chain. The initiative comprised several German top supermarkets and retailers cooperating.

According to the case summary, the initiative — run as a pilot mainly in Ecuador with planned expansion to other supplying countries — sought to (a) define a living-wage standard for workers in the banana sector, (b) verify producers as paying a living wage or (c) provide retailer bonuses to close the wage gap, and (d) set sales targets for the proportion of private-label bananas meeting the living-wage criteria (e.g., 50% overall by 2025, 90% for Ecuador in initial plans).

A banana would qualify as “living-wage” either once a producer had been independently verified as paying the living wage or where retailers provided a premium (bonus) to close the gap. The initiative relied on a data-driven methodology to close wage gap with benchmarks for each country. Quantitative targets (percentages of private-label bananas to meet the standard by specified dates) were framed as non-binding without sanctions for non-achievement. No agreement was made on wages in supplier contracts, no fixed pricing or uniform surcharge was imposed, and there was no mechanism to dictate how cost increases would be passed to consumers.

The Bundeskartellamt concluded that the initiative did not raise competition law concerns and decided not to pursue the case further, based on its power of discretion. Its review focused on whether the collaboration constituted a prohibited horizontal agreement or otherwise interfered with competitive processes by restricting retailers’ or suppliers’ independent pricing or purchasing decisions. According to the case summary, the Bundeskartellamt particularly investigated

• whether targets or commitments were binding or accompanied by sanctions (which could amount to a cartel-type restriction);

• whether the scheme entailed wage-fixing, price-fixing or an agreement on margins/prices along the supply chain;

• whether the scheme involved exchange of competitively sensitive information (procurement prices, volumes, costs, margins) that could facilitate further collusion; and

• the degree to which the collaboration would influence downstream competitive parameters (pass on, product price, assortment).

This analysis of the case by the competition authority highlights the priorities: leave room for individual competitive advances, refrain from hardcore restrictions such as price-fixing, avoid overspill effects as are induced by data exchange, and check the effects for downstream markets.

ii. The difficulty to deal with sustainability initiatives in practice

The case serves as a practical blueprint for how competition authorities can assess collaborative sustainability initiatives while guarding against anticompetitive risks. Still, the case indeed has all the ingredients that are typical for the difficulties with sustainability initiatives: It involves a “good cause”, a pay raise for workers in the Global South, that is covered as a social sustainability goal in the United Nation’s Sustainable Development Goals. Yet, it is not a climate change case, and it illustrates how many issues may be brought forward to justify cooperation between companies. And even if the Bundeskartellamt came to the conclusion that cooperation is at a minimum – every competition lawyer must feel an unease with initiatives where all “people of the same trade meet together” (Adam Smith). How easy is it for the managers of the retailers involved to abuse the data collection system? To discuss future projects? To fight off new market entrants? How can standards be set so that they have anticompetitive effects that are difficult to detect from the outside?

The most difficult question is one of competence. In the case there were legislative rules on worker protection. Ecuador has a minimum wage in place, yet it does not seem to be enforced by the Ecuadorian authorities so that the retailers’ initiative can close the gap. But any European competition authority has to walk a very thin line: Is it the job of the Bundeskartellamt to assess working conditions on the Ecuadorian labour market and make sure that private undertakings supplement a legislative non-enforcement? Questions of territorial and substantive competence come up with the integration of non-competition goals in the competition law analysis, and this begs questions of legitimacy when an authority goes beyond its usual realm. Could a German authority assess the positive effects of an initiative in the Ecuadorian banana sector and possibly weigh such effects with the negative restraints of competition in Europe? Conceptually and legally, this is beyond the scope of what enforcers in Europe can possibly do. Therefore, it was a wise move to avoid a more formal decision and to give an antitrust response that documents the will not to interfere, but does not grant an exemption in the technical sense.

Still, the case (in the non-binding summary) also establishes certain learnings for companies that wish to put forward such cooperation agreements.

Firstly, form matters: The Bundeskartellamt emphasised the high transparency and the voluntary, non-binding character of the cooperation agreement.

