Limited Politicisation: Strengthening, Not Undermining, Economic Regulation in the EU

Table of Contents: 1. Introduction. – 2. Politics, Technocracy, Non-Majoritarianism in the EU. – 2.1 The Standard Account… – 2.2 …and its Complications. – 3. Competition Law and Limited Politicisation. – 3.1 The Goals of EU Competition Law: An Inclusive and Flexible Mandate as Limited Politicisation. – 3.2. Legal Arrangements for Limited Politicisation. – 4. Conclusions.

Abstract: The article revisits the idea that non-majoritarian institutions, broadly understood as governance arrangements that delegate the pursuit of constitutionally pre-set goals to bodies insulated from politics, are apolitical and technocratic. To do so, it draws on scholarship exploring the links between delegation and politicisation, as well as scholarship emphasising the experimentalist features of policymaking by independent regulators. The paper argues that limited politicisation of the regulatory process can strengthen independent economic regulation in the EU. Limited politicisation is enabled via substantive concepts and doctrines that allow for a plurality of interests, goals, and perspectives to permeate the enforcement of rules that are apparently narrowly directed to a single objective, as well as procedural arrangements that allow for stakeholder participation or periodic revision of regulatory solutions. These doctrines and mechanisms have become pervasive in EU economic regulation, as illustrated by examples from EU competition law. While they politicise the regulatory process, thus strengthening the democratic credentials of economic regulation, said arrangements need not undermine the non-majoritarian character of the institutions deploying them and the effectiveness of their regulatory action. As such, limited politicisation may allow regulators to resist pressures from elected officials, proving useful at times of backlash against NMI’s independence and growing authoritarianism. This article is a contribution to a Special Section that critically analyses the role of non-majoritarian instruments and institutions with respect to three challenges that shape contemporary democracies in Europe: socio-economic inequality and discrimination, growing authoritarianism, and the pressing climate crisis.

Keywords: economic regulation – non-majoritarian institutions – competition law – politicisation – independence – experimentalism.

1.   Introduction

The growth of Non-Majoritarian Institutions (NMIs) – unelected bodies endowed by elected officials with ample public authority – is one of the most distinctive and well-documented developments of post-WWII liberal democracies.[1] NMIs include supranational organisations, national and international courts performing judicial review, and independent regulatory agencies (IRAs), including economic regulators.[2] Independent economic regulators, including competition authorities, which this article primarily considers, are tasked with powers to align market functioning to the public interest in the pursuit of constitutionally mandated objectives or values, and equipped with enough independence to do so without too much political interference.[3] While previously celebrated as a key achievement of the modern regulatory state, protecting the general interest in the face of sectoral economic ones, and pursuing impartiality against favouritism, the role of independent economic regulators has in recent years come under increased scrutiny, if not attack.

Various concerns drive the growing suspicion around independent regulators. In popular debates, unelected regulators are often characterised as ignoring the will of the people, thus weakening democracy. Another charge often moved against independent regulators is that they are narrowly technocratic, because they base their decisions on, and find legitimation in, narrowly expert knowledge – e.g. economics, in market regulation – rather than on citizens’ concerns and insights on the ground. In the populist repertoire, it does not matter that economic regulators are, by design, tasked with narrow goals and asked to marginalise, if not exclude, perspectives which would dilute the pursuit of said goals. These narrow goals serve, among others, to immunise regulators from political and societal pressures – possibly their foremost progressive justification is indeed that independent regulators are not swayed by those actors that have most economic and political power.[4] The non-majoritarian character of the regulators is seldom explicitly evoked, with the target of the critique being more often the NMIs’ supranational character, or the substantive values they serve (free movement, competition, an open society). But much popular suspicion around regulators stems from the idea that they are designed to be unresponsive to elected officials, political majorities, and democratic demands on the ground, and are thus described to advance the interests of the few (variously defined elites) at the expenses of the many (the people).[5] One core target of the critique is, hence, at least implicitly, the regulators’ independence;[6] another one is their technocratic character.[7]

These arguments resonate with a scholarship critical of the over-extension of the EU regulatory state as too narrowly reliant on expert knowledge (technocratic) and on market-based mechanisms (neoliberal),[8] as well as insensitive to lay concerns about local values, including the demands of the losers of the policy choices that regulators make.[9] Since many of the most powerful regulators in Europe are either EU institutions or national agencies tasked with mandates defined by EU law, this scholarship often resonates with a long-standing critique of the over-constitutionalisation of the EU and its law.[10] As the argument goes, when key areas of law and policy are insulated from the political process, and political discussion, citizens feel powerless, which in turn feeds disenfranchisement and the populist backlash against the EU and its institutions. On some accounts, the very backlash against NMIs can ultimately be ascribed to an overextension of the EU regulatory state.[11]

