Strategic or Stringent? Understanding the Nationality Blindness of EU Competition Policy from the Regulatory State Perspective

Abstract

EU competition policy has long been a case study for European integration and Europeanization research, while there is a growing scholarly interest in the external regulatory power of the EU in this area. Yet, the existing literature has insufficiently addressed the issue of whether this policy discriminates third-country based companies operating within and outside the union on a nationality basis. Nor does it link this issue to the wider debate on potential tensions between two major goals of this policy, namely the promotion of competition in the single market and the enhancement of international competitiveness of European companies. In this light, on the one hand, the article explains the increasing importance of international competitiveness in EU discourse, and on the other hand, it presents an initial empirical finding that despite this, EU competition policy has been largely neutral in terms of the nationality of firms. In addition, the article develops an original model, ‘stringent competition policy’, in order to theoretically explain the puzzle of the nationality blindness of the policy even vis-à-vis third-country based firms, while contrasting the model with a neomercantilist idea of strategic competition policy. Regarding methods, this study uses multiple sources, both EU and non-EU, in order to avoid the potential pitfalls of making excessively pro- or anti-EU arguments. It also employs the method of inductive and yet theory-informed hypothesis generation. The model of stringent competition policy proposed in this article draws on the theory of the regulatory state, and sociological institutionalism, as well as empirical observations. The former helps to understand how the supranational institutional setting and the market integration ethos of the EU have shaped its peculiar conception of competition and competitiveness underpinning its competition policy, which centers on the maintenance of a level-playing field rather than the creation of European champions through the discrimination of non-EU based companies. Based on this model, the article hypothesizes that the supranational institutional setting of the EU assures nationality-blind competition policy, even when non-EU based firms are concerned. Overall, the article contributes to the literature on the international dimension of EU competition policy by providing a new theoretical framework tailored to the analysis of the nationality-based (non-) discrimination issue. While the article examines several concrete competition cases, mainly, but not exclusively, in the area of merger in order to build and illustrate the two competing models, they should be subjected to further empirical inquiry in future research.