Sara Murawski

Good afternoon, everybody. A very warm welcome to crash course economics, or welcome back. It's nice to see you all here. So today we'll feature the fourth and already last webinar of our fourth crash course series on Ralge and monopoly capitalism. I'd like to ask you to introduce yourself in the chat. Just say who you are, where you're based, and at which institute you work. So, my name is Sarah. I'm a project manager at the Sustainable Finance Lab and at the Transnational Institute. I'll be your host today, together with Rodrigo Fernandes, a researcher at SOMO. And behind the scenes, we have our team consisting of Jeremy Krollsmith, our web developer, Jenny Pannemaker, communications officer at case start from global Info, working, as always, very hard to make this webinar into a success. So briefly, about crash course. We are a collective of engaged activists and experts from a number of organizations, and we united at the start of the COVID pandemic in order to understand how Covid the pandemic changes the world and reflect on challenges that we're faced with and also reflect on possible solutions. So crescourse is designed as a platform to open up debate on how we can move out of the multiple cris we're facing today and towards achieving social, economic, and ecological justice for all across the globe. In order to do this, we invite global experts to break down complex issues and make them accessible to you all so that we can shape our economic system in a just and democratic way. And by doing this, we want to democratize knowledge and give you the necessary tools to change the world. So this time in these series, we're discussing how a few corporate giants gained significant control over market access, technology and resources, which allowed them to extract increasingly substantial rents to the detriment of smaller competitors, but also undermining more stringent regulation and our democracies. And also, of course, consumer rights and labor rights. And in each webinar in this series, we provide you with a 1 hour crash course on a specific subject related to the main subject, ranche capitalism. That makes you understand our contemporary economy and society a bit better. So if you missed out on any of our crash course episodes, you can watch them all on our website, crashcourseeconomics.org. We also have a YouTube channel, and of course, you can listen to them on our podcast. So, of course, of this episode, there also be a recording, a podcast, and a summary on our website. Rodrigo, would you like to introduce this series?

Rodrigo Fernandez

Yes. Thank you, Sara. So in the first three episodes, we focused on separate sectors. We focus on big tech, on asset management, and on pharma, and how market power, monopoly power, operates in those fields. In this fourth and final episode, we will take a step back and focus on the policy side, on states versus markets, on the political economy side of how this all has been developing, particularly in the EU and beyond. So I think that this is a very important episode that will bring, hopefully will help to bring everything better together. Back to you, sile.

Sara Murawski

Yeah, thanks a lot, Rodrigo. So, just briefly, in practical terms, the setup of the webinar is as following. So shortly, Rodrigo will introduce today's speaker. And then very nice in an old school fashion, because we always used to do that in crash course, the speaker will give a presentation of about 15 or 20 minutes. It's a PowerPoint presentation, so you can follow her story. That's very nice. And thereafter, Rodrigo and I will interview the speaker for a bit, and then we'll have a round of questions from your side that will be read out loud by Rodrigo and me. And for those questions, there's a dedicated q a tab, which you'll find at the bottom of your screen. So if you have a question, just put it there, not in the chat. That's for introductions. And then we'll make a selection based on the questions that are most favored. And to favor a question you can upvote with your thumbs up in the system, a question that you like. So, in total, we'll have 1 hour of crash course, and we finish 05:00 sharply. Rodrigo, you have the honor to introduce today's speaker.

Rodrigo Fernandez

Yeah. So I'm very happy to have to announce Angela Wigger. She's with us today. She's an associate professor on global political economy at Rodbat University in Naime in the Netherlands. She has published. She's done research and published in a great number of topics, but originally, her phd was on competition policy in the EU. So in this episode, we asked her to go back in memory lane and to her original work. And I think her work in this field is very important and well can really help us to illuminate this topic. Next to being an academic, Angela is also the chair of the supervisory board of Somal, so the organization where I work at. And she was also a longtime chair at critical Political Economy Research Network. And beyond that, she works in many other networks, but let's not delve into that. So without any longer deal, I would like to ask Angela to put on her video and when she has time to do that, to start her PowerPoint presentation. So we will have some time left for Q A.