Secondly, the initiative focuses on quality, not pricing. After all, competition law is still primarily looking at price setting, not at other parameters. The initiative managed to create mechanisms (via voluntary premiums instead of industry-wide levies or price agreements) that are flexible.

Thirdly, information governance is crucial. Avoiding exchanges of procurement prices, margins, or volumes is decisive, and the initiative took care to limit the flow of data. Data firewalls, independent administrators, and the aggregation of data are vital aspects for such agreements.

Fourthly, while the Bundeskartellamt did not check the effects in Ecuador it still honoured a verifiable methodology and clear-cut benchmarks that were

plausible. The initiative made its case that there is scope for improvement through a cooperation of leading German companies.

Finally, the regulatory context is of interest. The statutory minimum wage in Ecuador played a role, but the Bundeskartellamt also pointed at the far-reaching exemption of agreements under Article 210a of the Common Market Organisation Regulation (CMO). The first paragraph of this Article exempts many cooperation agreements from EU antitrust rules:

“Article 101(1) TFEU shall not apply to agreements, decisions and concerted practices of producers of agricultural products that relate to the production of or trade in agricultural products and that aim to apply a sustainability standard higher than mandated by Union or national law, provided that those agreements, decisions and concerted practices only impose restrictions of competition that are indispensable to the attainment of that standard.”

Whether this exemption (with its qualifications in further paragraphs) applies to the Living Wages initiative was deliberately left open in the Bundeskartellamt’s decision. Still, the message is that with the United Nation’s Agenda 2030, the EU’s far-reaching exemption for coordinated business practices in agriculture, and the Ecuadorian statutory minimum wage, there is a regulatory context where a prohibition decision would raise eyebrows. That is, of course, not a legal argument.

In sum, the case highlights the difficulties to deal with such initiatives in a proper way. A good cause, but collateral damage for competition. Safeguards in the home market, but no insights for what’s happening abroad. Competition law embedded in a complex regulatory context. For a competition lawyer, the key question remains: Why do companies need to coordinate instead of competing?

iii. Cooperation derailing

There are prominent examples where cooperation agreements derailed and led to anti-competitive effects.

In 2011, the European Commission investigated the Consumer Detergents case. Initially, the detergent producers had entered into an agreement that would feature as a sustainability initiative today, setting standards for higher protection of the environment. Yet, the cooperation arrangement went beyond what was necessary to reach these effects. The producers integrated a non-compete clause on these matters and also agreed not to pass-on cost-savings to consumers. The Commission imposed a fine – the overspill from the welcome initiative into anti-competitive restrictions was obvious.

In the well-known Car Emissions case, car manufacturers agreed to restrict innovation in clean technology for emissions. They limited competition for innovation. The case became well-known for this approach where prices had not been affected, but the case also features an interesting sustainability angle. The innovation hindered by the cartel related to the reduction of emissions – the OEMs decided not to outperform the statutory standard even though they could have done that, thereby attaining higher environmental protection standards. The Commission handed down significant fines. The case shows that classic cartels may negatively impact sustainability goals. It is also significant for its contribution to shaping a theory of harm related to a qualitative outcome, here clean tech innovations.

2. The basic relationship between competition and sustainability

The cases presented in part 1 illustrate that competition, competition law and sustainability goals may be in a twisted relationship. Therefore, it is necessary to clarify some basics of this debate.

i. Definition of sustainability

Firstly, it is important to understand what sustainability entails. The term has become a miraculous catchphrase for many phenomena, nowadays sometimes including defence projects and nuclear energy.

The concept itself is rooted in forestry, where in the 18th century Carl von Carlowitz argued that timber cannot simply be felled without a plan for reforestation, which is known to take considerably longer than cutting down a tree. Interestingly, his starting point here was not an ecological concern, but an economic one: ore production, for which the wood was used as fuel, could not function in the long term if trees were felled indiscriminately. Even at its inception, the concept of sustainability (which von Carlowitz coined in his book Sylvicultura Oeconomica of 1713) was economically based. This means that economic law is the right place for debates on sustainability.

