International

Shortly in the European Parliament we’ll be discussing once more the annual report on EU competition policy. You’d be amazed by what’s possible. European Commissioner Margrethe Vestager recently answered my letter on Bayer’s takeover of Monsanto by saying she had received as yet no report of this, but she would certainly be looking into it. In my view the takeover should, however, have set alarm bells ringing, not only because of Monsanto’s questionable reputation, but principally because it raises the question as to when enough is enough, and when corporations become ‘too big to fail’. We have absolutely no need for such a chemical industry giant. If a takeover of this kind van happen under the existing policy, then in my view that policy should be changed.

A few weeks ago pill manufacturer Bayer launched a takeover bid for Monsanto, offering $66 billion. As you will know, this is the corporation that involves itself in seed breeding and then makes small farmers dependent on the resulting patented seeds. And it’s the firm that trades in genetically modified seeds. For the head of Monsanto this is a lucrative deal. If the competition authority doesn’t throw a spanner in the works, he’ll walk away with $226 million. If at some point we find ourselves having to swallow a Bayer pill, we’ll get the exploitation of small farmers as a free gift along with it, as well as lining the pockets of Monsanto’s executives.

This has, in my view, nothing much to do with entrepreneurship, with taking risks yourself, as is the case with small businesses. Top executives are principally concerned with shifting around business units, and therefore workers’ jobs, and they rake in capital, bonuses and in the case of takeovers, premiums. Sometimes economies of scale are needed in order to be able to carry out major projects. For the most part the endless succession of takeovers and mergers is merely the natural consequence of the market, which is in constant growth and within which economies of scale have become an end in themselves.

You can’t give the market unlimited freedom, as this would lead eventually to gigantic concentrations of corporate capital. It’s just the same with banks. At a given moment they become so big – and powerful – that when things go wrong the state has to give them billions in aid. The European Commission has taken upon itself the task of seeing whether takeovers and mergers don’t lead to too massive concentrations. Yet instead of judging whether enough players remain in a certain market, the Commission only subjects the takeovers and mergers to a test as to whether they create a danger of abuse of power. In my view Verstager should not have to look too long or too far into Monsanto and Bayer: this is no happy marriage. If this takeover can be approved, it shows that the EU’s rules themselves are not good enough and I’ll continue to pursue the Commission in an attempt to have these rules substantially amended.