Everywhere you turn, competition authorities are sharpening their claws.

Dubbing himself a 21st-century “trust buster”, US president Joe Biden on Friday unveiled a wide-ranging crackdown on everything from airline ticket pricing to non-compete clauses in employment contracts. The next day, China’s competition regulator blocked a domestic merger for the first time, a Tencent-proposed deal to create a dominant video-game streaming operator. On Tuesday, France slapped a record €500m fine on Google over its use of news content.

After years of growing disquiet over corporate consolidation and the dominance of big companies, governments are springing into action. For the most part, this is long overdue, but there can be some difficult trade-offs when they take unprecedented action, as two recent examples show.

Last week, the EU brought its first-ever cartel case focused on technical co-operation on technology, rather than the usual price fixing. It fined BMW and Volkswagen a total of €875m and let Daimler off a €727m fine because it alerted the commission to the collusion. The facts are well worthy of punishment. Several German carmakers gathered to set uniform tank sizes for a pollution control ingredient and standardise other measures and ended up conspiring to delay the introduction of better technology.

But the crackdown has sent shivers through companies that are trying to collaborate on electric cars and green energy. The punishment of BMW, which initially fought the case because the discussions did not affect product decisions, particularly worries some executives who say they are no longer clear on what kind of co-operation is acceptable.

This matters. Done properly, uniform standards accelerate commercialisation and adoption. Imagine if we had generic car batteries. You could drive to a filling station and swap in a fresh one rather than having to wait for your car to recharge. Done badly, they shut out new players and slow down progress: what if the shared batteries were inefficient and heavy but no one tried to improve them?

Meanwhile another groundbreaking competition case also pits future innovation against rapid adoption, this time in the medical sector. In only its second lawsuit over a vertical merger in 40 years, the US Federal Trade Commission is trying to block biotech company Illumina’s purchase of Grail, which makes cancer screening tests. The EU has reversed decades of merger policy to investigate the $8bn deal.

Illumina is the market leader in genome sequencing; Grail uses its machines. Such integration can improve efficiency. It can also stifle competition if a company that provides critical infrastructure — as Google does with search — competes with its customers. The FTC says Illumina could hamper companies that want to compete with Grail’s screening tests by charging them more or denying them access to Illumina’s technology.

Illumina chief executive Francis deSouza counters that his much larger company would save lives by bringing Grail’s novel tests to global markets faster and speeding up its acceptance by insurers. That in turn would make it easier for other groups to follow. He says that when Illumina began producing prenatal tests, rivals did so as well rather than being deterred.

To assuage the FTC, Illumina would commit to reducing its prices over time and charging external customers what Grail pays. But critics say regulators fail to enforce such behavioural remedies. The EU is weighing a more detailed probe and the US case goes to a hearing next month.

Authorities need to think hard about whether the faster promulgation of life-saving cancer tests or electric cars should outweigh fears about future consolidation. Evidence from the pandemic is mixed: government-sanctioned collaboration proved vital in developing and manufacturing Covid-19 vaccines, but competition helped ensure that there were multiple candidates.

Philippe Aghion, author of The Power of Creative Destruction, argues that the best option may be to let companies experiment and then bring punitive action afterwards if necessary. “Look ex post rather than ex ante. Did you or did you not reduce competition?” he says.

But enforcement cases tend to produce lists of “don’ts” at a time when industry really needs some “dos”. Tackling excess corporate concentration while simultaneously facilitating rapid progress in healthcare and green energy will require a deft touch. Margrethe Vestager, who heads EU competition policy, acknowledged last year that companies need more guidance as they try to tackle climate change. Watchdogs must step up and provide it.

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