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Environmental Protection and EC Competition Law

Arvidsson, Linnéa (1999)
Department of Law
Abstract
In recent years, public as well as private measures taken in order to protect the environment have proved to affect competition. As consumers have become more and more alert to the environmental effects of the manufacture, use and ultimate disposal of goods, undertakings have taken measures improving the environmental protection not only due to legislation imposing stricter standards on products and processes, but also due to the fact that having a good environmental image can be an important marketing instrument. However, measures improving the environmental performance of undertakings are so costly and environmental requirements so difficult to comply with, that co-operation with other firms and other action likely to affect competition... (More)
In recent years, public as well as private measures taken in order to protect the environment have proved to affect competition. As consumers have become more and more alert to the environmental effects of the manufacture, use and ultimate disposal of goods, undertakings have taken measures improving the environmental protection not only due to legislation imposing stricter standards on products and processes, but also due to the fact that having a good environmental image can be an important marketing instrument. However, measures improving the environmental performance of undertakings are so costly and environmental requirements so difficult to comply with, that co-operation with other firms and other action likely to affect competition sometimes have represented the only possibilities for undertakings to conform to the new rules and consumer demands. Furthermore, measures taken by States such as legislation imposing stricter environmental standards and the granting of subsidies for environmental goals also affect competition. Whereas environmental legislation have proven to bring about consequences such as increased concentration of the markets and distortions on free trade, State Aids harm undistorted competition by artificially giving some undertakings a better position on the market at the expense of the other firms, thus harming the equality. Within the European Union, the aims of environmental protection as well as free and undistorted competition are being pursued by means of highly developed policies accompanied by detailed legal frameworks. According to the Treaties, the EU shall aim for a high level of environmental protection at the same time as free competition must not be threatened, as being one of the most important means for attaining the more traditional EC goals such as economic growth and a high degree of competitiveness. As seen above, these goals often conflict, and the purpose of this thesis is to present the areas where the EU environmental policy and competition policy meet each other and to answer the question of how to deal with a conflict between the rules and principles they contain. The main question at issue is whether measures likely to restrict competition can be exempted from the prohibitions of the TEC competition rules and the Merger Regulation on the ground that they promote environmental protection. The fact that a high level of protection and improvement of the quality of the environment as well as sustainable development nowadays are enumerated among the Community goals, whereas undistorted competition remains a means for the attainment of the Community objectives does not automatically imply that environmental aspects should prevail in a conflict with competition. Nor can such a conclusion be drawn from the recently strengthened integration principle, which, even though it is probably legally enforceable, merely requires competition policy to take the environment into account. Measures to protect the environment cannot be generally exempted from the competition rules and consequently, measures of an undertaking or a Member State with environmentally positive effects must be taken in compliance with the competition rules of the TEC. The cases which have come before the Commission where environmental aspects have been included so far, show that environmental arguments nowadays can be put forward within the context of all the TEC competition rules, and probably in cases concerning the Merger Regulation as well. Even though there is no clear example of a competition restricting measure not being prohibited alone because of its environmentally positive effect, environmental considerations do play a part in the assessment of the competition rules and are likely to improve the chances for e.g. agreements or behaviour to be exempted from the prohibitions. Furthermore, the role given to the environment, both in the assessment of competition cases and in the Community as a whole, is increasing, and the tendency seems to be for environmental arguments to be given a more important role in the future. In the light of the fact that the Commission according to Article 6 TEC is obliged to take due regard to environmental arguments, such a conclusion is not surprising. However, the fact that environmental considerations must be taken into account when assessing the applicability of the prohibitions contained in the EC competition rules have, so far, not implied that environmental aspects are given the same importance regardless of which competition rule the environmental action is affecting. The Commission's assessment of conflicts between environmental goals and the aims of the competition rules is not coherent. In order to improve the treatment of the conflicts between environmental protection and competition in the future and to increase the legal certainty in these matters, the balancing between these interests made in the context of every specific competition rule should be reconciled. (Less)
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author
Arvidsson, Linnéa
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Konkurrensrätt
language
English
id
1555913
date added to LUP
2010-03-08 15:55:18
date last changed
2010-03-08 15:55:18
@misc{1555913,
  abstract     = {In recent years, public as well as private measures taken in order to protect the environment have proved to affect competition. As consumers have become more and more alert to the environmental effects of the manufacture, use and ultimate disposal of goods, undertakings have taken measures improving the environmental protection not only due to legislation imposing stricter standards on products and processes, but also due to the fact that having a good environmental image can be an important marketing instrument. However, measures improving the environmental performance of undertakings are so costly and environmental requirements so difficult to comply with, that co-operation with other firms and other action likely to affect competition sometimes have represented the only possibilities for undertakings to conform to the new rules and consumer demands. Furthermore, measures taken by States such as legislation imposing stricter environmental standards and the granting of subsidies for environmental goals also affect competition. Whereas environmental legislation have proven to bring about consequences such as increased concentration of the markets and distortions on free trade, State Aids harm undistorted competition by artificially giving some undertakings a better position on the market at the expense of the other firms, thus harming the equality. Within the European Union, the aims of environmental protection as well as free and undistorted competition are being pursued by means of highly developed policies accompanied by detailed legal frameworks. According to the Treaties, the EU shall aim for a high level of environmental protection at the same time as free competition must not be threatened, as being one of the most important means for attaining the more traditional EC goals such as economic growth and a high degree of competitiveness. As seen above, these goals often conflict, and the purpose of this thesis is to present the areas where the EU environmental policy and competition policy meet each other and to answer the question of how to deal with a conflict between the rules and principles they contain. The main question at issue is whether measures likely to restrict competition can be exempted from the prohibitions of the TEC competition rules and the Merger Regulation on the ground that they promote environmental protection. The fact that a high level of protection and improvement of the quality of the environment as well as sustainable development nowadays are enumerated among the Community goals, whereas undistorted competition remains a means for the attainment of the Community objectives does not automatically imply that environmental aspects should prevail in a conflict with competition. Nor can such a conclusion be drawn from the recently strengthened integration principle, which, even though it is probably legally enforceable, merely requires competition policy to take the environment into account. Measures to protect the environment cannot be generally exempted from the competition rules and consequently, measures of an undertaking or a Member State with environmentally positive effects must be taken in compliance with the competition rules of the TEC. The cases which have come before the Commission where environmental aspects have been included so far, show that environmental arguments nowadays can be put forward within the context of all the TEC competition rules, and probably in cases concerning the Merger Regulation as well. Even though there is no clear example of a competition restricting measure not being prohibited alone because of its environmentally positive effect, environmental considerations do play a part in the assessment of the competition rules and are likely to improve the chances for e.g. agreements or behaviour to be exempted from the prohibitions. Furthermore, the role given to the environment, both in the assessment of competition cases and in the Community as a whole, is increasing, and the tendency seems to be for environmental arguments to be given a more important role in the future. In the light of the fact that the Commission according to Article 6 TEC is obliged to take due regard to environmental arguments, such a conclusion is not surprising. However, the fact that environmental considerations must be taken into account when assessing the applicability of the prohibitions contained in the EC competition rules have, so far, not implied that environmental aspects are given the same importance regardless of which competition rule the environmental action is affecting. The Commission's assessment of conflicts between environmental goals and the aims of the competition rules is not coherent. In order to improve the treatment of the conflicts between environmental protection and competition in the future and to increase the legal certainty in these matters, the balancing between these interests made in the context of every specific competition rule should be reconciled.},
  author       = {Arvidsson, Linnéa},
  keyword      = {Konkurrensrätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {Environmental Protection and EC Competition Law},
  year         = {1999},
}