A sustained critique of the biases and failings of the EU regulatory state is to be welcomed, but automatic associations of independent regulators with a lack of politics and technocracy may be overly stylised and lead to wrong diagnoses of where the problems lie, including what may cause the backlash against independent regulators. To be sure, these associations are deeply rooted also in scholarship which is generally benign about the EU and its law as politicisation is seen as endangering the effectiveness of the regulatory process, while technocracy to guard said effectiveness and offer legitimacy.[12] By reference to their non-majoritarian character, independent regulators are widely described as apolitical, and their growth as signalling a shift towards depoliticisation.[13]

This article emphasises insights from scholarship that questions a characterisation of independent economic regulators as inherently apolitical and narrowly technocratic. The two streams of scholarship upon which I draw (1) show how the regulatory process can become politicised without this resulting into a fundamental erosion of the regulators independence or their ability to pursue their mandate;[14] and (2) describe strategies via which regulators may become more responsive to societal demands, including via forms of engagement with stakeholders and civil society, as part of democratic experimentalist features of economic regulation in the EU.[15] As this work suggests, the ability of regulators to act effectively and in the general interest rests less on their insulation from politics than on their ability to respond to the outside world, gain knowledge about interests on the ground, and manage popular demands. Said engagement with the outside world is not only desirable but a necessity in regulatory contexts characterised by complexity and uncertainty, where uncertainty is pervasive and extends to the very goals/concerns that the regulators should respond to; the practices on the ground that may harm said goals; and how to remedy them when identified as a problem.[16]

Via a reading of the above scholarship in light of recent regulatory developments in EU law, the article presents an initial conceptualisation of limited politicisation of independent economic regulation in the EU. Politicisation is in the article used in a broader and less technical sense than most contributions in political science, to indicate that the regulatory process is responsive to interests, demands and democratic pressures in society, and influenced by the very political conflicts behind the regulatory choices they make, including distributive concerns. This meaning of politicisation locates politics beyond the electoral arena and representative government: that is also in markets, society, and their regulation. In line with some of my previous work, I seek to advance this notion of politicisation as desirable in the regulatory process.[17] This type of politicisation is both more diffuse and less intense than forms of politicisation by which the regulators’ political principals seek to re-assert control over the decisional process – what is sometimes called institutional politicisation.[18] It is more diffuse, because it is a form of politicisation which is often built-into the regulatory process, initiated by the regulators themselves, and may include a plurality of stakeholders beyond the political principals - such as other public bodies, the regulated and other businesses, NGOs, and media.[19] It is less intense, because limited politicisation does not entail de-delegation or a fundamental compression of the NMI’s independence. Such a politicisation relies on procedural arrangements, decisional practices, as well as substantive choices within the regulators’ mandates that open the regulatory processes to insights from a broader set of actors and salient societal concerns, which points to a more democratic, i.e., deliberative, implementation of the regulators’ mandates.[20] Among others, we can think of regulatory arrangements that can be used to collect input from affected third parties (beyond the regulated); revise decisions as new perspectives or concerns emerge around the regulated issue; open-ended concepts or flexibilities introduced in the pursuit of the regulatory goals, which can be used to show responsiveness to novel concerns and democratic demands on the ground. 

In the face of sustained attacks on NMIs, including regulators’ independence, which characterise our times of interrelated backlashes against liberal and supranational institutions,[21] it may seem counterintuitive to evoke politicisation as a desirable feature of EU market regulation. Arguably, politicisation, even in the less intense form this article describes, raises concerns about the regulators becoming vulnerable to political interference or inclined to deploy their very intense powers in ways that divert from the public interest.[22] While the article acknowledges said risks, it also points to the potential of limited politicisation to preserve and build up the regulators’ independence, including by increasing their ability to resist attacks from politicians. As some of the insights I present illustrate, building responsiveness into the regulatory process can reduce risks of backlash against regulatory decisions later. Some politicisation may thus be needed not only to improve the democratic credentials or accountability of independent regulators, but also the effectiveness of regulatory action. Ultimately, the notion of limited politicisation confirms that independence is not an on/off concept; it comes in degrees and is not always best protected by more insulation from politics and society.[23]

While this article cannot do full justice to debates about non-majoritarianism, politics, and technocracy, which are incredibly rich and complex, it offers some insights which can enrich the answers we give to the overarching questions posed by this Special Issue; over the desirability of NMIs, their role in European societies, and whether they aggravate or rather can mend the big divides – and dissensus - that fracture European polities. The structure of the paper is as follows. The next section (2) briefly recounts the main tangents of research around NMI and economic regulation and presents insights from two streams of scholarship that complicate the association between NMI’s independence, lack of politics and technocracy. Thus, this section offers a first sketch of the notion of limited politicisation. Section 3 presents examples from the field of competition law that broadly mirror the scholarly insights presented and further substantiates the notion of limited politicisation. Section 4 concludes. 