Angela Wigger

Thanks for the introduction, Rodrigo and Sara, and thanks for having me. I will just jump on the theme immediately. Since the very inception of european integration, economic concentration through mergers and acquisition has been facilitated and occasionally even actively stimulated. So if you're wondering why there are these giant mammoth corporations out there, oligopolies, monopolies, you need to understand competition policy, EU competition policy the European Commission, that is the DG competition, a directorate general competition, loves to portray itself as competition watchdog, a sort market police that is patrolling the EU for anti competitive conduct, that would bust, curtels and vet mergers as if it were some David versus Goliath flexing its muscles against giant corporations like Microsoft, Google and the like. And this image is very often uncritically reproduced by mass media or different media outlets. And this image needs very urgent corrections. But before we get there, because since this is a crash course, there's a couple of things you need to know about the nature of the beast to the European Commission, because competition policy is actually quite unique in the EU context. There is no other policy field where the European Commission is equipped with such far reaching discretionary powers and where the European Parliament and the Council have so little to say. The DG competition acts as an investigator, prosecutor, judge, jury and executioner all in one, meaning that the Commission embodies the three branches of the state with respect to competition law enforcement. It is legislative, executive and judiciary altogether. So wide ranging competences have been fused into democratically unelected body that is also unaccountable. And the DG competition can directly impose fines on corporation whenever there's an abuse of a dominant market position, or when companies enter an anti competitive agreement like a cartel. It can conduct dawn rates, meaning that the European Commission can enter companies unannounced in the morning, early morning and ask them to open up their books. And since 1989, it can also block or permit mergers without further ado. Or it can ask divestitures whenever there are impediments to effective competition, which means that the European Commission can ask to sell off assets, divisions, subsidiaries or business units, or other type of, or ask for other type of amendments. The European Commission can also ask for privatizations, can issue privatization directives, and it can do this without involving the European Parliament Council. So this is where the European Commission acts as a legislature in the field of competition control, and it can prohibit state aids, and it can grant exemptions and thereby use its discretionary powers to shelter corporations or entire industries from the need to compete. The European Commission is a so called independent competition authority, which is basically eu newspeak for not being democratically accountable. The Dichi competition can ignore political contestation about the course of the enforcement of competition laws. The only checks and balances are the EU courts. So in case of a dispute, corporations, citizens and other community institutions or member states can appeal to the European Court of Justice and challenge a commission ruling. However, it should be noted here that in 80% of the cases the commission wins. So there is some democratic interference possibility. But basically, the DG competition is a bastille of largely unchecked powers, and this also has a physical dimension. So if you go to the Berlimond, the headquarters of the European Commission in Brussels, the Dichi comp is hermetically sealed from the other director generals. So you have to go through various checkpoints actually to enter the teaching competition. So what about merger laws? Capitalist competition in the EU has a very strong constitutional character in the preambles and preambles. These are the opening articles of the treaty where the central purpose of european integration is being outlined. And in these preambles, in the Treaty of Rome of 1957, it says that the EU strives, or back then, the European Community, to ensure that competition in the internal market is not distorted, in addition to the goal to create a high degree of competitiveness. And the specific competition laws are stipulated in the later treaties, actually. And what is remarkable is that when the role treaty was drafted, there were no merger control rules included. And this is particularly remarkable because the Paris treaty, which set up the european coal and steel Community in 1952, the so called precursor to the European Economic Community, it did have merger control laws, whereas the Rome treaty did not. So what happened back then? A coalition of governments and industry representatives successfully blocked the inclusion of supranational and merger laws. The view back then was that companies had to grow in size, create synergy effects and reap the benefits of economies of scale and scope production through economic concentration. So economic size was considered pivotal for postwar recovery, and delegating the rights to that mergers to a supranational body was not considered an option. There