Today, sustainability is mostly defined with the words from the Brundtland Commission, installed as the World Commission on Environment and Development (WCED). It stated in 1987 (one year after the catastrophe of Chernobyl and after the rise of environmental concerns in the Western countries in the 1970s and 1980s) that development is sustainable “that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

This definition has two elements. The obvious one is the intergenerational aspect: considering the chances of future generations. A life at the expense of generations to come is unsustainable. This was often related to the ecological dimension. Yet, with the reference to development, a term that, at the time, was closely linked to the support of poorer countries, another dimension was added. If it is not correct to live at the expense of future generations, it must also be unsustainable to live at the expense of other people in the present. This is the intragenerational dimension – it is unsustainable if some people live at the expense of others. This opened the door for social considerations, e.g. the exploitation of cheap labour in

developing countries for the benefit of the population in richer countries. The social dimension became a matter of sustainability, too.

Today, sustainability is often equated with the three letters ESG: Environmental – Social – Governance. These are the three pillars for a modern concept of sustainability. The ecological aspects that had traditionally been in the focus are supplemented with social issues and the way of problem-solving, the governance of world problems. Such a more holistic understanding has its merits. Climate protection, for instance, is an ecological issue. Yet, the social issues are very closely connected: If heat waves keep striking the Global South, migration to the North will increase. If the economy is transformed into a net-zero-emissions economy, poorer people may no longer be able to afford the same level of goods and services. Solving these issues is as complex as the matter itself: it needs a governance structure for this.

The substantive goals of a sustainable development are nowadays laid down in many different legal documents. Two definitions stand out: The leading document in the world is the declaration of the United Nations for the Agenda 2030, including the Sustainable Development Goals (UN SDG). Everyone knows the catchy and colourful graphic with the 17 goals in short words (“Life under water”, “Zero Hunger”, “Gender Equality”). Yet, the UN SDG have much more substance than that. The goals are formulated more explicitly and with time-frames. In particular, they are combined with concrete targets and clear indicators so that sustainable development becomes measurable. This is a major aspect of the current sustainability trend: Measuring results and effects in concrete terms has replaced more normative promises. (At the same time, this tendency provokes documentation and bureaucratic processes.)

For the European Union, another approach has gained considerable importance. The EU has devised a taxonomy that is designed to identify financial instruments that are allowed to be called “sustainable”. Yet, the methodology may be helpful for other contexts as well. It is laid down

in Regulation (EU) 2020/852. According to its Article 3, activities are sustainable if they

A) Contribute substantially to one or more environmental objectives,

B) Do not significantly harm any of these objectives,

C) Are carried out in compliance with minimum safeguards, and

D) Comply with technical screening criteria.

All terms are further defined in the regulation.

The four-step-approach distinguishes itself by focusing on the environment, by looking at side effects (no significant harm, minimum standards) and by providing clear criteria. The EU has defined sustainable development as one of its key objectives. The first two sentences of Article 3(3) of the EU Treaty read:

“The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment.”

Sustainable development is enshrined in the European project, and it is closely connected to the economic framework – the internal market, economic growth, the competitive market economy.

In spite of this and other definitions, the term “sustainability” remains elusive. What it really means and entails is part of the search process in the judiciary, in parliaments, and in society. However, the debate has been enriched in the past years, it has found its way into legally binding documents, and it relies heavily on measuring and calculating effects – thereby becoming more compatible with a field of law that was itself shaped by a “more economic approach” in the past years.

ii. The economic case for and against cooperation

Most damage done against sustainability in economic terms can be interpreted as a problem of market failure. When companies pollute without being liable for it, this is not sustainable. It constitutes a negative

externality, i.e. a market failure. The companies can free-ride on the cost-bearing by the public. The proper functioning of the market is compromised.

Competition law can step in when markets do not function, but usually, the core legitimacy for competition interventions does not lie in negative externalities, but in market power. Market power can aggravate the negative externalities, e.g. when a dominant company exploits these. But usually, negative externalities are not the primary motivation to apply competition law. Of course, other causes of market failures, e.g. information asymmetries, also add to the problems.