2.   Politics, technocracy, non-majoritarianism in the EU

2.1.  The standard account… 

In the modern regulatory state, governments delegate a variety of public authority functions (ranging from service-provision to risk-assessment, from enforcement to audit and appeals[24]) to unelected bodies which operate at arm’s length from governments. A rich scholarship across the social sciences and law has theorised these bodies as Non-Majoritarian Institutions (NMIs) because their decisions should not be expression of, or responsive to, national majorities.[25] The growth of NMIs in the government of our economies and societies is well-documented in the literature, and so are the reasons that may explain said growth. Elected officials have an interest in delegation as it allows to make commitments towards certain values or policy choices credible vis-à-vis business and consumers, and in turn to lock in current policy preferences and make it hard for future majorities to change them.[26]Politicians may need to delegate areas of complex decision-making to bodies possessing specialised technical knowledge. Moreover, representative governments turn to NMIs for their capacity to make politically costly decisions (or at least amplify the weight of minoritarian and unpopular concerns within the decision-making process) that elected officials would not be able to make, especially in the face of powerful economic actors which can sway electorates.[27]

Wide variation exists in the institutional forms that NMIs take, as well as their powers,[28] but their common theorisation as non-majoritarian relies on the fact that they derive their authority not from electoral mandate but from their independence from politics, typically by stipulations that ensure that their heads are unelected and unaccountable to parliaments, and that their decisions are executive without need of approval from elected bodies. This contribution focuses on NMIs that can be described as independent economic regulators, in that they oversee the protection and advancement of the public interest in markets. The goals protected by these bodies include, among others, competition, financial stability, consumer protection, trust in financial markets, and media freedom. In Europe, the pursuit of said goals is often prescribed by EU law, typically via broadly defined mandates at the Treaty or legislative level. Independent regulators, either EU bodies themselves – e.g., the European Commission in some of its function; the European Central Bank – or national bodies as decentralised enforcers of EU law (e.g., EU competition law) are tasked with ensuring that the goals at the core of their mandate are protected, by specifying conduct rules, enforcing related obligations, and designing remedies, among others.

Political scientists have theorised NMIs, including independent economic regulators, largely via principal-agent theories whereby political officials delegate decision-making to non-elected bodies: delegation reinforces the principals’ (politicians’) commitment to certain values or goals, by tasking their advancement to agents (the regulators) that work at arm’s length from government and are thus insulated from political pressures and democratic demands.[29] The logic of delegation offers an especially persuasive justificatory story to EU integration and EU law as non-majoritarian instruments that constrain national majorities.[30] There is hence a strong link between the theorisation of NMIs and EU supra-national policymaking, which is in the background of many of the reflections in this article.

As mentioned, the growth of independent regulators coincides with the growth of the regulatory state, in that their number and powers grew as States took on more regulatory functions, namely as the State retreated from direct service provision of many public goods, to instead ensure that private operators in markets delivered said public goods under regulatory oversight.[31] A regulatory state must ensure that its ample public powers of market oversight are exercised impartially and in the public interest. This is achieved through notions of independence as constructed though various legal provisions and doctrines aimed at limiting political interference in the regulatory process. Alongside independence, economic regulators possess a sizeable amount of specialist or expert knowledge; hence the much-discussed technocratic character of independent regulators.

Economic regulators are to at least some extent independent and technocratic by design, and it is broadly agreed that some independence and specialist knowledge are desirable and necessary in the governance of complex economic and other societal issues. This contribution takes no issue with this broad characterisation. But the non-majoritarian label attached to economic regulators often also leads to a vision of regulators as inherently apolitical, insensitive to democratic demands in society, and narrowly technocratic.[32] The next sub-section complicates this latter vision. 

2.2.  …And its complications 

This section briefly presents insights from two streams of scholarship which, by contributing to a more nuanced understanding of the links between independence, politics, and technocracy in economic regulation, inspire my observations in this article.[33] One stream of scholarship, mostly from political sciences, emphasises the complex links between delegation and politicisation. Another stream of scholarship describes regulators as working as part of an experimentalist architecture of EU public decision-making, which is theorised as the best solution to deal with uncertainty and complexity in the governance of various economic and social issues.[34]

The first stream of scholarship takes off from the observation of the growing politicisation of NMIs, and specifically independent regulatory agencies, which in recent years have been the targets of intense challenges to their legitimacy and independence by elected officials – their principals.[35] The puzzle this scholarship confronts is that despite politicisation, de-delegation (namely the withdrawal of the regulators’ powers) has been limited – with selective non-compliance or an increase of control over the NMIs being more common outcomes of politicisation.[36] As this work illustrates, meaningful delegation can survive in more politicised contexts. Among the explanations advanced for the persistence of delegation in more politicised contexts are the fact that most independent regulators operate in a system of multi-level governance, whereby potential retaliation by elected officials is constrained by EU legal requirements, often formally mandating the delegation of certain functions to independent agencies (coercion), as well as more informal processes by which regulators gain support from international peers or in networked governance.[37]