was, however, an article addressing economic size, and that's article 102 back then in 82. But the language is actually very clear. It's not a dominant market position that is being prohibited, but only its abuse. I will come back to the merger regulation in a minute, but I think it's important to understand how competition laws were enforced. I will cut a long story short because I only have limited time, but in the post war era of economic integration, the commission took a very permissive stance on economic concentration because it sought to sustain fortis accumulation structures. Back then it actively promoted cross border economic concentration and various forms of cross border intercompany agreements like chant ventures and the like. And the goal was to create euro champions that could stand up to the competitive threat of the much larger and technologically more advanced us corporations that were dominant in. In markets of high value added goods. In the 1960s, 27 of the 30 largest corporations worldwide came from the US. And this lenient stance is on economic size very much reflect the zeitgeist of embedded liberalism. This was the time of large ward is companies, the time of mixed economies with public monopolies in utility sectors. This was also the time of an active industrial policy at national level. So there was a lot of visible hands of the state and the creation of redistributive welfare states. And all these institutions. They sought to cushion economies and societies from so called external economic shocks. So basically it was the time of Keynes at home and Adam Smith abroad. And this was also. And it came with a particular power configuration where productive industrial capital and trade enjoyed primacy above labor, but also over financial capital. Financial capital back then was a servant to production oriented capital. And this more sort of protectionist or neomarcantalist orientation was justified on the basis of public interest criteria. So it was legitimized on the basis of we need to ensure social inclusion, full employment and interclass solidarity. For several reasons. In the 1970s, this system ran into a crisis. And I'm just going fast forward to the neoliberal turn. When european companies tried to overcome the great statulation crisis and the limited growth prospects through relocating and subcontracting production to geographically new markets where labor was cheap and more docile. And it was this transnationally oriented capital that pushed for the completion of the common market, the enlargement of the European Union and the creation of free market access in other parts of the world. And with this gradual transnationalization of capitalist production competition, law enforcement became neoliberalized. The dichi competition was populated by so called neoliberal ayatollas hardliners, which were strongly aligning with the expansionist interests of transnational capital. And competition loss became more narrowly defined on the basis of a competition only focus. And this came together with econometric price modeling as a central reference point for determining anticompetitive conduct. And the focus very much narrowed down to microeconomic perspectives and short termism. So basically disregarding broader macroeconomic issues like unemployment and economic concentration or. Yeah, the focus was mostly on single company behavior and through the focus on prices, price competition. The competition loss only focused at the end products, not the entire value chain or transfer pricing within large corporations or conglomerates and their subsidiaries. The neoliberal turn in practice, meant that cartels were more stringently prosecuted and ever more larger fines were imposed, state aid schemes were prohibited, and public monopolies in key utility and infrastructure sectors were privatized and heaved over to the market. But in the neoliberal phase that continues until today, economic concentration was not considered a problem. In fact, to the contrary, in 1989 the EC merger control regulation was adopted and it came with a largely neoliberal text. There was no room for societal interest criteria like employment, environmental concerns or regional development, or the involvement of workers. Or there were also amendments by the European Parliament asking for, including the European Parliament having a say when two companies were merging. This was all ruled out. And interestingly, this time transnational industrial capital was welcoming supranational merger control rules. And it was also closely involved in the drafting of the merger regulation. Merging companies were operating across borders and they were confronted with what is called a multi jurisdictional overlap. They had to notify their envisaged mergers to multiple competition authorities, asking for different information, enforcing different rules, having different time schedules, and sometimes merging companies had to announce their mergers or ask permission to 30 40 different jurisdictions. And supranational EU merger control created a one stop shop rule, basically eliminating the multiple and contradictory rulings of the member state. Competition authorities and the European Commission also ensured the business community that bringing the big together