The typical instrument for achieving environmental (or other sustainability) goals (i.e. for stopping such externalities) is therefore the stopping of negative externalities, i.e. the internalisation of costs. Economically, this idea is traced back Arthur Cecil Pigou and the Pigouvian tax. Governments use prohibitions, subsidies, taxes, liability rules, or more sophisticated schemes such as the emissions trading system to internalise negative effects according to the polluter pays principle. Classic environmental law goes along this path: Companies are forced to install filters to pollute less, otherwise they are fined, have to pay damages or lose their concession.

So, where is the place for the coordination of private undertakings to mitigate unsustainable practices? Cooperation of companies may yield results that are more far-reaching than what is possible with government intervention. The Living Wages case is a telling example: There would be no need for cooperation if Ecuador enforced its statutory rules. But it does not. When undertakings establish standards in their trade this can be much more effective than a difficult-to-monitor state intervention. When two leading suppliers of certain goods decide to reduce emissions together, this may mean that products quickly become “green”.

From an economic viewpoint, there can even be a case for this kind of cooperation that brings about efficiencies that could not be reached by

unilateral behaviour. Cooperation, if at all eligible, must always go beyond the standards set by the law. When the first mover towards sustainability in a market has huge cost disadvantages and therefore needs to fear a loss of customers, collective action seems more promising (“first-mover disadvantage”). This may also be true where there is no consumer demand, where industries need to invest heavily to transform, or where one undertaking does not have enough leverage to bring others in the vertical supply chain to adapt to new, more sustainable policies.

But the stakes are high: All these helpful cooperations mean that competition, the risk-taking inherent to doing business, is substituted by agreements between those who are expected to compete. The rivalry ends at the negotiation table. There may be spillover effects (i.e. hardcore collusion on the occasion of sustainability partnerships – see Detergents). There may be arrangements for a minimum that is less than what a free market competition would bring after a while (Car Emissions). The incentive to innovate is reduced. Where agreements are reached without any appreciable effect on competition, there is no problem. But where the sustainability cooperation comes with some restriction on competition, customers can regularly expect higher prices, less innovation, less choice, and a spiralling concentration in markets. This is the reason why competition law is very critical of such cooperations.

With this logic in mind, competition law and sustainability through the coordination of corporate actors are foes, not friends.

But competition law is also friends with sustainability. Interventions for more competition usually help to make companies compete, not least in the department of sustainable development. The more competition, the better for sustainability – at least as long as one of two requirements is met: Either customers or other stakeholders such as shareholders or employees value sustainability so that striving for sustainability becomes a competitive advantage. Or all negative externalities are internalised so that the market is a fair representation of costs and potential benefits. In this case, the companies can concentrate on becoming more efficient without free-riding on negative external effects.

The first condition is met only in a few markets. The second one is rare. Still, competition law defines the outer limits of what is necessary for markets to function. This structural approach needs to be kept in mind when doing competition law: A field of law that aims at protecting the working mechanism of markets must not ignore that the very fundamentals of these markets are endangered. Where the planet reaches its limits, the economy will not function anymore. This is the working basis for competition law.

iii. There is no alternative

Critics of capitalism and the current market-oriented framework state that competition is the problem – competition is the driver of the growth agenda. Markets thrive when consumers consume and when undertakings grow. But consumerism and economic growth, so they say, relate to more waste, pollution, higher costs for the environment, exploitation of the weak. It seems, that the limits of growth have been reached.

But I do not share this understanding of the market economy. Competition, in my view, is the only way forward to reach the goals we set for ourselves. This may be a matter of evidence, but also one of fundamental beliefs. This contribution is based on the belief that it is important to keep competition and to organise the distribution and protection of scarce resources through competition.