Other scholars have more explicitly questioned the association between strong insulation from politics and effectiveness of the NMI’s regulatory action. As Onoda has shown, in regulatory contexts with lower levels of delegation, regulators may face less contestation of their policy mandate: regulators with less ability to make politically costly decisions, for example because they may just advise the government ministers who stay ultimately responsible for the decision, face less institutional politicisation.[38] Ultimately, these less well-insulated regulators may be more effective because their mandates and decisions tend to be less contested. As Onoda states ‘delegated policymaking insulated from politics can undermine itself by becoming a source of subsequent politicisation’[39]. Onoda suggests that inability to contest regulatory solutions within the regulatory process shifts the controversies around the regulators’ decisions to the public arena, with consequences that are harder to predict and control.[40]

I take this line of work to suggest that regulatory contexts characterised by lower levels of delegation, for example, those in which decision-making still relies on agreement by several players, including more representative ones, or where societal interests find some form of representation in the regulatory process, may be better able to internalise the potential challenges to the regulators decisions and avoid conflicts that end up undermining the regulators’ independence. These findings seem congruent with research suggesting that NMIs can avoid de-delegation in the face of politicisation by mobilising extensive networks of support, made of both international peers and local actors.[41] Furthermore, they are in continuity with scholarship questioning the sufficiency of formal independence in explaining the effectiveness of regulatory action.[42]

Overall, this scholarship complicates a static vision of regulators as either possessing independence or losing it because of the ability of politicians and other external actors to interfere with the decisional process. For the purposes of this article, this scholarship is salient in that it invites to pay close attention to the mechanisms through which regulators communicate with and respond to interests in society. These mechanisms may not only improve the democratic pedigree, and accountability, of the regulatory process, but also increase the regulators’ ability to withstand political interference and ensure policy stability in times of backlash. This paper aims to contribute to the description of some of these mechanisms as instruments of limited politicisation of the regulatory process. 

Before turning to examples, I will present a second stream of literature which describes EU economic regulation as possessing features of an experimentalist governance architecture.[43] Among the many instruments that have been theorised as part of experimentalist governance, we can mention the collection of input from stakeholders and affected parties, which has both diagnostic value and informs policy implementation and design; collaborative rule formulation and remedial design, which relies on the regulated for implementation and monitoring; the design of preliminary solutions and their iterative revision supported by monitoring systems; peer review of regulatory solutions, often in international settings, as a way to learn by comparing different experiences.[44] These mechanisms can be seen as desirable from two broad normative visions – as instruments to deal with uncertainty,[45] as well as the best we have to preserve meaningful democracy in the governance of complex societies.[46] This literature is relevant for my observations because experimentalism can be seen as ensuring responsiveness to knowledge and concerns in society and not only in expert communities. This work shows that the regulatory process is influenced by multiple considerations beyond narrowly technocratic and that ‘insulation from politics’ is a poor description of how regulators work, especially when we locate politics beyond the electoral arena.

Scholarship on experimentalist governance problematises the relationship between specialist knowledge and effectiveness of regulatory action. The traditional view would describe independent regulators as holders of expertise which is necessary to design and implement policy in complex technical areas (e.g. monetary policy; competition; environment; human rights). The experimentalist scholarship, while by no means averse to expertise, clarifies that in the face of uncertainty, regulation is poorly served by specialism alone.[47] Expertise alone is unable to predict where regulatory problems will materialise in highly dynamic economies, or, for that matter, to predict the consequences of the regulators’ remedial solutions.[48] In this context, the best that regulators can do is learn about problems on the ground and how to best remedy them based on their own experience as well as their peers’ enforcement. This means experimenting with different regulatory solutions and revising the adopted solutions in light of new evidence emerging, for example about their unintended consequences. But revision may also be the product of the new salience of some concerns in changing political and social realities; think, for example, about the burgeoning debates on inclusion of sustainability concerns in competition enforcement, to which I briefly return. The experimentalist scholarship shows that institutional arrangements that enable learning, revision, and responsiveness are pervasive across regulatory contexts in the EU.[49]

Finally, the experimentalist governance literature has profound implications for the principal-agent descriptions that dominate scholarship on NMIs. For one thing, if uncertainty is pervasive, the idea that the principal defines a policy mandate which the agent executes is likely to be a poor description of the regulatory process. As Sabel and Zeitlin put it, ‘… if actors have to learn what problem they are solving, and what solution they are seeking, through the very process of problem solving, then principal–agent relations are impossible, not least because the very distinction between principal and agent is confounded’.[50] In contrast to principal agent theories, experimentalism accepts that ends and means are not in a stable relationships, and that they are iteratively redefined and specified in the regulatory process. This is quite apparent in EU competition law – where what protecting competition in markets means stays heavily contested, and is constantly evolving. 

