Competition and Market Risks
Question 1
With reference either to agreements between workers and employers or to agreements
by which undertakings seek to achieve sustainability goals, discuss the following
statement by drawing on the course materials and case law.
“It is a generally accepted principle that at times it is necessary for competition to be set
aside because other goals are more important. However, the way in which this principle is
implemented in practice is arbitrary and unpredictable. This has the adverse effect that
important EU values are not pursued because undertakings are afraid of infringing EU
competition law.”
Introduction
EU competition law is traditionally concerned with protecting effective competition and
preventing agreements that distort market processes. However, competition is not an
objective in itself. The European Union pursues broader public interests, including
environmental protection, sustainable development and climate neutrality. As a result,
competition law is increasingly confronted with situations in which restrictions on
competition can contribute to important societal objectives.
The statement is partly convincing. Competition law no longer treats sustainability
cooperation as automatically suspicious, especially after the Commission’s 2023
Horizontal Cooperation Guidelines and the ACM’s more permissive approach. At the same
time, undertakings still face real uncertainty where benefits are collective, long-term or
difficult to quantify. The problem is therefore not that EU competition law ignores
sustainability, but that undertakings cannot always know in advance whether their
cooperation will satisfy Article 101(3) TFEU. 1
Competition Law and Public Interest Objectives
The idea that competition law should accommodate broader societal interests is not new.
In the case of Wouters v Algemene Raad van de Nederlandse Orde van Advocaten, the
Court of Justice recognized that restrictions on competition may be permissible when they
are necessary to achieve legitimate objectives of general interest. 2 Although the rules in
question restricted cooperation between lawyers and accountants, the Court held that the
restrictions were inherent to ensuring the proper exercise of the legal profession and
sound administration of justice.
Wouters is often regarded as one of the clearest examples that competition law cannot
always be applied in isolation from other policy objectives. The case demonstrates that
competition is an important objective of EU law, but not the only one. This principle is
particularly relevant in the context of sustainability, where environmental protection itself
is a fundamental objective of the European Union. Article 3(3) of the TFEU obliges the
Union to pursue sustainable development, while Articles 11 and 191 of the TFEU require
that environmental protection be integrated into EU policy. However, Wouters should not
be overestimated.3 The case does not create a general exception to Article 101 TFEU in
the general interest. It shows rather that certain restrictions may fall outside Article
101(1) when they are inherent to and proportionate to a legitimate objective. 4
Sustainability agreements will generally still have to be assessed on the basis of Article
101(3).5 This confirms that competition law must sometimes be interpreted in the light of
broader regulatory objectives, a principle that later proved very relevant in the context of
sustainability.
As sustainability plays an increasingly central role in EU policy, particularly through the
European Green Deal and the European Climate Law, competition authorities are forced
1
Article 101(3) TFEU.
2
Case C-309/99, Wouters and Others v Algemene Raad van de Nederlandse Orde van
Advocaten EU:C:2002:98.
3
Article 3(3) TEU; Articles 11 and 191 TFEU.
4
Article 101(1) TFEU.
5
Article 101(3) TFEU.
, Competition and Market Risks
to reconsider how sustainability agreements should be assessed on the basis of Article
101 TFEU. 6
Sustainability Agreements under Article 101 TFEU
Sustainability agreements frequently involve cooperation between competitors. 7 Firms
may collectively agree to reduce emissions, improve recycling systems, establish
sustainability standards or phase out environmentally harmful products. Such agreements
may generate significant environmental benefits but simultaneously restrict competition
by affecting prices, product characteristics or output.
Traditionally, these agreements were assessed on the basis of Article 101(3) TFEU. 8 To
qualify for exemption, an agreement must yield efficiency benefits, consumers must
receive a fair share of the benefits, the restrictions must be indispensable, and
competition must not be eliminated.
The main difficulty is that sustainability benefits often benefit society as a whole, and not
directly the consumers in the market concerned. Consequently, the traditional consumer
welfare framework may struggle to integrate environmental objectives.
This problem became evident in the Dutch ‘Chicken of Tomorrow’ case. The agreement
sought to improve animal welfare and environmental sustainability in the poultry sector.
