Competitiveness Without the Cronyism

Key Takeaways

• Static market‑share presumptions ignore innovation and dynamic capabilities
• European draft guidelines seek to weigh scale against genuine efficiency
• Dynamic competition requires assessing R&D assets, talent, and future rivalry
• Remedies should preserve pro‑competitive benefits without becoming regulatory theater

Pulse Analysis

The resurgence of "national champion" language in merger reviews reflects a geopolitical shift, but antitrust law was never intended to serve industrial‑policy goals. In the United States, courts have repeatedly rejected the notion that larger firms are automatically more competitive, as illustrated by the landmark *United States v. Philadelphia National Bank* decision. Yet agencies still rely heavily on structural presumptions, which can obscure the real drivers of competition—innovation pipelines, data assets, and the ability to adapt to rapid technological change. Recognizing these dynamic factors helps regulators distinguish between harmful concentration and legitimate scale economies that benefit consumers.

Europe’s experience offers a contrasting evolution. After blocking the Siemens‑Alstom rail merger in 2019, the European Commission faced pressure to protect "European champions," prompting concerns about a backdoor to protectionism. Recent initiatives, such as the Draghi Report and the 2026 draft merger guidelines, aim to embed considerations of scale, resilience, and innovation into the analytical framework. The key challenge is ensuring these factors are evaluated through rigorous economic evidence rather than political expediency, thereby preserving competition while allowing firms to achieve efficiencies that drive future growth.

A forward‑looking antitrust approach also reshapes how remedies are crafted. Structural divestitures remain the cleanest tool, but behavioral commitments—like investment obligations, licensing arrangements, or interoperability mandates—can preserve competition without dismantling value‑creating synergies. The UK’s handling of the Vodafone‑Three merger, which tied approval to concrete 5G investment, exemplifies how targeted remedies can align public policy goals with consumer welfare. Ultimately, a transparent, evidence‑based competitiveness lens helps agencies avoid both over‑blocking innovative deals and uncritically endorsing politically favored consolidations.