Taken together the two streams of scholarship above suggest the following observations. First, excessive insulation from politics may produce backlash or foster dissensus, and thus lead to heightened politicisation – potentially to the point where the regulators independence is threatened. Second, a less delegated setting may not only be one in which political principals have more ability to interfere in the regulatory process, but also one in which by either practice or institutional design, the regulators foster responsivenessvis-à-vis society. Mechanisms for responsiveness can politicise economic regulation because democratic demands on the ground and debates about the concerns which fall within or outside a regulatory mandate permeate the regulatory process. This politicisation is limited in that it does not question the underlying core of independence of the regulators, namely their ability to act in the broad service of the public interest, but still acknowledges the political stakes of economic regulation, and makes some space for their deliberation within the regulatory process. Limited politicisation can enhance rather than undermine the ability of NMIs to be effective, serve the general interest and withstand interference from political principals. 

All in all, independent economic regulators emerge not any longer as de-politicised and technocratic in a narrow sense but as constantly repositioning themselves and their mandate vis-à-vis both society and elected officials, including via regulatory strategies that are aptly described as experimentalist. The next section brings in some examples that give more concreteness to the above observations, and in turn allow to further advance the notion of limited politicisation. 

3.   Competition Law and Limited Politicisation

This section draws on recent developments in, and scholarship on, EU competition law and presents examples of limited politicisation of the regulatory process. Limited politicisation is enabled by features of the procedural infrastructure of the EU regulatory process, as well as substantive doctrines developed by the regulators, and authorised and supported by courts. As I show, EU competition law enables regulators to consider a plurality of interests on the ground and deliberate their merits via input from various stakeholders. 

3.1.  The goals of EU competition law: an inclusive and flexible mandate as limited politicisation

EU competition law consists of several prohibitions in the EU Treaties aimed at preventing business conduct that harms competition.[51]The prohibitions are enforced by the European Commission and, since at least 2004, national competition authorities (NCAs), one in each member state, in a system of decentralised enforcement.[52] The non-majoritarian character of EU competition law and policy is at two levels. First, the field of law itself can be construed as a non-majoritarian instrument in relation to national majorities: some basic commitment to competitive markets is shielded from national political discussion and constitutionalised at the EU level.[53] Secondly, delegation is strong in EU competition policy, and the Commission and NCAs (the CAs) can themselves qualify as NMIs.[54] CAs work at arms-length from governments: equipped with varying levels of formal or de facto independence,[55] they specify and enforce the competition rules without the need of approval by elected officials, while accountability to EU or national parliaments remains limited.[56] While CAs in the EU can also be seen as semi-judicial in that they can impose fines without court approval, they are here treated as independent economic regulators in line with a scholarly tradition that observes how the lines between rule-formulation and enforcement are growingly fuzzy.[57]

For the past decade or so, competition law scholarship and practice have been consumed by a debate about the goals of competition law and whether these goals should be expanded.[58] For some, competition law should serve a narrow set of goals, if not one goal, which is often identified with the advancement of consumer welfare via efficient markets.[59] This suggests that CAs should stay insensitive to social concerns emerging in the governance of markets.[60] For others, the competition rules should serve a wider set of goals, linked to reducing market concentration and democratising the economy, in assistance of smaller businesses, workers, and even with an eye to reducing inequality and relieving poverty.[61] Moreover, as competition law arguably offers the sharpest set of regulatory tools to control markets, many call for its deployment to advance salient public interest objectives, such as sustainability.[62] While the EU Treaties do not identify consumer welfare or efficiency as the main or only goal of EU competition law,[63] the “more economic approach” initiated in the 1990s is widely described as having marginalised other goals and to have given prominence to consumer welfare as the primary goal of competition enforcement.[64] Consensus around consumer welfare as the primary goal of EU competition law, assuming it ever existed, is today growingly challenged as competition law is enforced in novel contexts - digital markets; in support of the green transition; and with an eye to the EU economy’s global competitiveness.[65]

The above debates are only in part about the substance of the goals antitrust serves, with proponents of efficiency confronting proponents of de-concentration. At closer look, these debates are also very much about competition law as a non-majoritarian instrument, as well as the political versus technocratic credentials of competition authorities. First, on at least some readings of it, a narrow one-goal mandate supports the non-majoritarian character of competition law, as well as preserves the authorities’ independence, and their ability to make politically costly decisions. In the logic of delegation, a narrow mandate shields regulators from democratic demands and other societal pressures.[66] This prevents regulators from seeking to serve too many goals which can get them entangled in heated political discussions. Excessive responsiveness to demands from society can dilute the regulators’ independence and ultimately the effectiveness of their action. A one-goal mandate may serve as a legitimation device, which increases the ability to fend off political pressures. 