However, the ACM concluded that consumers were not willing to pay enough for the
resulting benefits and therefore that the agreement failed to satisfy Article 101(3). 9
A more sustainability-friendly example is CECED, concerning an agreement between
washing machine producers to phase out less energy-efficient machines. Although the
agreement reduced consumer choice and could increase prices, it was accepted because
it generated environmental and consumer benefits through lower energy and water
consumption.10 This illustrates that sustainability benefits can be accommodated, but also
shows the uncertainty: CECED was accepted, whereas Chicken of Tomorrow was not.
The decision generated significant criticism. Many commentators argued that the ACM
focused too much on direct benefits for the consumer and ignored broader societal
benefits, such as improved animal welfare and environmental protection. The case
became a symbol of the alleged tension between competition law and sustainability
policy. The practical problem was not only that the initiative failed, but that the
assessment depended heavily on how benefits were measured and whose benefits
counted. This made it difficult for undertakings to know in advance whether a comparable
agreement would be lawful.
The shift towards a more flexible approach
Partly in response to criticism of earlier decisions, both the ACM and the European
Commission have adopted a more accommodating approach to sustainability
agreements.
The ACM's 2023 Policy Rule on Sustainability Agreements distinguishes between
agreements aimed at ensuring compliance with binding legal obligations and agreements
that seek to reduce environmental harm.11 The ACM has indicated that it will generally not
6
European Commission, The European Green Deal, COM(2019) 640 final; Regulation (EU)
2021/1119 (European Climate Law).
7
Van den Bergh, ‘Self-Regulation and Competition Law’, cited in Monti, Self-Regulation and
Competition Law slides, Class 4, 2026.
8
Article 101(3) TFEU.
9
ACM, ACM’s analysis of the sustainability arrangements concerning the ‘Chicken of Tomorrow’ (26
January 2015).
10
Commission Decision 2000/475/EC concerning a proceeding under Article 81 EC and Article 53
EEA (Case IV.F.1/36.718 - CECED).
11
ACM, Policy Rule: ACM’s oversight of sustainability agreements (4 October 2023).
Question 1
With reference either to agreements between workers and employers or to agreements
by which undertakings seek to achieve sustainability goals, discuss the following
statement by drawing on the course materials and case law.
“It is a generally accepted principle that at times it is necessary for competition to be set
aside because other goals are more important. However, the way in which this principle is
implemented in practice is arbitrary and unpredictable. This has the adverse effect that
important EU values are not pursued because undertakings are afraid of infringing EU
competition law.”
Introduction
EU competition law is traditionally concerned with protecting effective competition and
preventing agreements that distort market processes. However, competition is not an
objective in itself. The European Union pursues broader public interests, including
environmental protection, sustainable development and climate neutrality. As a result,
competition law is increasingly confronted with situations in which restrictions on
competition can contribute to important societal objectives.
The statement is partly convincing. Competition law no longer treats sustainability
cooperation as automatically suspicious, especially after the Commission’s 2023
Horizontal Cooperation Guidelines and the ACM’s more permissive approach. At the same
time, undertakings still face real uncertainty where benefits are collective, long-term or
difficult to quantify. The problem is therefore not that EU competition law ignores
sustainability, but that undertakings cannot always know in advance whether their
cooperation will satisfy Article 101(3) TFEU. 1
Competition Law and Public Interest Objectives
The idea that competition law should accommodate broader societal interests is not new.
In the case of Wouters v Algemene Raad van de Nederlandse Orde van Advocaten, the
Court of Justice recognized that restrictions on competition may be permissible when they
are necessary to achieve legitimate objectives of general interest. 2 Although the rules in
question restricted cooperation between lawyers and accountants, the Court held that the
restrictions were inherent to ensuring the proper exercise of the legal profession and
sound administration of justice.
