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[null,"Prepared By:","Contributors:"]
[null,"Noerr","Fabian Badtke"]
[null,null,"Peter Bräutigam"]
[]
[]
["Sustainability and Competition Global Practice Guide"]
[]
["Report Generated: 11/19/2025"]
[]
["View your report results on next tab"]

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["Question","European Union"]
["Lex Mundi Sustainability and Competition Global Practice Guide"]
["Are ESG measures/sustainability agreements included in your jurisdictional competition regime?"," Yes, European antitrust law covers ESG measures and sustainability agreements, but so far only on a very small, general scale, namely with respect to sustainability issues in vertical agreements, i. e. supply/distribution agreements between undertakings operating at different levels of the production or distribution chain. \n\n \n\t Agreements between Non-Competitors : In May 2022, the European Commission (“ Commission ”) released new Guidelines on Vertical Restraints (2022/C 248/01 – “ V-GL ”) which set out the principles for the compliance of vertical agreements with the ban on cartels ( Article 101 TFEU ). As a general notion, the V-GL mentions that sustainable development is a core principle of the European Union’s policies (cf. also Art. 11 TFEU ). Even if a vertical agreement that pursues sustainability objectives does not form a distinct category of vertical agreements, the V-GL explicitly clarifies that the ban on cartels and, respectively, the Vertical Block Exemption Regulation (“ VBER ”) also apply to vertical agreements that pursue sustainability goals and that such agreements can benefit from a block exemption under the VBER . The V-GL also includes some ESG/sustainability-specific examples (cf. para 8, 9, 144, 316 V-GL ). For instance, quantitative criteria in a selective distribution system may refer to sustainability objectives. \n\t Agreements between Competitors : There are currently no specific rules or regulations in the European competition regime addressing ESG measures or sustainability agreements as part of horizontal cooperation between competitors. \n \n\n However, the topic of ESG measures/sustainability agreements in (horizontal) agreements between competitors and their admissibility under European competition law is currently a high priority for the Commission (see our response to \" If ESG measures/sustainability agreements are not included in your jurisdictional competition regime, do you foresee any new regulations coming into place in 2022? \"). \n"]
["If ESG measures/sustainability agreements are not included in your jurisdictional competition regime, do you foresee any new regulations coming into place in 2022?"," Yes, further guidance regarding sustainability agreements between competitors can be expected during 2023. \n\n General background : \n\n In December 2019, the Commission introduced the European Green Deal , which is a commitment to achieve climate neutrality by 2050 in the EU. Also, in its Policy Brief of September 2021 , the Commission explored how EU competition rules can complement environmental and climate policies more effectively. Even if such Policy Briefs are not “official” statements by the Commission , it points out the future focus on sustainability considerations in EU competition policy. Regarding antitrust matters, the Commission identified a demand for more clarity on how the pursuit of sustainability objectives affects antitrust assessment. \n\n Further guidance for competitors: \n\n ESG measures and/or sustainability agreements between competitors can be challenging to assess. The Commission plans to provide more guidance and clarity. The present Guidelines on the applicability of Article 101 TFEU to horizontal cooperation agreements expire at the end of 2022. Thus, the Commission is currently working on an update to these guidelines. The current draft – published in March 2022 (“ Draft H-GL ”) – contains also a completely new section specifically relating to sustainability agreements that are supposed to provide guidance to companies in pursuing sustainability objectives: \n\n The Commission attempts to provide guidance by addressing two major questions and problems in the assessment of sustainability cooperation to date: \n\n \n\t What are eligible efficiencies/benefits? In particular: Can long-term objectives that are not directly linked to the product be considered in the antitrust assessment at all? \n\t When does the consumer participate reasonably in the efficiencies/benefits? In particular: Does the consumer participate sufficiently if the benefit is \"at a distance\" or \"external\", i.e. if the benefit is not directly connected with the product market concerned by the cooperation? \n \n\n The terms \"ESG\" and sustainability agreements are defined very widely, namely as agreements with the aim of promoting economic, ecological, or social developments (climate; environment; resources/waste; human rights; animal welfare). The potential scope of application is thus very broad. \n\n The Commission confirms that not all sustainability agreements between competitors are caught by the ban on cartels. Where such agreements do not affect parameters of competition, such as price, quantity, quality, choice or innovation, they are not capable of raising competition law concerns (for instance internal company behavior that does not concern (external) economic activities; ESG information databases; industry-wide awareness campaigns on ESG issues).  \n\n When sustainability agreements affect one or more parameters of competition, they need to be assessed further.  \n\n The Draft H-GL provides, inter alia, the opportunity for setting “sustainability standards”. Sustainability standardization agreements specify the requirements that producers, traders, manufacturers, retailers, or service providers in a supply chain may have to meet in relation to a possibly wide range of sustainability metrics such as the environmental impacts of production. They usually provide rules, guidelines or characteristics for products and production methods on such sustainability metrics and are sometimes referred to as sustainability systems (e.g., green labels). In a nutshell, the Draft H-GL foresees establishing a “soft safe harbor” for sustainability agreements - \"standardization agreements about sustainability aspects” - that meet the following requirements: \n\n \n\t The standardization procedure is transparent and all competitors have the possibility to participate. \n\t There is no obligation to comply with the standard. \n\t Applying a higher standard must be possible. \n\t There is no exchange of commercially sensitive information. \n\t There is non-discriminatory access to the standardization scheme. \n\t The standard shall not result in a significant price increase. \n\t Monitoring of compliance is required. \n \n\n The Commission also provides guidance on assessing an individual exemption regarding sustainability agreements . If there is a restriction of competition (and the agreement goes beyond a pure standardization), the admissibility will depend on whether the agreement may benefit from an individual exemption pursuant to Art. 101(3) TFEU . For this purpose, four conditions need to be met: The agreement must lead to (i) efficiency gains/benefits, (ii) whereby the consumers must reasonably participate in these benefits. Also, (iii) the resulting restrictions must be indispensable and (iv) there is no possibility to (completely) eliminate competition. While the Draft H-GL , due to its very broad definition (cf. above), clarify that a very large number of efficiencies are eligible for consideration in the context of sustainability cooperation, the Commission also tries to provide guidance as to when consumers participate appropriately in the efficiencies (even though they may not have an immediate impact on the product market concerned). Therefore, the Commission introduces three categories of benefits and describes how to prove that consumers will participate to a fair extent:  \n\n \n\t Individual use value benefits: This means individual benefits that result from the use of the product (e.g., organically grown vegetables can be tastier and healthier for consumers). Generally, the consumer directly participates because the benefit is directly linked to the product. \n\t Individual non-use value benefits: In such a case the consumer is willing to pay a higher price for a sustainable product for society or future generations to benefit. The parties of an agreement need to provide evidence of actual consumer preferences (for a representative part of all consumers in the relevant market). \n\t Collective benefits: This means cases of unsustainable consumption may lead to negative externalities outside the relevant market. The parties of an agreement need to prove that the cooperation agreement is necessary to provide sustainability benefits to a larger group of society. For this, the parties must describe and prove the benefits. The beneficiaries must be defined, and it must be proved that consumers in the relevant market substantially overlap with or are part of the beneficiaries. It must also be shown which part of the collective benefit outside the relevant market reaches consumers in the relevant market. Since the burden of proof lies with the companies, it is expected that empirical elements or studies or consumer surveys will have to be used in the future. \n \n\n Please note that the above summary is based on the current Draft H-GL from May 2022 and thus may be subject to further changes.  \n"]
["Has your Authority issued any guidance on the role, if any, of ESG in the competition law analysis applied to mergers or other conduct?","No, there has not been any specific guidance on the role of ESG in merger control analysis or other conduct.\nIn its \nSeptember 2021 Policy Brief, the \nCommission expressed that the\n European Merger Control Regulation (“\nEMCR”) and its enforcement by the \nCommission support the objectives of the \nGreen Deal.\nIn its enforcement practice, the \nCommission already considers consumer preferences for sustainable products, either as part of defining the relevant market, to identify in and out-of-market constraints and/or in the competitive assessment as a parameter of differentiation affecting closeness of competition. The \nCommission has already enforced and pursued innovative theories of harm across different sectors. This framework is very much suited to address competition concerns that may result in innovation efforts related to environmental technologies.\nIn March 2021, the \nCommission adopted a guidance paper on the application of the referral mechanism between the Member States and the \nCommission (\nArticle 22EMCR) to tackle issues related to possible enforcement gaps for acquisitions of nascent competitors that may lead to a loss of innovation in, for example, a sustainability context. In such cases, a review of intended transactions is possible even where they do not meet the merger control thresholds. The main aim is to avoid “killer acquisitions”, i. e. an incumbent acquiring a start-up who otherwise may have played a significant competitive role in the market, being executed without any review of their effects on competition. There are also “Green killer acquisitions” possible if a small undertaking is active in “green” innovation and gets acquired by a large incumbent competitor. Many of the “green” innovative companies are small players and therefore potential targets for a “killer acquisition”, and a transaction/concentration could fall below the usual merger control notification thresholds at the level of the EU and the Member States.\n"]
["Has your jurisdiction issued guidance regarding competitor collaborations or participating in industry working groups, and if so, do they specifically address ESG?","Yes, there are guidelines for horizontal collaborations. However, the guidelines on the applicability of \nArticle 101 TFEU to horizontal cooperation agreements in their current form date back to 2011 and do not contain specific ESG provisions (see our response to \"\nIf ESG measures/sustainability agreements are not included in your jurisdictional competition regime, do you foresee any new regulations coming into place in 2022?\" for the currently ongoing update process of these guidelines).\nNonetheless, ESG cooperation can already be assessed under the current regulatory framework, albeit this comes with legal uncertainty. It can already be argued that cooperation that restricts competition is permissible, especially if it results in ESG benefits for the consumer and the consumer also participates in these benefits (cf. above on the benefit of an individual exemption pursuant to \nArt. 101(3) TFEU). The current challenge is which ESG benefits should be accepted for an individual exemption and how they can be considered, in particular how to measure the benefits for the consumer and which consumers benefit from them (cf. previous response to \"I\nf ESG measures/sustainability agreements are not included in your jurisdictional competition regime, do you foresee any new regulations coming into place in 2022?\").\n"]