Secondly, the goals pursued by CAs have consequences for the type of knowledge guiding enforcement: a competition law system that pursues consumer welfare via efficient markets can more confidently rely on economic knowledge and methods; one that expands its goals much further may need to diversify the range of knowledge and perspectives it draws upon, including lay knowledge in society. Arguably, CAs may be wary of departing from their anchoring in consumer welfare, also because economic knowledge builds up their authority and enables them to make politically costly decisions – for example, they can impose fines on powerful firms, even when these firms have sizeable power, broad popular support among consumers, or offer employment in the local economy. A multi-goal enforcement paradigm may thus come at the expenses of the boldness of enforcement action.[67]

While these associations are persuasive and point at important concerns, the reality of enforcement is much messier. As the reflections that follow suggest, the enforcement of competition law is already responsive to a plurality of concerns and perspectives, and the ability of CAs to incorporate these perspectives, through various substantive and procedural legal devices, has been key to preserve effectiveness and relevance of this field of law. Hence, it is not true that competition authorities are apolitical and narrowly technocratic, nor that they need to be so to guard their authority, effectiveness, and independence. Competition law has built-in mechanisms that enable a degree of politicisation in the enforcement and implementation of the rules, with some mechanisms more effective than others to open up avenues for limited politicisation. 

Attempts to reduce EU competition law to the pursuit of a single goal, have been unsuccessful not only because of political disagreements, including among Member States, around what that goal should be,[68] but also due to structural features of competition law in general and EU competition law in particular. As Ezrachi has evocatively described, competition law has sponge-like qualities: being based on open-ended prohibitions, and resting on only a superficial agreement as to what preserving competitive markets entails, contextual - country or regime-specific – concerns shape what competition enforcement looks like.[69] Multi-purpose enforcement of the competition rules is just natural as competition law is able to absorb concerns and enforcement rationales, articulated before Courts or competition authorities by the regulated firms or third parties. This is confirmed by several statements that EU competition law serves indeed several goals, most notably the one in GlaxoSmithKline for which EU competition law protects “not only the interests of competitors or of consumers, but also the structure of the market and, in so doing, competition as such”.[70] As observed by many, no single goal can explain all the enforcement of the Commission,[71] or the NCAs for that matter.[72]

To be sure (staying with Ezrachi’s metaphor), the sponge’s absorption capacity is not unlimited: competition law systems across the world deploy economics to work as a membrane that limits the types of considerations which feature in and guide enforcement – competition law would otherwise absorb too wide a variety of concerns.[73] This filtering function of economics, however, is also imperfect and unstable, and it has not succeded in rendering the enforcement of competition law narrowly technocratic. Apart from the overwhelming consensus around the harmfulness of some horizontal agreements (cartels and a few other forms of collusion that EU competition law treats as by object restrictions), most forms of business conduct which come under the scrutiny of competition authorities have ambiguous or contradictory effects on various competition parameters. Hence, far from working as a stable set of tools, which when applied to a regulatory problem yields the same outcome, economics can support different regulatory outcomes. As cursory reading of most competition law decisions reveals, economics is invariably deployed to support arguments for both the prohibition and permission of a certain form of conduct. Moreover, economics faces its internal contestations. For example behavioural economics may unveil problems or suggest solutions similar to those advanced by perspectives advocating a more decisive departure from economics.[74] This is not to dismiss economics, which remains an essential tool for antitrust analysis, but rather to question the idea that economics can preserve the ‘analytical purity’[75] or political insulation of competition law. 

Similar observations can be advanced regarding the concept of consumer welfare.[76] A notion like consumer welfare is invariably open-ended, and differences emerge in how competition is best protected, in its name, in specific contexts.[77] Consumer welfare can be equated with the consumer interest in low prices and this can be identified as the main rationale underlying at least some enforcement actions. But in a majority of cases, and especially in the digital economy, consumer welfare has been interpreted to encompass a broader range of consumer interests beyond price period. These include not only concerns for product quality and variety, as well as innovation,[78] but also, more implicitly, concerns about diversity of offers and consumption settings, as captured by notions of contextual variety,[79] or plurality of market experiences.[80] In a different context, the Commission has significantly expanded the ability to account for sustainability considerations in justifying horizontal cooperation agreements while still anchoring its guidance on the idea that in-market consumers should receive significant benefits.[81]

All this to say that even if EU competition law were designed or applied in the declared service of a narrow goal, and with strong backing in economics, it would be unlikely to achieve insulation from the broader set of goals and concerns which exist in society around the forms of business conduct that come under the scrutiny of competition authorities.[82] This is in line with the main observations of scholarship which emphasises the open-ended and plural character of EU competition law, including the experimentalist governance literature.[83] A competition law that is open to a plurality of concerns is likely to operate in a more politicised context: it is not insulated from political discussion and societal demands. As this Section has illustrated, EU competition law is flexible and inclusive, and capable of responding to a plurality of concerns. Its multi-purpose policy mandate constitutes the first feature that contributes to its limited politicization. The next Section identifies additional and more specific features and techniques that help sustain this limited politicization.

