- Publication date
- 15 December 2022
- Directorate-General for Research and Innovation
Competition law is a key element of ensuring well-functioning markets and innovation. Markets need rules to operate well and to be competitive. Competition law helps to foster free and open competition. The functioning of markets is closely interlinked with innovation performance. Non-competitive markets, with barriers to starting and operating a business, hamper the innovation potential of economies.
At the same time, innovative activities require adequate protection through intellectual property rights. Although intellectual property can be overused and misused, it remains an important pillar of successful innovation policies, as without the legal monopolistic incentive given to firms thought it, incentives to invest in risky innovative activities are lower.
Competition policy has contributed to preserving and fostering the EU’s economic prosperity. Competition enforcement through law and other competition-enhancing measures have served European consumers, citizens and businesses, by empowering them to make choices in the marketplace and benefit from innovative products and services at affordable prices.
The European Single Market, together with the continuous use of all competition instruments (merger law, antitrust law and state aid control) will be crucial in leading EU industries toward the twin transitions while allowing consumers a fair share of the resulting benefits. EU competition policy helps to set the right incentives for companies to use resources efficiently, avoid stranded assets and innovate their production processes towards greater sustainability. Indeed, regulators need to remain vigilant, including in light of the increasing market power of some firms and the acceleration of this trend in the digital economy.
This literature review looks into different aspects of market concentration and R&I, investigating the current trend of rising market concentration, highlighting the main drivers and consequences for innovation outputs.
Contributors: Valentina Di Girolamo, Alessio Mitra, Océane Peiffer-Smadja, Julien Ravet and Jan-Tjibbe Steeman