3. Legal issues

The debate on competition and sustainability has largely focused on the question whether the cooperation of companies can be allowed under Article 101 TFEU despite anti-competitive effects when the cooperation agreement pursues sustainability goals. In chapter 4, I will state that there are many other interesting questions in this debate. But concentrating on

the issue for a moment, doctrinal aspects come up: On what legal basis can sustainability

considerations find their way into the competition law analysis? And what is the right place to analyse the pro-sustainability effects?

i. Preliminary insights

I have the benefit of having read two PhD theses from 2025 (as yet unpublished) on the topic that have deepened my understanding for the issue. They are presented here for a start into the topic:

Philipp Offergeld, building on the vast literature on non-competition considerations under Article 101 TFEU, makes the case that competition law has changed along with the regulatory environment in which it operates. Although the provision prohibiting cartels (Article 101 TFEU) has not changed its wording since 1958, the EU treaties surrounding this provision have evolved considerably. The narrow economic community that sought to create a single market with free competition has become a comprehensive political and economic union – from the EEC to the EU. The original economic objectives that were outstanding are now incorporated with other objectives that are placed on the same norm-hierarchical level. The tendency often found in competition law to view it as an isolated island of pure competition-related considerations is thus no longer valid. The objective of competition now competes with other political objectives and must be balanced against them. Attempts to marginalise and qualify other objectives do not do justice to this development. The most fitting example for such an objective is Article 11 TFEU:

“Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development.”

From the words, it is hard to see why this should not relate to antitrust. Offergeld’s historical perspective of the evolving treaties gives legitimacy to the integration of different aims into the competition law framework.

He and Leon Kümmel, the author of the second book, argue that the latest rulings of the European Court of Justice provide ample room for such balancing. The Wouters doctrine, so both of them claim, can no longer

be read as an exception. It must be read as the norm, that Article 101 TFEU must be read in conjunction with other legal aims. This sounds much more revolutionary than it is in practice, but conceptually it is a strong statement.

According to Kümmel, the doctrinal debate on the right place for the assessment of sustainability effects is overblown. He argues that in any case it always comes down to a balancing test: the anti-competitive effects of a coordination need to be balanced with the pro-environmental effects, whether in the course of Art. 101(1) or (3). They should be integrated according to a principle of maximum consistency (or “praktische Konkordanz” in German), trying to get the most out of both aims. This, however, requires the measurability of effects. The weighing exercise must be precise and sincere.

I share these views of younger scholars since they provide a fresh perspective on the matter. They signal to me that sustainability is here to stay.

ii. Sustainability and the Wouters doctrine

To refer to the (overcome?) doctrinal debate centred, the question is whether sustainability is to be tested according to the Wouters doctrine (as a non-competition goal) or under the regime of Article 101(3) TFEU, i.e. in the course of the economic efficiency exemption. Much has been written on this. Highlights may suffice here.

The Wouters doctrine establishes that certain restrictions on competition may fall outside the scope of Article 101(1) TFEU where they are inherent in, and proportionate to, the pursuit of a legitimate non-economic objective. The Court of Justice thereby recognised a limited form of regulatory self-justification for professional or associative rules serving the “proper practice” of a profession or other public-interest aims. The doctrine’s analytical structure—legitimate objective, necessity (or “inherency”), and proportionality—has since provided a framework whenever claimants tried to get their agreement out of the scope of Article 101(1) TFEU. The most prominent other example is the field of sports with the Meca-Medina-exception. So far, many authors have not yet embraced Wouters as a

general concept that applies indiscriminately to issues such as environmental protection.

The first step of the test requires the identification of a legitimate objective external to competition policy. While Wouters concerned the integrity of the legal profession, subsequent case law (e.g. Meca-Medina, C-519/04 P, EU:C:2006:492) extended the logic to sports governance, emphasising that restrictions may be justified when they pursue objectives “legitimate in light of the overall public interest.”

The second element—inherency—demands that the restrictive effects on competition be intrinsic to the pursuit of that objective, rather than merely convenient or ancillary. The restriction must be functionally necessary for the realisation of the identified aim. Finally, the proportionality requirement ensures that no less restrictive alternative could achieve the same legitimate goal.

