This year E.CA Expert Forum took place at the Fondation Boghossian (Villa Empain) in Brussels on 30 May.

You will find a summary of the panel discussions regarding “Self-preferences and AI” and “The role of competition policy in the transformation of the European economy” below. We also summarised our key take aways from the closing remarks by Olivier Guersent.

A big thank you to the speakers, participants and for everyone else who contributed to the success of our event.

Date

30 May 2024
Start: 4 pm

 

Location

Fondation Boghossian
Avenue Franklin Roosevelt, 67
1050 Brussels
Belgium
Google Maps

Summary of panel 1: Self-preferences and AI

E.CA’s Expert Forum 2024 in Brussels started with a panel “Self-preferencing and AI” with the participation of Brice Allibert, Professor Leslie Marx, Professor Gregory Crawford, and Mike Walker.

Regulatory constraints on self-preferencing have become a key issue in developing digital markets. Self-preferencing, particularly when driven by “black box” AI algorithms, is challenging to define, identify, and monitor, putting significant constraints on market participants and enforcement.

Several key takeaways emerged from our panel discussion chaired by Hans W. Friederiszick:

  • One participant emphasised the need for a dynamic enforcement approach due to the fast-paced evolution of digital markets and AI. While he agreed that it is often difficult to judge whether algorithms favour themselves, he noted that, sometimes, firms have a clear objective to exclude competitors, as seen in internal documents.
  • It was argued that it is, in general, not clear whether self-preferencing harms consumer welfare and therefore agencies should be cautious when they decide on self-preferencing cases. Yet, despite the dynamic nature of digital markets, competition agencies sometimes need to act before markets tip.
  • The panel underlined that algorithms are often not designed to be explainable. The discussion emphasised the challenge of understanding their competitive effects, both for people inside digital companies as well as for enforcers.
  • One participant used the example of price-sharing platforms to illustrate that if one company takes the leadership, its pricing could act as a price recommendation for other market participants, which in turn could lead enforcers to interpret the markets’ price evolution as mediated collusion, even without explicit horizontal agreements.

The insights from this event highlighted the complexities and the need for adaptive and robust solutions to manage self-preferencing effectively and AI in digital markets.

Summary of panel 2: The Role of Competition Policy in the Transformation of the European Economy

Does market power rise across various sectors and, if so, what can be done about it? What role does state aid play in fostering private investment? Can competition policy and industrial policy complement each other?

These and other important questions were discussed at our Expert Forum in Brussels together with the speakers and chair of the panel “The Role of Competition in the Transformation of the European Economy”: with the participation of Professor Jan De Loecker, Professor Mathias Dewatripont, Griet Jans, Professor Lars-Hendrik Röller and Alexis Walckiers.

  • Market power has risen across various sectors, including the healthcare and energy sectors, not just big tech. One panel participant emphasised the importance of considering broader economic trends like globalisation and climate change, noting that market power often results from frictions such as regulatory barriers and geopolitical factors.
  • The discussion round spoke in favour of the complementarity of industrial and competition policy and highlighting that industrial policy must be shaped in a broader competition-friendly environment. In support of this view, an empirical study in China was described as well as the rapid development of COVID-19 vaccines through strategic state aid in the US.
  • Another participant of the panel discussed the need for a coordinated EU-level approach to state aid, stressing that private investment is crucial for the transformation of the European economy. He warned against an overreaction to foreign subsidies while recognizing the benefits they may imply, advocating for a balanced response that does not compromise competitiveness.
  • The panellists agreed on how important it is for competition authorities to collaborate with regulators and firms to gain sector-specific insights and effectively address competition issues. It was stressed that smaller authorities face specific challenges, and it is key for them to prioritise their actions.

The discussion round concluded that strategic state aid, balanced with competition-friendly policies, is essential to drive investment and economic growth in Europe.

Closing remarks by Olivier Guersent

The closing remarks were given by Olivier Guersent. Below we summarised our four key takeaways on the interaction between competition and innovation for the competitiveness of the European economy.

  • Innovation is in constant acceleration and, arguably, we innovated more in the last twenty years than in the previous 2000 years altogehter. Competition policy needs to accompany this innovation process and be adapted where required.
  • While innovation concerns practically all industries, AI raises some distinctive challenges. For the moment, it is unclear whether AI markets will tip, and the role of competition authorities is to ensure that competitors can access at least three key components: data aggregation, cloud and specialized chips. However, this may evolve over time, and more hands-on approaches may be required in the future.
  • EU merger control is a horizontal policy instrument that should avoid double standards at all costs: merger control must be enforced in the same way for Chinese & American firms, as for French & German firms, as well as for firms from other EU member states.
  • Turning to state aid, Olivier Guersent agreed with the speakers of the second panel that more public subsidies are needed especially to decarbonise the economy. An efficient industrial policy should be embedded in competition policy, or in Olivier Guersent’s words there should be “a two-way traffic” between industrial policy and competition policy.

The speakers

  • Olivier Guersent

    Director-General of the Directorate General for Competition

  • Griet Jans

    Chief Economist of the Belgian Competition Authority

  • Brice Allibert

    Head of Unit at the Directorate General for Competition

  • Mike Walker

    Chief Economic Adviser at the Competition and Markets Authority

  • Jan De Loecker

    Professor of Economics at the KU Leuven and visiting Professor at Princeton University

  • Mathias Dewatripont

    Professor at Université libre de Bruxelles

  • Leslie M. Marx

    Professor of Economics at Duke University’s Fuqua School of Business

  • Lars-Hndrik Röller

    Director, E.CA and Professor of Economics, ESMT Berlin

  • Gregory Crawford

    Professor of Economics, University of Zurich & Chief Economist Zalando