Q 3.1: How can nordic governments support productivity, competition and private investment?
To support productivity, competition, and private investment, Nordic governments can consider several policy interventions:
Encourage a regulatory environment that foster innovation
First, Nordic governments can foster a regulatory environment that encourages innovation and facilitates cross-border M&A activity by reducing barriers – such as harmonizing competition policies and streamlining market entry procedures (see section 2.5). Advocate for competition assessments that value enduring innovation benefits
Governments should prioritize nurturing long-term innovation, ensuring that merger review policies emphasize not just short-term efficiencies but also the potential long-term innovative impacts. This involves engaging in EU-level discussions to advocate for competition assessments that value enduring innovation benefits and guard against theories of harm that focus solely on immediate effects (see section 2.5). We also note that event studies (assessments of pre/post stock price changes as we analysed in section 1.3) are not currently used in merger reviews by the EU. This type of analysis should perhaps play a larger role in the reviews themselves and the evaluation of competitive effects of previously approved cases. Advocate for a level playing field in times of geopolitical fragmentation
Maintaining a level playing field is essential; even though results highlighted in this report could be used to argue to protect Nordic firms from being acquired from foreign investors (potentially reducing innovation levels), this type of conduct could potentially lead to reciprocal measures from foreign countries (see section 1.2). By keeping competition fair and transparent, the Nordics can attract private investment and encourage domestic firms to scale and compete internationally. Promoting collaboration among Nordic countries
Both at the national level and through joint initiatives – can amplify productivity and investment. Harmonizing the merger control rules across the Nordic countries would contribute to a more integrated regional market and make the regulatory environment easier to navigate for foreign investors. This could also contribute to the development and deepening of capital markets.
Nordic governments should maintain a strict focus on competition in the realm of competition policy while paying close attention to the developments in certain areas such as technology where barriers to entry are high (i.e., few firms are able to sustain high markups without facing effective competition).
Q 3.2: What compensatory measures can be made?
Emphasize data protection to counterbalance market concentration
As technologically advanced sectors become increasingly data-driven, the ability of dominant firms to create and leverage vast quantities of citizen data can reinforce their market position and create substantial barriers to entry for new competitors. This concentration of unique, non-replicable datasets not only tilts the competitive landscape but also raises significant concerns about privacy, consumer choice, and the potential for exclusionary practices (see e.g., discussion on the economics of superstars).
To compensate for the enhanced market power that comes with data dominance, Nordic governments should advocate robust data protection frameworks. Stringent data governance, transparency requirements, and clear consent mechanisms can help mitigate the risk that dominant firms use their informational advantages to stifle competition or exploit consumers. Such policies should go beyond mere compliance, aiming to give individuals more control over their personal information and ensuring that access to essential datasets is not hoarded by a handful of powerful actors.
Additionally, by promoting data portability and interoperability standards, policymakers can facilitate a fairer marketplace where new entrants are not disadvantaged by incumbents’ control of critical data assets. In concert with competition policy, an emphasis on data protection and open data access will not only safeguard citizens’ rights but also help preserve dynamism and innovation in technologically advanced sectors.