Using Experience from Ministerial Authorisation Procedures at European Level

At the invitation of the German Federal Cartel Office, leaders and competition experts from various countries are discussing current issues of cartel law at the 20^th International Conference on Competition today alongside Federal Minister of Economic Affairs and Energy Peter Altmaier and EU Competition Commissioner Margrethe Vestager. One of the focal points of this year’s event will be a panel discussion with Professor Achim Wambach, president of ZEW Mannheim and member of the Monopolies Commission, on public welfare goals as a challenge for antitrust practice. Wambach comments on this matter:

“Competition law, with its focus on preserving well-functioning competition, is increasingly confronted with demands to take environmental and social aspects into account. This can lead to conflicting goals. In Germany, we already have experience in resolving such conflicting goals through ministerial authorisation. With this instrument, the economics minister can allow a merger of companies that was previously prohibited by the Federal Cartel Office due to competition concerns on the grounds of an ‘overriding interest of the general public’. These experiences can also be helpful in the European discussion.

The instrument of ministerial authorisation has so far been used with a good sense of proportion. Since 1978, there have only been 23 applications for ministerial authorisation, and only ten cases were granted. In the proceedings, it is not always clear what exactly constitutes a public benefit. For example, achieving full employment is certainly in the public interest, but preserving jobs at a particular company usually is not. The theory and methodology of weighing the negative competitive effects against the positive public welfare effects still needs further refinement. For example, in no ministerial authorisation procedure has there been a systematic quantitative assessment. More research is needed, for example, to better understand the willingness of the population to pay for climate protection measures.

Against this background and in view of the still open questions, it is recommendable to introduce the principle of public welfare effects, whether of an ecological or social nature, into the practice of European competition regulation with great caution and only with appropriate institutional control. For example, it would be advisable to examine the public welfare effects outside of the competition authority and to seek advice in such procedures from independent experts – similar to the Monopolies Commission in Germany.”