The International Cartel Conference (IKK) took place in Berlin from February 28 to March 1. The high-level conference organised by the German Federal Cartel Office brings together the current debates on competition policy, the market power of large corporations and economic policy in general. An exciting meeting and an opportunity to take stock: competition policy has changed significantly in the last two or three years, there has been a change of course towards a stricter approach to market concentration and monopolization. At the same time, the IKK showed that there is a need for reform – also in terms of social participation in competition policy.
Every two years, the German Federal Cartel Office invites competition experts who flock to the International Cartel Conference. EU Competition Commissioner Margarete Vestager, Minister of Justice Marco Buschmann, Sven Giegold, the State Secretary in the Ministry of Economic Affairs responsible for competition law, and numerous representatives of competition authorities from Europe and around the world attended. There were also academics, a large number of lawyers and company representatives. It is noticeable that it is mainly large companies that are present: Amazon, Google, Microsoft, BASF, Siemens, Telekom, Post/DHL, etc. Considering that many lawyers and consultants also tend to work for large companies, small and medium-sized enterprises are underrepresented. Civil society was represented by LobbyControl and Rebalance Now. Consumer protection organisations, trade unions and many others were missing. The IKK audience does not (yet) reflect the societal significance of competition policy.
The IKK program was exciting. However, it would be beyond the scope of this text to reproduce all the details of the debates. Only a few key points will be filtered out here:
1. there is an international change of course towards a stricter competition policy. In his speech, State Secretary Giegold recalled his statement at the last IKK 2022 that the pendulum in competition policy had swung away from the neoliberal Chicago School. This development has continued and must continue. The change can be clearly seen in the USA: under Biden, the authorities there are taking much tougher action against the concentration of power and its effects across the board, for example on employees. Antitrust for the people is the motto here. The EU has shown in recent months that it takes a closer look at company takeovers and prevents problematic mergers (such as the planned takeovers of iRobot by Amazon or etraveli by booking). In her speech, Margarete Vestager went into detail about the conceptual developments with which the EU analyzes the negative effects of mergers (the so-called theories of harm).
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2. competition and diverse markets strengthen innovation and competitiveness. This point was emphasised by many, including EU Competition Commissioner Margarete Vestager, State Secretary Giegold, Guersent, the Director General of the EU antitrust authority, and economist Veronika Grimm. In doing so, they clearly positioned themselves against a current in Europe that wants to focus on European champions, i.e. on a further concentration of power in large corporations in order to keep up internationally. This debate is likely to intensify over the coming months. It is good that there were many voices against more concentration of power at the IKK.
3. the business side also campaigned at the IKK for “cutting red tape” and the EU single market. A different narrative emerged here: competitiveness by reducing the burden on companies. It was quite impressive how Arndt Kirchhoff, as an entrepreneur and representative of the Federation of German Industries (BDI), repeatedly used the word competition without saying anything about competition policy or the problems of market concentration. “Competition” became an empty phrase that was then filled with corporate interests – which is something different from the concern for diverse markets and limiting the power of individual companies. At this point in the IKK, more critical questions or an explicit counter-position would have been desirable. Aspects such as the problem of concentrated supply chains or inflation did appear in the announcement of the first panel discussion, but were largely ignored at the conference. This was regrettable.
4. Artificial Intelligence threatens a further concentration of power in the digital economy. The problem has been recognised, but concrete measures from the competition authorities are (still?) lacking. The panel on artificial intelligence was certainly a highlight of the conference, especially as a representative from Microsoft sat opposite two representatives from competitors / smaller companies (from Aleph Alpha and GetYourGuide). Concentration in AI is not only at the level of AI models (such as large language models like ChatGPT), but on the entire chain of necessary technologies and inputs (the AI “tech stack”). Johannes Reck from GetYourGuide pointed out the danger that Big Tech has the ability to monopolise on various levels, such as chips, cloud computing and data. Smaller competitors and users were in danger of being left with only the crumbs. The scenarios presented varied between a dystopian control of AI by a few corporations and a positive picture of a large number of providers and services. The actions of the competition authorities will play a relevant role in determining which future scenario materializes. For example, there were calls for rapid intervention at cloud level. Either through clear non-discrimination rules that prevent self-preferential treatment by Amazon, Microsoft and Google, or by separating the cloud business from other business areas.
5 The European Digital Markets Act is an opportunity, but enforcement will be challenging. The DMA is intended to strengthen our freedom of choice and create fair competitive conditions for small and medium-sized enterprises. But there is a threat of poor compliance with the rules by the big tech companies (the gatekeepers). State Secretary Giegold emphasized that the German government will keep a close eye on the enforcement of the DMA and is determined to react quickly and harshly if there is a lack of compliance. Andreas Mundt, President of the German Federal Cartel Office, pointed out that he had said years ago that if the big tech companies did not comply with the competition rules, there would be regulation. Now there is regulation with the DMA. The companies had better implement it, otherwise the instrument of splitting up the companies would remain (You better comply or we will see divestment). One problem is the EU Commission’s limited resources for effective implementation. One proposed solution is monitoring fees for tech companies that are supervised under the DMA. This is also being called for by many civil society organizations.
6. there is a relevant need for reform in antitrust policy. This became clear, among other things, in the panel on so-called abuse control, i.e. the proceedings of the competition authorities against the abuse of power by individual companies. Presuppositions are needed that make it easier to provide evidence. The so-called “more economic approach” of recent decades does not work. Wolfgang Kirchhoff, judge at the Federal Court of Justice, said that he needed to clip his wings a little bit. Benoît Coeuré from the French competition authority also pointed out ways in which more can be achieved within the existing framework, for example by imposing interim measures. This option should also be strengthened at European level.
Tomaso Duso from the German Institute for Economic Research and the Monopolies Commission spoke in the panel on merger control of a lack of enforcement (“underenforcement”) in the past. This is currently changing, but there is still a need for the competition authorities to be more courageous when it comes to mergers.
State Secretary Giegold called for an ambitious work program for the next EU Commission. The EU should be given the opportunity to impose remedies up to unbundling after investigating individual sectors – a “New Competition Tool” similar to the new powers of the German Federal Cartel Office following the latest cartel reform of 2023.
Summary
The Bundeskartellamt organised an exciting conference with the IKK. It highlighted the progress made in antitrust policy and discussed current problems (AI, abuse control). Competition policy is an important component of economic policy that is of great significance. We need a more balanced economy and to limit the increasing concentration of power.
It is therefore important that civil society is present in antitrust policy and at conferences such as the IKK. It is gratifying that the Bundeskartellamt has invited LobbyControl and Rebalance Now. At the same time, it would be desirable if the audience were even more diverse, if more small and medium-sized enterprises, trade unions, consumer protection organizations and other social actors were present. In two years’ time, the next IKK will show how the field has developed.
