Sustainable Divergence between the UK and the EU—the Fair Share Principle in Practice

As sustainability continues to grow in importance for businesses, regulators are starting to provide guidance on how competition law applies to ‘green agreements’. In our recent article, written alongside Linklaters, we examine how the European Commission and the UK’s Competition and Markets Authority (CMA) are shaping their frameworks to account for sustainability under Article 101(3) TFEU and the national equivalent.

One of the key differences between the two regulators is how they assess the benefits to consumers. Both agree that consumers must receive a ‘fair share’ of the benefits from green agreements, but the scope of consumers for which sustainability benefits can be considered varies. While the European Commission’s approach remains relatively constrained, allowing only benefits to consumers within the relevant market, the CMA appears to take a broader stance. Under the UK guidelines, collective benefits to consumers outside the immediate market may be considered, potentially allowing agreements that may be blocked under the European Commission’s rules.

In the article, we empirically illustrate this divergence through a hypothetical case study involving an agreement between grocery delivery companies to adopt more sustainable delivery fleets. The analysis reveals how the UK interpretation could permit an agreement that might not be allowed under EU rules. Nevertheless, we explore the possibility that the EU’s regulatory framework, despite its stricter parameters, could still achieve a similar outcome in certain cases. Both jurisdictions offer ’open door’ policies, enabling businesses to seek informal advice from regulators, providing a pathway for green agreements to proceed.

This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in Rosenboom, N., Moore, D., Ford, J., Cochrane, E. and Cameron, Z. (2024), Sustainable Divergence between the UK and the EU—the Fair Share Principle in Practice, European Competition Law Review 45:9, September, and is reproduced by agreement with the publishers. For further details, please see the publishers’ website.