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10 key themes

Antitrust in transforming industries — new issues on the horizon

The only constant

Technology conversion, energy transition, consumer protection and data privacy, shifting customer expectations, and disruptive new entrants are driving businesses across a range of industries to venture beyond core competencies and expand into new spaces.

  • Products are increasingly “smart,” connected to other devices through the Internet of Things and supported by services as add-ons, often in the cloud.
  • Cars are becoming automated, connected and electric.
  • Banks are becoming ever more digital and finding new ways to leverage their data.
  • Energy companies are expanding into renewables while diversifying across the energy value chain.
  • AI and big data are set to revolutionize R&D in the pharma and life sciences industries.

By combining (bio-)physical and ESG elements into the digital and tech transition, the Fourth Industrial Revolution is creating new product and process upside and avenues for industrials while at the same time causing first-mover challenges and exposure.

Deborah Janssens
Global Transactions Partner and Co-Head of Industrials,

As transforming businesses reinvent themselves — whether organically, by collaborating or via M&A — they face new and often complex antitrust risks that must be managed across their business and investment strategies. Against this backdrop, the need for change also brings opportunity, and businesses that understand and can navigate both the antitrust and regulatory landscapes stand to benefit.

Collaborations, not cartels

Cooperation between market actors, whether on a bilateral basis or across an industry, is often crucial to unlock the innovation and investment necessary to achieve a step change in sustainability goals. However, cooperation can be a loaded concept in antitrust: alongside the familiar concerns about price-fixing (including to account for additional costs for new technologies) or information sharing, competition authorities are expressing other concerns about collaboration arrangements:

  • Can they result in reduced competition in innovation, including the potential knock-on effect of softening competition in adjacent products or services?
  • When is it appropriate for collaborators to impose exclusivity or other restrictions to recoup investment and prevent free riding?
  • If collaborators pool data, have they set up appropriate safeguards? Are those in the pool inappropriately cutting off access to those outside?

In Europe, we’re seeing a broad range of novel collaborations — from hydrogen purchasing for the chemical production process to charging stations for electric vehicles — to meet tech conversion and energy transition goals. Governments and the European Commission often recognize that these collaborations are necessary but nonetheless prescribe a narrow path for compliance.

Katrin Gaßner
Antitrust Partner,

In this fast-moving environment, it is essential that commercial strategy and compliance take account of the sometimes-ambiguous line between justifiable cooperation and anticompetitive conduct. There is a way through — and governments are increasingly acknowledging that such collaborations are often beneficial and even necessary to achieve broader policy objectives — but businesses will have to understand the direction of travel for antitrust authorities across the globe in order to position their practices on the right side of the divide.

Although traditionally US antitrust authorities have focused their intervention efforts on horizontal combinations, in the first year of the Biden Administration we’ve seen more scrutiny of vertical competition issues. Collaborations and mergers with market players at different points in the value chain are now more likely than ever to draw regulatory attention.

Mary Lehner
Antitrust Partner,
Washington, DC

Financing the transition to Net Zero

Businesses need unprecedented levels of investment — both public and private — to fund the green transition and promote innovation. The good news is that the opportunity is there: the long-term and investment-heavy nature of these initiatives has already led many governments to provide direct subsidies and loans — such as the EU’s Recovery and Resilience Facility — as well as to establish frameworks to enable private investment; and antitrust authorities are considering how their regimes can further facilitate this approach (see theme 8). The flipside is that the precise scope of these new regulations and guidelines remains often unsettled, creating uncertainty for businesses and investors.

The EC has recently adopted a revised Communication on State aid to promote the execution of important projects of common European interest (the IPCEI Communication), setting out criteria that the EC will use to assess the compatibility of public financing of certain projects with State aid rules. It places particular emphasis on the need for projects to contribute to existing EU objectives including the pursuit of sustainable growth, addressing societal challenges and increasing competitiveness.

In this context, it also provides for State aid for upscaling of pilot facilities or first-in-kind facilities — so-called first industrial deployment — to promote innovation and transformation of industry. To date, the EC has authorized very few such projects, leaving industrials to navigate largely uncharted territory. In addition, the EU’s “Fit for 55” package prioritizes decarbonization of key sectors, such as energy, steel and transportation. Investors and businesses will have to find ways to use public funds to support their own transformation strategies without market distortion.

The provision of government funding and State aid to less environmentally friendly industries and businesses may also be scrutinized more closely or made subject to sustainability commitments going forward. This may create obstacles for companies that need to maintain traditional activities which conflict with the global sustainability agenda in the short term, in order to finance the green transition in the longer term.

Firms navigating collaborative private sector-led sustainability initiatives must be attentive as well: joining rivals to pool funds and collaborate on targets, standardization, know-how and carbon pricing may prompt regulatory concerns regarding collaboration unless structured carefully.

EU frameworks, such as the Guidelines on State aid for climate, environmental protection and energy (CEEAG) and the Guidelines on State aid to promote risk finance investments, can facilitate the investment opportunities necessary to help certain sectors as they transition, but businesses must be mindful of the limits that antitrust and State aid laws may still place on their conduct.

Tone Oeyen
Antitrust Partner,

Combine with care

Acquiring new capabilities through consolidation carries its own uncertainty as well. In the past, such deals — often bolt-on acquisitions of less mature targets in new product or service areas — would typically not attract regulatory scrutiny. But key antitrust authorities are now taking a more expansive view both of their jurisdiction to review these deals and of the issues that could arise — especially in deals where innovation is critical (see theme 2). In particular, the role of data as a competitive factor is becoming an increasingly salient consideration (see theme 4), and authorities are correspondingly becoming more sophisticated in their assessments.

National security and foreign investment regimes are also expanding to cover 21st century concerns (see theme 3). Gone are the days when intervention risk was limited to deals involving the defense sector: investments in transforming industries, such as energy, banking and manufacturing, can all raise questions in relation to critical infrastructure, security of supply, technological competitiveness, industrial policy and counterintelligence.

Financial services providers, in particular, must be prepared for scrutiny of transactions that would result in a foreign investor having access to sensitive data. And the expanding concept of critical infrastructure can catch industrials — whether because physical infrastructure in traditionally uncontroversial sectors has become a greater focus for foreign investment regulation or because industrials are expanding into typically sensitive areas where access to infrastructure is a security issue. All of this has been further compounded by the global supply chain crisis.


In the UK, the CMA has a laser focus on M&A deals and non-merger collaborations among potential as well as existing competitors. Industries undergoing digital or environmental transformation do not get a free pass: in order to satisfy the CMA, deals and collaborations in these sectors need to have a clear pro-consumer rationale, such as bringing to market new and/or more sustainable products and services, and not unduly limit market-wide competition on innovation, price or other factors.

Rod Carlton
Antitrust Partner,
Brussels and London

With thanks to Josh Chamberlain, Aaron Green and Tom McGrath for their contributions to this theme.

Looking ahead in 2022:

  • Collaborations with competitors to meet sustainability and innovation objectives must be set up and managed appropriately at all times. Make sure that sufficient safeguards are in place to prevent information exchanges from straying into anticompetitive territory.
  • Consider whether your business may be eligible for government financing and, if so, what conditions are likely to be attached to the grant of aid. For companies active in less environmentally friendly industries yet seeking aid, consider whether it is possible to offer commitments linked to sustainability. 
  • If mergers or collaborations involve new ownership of data, give careful consideration to how such data is maintained and accessed to ensure compliance with competition laws.
  • Think about how these themes of transformation — whether driven by sustainability, technology and/or innovation — inform M&A activity and ensure that the transaction rationale is appropriately framed and documented.

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