Wouters is often regarded as one of the clearest examples that competition law cannot
always be applied in isolation from other policy objectives. The case demonstrates that
competition is an important objective of EU law, but not the only one. This principle is
particularly relevant in the context of sustainability, where environmental protection itself
is a fundamental objective of the European Union. Article 3(3) of the TFEU obliges the
Union to pursue sustainable development, while Articles 11 and 191 of the TFEU require
that environmental protection be integrated into EU policy. However, Wouters should not
be overestimated.3 The case does not create a general exception to Article 101 TFEU in
the general interest. It shows rather that certain restrictions may fall outside Article
101(1) when they are inherent to and proportionate to a legitimate objective. 4
Sustainability agreements will generally still have to be assessed on the basis of Article
101(3).5 This confirms that competition law must sometimes be interpreted in the light of
broader regulatory objectives, a principle that later proved very relevant in the context of
sustainability.
As sustainability plays an increasingly central role in EU policy, particularly through the
European Green Deal and the European Climate Law, competition authorities are forced
1
Article 101(3) TFEU.
2
Case C-309/99, Wouters and Others v Algemene Raad van de Nederlandse Orde van
Advocaten EU:C:2002:98.
3
Article 3(3) TEU; Articles 11 and 191 TFEU.
4
Article 101(1) TFEU.
5
Article 101(3) TFEU.
, Competition and Market Risks
to reconsider how sustainability agreements should be assessed on the basis of Article
101 TFEU. 6
Sustainability Agreements under Article 101 TFEU
Sustainability agreements frequently involve cooperation between competitors. 7 Firms
may collectively agree to reduce emissions, improve recycling systems, establish
sustainability standards or phase out environmentally harmful products. Such agreements
may generate significant environmental benefits but simultaneously restrict competition
by affecting prices, product characteristics or output.
Traditionally, these agreements were assessed on the basis of Article 101(3) TFEU. 8 To
qualify for exemption, an agreement must yield efficiency benefits, consumers must
receive a fair share of the benefits, the restrictions must be indispensable, and
competition must not be eliminated.
The main difficulty is that sustainability benefits often benefit society as a whole, and not
directly the consumers in the market concerned. Consequently, the traditional consumer
welfare framework may struggle to integrate environmental objectives.
This problem became evident in the Dutch ‘Chicken of Tomorrow’ case. The agreement
sought to improve animal welfare and environmental sustainability in the poultry sector.
However, the ACM concluded that consumers were not willing to pay enough for the
resulting benefits and therefore that the agreement failed to satisfy Article 101(3). 9
A more sustainability-friendly example is CECED, concerning an agreement between
washing machine producers to phase out less energy-efficient machines. Although the
agreement reduced consumer choice and could increase prices, it was accepted because
it generated environmental and consumer benefits through lower energy and water
consumption.10 This illustrates that sustainability benefits can be accommodated, but also
shows the uncertainty: CECED was accepted, whereas Chicken of Tomorrow was not.
The decision generated significant criticism. Many commentators argued that the ACM
focused too much on direct benefits for the consumer and ignored broader societal
benefits, such as improved animal welfare and environmental protection. The case
became a symbol of the alleged tension between competition law and sustainability
policy. The practical problem was not only that the initiative failed, but that the
assessment depended heavily on how benefits were measured and whose benefits
counted. This made it difficult for undertakings to know in advance whether a comparable
agreement would be lawful.
The shift towards a more flexible approach
Partly in response to criticism of earlier decisions, both the ACM and the European
Commission have adopted a more accommodating approach to sustainability
agreements.
The ACM's 2023 Policy Rule on Sustainability Agreements distinguishes between
agreements aimed at ensuring compliance with binding legal obligations and agreements
that seek to reduce environmental harm.11 The ACM has indicated that it will generally not
6
European Commission, The European Green Deal, COM(2019) 640 final; Regulation (EU)
2021/1119 (European Climate Law).
7
Van den Bergh, ‘Self-Regulation and Competition Law’, cited in Monti, Self-Regulation and
Competition Law slides, Class 4, 2026.
8
Article 101(3) TFEU.
9
ACM, ACM’s analysis of the sustainability arrangements concerning the ‘Chicken of Tomorrow’ (26
January 2015).
10
Commission Decision 2000/475/EC concerning a proceeding under Article 81 EC and Article 53
EEA (Case IV.F.1/36.718 - CECED).
11
ACM, Policy Rule: ACM’s oversight of sustainability agreements (4 October 2023).