was not bad. In fact, there were several merger waves rolling over Europe. And the European Commission considered that as part of a healthy restructuring, it was interpreted as an economic upswing. And this permissive stance to economic concentration was politically justified on the basis of synergy effects, very much echoing the Chicago school doctrines. So the usual economies of scale and scope, benefits, and the displacement of inefficient management structures would create efficiency gains and this would translate into lower prices for consumers eventually. And it's also interesting that initially there was a dominance test involved in the merger regulation. So looking at market shares and then the competition authority or the European Commission could gerrymander around what concerned a product market where markets start and end. But in 2003, the merger regulation was reformed and then a new test was introduced. And this was the significant impediment to effective competition test. It's basically the same test as the US used, with a slightly different wording. So they didn't just copy the whole caboodle but had some own europeanized language included. But this new test that they were using looked at whether there would be future efficiency gains. So basically every merger you have will create future efficiency gains. So anticipated future efficiency gains. So by legally anchoring this efficiency gain logic, corporate size no longer could be a reason to block a merger. And we can see that, interestingly, here you see only the mergers that were notified to the European Commission. So it's not the global mergers, but basically this very much reflects the sort of the ascending line of the global merger and acquisition activities. And in 2007, globally, eight of the ten worldwide largest mergers ever were conducted. If you look at the aggregated volume of the companies involved, but also the sheer number. In the meantime, we've reached higher new records. But this was just shortly before the outbreak of 2008 global economic crisis. And a lot of these mergers were strongly speculative in nature. So they were boosted by financialization processes and the emergence of new financial players that could attract a lot of liquidity to finance merger and corporate buyouts. And also with the growing stock market, capitalization as a means for corporate finance companies became more vulnerable for hostile takeovers. So stock markets functioned as marks for corporate control. And between 1980 and 1999, less than 3% of the total number of cross border mergers were true mergers based on a mutual consent of the executive directors. So most of them were hostile mergers. And you saw new financial players entering in 2000. And 720 percent of all the global merger activity was conducted by private equity firms. So hypermobile and footloose financial capital became a player with a very narrow short time focus. So following the logic of buy it, strip it, flip it, and ever since the EU merger control regulation has been adopted, the fast majority has been approved. Less than 1% of all the mergers were blocked. Nine out of the ten mergers were approved without any conditionalities. And the commission is very proud about this, following sort of the corporate maximum of speed is our friend and time is our enemy. More than 90% of the cases were settled within one month after notification. And that's quite an achievement considering that there are 800 people working at the DG competition and about 120 are focusing on mergers. And what is also important, finance capital is basically having a card blanche with respect to the notification obligation, so they do not have to notify when they act as an intermediate buyer. Could be a bank or another financial institution acquiring a company on an interim basis only for a short term with the purpose to sell it off to a later yet unknown buyer. And this goes uncontrolled. This is referred to as antitrust warehousing. So parking corporate assets with an intermediate buyer who eventually sells it off to a competitor with a timely delay. This goes beyond the radar of the regulator. So since 2020, we do not have the latest data. We are basically back to the level of 2007 of merger activity, and I do not see any signs of change. So I see that mergers continue to be permitted, quite generously, by the European Commission, which means that economic concentration continues to be facilitated by the European Commission. And I would like to, just as the last point, to add to that. It is a bit misleading only to look at mergers and acquisitions because there are other forms of concentration, commercial intercompany agreements and strategic alliances. They're much more common practice and they're not so easily observable than mergers and acquisitions, and the boundaries are very often blurred. So intercompany agreements can integrate major long term business goals and include far reaching equity joint ventures or minority holdings and equity swaps. And the. Have they also go below the radar of the EU regulator because they do not have to notify their agreements anymore? This used to be the case, but this was abolished in 2003. So I will end my presentation here. I have lots more to tell, but I'll just wait for your questions.