3.2.  Legal arrangements for limited politicisation

Inspired by the observation above about the goals of EU competition law, in the remaining few pages, I point at some of the legal arrangements that make said politicisation possible. In particular I focus on (1) features of the EU system of decentralised enforcement; (2) arrangements that allow to hybridise goals and concerns; and (3) arrangements for collaborative rule formulation and remedial design. 

First, the institutional structure of EU competition law, with a decentralised system of enforcement characterised by weak hierarchy encourages divergence in enforcement solutions. This divergence is explicitly protected in relation to Article 102 TFEU,[84] but it manifested, albeit perhaps more under the radar, also in the enforcement of Article 101 TFEU.[85] As observed in the scholarship, decentralisation can create diversity of approaches and solutions especially in regulating novel practices.[86] Furthermore, this diversity is deliberated in networked governance structures, such as the European Competition Network (ECN) – which while some have described as mostly geared towards achieving convergence, can also serve as a forum for deliberation of different solutions in the governance of markets.[87] Svetiev has early on described these arrangements as experimentalist; and subsequent scholarship has observed how, via networked governance, authorities learn from each other also in the development of guidance notices which spell out their enforcement approach, especially in the field of sustainability where NCAs took the lead.[88] The fact that local market practices subject to competition law decisions or judicial challenges at the national level can reach the EU Court of Justice through the preliminary reference procedure also contributes to maintaining limited politicization within the system. As local market arrangements reach the CJEU, their harm to competition and otherwise normative merits get deliberated in a dialogic way, and the Court statements are then likely to be reflected in the approach of national competition authorities.[89]

Secondly, we can point at strategies for hybridising policy goals and perspectives in the enforcement of EU competition law. There is recognition in most competition law regimes that certain industries or business practices should fall outside of the scope of the competition rules, or that the demands of competition law on these industries and practices should be moderated. Typical strategies to accommodate said concerns include statutory or judicial exclusions or exceptions, for example stipulations that exclude or limit application of competition rules to certain industries or areas.[90] Alternatively we can mention the ability of certain government ministers to overrule the decision of a competition authority on public interest grounds,[91] or, for that matter, statutory overruling of certain competition decisions.[92] Exclusions or exceptions seem, however, poor avenues for politicisation because by stipulating that competition law does not apply in one area, they foreclose scrutiny and deliberation around the type of practices which may create regulatory problems in that area and how to best govern them.[93] From this perspective, it is congruent with descriptions of EU competition law as experimentalist, that EU competition law makes very limited resort to exceptions and exclusions.[94]

Other strategies, however, provide for the hybridisation of competition and other public interest concerns. An illustration of this approach is the recently revived Wouters doctrine,[95] which, as the CJEU recently clarified in a series of cases on sporting activities, is still good law in EU competition law.[96] The Wouters doctrine allows companies to show that their agreements or decisions which may restrict competition do so in order to protect some public interest, such as the integrity of the legal professions,[97] sports competition,[98] notarial services.[99] As these controversies reach the CJEU, politicisation is inevitable in that the comparative merits of competition and restrictions thereof in achieving the public interests at stakes get deliberated, with several actors, concerns, and perspectives participating in these deliberative processes. This contributes to the overall politicisation of competition law enforcement and adjudication. But here politicisation is limited, and to some extent principled, in that it is constrained by well-honed techniques of such as applying proportionality as developed in internal market case law. 

While the Wouters doctrine has so far found application only in relation to decisions by professional (including sports) associations that perform semi-public regulatory functions, the CJEU does not say that this is their only ambit of application. Indeed, one could see a version of these doctrines applied, albeit not explicitly, in cases such as Coty, where the ECJ confirmed that restrictions to sell online imposed within selective distribution systems can be compatible with the competition rules if they are necessary to preserve product quality which is rooted in the aura of luxury that selective distribution protects.[100] It is interesting to note, which confirms one of the points above, that it is possible to make sense of a decision such as Coty both from a consumer welfare perspective by reference to product quality, and when considering the broader public interests that the restriction to online sales may serve (plurality of retail channels; or concerns for urban development).[101]

Another set of cases which point at legal strategies for hybridisation between competition and other public interests are cases in which regulators look for an external (that is rooted in rules outside of competition) benchmark for the enforcement of competition law. This is the case, for example, in the German Bundeskartellamt decision in the Meta case, where Facebook was found to abuse its dominant position because its data collection policies imposed an excessive burden on consumers’ privacy.[102] The German competition authority here grounds its finding of a violation of competition law in the fact that a dominant company had violated GDPR rules. The Court of Justice found this form of hybridisation permissible, but as long as that the CAs collaborate in good faith with the GDPR enforcers. We can see here potential for politicisation, but it is a limited one: the CAs’ ability to resort to extra-competition principles as benchmarks is constrained and proceduralized, in that competition authorities must engage in cooperation with the competent privacy authorities. Scholarship has described this intervention as a prototype for the use of external benchmarks in competition law, which could be extended to enable competition law to bear on other salient contemporary debates, such as the protection of democracy via media pluralism.[103]

