Collusion in Technical Development: A Perspective on EC’s Emission Cleaning Judgement

Abstract

In July 2021, the European Commission (EC) came out with a decision in a matter involving the issue of collusion in technical development with reference to emission cleaning for new diesel passenger cars. The said decision is the first of its kind, wherein the EC ruled that meeting of minds amongst competitors placed at a horizontal level with a view to limit technical development and competition on innovation in the area of emission cleaning technologies for passenger cars amounts to cartelisation, leading to the imposition of penalty on the five colluding parties. Taking clues from the above ruling of EC, this paper, by using doctrinal research methods, establishes a parallel between technology lock-in, network externalities, and collusion in technical development so far as their anti-competitive outcomes are concerned and provides that, in both technological lock-in and technical collusion, markets fail to produce efficient/competitive outcome. The paper supplements existing literature by advocating prompt regulatory intervention in both situations to correct market aberrations. Even though the ruling under reference relates to emission cleaning technologies for passenger cars, similar conduct may be present in other sectors. Accordingly, the paper suggests prompt regulatory action by competition authorities to ensure effective competition in the technology and innovation fields and for the benefit of society as a whole through the availability of innovative products at competitive prices and favourable impact on the environment.