["Can parties seek specific guidance from authorities on proposed ESG initiatives?","Yes, the \nCommission offers individual guidance for implementing ESG initiatives.\nThe \nCommission expressed that it remains and is ready to consider requests for individual guidance letters in relation to ESG/sustainability initiatives that raise novel issues.\n"]
["How, if at all, does your jurisdiction quantify or calculate the ESG effects?","European law does not contain, neither in statutory rules nor in “soft law”, specific guidance for quantifying or calculating ESG effects. However, in its \nCompetition Policy Brief No 1/2021, the \nCommission stated that sustainability benefits can be assessed as qualitative efficiencies which form part of the assessment of the prerequisites for an individual exemption pursuant to \nArt. 101(3) TFEU.In its \nDraft H-GL, the \nCommission points out that, if there is no data available allowing for quantitative analysis of the benefits involved, it must be possible to foresee a clearly identifiable positive impact for consumers. As the current experience with measuring and quantifying collective benefits remains scarce, the \nCommission will only be able to provide further guidance on this matter after accumulating experience in dealing with concrete cases, which could allow the future development of methodologies of assessment.\n"]
["What does your legal authority currently permit even if your agency is not yet active on this topic?","ESG measures/sustainability agreements can already be assessed for their antitrust compliance under the current legal framework but are associated with a certain degree of uncertainty for companies (cf. response to \"\nHas your jurisdiction issued guidance regarding competitor collaborations or participating in industry working groups, and if so, do they specifically address ESG?\" above).\nEven though there is currently no explicit legal basis in EU antitrust law for the consideration of ESG criteria, the Commission will take these into account in an antitrust assessment. The authority can and has already approved or prohibited/penalized measures based on ESG criteria.\nIn January 1999, the \nCommissionapproved an agreement (“\nCECED”) to block the import into the European Union of washing machines with low energy performance rates. Despite causing cost increases, the \nCommission found that the societal and individual cost-saving benefits outweighed the increase in price. Since washing machines with better energy efficiency had higher production costs but resulted in lower electricity consumption over their operating lifetime, both aspects had to be taken into consideration. In particular, the Commission stated that the “benefits to society brought about by the \nCECEDagreement appear to be more than seven times greater than the increased purchase costs of more energy-efficient washing machines.” Despite the lack of regulatory rationale, the Commission established assessment and quantification criteria that took ESG criteria into account and approved the agreement.\nFor further examples see also the response to \"\nHas your jurisdiction issued guidance regarding competitor collaborations or participating in industry working groups, and if so, do they specifically address ESG?\".\n"]
["Are there precedents that involved ESG/sustainability matters in your country? If so please provide a short description.","Yes (see also our response to \"\nWhat does your legal authority currently permit even if your agency is not yet active on this topic?\").\nOn July 8, 2021, the \nCommission published a press release stating that five German car manufacturers have been fined a total of EUR 875 million for violating the ban on cartels (\nArticle 101(1) TFEU). The companies prevented further efforts to achieve cleaner exhaustion from the cars in the period from June 25, 2009, to October 1, 2014. It was the first time the \nCommission concluded that collusion in technical development may constitute a cartel (harm to innovation competition). The car manufacturers exchanged information on the development of the “\nSCR technology” (“\nAdBlue”) in regular technical meetings. The press release explicitly refers to the \nGreen Deal and its objectives. The decision shall be seen as an example of how competition law enforcement can contribute to the \nGreen Deal by keeping the markets efficient, fair, innovative, and free of harm to innovations beneficially for ESG/sustainability aspects.\nIn May 2020, the \nCommission approved the acquisition by Aurubis, the largest copper producer in Europa and the largest copper recycler in the world, of the metal recycling company Metallo Group. A concern was raised that the merger would cause the copper price to decrease, which would result in diminished incentives for copper scrap recycling. The merger was cleared since the \nCommission found the potential price effects not to be significant. The \nCommission stated that copper is an important input needed for electric mobility and digitization. A well-functioning circular economy in copper is important to ensure a sustainable usage of resources in the contest of the European \nGreen Deal.\nOn December 21, 1994, the \nCommission decided on a joint venture between Philips International BV and Osram GmbH. The \nCommission decided that the joint venture would result in benefits for consumers from reduced air pollution. The joint venture would lead to extended production range, rationalization, decreased overhead costs, flexible furnace utilization, reduced energy and environmental costs, and shared R&D on substitutes for lead glass.\nFinally, the Commission based its decision on ESG criteria also in the so-called CECED decision (cf. response to \"\nWhat does your legal authority currently permit even if your agency is not yet active on this topic?\").\n"]
["Is there specific antitrust regulation in your jurisdiction to be aware of which might give rise to private or class action ESG litigation?","No.\nThere is currently no specific regulation that could cause ESG class action litigation cases in the EU.\n"]