Rodrigo Fernandez

Angela, thank you. Thank you for this very clear introduction. So Sarah and me have some questions to continue with this. So my first question is about what makes the EU's competition policy special compared to other countries? So, yeah, if I compare competition policy with, for example, tax policy in the EU, in tax policy, it is clear that it's part of the national competence. The EU Commission has nothing to say about taxation, but with regard to competition policy, it is fully concentrated at the commission. So my question is, how come that competition policy is so much at the heart of the EU Commission compared to other policy areas? Does it matter that competition policy is supranational in nature? In EU, compared to, I don't know, the US or Japan, does it lead to different. Also, sorry, these are a lot of questions. You can pick one if you want. But also, is it the case that competition policy, because of this supranational nature, because of its undemocratic nature, concentrated in the commission, it is much more in the hands of unelected officials, which sets it apart from how competition policy is shaped in other countries. So basically, this whole unelected official machinery that decide on this, does it set it apart from how it works in other countries?

Angela Wigger

Yeah, I think the very special role of competition policy, it is the key policy area that made european integration possible, one could argue, because EU competition laws, they're about removing private and public obstacles to market integration. So the entire reconfiguration of several fragmented markets into this giant single market was facilitated through competition policy, because the right to compete gives you the right to enter the different markets for companies. So it is central to the four freedoms of capital, finance, labor and services of the european integration process. And what makes it special. Yeah, that's the particular configuration of the supranational body, the European Commission, enjoying primacy above the national competition laws that the member states have. So the European Commission can overwrite, in many cases, national competition authorities, they've created a european competition network around 2003, but there's one principal agent there, and that is the European Commission, that tries to ensure that there is some harmonization and convergence of the different rulings. So there's a lot of interaction and steering going on. If you compare the competition competences of the European Commission, for example, in the US, you have the Federal Trade Commission and the Department of to. They do the investigation of anti competitive conduct. And you can also announce as not a company or as a citizen, that you observe anti competitive conduct and then they will take it up and they have to bring that before the courts. So the courts are having a much stronger role in the US than compared to the EU. And what's also quite unique is that the European Commission controls state aid subsidies given by member states in the US. You do not have that. So if there are federal subsidies given, there's no authority controlling the state for state aid schemes, and it is just unmatched power to intervene into domestic industrial policies. It's not that the European Commission does all the competition control. It is there's a division of labor. So only the cross border mergers, for example, have to be notified to the European Commission and only if the aggregate turnover size matches a particular threshold. I think it's 5 million worldwide and 250,000,000 within the EU.

Sara Murawski

So, yeah.

Angela Wigger

It'S a unique body that has a lot of power and it can use this power in discretionary ways.

Sara Murawski

Maybe to go to one of your favorite persons in the commission, the former competition commissioner, Neely Cruz. So one of her quotes is that the merger tsunami is a good sign. It shows that the market itself is adapting to change and that the european companies are adapting to global competition. Healthy restructuring is taking place in many sectors. These processes must be allowed to run their course without undue political interference, end of quote. So, yeah, what we see here, I think, is that commission is very clearly actively promoting the concentration of corporate power to compete also with other economic blocs. And I think it's more true today than ever. Right. We also see a lot of geopolitical muscles being flexed. Ursula von de Lair is very keen on building a big european industrial bloc.

Angela Wigger

Right.

Sara Murawski

So do you think that this kind of power dynamic can be coined as imperialist in the sense that big states and big corporations operate tandem, so their power goes hand in hand at a supernatural scale for a geopolitical muffler flexo to say, visa vis China, vis a vis the US and other competitors. So is that really imperialist?

Angela Wigger

That's a very big question, yes. I mean, we have seen various imperialist tendencies within competition law enforcement. In the beginning, there was this protectionist, neomercantilist focus, shelter in certain industries from outside competition and others not so. It was also the idea of embedded liberalism is sort of a gradual opening up to the exposure of global competition. And when transnational capital was sort of solid from the 1990s onwards, you could see that the European Commission became very activist trying to establish a global competition regime, so facilitating the access to new markets for european companies. And it was very active through the Singapore ministerial at the WTO, established in the Singapore criteria, or extending the multilateral trade agreement to trade and investment. Trade and competition. But this whole thing collapsed because there was too much opposition. But what we see today, up until today, is that every trade agreement or investment agreement that the European Commission is concluding, there is always a competition chapter in there, enabling the right to compete and thereby to access new markets. So we very strongly see this imperialist tendency there facilitating capital accumulation. That is what the European Commission does. The European Commission is part of a capitalist state that enables certain fractions of capital to accumulate privileges. It selectively sort of facilitates these accumulation patterns. And as a part of that, some need more protection. You can see that there's investment control. There's a lot of sort of new protectionist elements today making their inroads. But this does not change the nature that competition policy is still trying to facilitate capital accumulation within Europe. So it always has had a neo americanist orientation, but now we see that more visible. So, yes, I mean, the competition policy is by its nature imperialist. And it's interesting to see, I mean, there was a lot of organizations, the ICN, the international competition network, but also within the OECD, that the European Commission was in the driver's seat, actually trying to especially upload its own regime to.

Sara Murawski

Many.

Angela Wigger

Countries in the world, even countries like Zambia, that have one main road and a hospital. But they also happen to have a competition authority because this came as part of the development aid that the EU does, establishing competition authorities and creating new capabilities in this regard.

Sara Murawski

Great. Thank you. Very clear answer.

