Johannes Jarlebring: The European Union’s market power: Techniques, constraints and implications for external action

Abstract

The European Union (EU) is known to have considerable market power, which flows from the size of the single market and its sophisticated regulatory capacity. However, relatively little is known about how, when and why the EU uses its market power and what its power projection signifies for our understanding of EU external action. This thesis explores the EU’s techniques for leveraging market power, as well as the factors that drive or constrain its active use of such power. It finds that the EU’s projection of market power is highly regulatory in nature, and often shaped by factors associated with the EU’s internal integration in specific policy areas such as environmental sustainability and digital markets. The thesis proposes that in these areas, competing networks of EU policy entrepreneurs can leverage a variety of structural and contextual factors, such as stringent EU laws, sophisticated EU regulatory capacity, societal fear of negative externalities and highly developed international regimes, to promote their preferred uses of market power. Based on these findings, the thesis argues that EU market power has limited transferability across sectors and is unlikely to be leveraged in geopolitical games or to propel the EU to become a true geopolitical player. Nonetheless, in a context where geopoliticization enhances the friction between the EU’s internal market and external market regimes, the EU can be expected to step up the use of market power to externalize European regulatory regimes in specific sectors in order to protect the integrity of the internal market and achieve international market integration on its own terms.