Industrial Policy and Competition Policy

Natalia Fabra chaired the ACE Conference panel on Competition and Industrial Policy, where she engaged in discussions on these important issues together with Elisabetta Iossa, Matthias Dewatripont, Andrea Coscelli, and Kai-Uwe Kühn.

Both competition and industrial policies will be essential for boosting industrial competitiveness and driving economic growth, especially in leveraging the opportunities from the digital and green transitions within an increasingly complex geopolitical context. Competition policy can play a pivotal role in enhancing the effectiveness of industrial policy by offering principles for well-designed industrial policy that will be more impactful the more competitive markets are. As the Draghi report stresses, “evidence is overwhelming that competition stimulates productivity, investment and innovation.” 

The debate over the roles of competition and industrial policy ranks high on the political agenda, influenced by the Draghi report, Ursula von der Leyen’s mission letter to Teresa Ribera, and her responses in the EU Parliament’s public hearing. The overarching question remains: in order to foster growth and competitiveness, does competition policy need to be modernized? And modernizing means using this opportunity to improve competition policy, and if so, how? Or modernizing mean softening it? 

Against this backdrop, there is solid evidence, highlighted by DG COMP in a recent report on the evolution of competition in Europe, of rising concentration, markups, and profits at both the industry and market levels. This underscores the need for more, not less, effective and rigorous enforcement of existing competition rules. So, where should we stand?

There is no doubt that these discussions will continue to challenge and engage us in the years to come!