Rodrigo Fernandez

Yeah, if I can continue on this imperialism. Well, at least as we know it from almost 100 years ago, from Lenin's time, it is about shared interests of the state and big corporations. And what we see today, if we look at your work, it is that the EU merger control, the system of merger control basically is facilitating and pushing for economic concentration. It is pushing this from position of basically of being isolated from democratic control and democratic accountability and being operating very close to corporate lobbyists. The corporate lobbyists know how to find this institution. So there's no democratic accountability or very little. So is it possible for the EU Commission to operate in a different way in this regard? Because at the moment you're seeing a large number of ngos pushing for a change, for a wind of change. You see this also, for instance, SoMO, but also the balanced economy project, has been set up to push for a different type of approach by the EU Commission with regard to mergers. But do you think it is possible at all to operate against the interest of big corporations?

Angela Wigger

Oh, yeah, we have to. I think that we have to think about the different steps of what we should do to get started. And we have to debunk the myth that capitalist competition is something inherently good. And the freedom, I mean, the European Commission presents the freedom to compete together with broader notions of political freedom and individual self determination. Even democracy and competition is argued to boost the overall competitiveness of an economy. It would increase social welfare, benefiting society as a whole. And in the context of european integration, it has even become a sort of unifying principle. It's been elevated as a mantra, totalizing logic. And this might seem intuitively appealing and politically motivating. But capitalist competition distinites more than it unites. So it negates individual freedom. It's a social class relation that is essentially antagonizing. Capitalist competition pits capital against capital, capital against labor, and in the presence of a reserve army of the unemployed, labor against labor. So we have to debunk the myth that capitalist competition is something good. So at the end of the day, capitalist competition installs a race to the bottom. It devalues labor through lowering wages for the sake of ensuring the continued accumulation of capital. So there's nothing wrong in creating better products and maybe also environmentally sustainable products. But competition should never take place on the basis of prices. And that's the central focus. So where to enter is so debunk the myth that price competition is something good and that it will ultimately benefit consumers because you need to have a job first before you can consume. So we have to bring labor into the equation and we do have to reform the commission as an institution. We have to democratize. And it's quite interesting if we go back in time when the allied forces occupied Germany, they had a program, a 4D program. It was de nastified, decartitalize, deconcentrate and democratize. We could bring up another 4D program. So de neoliberalize, deconcentrate, democratize. What would be the force?

Rodrigo Fernandez

I decarbonize.

Angela Wigger

Decarbonize.

Rodrigo Fernandez

Thanks.

Angela Wigger

That's excellent. Yes, perfect. In a capitalist system, production takes place for creating exchange value more than use value. So we could give more primacy to use value. So we have to fundamentally change the institutional body that is looking at competition and how we interpret competition and remove the capitalist logics of price competition. Yeah, so that would be the. It is possible, but we will not see it very soon.

Sara Murawski

No, thanks a lot. I mean it's something we need to work on, I guess, especially in these very geopolitical sensitive times. And also thank you for bringing in the workers. I had a question about that, but I don't have to ask that anymore. And that's also good because we have quite some question six already from the audience. So I'm going to start with the most upvoted question, which is from Margarita Silva. You can also read it, Angela, if you'd like, in the Q A tab. And the question is, do you think there's a welcoming approach towards EU companies while a hostile approach towards the US and chinese companies? So a welcoming approach towards EU companies vis a vis a hostile approach towards american and chinese companies case.

Angela Wigger

It goes very subtle. You really need to beat footer lines and do a very good profound analysis, go through all the case work and I haven't done that. It is the image that this is the case because there's a lot of chinese companies that, especially in Germany, have taken over german companies and there is some resistance emerging from there. So there is a privileged, or at least sometimes you get the impression there's a privileging of EU industrial capital and financial capital visa the competitors. Absolutely. But I haven't done really the profound casework to sustain this. Good.

Sara Murawski

So still research out there to be done?

Angela Wigger

Absolutely, yeah.

Rodrigo Fernandez

I don't know which question is next.

Sara Murawski

There's, I think one by an anonymous attendee which is upvoted.

Rodrigo Fernandez

Oh, yeah, I see it. Yeah. I also see that there are questions in the regular chat, so maybe we have to look at both if there's time to answer all of these questions. So this question is, I hope this is not out of the scope of your presentation. Would you be able to give an example of how the EU competition policies and the DG competition excessive competences influence the EU climate and environmental policies?

