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ASE professor Maarten Pieter Schinkel's commentary on the new Guidelines for Sustainability Agreements issued by the Netherlands Authority for Consumers & Markets (ACM) was recently featured in a number of prominent publications (NRC, FD, Global Competition Review and Politico). He criticizes the policy for conflicting with basic economics.

The guidelines make it possible for companies to make cartel-type agreements about sustainability initiatives. This exception applies when the advantages for 'society as a whole' outweigh the detrimental impact – higher prices, for example – such an agreement would have for consumers. Schinkel notes that this criterion significantly stretches the interpretation of existing EU competition law, which even stipulates that consumers are compensated. This relaxes the applicable conditions for exceptions.

Greenwashing

Based on his research, Schinkel cautions that this move further encourages the ‘greenwashing’ of cartels. There are more incentives for businesses to make green investments when they compete with rather than when they collude with each other. In addition, the new guidelines invite a politicization of cartel enforcement.