Theories of Law

The recent remarks of European Commission Competition Commissioner Teresa Ribera at the Fordham Law School conference on International Antitrust Law and Policy, and Antitrust Economics signal a nuanced shift in EU competition policy: to make EU antitrust enforcement more closely align with American economic dynamisms.

In this remark of the remarks, we explain why we think Europe "cannot make it," which brings us back to the title of this short comment.

No cowboys in Europe, but a social market economy

Risk-taking and entrepreneurial dynamism are primarily based on a state of disorder, more similar to the Old West than Versailles in France, or the Habsburg court in Vienna. Different instincts generate different societal structures, and entrepreneurial initiative appears to be driven by profit-maximizing instincts rather than cooperative impulses. Monopoly profits are a necessary reward for innovation and risk-taking, so the real question is whether Europe is ready to embrace a process of creative destruction and tolerate cycles of boom and bust, that is, embrace market disorder as a driver of progress. 

While theorists like Schumpeter and Feyerabend originated in Europe, the continent’s regulatory culture resists such radical change, and the "therapeutic obstinacy" against Google is an involuntary admission. While the European Commission imposed another fine on Google, Judge Mehta in US. v. Google observed that the emergence of generative AI changed the course of the case. GenAI was a key factor in his decision to choose less drastic remedies than those requested by the Department of Justice (DOJ), such as structural separation.

Special responsibility, fairness, stability, and ordo liberalism

The ordo-liberal concept of economic order, on which the European competition is rooted, is based on ideals of social hierarchy, stability, and responsible stewardship in economic life, priorities that are not so different from those of European aristocracies in the past. The role of public institutions is to manage relationships in the economy hierarchically, ensuring no disruptive individualism, but rather predictability and control. It is self-revealing what the Executive Vice-President, Ribera, observed: "Our new rules will clearly explain when we won't intervene and highlight mergers that promote innovation, giving these dynamic companies certainty and reducing red tape." It does not sound like a market-driven approach, but rather a clear attempt to channel market activities into frameworks.

Conclusions

Europe excels in coordinated innovation and complex regulatory frameworks. Yet, the continent’s resistance to the cycles of creative destruction and entrepreneurial risk remains a fundamental barrier. Until the EU policy fully embraces the disorder and uncertainty of a market-driven economy, disruptive innovation and market-making innovation remain an elusive goal.