Sara Murawski

Interesting one.

Angela Wigger

Yeah, it's a very good question. But there's no climate and environmental policies, sort of public interest criteria included when assessing mergers or cartels. But what we do see, and we do see a temporal relaxation of state aid control. So basically, whenever national domestic member states are offering state subsidies, which does not have to be like non enbursable funds, it can also be just guarantees or tax concessions that go together with an EU program or industrial policy, but also moving the EU production towards a more green, more sustainable future, then there is no control for state aid. And we also see this with the important projects of european concerns, with the IPC. The important projects of european interest.

Sara Murawski

Exactly.

Rodrigo Fernandez

It is, of course, not my field of expertise, but I know my classics of Rockefeller and standard Oil being chopped into 21 separate entities, being the sort of the classic interaction of a state that really wants to intervene against monopolies. So this was 100 years ago, but now perhaps we're seeing oil companies mergering into ever larger energy companies that become untouchable. I mean, could that be also something that is the result of how the EU competition policy works?

Angela Wigger

Yeah, so maybe to this question. So we have like one share that comes with this greening capitalist production, but at the other mean there's no official distinction between made whether you're environmentally sustainable in the future or not. So there's no basis where the European Commission would judge these merchant's economic concentrations different to the more green technologies. And if you look at the fondle lion, she was quite outspoken, saying that the EU would do whatever it takes, echoing Mauritraki, to bring european companies ahead of the green and digital value chains. We do not hear Russell von Delane saying, we're going to do whatever is needed to decarbonize capitalism. So basically in here, you have the answer to your question, Rodrigo. It's bringing european companies ahead of value chain. So basically also the question that was posed before. So do we see that there's a privileged treatment? Yes. European companies have to dominate global value chains.

Sara Murawski

Thanks a lot, Angela. We have a burning question here from Isa Stasi, who managed to put her question in the Q and A. It has been uploaded now as well. So ISA is from article 19. And thanking you, Angela, for the great session. The question is about discretionary power. The question reads, I think it's very useful to guarantee functional interpretation of the rules rather than a narrow literal one. I think functional interpretation is essential to realize the full potential of the rules and achieve their goals. A great example is DMA Digital Markets Act. I presume with a literal interpretation of the obligations, gatekeepers might be required to do just some tweaks. But with a functional interpretation, they might need to do much more. So maybe the point is to have clear regulatory principles to oriented discretionary power and then accountability. That's the question. Maybe you can just briefly reflect on what functional means in this context. Angela?

Angela Wigger

Yeah, I don't interpret, I find functional interpretation. My answer would be like a competition policy is always political. I mean, you're benefiting some agents more than others. So there is no functional logic. Capitalism does not work like that. So when we have to politicize what is political, because competition control is being taken out of the democratic realm like any other field of european governance that deals with the economy. We organize, orchestrate the economy. So yeah, a functional has a bit of an undertone of that. There is a solution, there's a certain fix. And I don't think so, because if we want to democratize the European Union, we have to account for what is political and treated as political.

Sara Murawski

So instead of depoliticize, repoliticize.

Angela Wigger

Absolutely, yeah. And maybe also what competition policy does, or competition laws, they function. There's one function that I would use as an fictitious equalizer. They treat different corporate units as if they were equals while they're not. So this whole logic of creating a level playing field, so every company is basically treated as if it were equal. There is a de minimis rule. I have to give justice to that. So that there's certain companies from smaller size that are being excluded, they have a special treatment.

Sara Murawski

Indeed.

Angela Wigger

But still competition laws function as fictitious equalizer.

Rodrigo Fernandez

Maybe we have time for two questions because we're very ambitious. So I think that the next question in line would be from Miriam von Steichler. Is there renewed interest in the dominance test? How should a dominance test look like?

Sara Murawski

And maybe you can also reflect on how a dominance test functions.