Thirdly and finally, we can point to avenues for collaborative enforcement whereby compliance measures and remedies are designed via interaction between the regulated companies and the CAs, including opportunities for third parties’ participation. These practices are well documented in EU competition law, where the Commission has made growing use of commitments decisions.[104]Through these decisions commitments by the companies to modify their behaviour in response to the regulators’ concerns are made binding and monitored by the authorities, what has been described as a system of collaborative remedial design.[105] The process that leads to adoption of commitments by the Commission involves market-testing, meaning that a preliminary remedy is presented to market participants, giving an opportunity to interested third parties to present observations.[106] These third parties include mostly customers and competitors that feed enforcers with relevant knowledge about the harm of the practices under scrutiny and whether the proposed remedy is sufficient. The Commission has shown responsiveness to the knowledge gained via market testing, for example in Google Shopping where commitments were abandoned after opposition by third parties.[107] More broadly, the fact that CAs monitor and can periodically revise the remedies jointly designed with the undertakings involved contributes to the politicisation potential, as solutions are rarely permanent and open to input by affected stakeholders. Some scholars, while recognising the potential for collaboration of this style of enforcement, lament that it is overly reliant on information provided by the regulated companies, and largely excluding civil society and other more dispersed interests on the ground.[108] While more can certainly be done to allow participation by a more diverse set of players, the enforcement practices of Commission and NCAs do not seem an obstacle to this. 

An even broader scope for collaborative design of remedies and compliance measures emerges in the Digital Markets Act (DMA). The DMA formalises a series of obligations and prohibitions addressed to Gatekeepers (firms holding substantial powers in the digital economy). In this context, enforcement relies on compliance reports submitted by the gatekeepers to the Commission, where the regulated present their plans to comply with the DMA’s obligations to be specified through regulatory dialogue (Article 8 DMA). The Commission makes available public summaries of these compliance plans which enable participations from third parties. Furthermore, for some of the key prohibitions in the DMA (those listed in Articles 6 and 7), the Commission can specify the compliance measures that gatekeepers should adopt, in a process which is explicitly identified as dialogic.[109] The fact that the DMA explicitly excludes efficiency defences, namely companies cannot justify otherwise harmful practices in the name of benefits they accrue to consumers, can also contribute to a type of deliberation that is not narrowly based on economic evidence, and thus engaging with a plurality of concerns on the ground. Under the DMA, most of the uncertainty concerns which type of practices substantiate the prohibitions, which in turn means companies deploy different understandings of how the platform looks like and work.[110] All in all, as argued elsewhere, the DMA prefigures a system for deliberation over platform design, which is open to many market participants including potentially public interest organisations.[111]

4.   Conclusions

This contribution has started from an observation that Non-Majoritarian Institutions are often described as insulated from politics and narrowly technocratic. This characterisation stands in contrast with recent scholarship on independent regulatory agencies, which has observed how politicisation of the regulatory process is compatible with delegation, as well as strategies for experimentalist governance which open-up the regulatory process to input from various stakeholders, and deliberation and revision of preliminary solutions. I have drawn on these two streams of scholarship, and my work on EU competition law and market regulation, to suggest that non-majoritarian instruments like competition law as enforced by independent regulatory agencies can and do rely on limited politicisation strategies period. As suggested, these strategies may be productive not only to improve accountability and responsiveness, but also the capacity of NMIs to withstand backlash. 

Independence and specialist knowledge are essential features of effective economic regulation in the EU and beyond. However, responsiveness and engagement with salient societal concerns are equally important. In this respect, the article aligns with scholarship that nuances the binaries of independence versus politicisation and democracy.

Particularly in regulatory contexts marked by complexity and multi-level governance, these elements should not be understood as mutually exclusive. Rather, they are all desiderata for the effective governance of markets and society. 

The contribution has looked specifically at EU competition law and identified arrangements within it, that offer examples of limited politicisation strategies. Competition authorities are called to apply rules whose basic orientation is pre-determined at a higher level of decision-making (e.g. constitutionalised in the Treaties or other EU secondary legislation). But while such constitutionalisation may suggest an insulation from politics, the processes described suggest that CAs may have enough scope to politicise, and potentially democratise these areas of governance.[112] Ultimately, via the notion of limited politicisation, the article also aspires to bridging the gap between more formal and stylised accounts of NMIs, and more granular descriptions of their actual functioning that lawyers and regulation scholars have produced. More granular description of institutional design choices, decisional practices, as well as the dynamic interaction of regulators, regulated, interested third parties, as well as courts and political principals point at more nuanced accounts of economic regulation in the EU, and how politics, technocracy and independence interact. This awareness may soothe some of the “independence wars” which afflict contemporary Europe – that is wars around the scope and meaning of independence to be awarded to courts, central banks, the EU commission, and other independent economic regulators.[113]