Under a Wouters-based analysis, sustainability may constitute a legitimate non-competition concern, particularly based on Article 11 TFEU, provided that the restriction demonstrably serves an objective of recognised public policy—such as environmental protection or the reduction of carbon emissions—and that the competitive constraint is both inherent and proportionate. Empirical substantiation is crucial: firms or associations invoking sustainability must, even under Wouters, provide verifiable data (e.g. life-cycle analyses or measurable carbon reductions) establishing a causal nexus between the restriction and the environmental outcome.

In practice, the Wouters doctrine offers only a narrow safe harbour for sustainability-motivated coordination. Where these criteria are satisfied—and substantiated with empirical evidence—sustainability considerations may legitimately inform the competition assessment. Sustainability may justify a restriction, but it will not excuse market foreclosure.

iii. Balancing sustainability effects under Article 101(3) TFEU

An alternative path to the early exemption via Wouters is to acknowledge the restriction of competition as an infringement of Article 101(1) TFEU, but to compensate it with positive efficiency effects under Article 101(3) TFEU. The European Commission explicitly accepts that sustainability benefits—traditionally seen as external or non-economic—may constitute “efficiency gains” under Article 101(3). This approach is codified in the 2023 Guidelines

on Horizontal Cooperation Agreements, which now devote an entire chapter to sustainability agreements.

Article 101(3) sets out a four-part cumulative test. To qualify for exemption, an agreement must:

(a) contribute to improving the production or distribution of goods or promote technical or economic progress;

(b) allow consumers a fair share of the resulting benefit;

(c) not impose restrictions that are not indispensable to attaining those objectives; and

(d) not afford the parties the possibility of eliminating competition in respect of a substantial part of the products concerned.

The Commission’s 2023 Horizontal Guidelines establish that sustainability objectives—such as reducing carbon emissions or promoting biodiversity—can qualify as efficiency gains under Article 101(3). Yet, such efficiency gains must be objective, substantiated, and quantifiable, as is the case with other efficiencies under Article 101(3). The quantification will remain a difficulty, but as stated above there is a lot of monitoring and there are considerable efforts in environmental economics. The Chicken of Tomorrow case in the Netherlands serves as a cautionary tale. The case dealt with an agreement to have better conditions for livestock, but it entailed anti-competitive restrictions so as to avoid disadvantages in pricing for those who cared for (some limited) animal welfare. Consumers were asked for their willingness to pay for chicken bred under these improved conditions. But according to their preferences revealed in the empirical study their willingness to pay extra was lower than the price increase in case of improved conditions. The Dutch competition authority therefore prohibited the agreement, based

on the economic evidence and a strict consumer welfare approach. This triggered hefty criticism – and in retrospect also emphasises the limits of a strict more economic approach.

Crucially, the efficiency gains must at least partially accrue to consumers in the relevant market. The Guidelines also introduce the concept of collective benefits: where an agreement delivers environmental or social improvements extending beyond the immediate consumers of a product, these may still be taken into account if they align with EU or national sustainability objectives. Also, the consumers who benefit from the advantages must form part of the group of consumers negatively affected by the restriction. This marks a nuanced shift from the traditional consumer-centric model towards a more holistic welfare analysis. Complete out-of-market-efficiencies are still not accepted under Article 101(3).

The balancing process still requires an empirical demonstration that the restrictive elements of a sustainability agreement are indispensable and outweighed by the pro-sustainability outcome. Firms must produce verifiable data linking the restriction to specific environmental or social improvements, supported by transparent monitoring and reporting mechanisms. The endeavour remains a tough one for applicants, but the Commission’s approach is better aligned to Article 11 TFEU than a stricter approach. The test remains demanding and economic in nature.

In sum, the legal integration of sustainability concerns is inevitable. There may be cases where competition and sustainability conflict and antitrust lawyers need to get used to the point that the competition principle does no longer reign supreme. There can be some balancing test. Whether this is done within the Wouters doctrine or Article 101(3) does not matter so much – it will remain a difficult economic assessment.

4. Options for reconciling competition and sustainability

When it is correct that competition law needs to be aligned with the demand for environmental protection under Article 11 TFEU the question arises as competition and sustainability can be reconciled. The question becomes more pressing with rising temperatures and passing time.