In new research, Francisco E. Beneke Avila proposes a multifactor test to distinguish between the legitimate exercise of the right to lobbying and efforts to capture areas of public policy. He argues that the latter is an abuse of the firm’s political rights that can justify the intervention of EU competition authorities when corporate political activity leads to a lessening of competition.
Lobbying by firms in the European Union has been steadily on the rise, not only in absolute terms but also relative to other organized interests, such as non-governmental organizations. Firms are also increasingly lobbying independently of business associations. At the same time, the evidence suggests that competition in the EU (and around the world) is decreasing, as measured in terms of concentration and corporate profits, as noted by Mario Draghi’s report on EU competitiveness. These two trends, combined with the extensive literature on the connection between the political influence of firms and market power, point towards the need to address the role of competition law enforcement in cases where corporate political activity leads to a lessening of competition and consumer welfare.
Unlike in the United States, which excludes the application of its antitrust laws to political conduct, EU law does not immunize firms from antitrust liability when they seek to influence policy to restrict competition. In the EU, the General Court has admitted the possibility of lobbying falling under competition law when the efforts exceed “the normal lobbying activity” and firms influence policymaking to the extent of “controlling and undermining” the process. The issue has never reached the Court of Justice, which has only more generally entertained the question on when the exercise of the right to petition can be abusive in the context of the abuse of pre-existing regulations. In AstraZeneca v Commission, the Court of Justice found AstraZeneca guilty of abusing its dominant market position by using regulatory procedures to prevent the entry of competitors without an objective justification. The record showed that the main purpose was to prevent generic drug manufacturers from using AstraZeneca’s clinical trial data to obtain their own marketing authorizations.
The CJEU is therefore more permissive of competition law intervention that restricts the right to petition, requiring an objective justification for its exercise when it excludes rivals. This may be more in line with the difference between the motives of a company to participate in politics and those of a natural person. The main difference is that corporate political activity is carried out with the main purpose of shaping economic regulation to enhance profits, whereas the motivations of a natural person may be their values, beliefs, etc. This one-dimensional motivation of firms to participate in politics also blurs the lines between political and market activity. In addition, if there is a risk of regulatory capture, the political participation rights of excluded stakeholders are also restricted, which further justifies state intervention to limit the political activity of highly influential firms. On the other hand, even if this provides a rationale to address corporate lobbying when carried out with anticompetitive purpose and effects, we still need to strike a balance to not unduly restrict the political rights of a firm and its constituents.
In my latest paper, I argue that when firms strive to capture areas of public policy, they have gone beyond their right to be heard and abused their political rights. Therefore, I propose a multi-factor test to identify when there is a substantial risk of regulatory capture. Only under such a distortion of the policymaking process should a competition authority punish firms that lobby for anticompetitive policies, like raising the import tariff on competing products.
Even if anticompetitive lobbying can have pernicious effects on the economy and trust in public authorities, one has to take into account the benefits of corporate participation in policymaking. In political science literature in the EU, it is generally recognized that firms can provide useful information to regulators through their lobbying activities when done under a legal framework that guarantees transparency. Such information is seen as the currency with which firms gain access to regulators. Since regulators cannot be expected to gather all relevant information on their own, corporate lobbying can help to design better policies. Indeed, in the context of the energy reform to promote the use of renewable sources in Germany, a survey of ministers and members of parliament found that providing useful information was seen as the second most effective aspect to incorporate in a lobby strategy. A captured regulator breaks this information exchange dynamic of lobbying. However, absent such a distorted situation, lobbying activities should not be overly restricted.
The heart of the matter is how one identifies situations with a substantial risk of regulatory capture. One indicator can be if regulators are routinely consulting a restricted inner circle of stakeholders through the policy lifecycle. However, a reduced number of trusted interests does not necessarily mean that they have captured the regulatory process. If a particular policy area affects a wide range of interests, regulators do not have the time to consult all interested parties. Rather, the circle may comprise parties and firms that can offer unique or sophisticated information that the regulator firms useful. Therefore, we need a list of telltale signs of when this reduced inner circle of trusted stakeholders has degenerated into a problem of regulatory capture.
Underrepresentation of stakeholders in parliamentary or executive working groups can be a signal of the relative influence of actors who do participate. One should also take into account the financial links of certain civil society groups to large firms to avoid overestimating the inclusiveness of the policymaking process.
Lobby budgets can also be illustrative. In the EU, however, it is not uncommon to find mistakes in this data. The recorded number of meetings that lobbyists have with commissioners and members of the EU Parliament provide a more accurate picture. Data on these meetings are found in the published agendas of public officials, which can be cross-checked with the registrant’s reports.
Using the aforementioned data, an imbalance in the number of meetings in favor of a reduced number of stakeholders can be a preliminary indicator of a regulatory capture problem. This brings to mind, for example, the substantial increase in meetings of top EU Commission officials with the largest information technology companies, such as Google, Meta, Microsoft, Amazon, and Apple in 2025, who were already some of the companies that met the most with EU commissioners on a yearly basis. Their lobby budgets have also increased exponentially in the past 10 years. This has happened in the context of the implementation of the Digital Markets Act, the entry into force of the AI Act, and the discussion of sweeping reforms to the digital sector in the EU.
If available, the history of the legislative footprint of regulated firms and entities linked to them through financial or other means can be useful evidence (for example, think tanks funded primarily by dominant firms). Legislative footprint requirements compel policymakers to record who has attempted to influence a specific policy and in which direction, which can be compared to the initial draft and end results. This information can indicate the degree of relative influence that an actor or group of actors has. When lobbying transparency regulations do not require keeping records of the regulatory footprint, internal documents on a firm’s position on a given policy could be requested and be illustrative of the footprint as well.
When officials who have conflicts of interest support policies because of their links to regulated firms, the risk of capture is stronger.
If the policymaking process is carried out without regard to rules that promote fair access to stakeholders, one could argue that a policy that harms consumers is less the product of an accident and more by design of influential stakeholders. This brings to mind again anecdotal evidence on off-the-record meetings masked as social events or as technical consultation with large tech firms in the context of the discussion of reforms to the regulation of the digital sector in the EU.
Corporations can also resort to less legitimate ways of gaining access to policymakers, such as through donations to political parties, instead of the provision of useful information. If so, lobbying acquires a greater rent-seeking character and a captured quid-pro-quo dynamic. Therefore, evidence of the intensity of donations to political parties can be used in the risk of regulatory capture inquiry.
And lastly, a consistent history of policy in favor of regulated firms at the expense of consumers can be a sign of a capture problem.
In sum, this guide to signs of regulatory capture attempts to strike a balance between the political rights of firms and their stakeholders, the benefits in terms of information exchange that lobbying can bring, and avoiding harms to competition that a captured policymaking process can bring about. Competition law is certainly not a silver bullet, but it must be considered as part of the puzzle to address undue political influence when it leads to anticompetitive effects.
Author Disclosure: The author reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
Subscribe here for ProMarket’s weekly newsletter, Special Interest, to stay up to date on ProMarket’s coverage of the political economy and other content from the Stigler Center.