Angela Wigger

Yeah, dominance test. What is interesting is that there are member state governments, but also a lot of political voices wanting to go back to the dominance test that looks at market shares. So measuring effective competition on the basis of market shares when the merger regulation was adopted in 1989, there is a german class and a dutch class asking for using the dominance test whenever they invoke it. So there is this possibility for member states to go back to use the dominance test if they ask for that. But to my knowledge, and haven't checked recently, this has not been invoked. But it is a debate to look more at market size rather than expected future efficiency gains in the form of lower prices. This is futuristic assessments, so you cannot look into the future whether this will lead to lower prices. And as I said, labor is totally excluded. So it's esoterics, basically. You can never prohibit a merger because every merger will eventually create economies of scale effects.

Sara Murawski

So I think at least one more question that has also received an upload. Zadri Kawas, sorry for pronouncing you most likely incorrectly, but here goes. I think there is an anti monopoly approach that's rising at both sides of the Atlantic. So the Digital Market sect and Digital Services act are good examples, if you're interested in that, by the way, also see our former crash courses. Recently, EU also adapted foreign subsidies regulation, another regulation. Do you interpret these changes as a result of increased concentration or increased foreign dominance? Now, what is the main concern that drives EU policymakers to adapt new competition rules?

Angela Wigger

This is a difficult question. It's a good question. I'm afraid I can't answer it. What I do see is that the actual substance of the competition laws hasn't changed since the treaty of Rome. So they always had a very strong neoliberal core. Every competition provision that the EU has comes with a whole array of exemptions. And this is also part of the discretionary power that the European Commission enjoys. So we can just pick and choose some rules above others. So I do not see new competition laws being adopted. So they basically remain the same. And I have to say the digital Markets act is beyond my, I haven't studied it, so I can't say something really meaningful about it. I'm very interested in it. So this is homework for me. But I can't look at the competition provisions or say something about it right here.

Sara Murawski

No, no worries. And I think so in one of our former crash courses on big deck, there was attention paid to these regulations. So to all that are interested in this, maybe. Yeah, that's a good source.

Angela Wigger

Rodrigo, maybe one thing that is maybe important with regard to digital platform economies, the merger control regulation that the European Union has looks at aggregate combined annual turnover to assess whether or not you have to ask permission by the European Commission and we saw that companies like Amazon, in the beginning, they didn't have a turnover. There were loss. They were when they conducted mergers and acquisitions and grew in size by taking over other companies. This was not accounted for by the European Commission because they didn't meet this turnover threshold criteria. So a lot of these platform economies, because they enter this tipping point before they really become dominant, before that happens, they're outside of the control of the European Commission. So even if the European Commission would be more hesitant to excessive economic size, the rules would not allow to control these.

Sara Murawski

I think we briefly lost Angela.

Rodrigo Fernandez

Yes.

Sara Murawski

Let's see if she comes back, because we also need to wrap up. But this would be, of course, out with a bag. Too loud.

Rodrigo Fernandez

I think she fell out of the. She fell out.

Sara Murawski

Okay, well, we will have to wrap up, I'm afraid. Maybe in the meantime, while. I'll just keep talking. Angela will be back.

Rodrigo Fernandez

It was perfect timing by Angela.

Sara Murawski

Yeah, the timing is amazing. We have to agree on that. So, yeah, we want to thank Angela then, by means of this recording. So much for her presentation and her great answers to all the questions. Also, thank the audience for all your questions. Very elaborate. I see that there's a whole discussion unwinding also in the chat about depolitization. I wish we could continue that, but that will be for another occasion. So there will be a recording of the session, of course, put online, as well as a podcast version and a transcript on our website. For now, we'd like to thank you very much in participating in this fourth and final webinar of crash course economics on Ronchier and monopoly capitalism. It was the final webinar of this series, but we're thinking about a new series, so stay tuned. You can sign up for our newsletter on our website, crashcourseconomics.org. And I'm wishing you a very pleasant day. And there's Angela. That's great to see Angela. We were thanking you very much for your presentation and your presence and all.

Angela Wigger

The answers you gave.

Sara Murawski

And we're wrapping up, so we're just on time. So thanks a lot to you.

Angela Wigger

I was picked out, something happened, the Internet went down, and I was off screen.

Sara Murawski

Where are those big techs when you need them? Right? So.

Angela Wigger

Well, here we are.

Sara Murawski

Thanks again. Thank you so much. And we hope to see you on another location and just visit our website if you want to stay updated. Goodbye.

Angela Wigger

No bad bye. Thank you.