Corporate Power and Regulation

Consumers and the Environment in the European Union

Sandra Eckert

• Publisher: Palgrave Macmillan
• Year: 2019
• Print ISBN: 9783030054625
• eBook ISBN: 9783030054632
• Topic: Politics & International Relations
• Subtopic: Corporate Governance
• Index: Politics & International Relations

?"A novel, insightful and provocative foray into the abilities, capacities and limits of corporate power on the one hand and public power and capacities on the other hand. Eckert offers new and refine insights on core issues in the theories of public and private interest regulation." —David Levi Faur, Hebrew University of Jerusalem, Israel
"This impressive book breaks important ground in the regulatory governance literature by bringing in a fresh corporate perspective. Based on a set of fascinating case studies of European regulation, Eckert compellingly unpacks key facets of corporate power. A must-read for regulation scholars who often neglect the targets of regulation!" —Burkard Eberlein, York University, Canada
"This book offers systematic and empirically fascinating insights into the regulatory power of corporations which unfolds outside the traditional political arenas. Its policy effects have important implications for the target groups of regulation, the general public, and the democratic political process as such. The conceptualization and use of rich empirical sources make for a compelling read." —Adrienne Héritier, European University Institute, Italy
This book takes a fresh look at corporate power in the regulatory process. It examines how corporations seek to prevent, shape, make or revoke regulation. The central argument is that in doing so, corporations utilise distinct power resources as experts, innovators and operators. By re-emphasising the proactive role of business, the book complements our acquired knowledge of policymakers' capacity to put pressure on, or delegate power to private actors. Empirically, the book covers European consumer and environmental policies, and conducts case studies on the chemical, paper, home appliance, ICT and electricity industries. A separate chapter is dedicated to the assumption that Brexit will lead to an unprecedented result of EU regulation being lifted, and how this could put corporate power in regulation at risk. This book provides a new perspective on the policy implications of corporate power to scholars, students and practitioners alike.

© The Author(s) 2019

Sandra EckertCorporate Power and RegulationInternational Series on Public Policy https://doi.org/10.1007/978-3-030-05463-2_1

Begin Abstract

1. Introduction

Sandra Eckert¹

(1)

Goethe Universität Frankfurt, Frankfurt, Hesse, Germany

Sandra Eckert

Email: [email protected]

End Abstract

This book is about how consumers and the environment are protected through European regulation and, in particular, the role of corporate actors in the policy process . But it is not a book only about European consumer and environmental policy . Rather, it is about the extent to which private actors, mainly firms and their associations, acquire a regulatory role. This book asks how corporations do so, and what resources they draw upon, especially where they have to face media and NGO pressure and are exposed to regulatory threats. Four examples show that corporate power in regulation prevails in very diverse settings, addressing quite distinct policy challenges.

A 2015 video of a sea turtle with a plastic straw up its nostril went viral. The eight minute video taken by a team of biologists who were on an expedition off the coast of Costa Rica has, at the time of writing, been seen more than thirty million times since it was uploaded on YouTube. The heartbreaking video caused many people to re-think their own consumption of plastic products, many of them for single use. NGO -led public campaigns such as the global “Break free from Plastic Movement ”, media coverage such as the BBC series “Blue Planet”, or the work of the renowned Ellen MacArthur Foundation (EMF) on the “New Plastics Economy” further contributed to the upward momentum for change. In 2018, a number of airlines, coffee house chains, hotels, fast food restaurants and retailers, including large international companies such as McDonald’s, Starbucks and Marriott Hotels, announced phase-outs or bans of plastic straws and other single-use plastic items in their business premises. Concurrently, policymakers seemed to engage in a race to the top, claiming leadership in the global fight against plastic pollution. In January 2018, China announced bans and restrictions on imported plastic waste . In the same month, the European Commission came forward with its plastics strategy, and the UK government announced its “world-leading micro-beads ban”. In May 2018, the European Commission proposed to ban the top-ten single-use plastic products most commonly found in marine litter, including the famous plastic straw, and a provisional political agreement was reached by the European Parliament and the Council of the European Union (EU) in December 2018 on the proposed directive.

* * *

In summer 2015, the automotive manufacturing giant Volkswagen was discovered to have been falsifying emission testing results, leading to a large scandal and drawing massive media attention for many months. The Volkswagen emission scandal became a classic of corporate misbehaviour over false and misleading “clean Diesel” claims. Echoing such accusations presented in the “Dieselgate” scandal, British inventor Sir James Dyson sought to trigger a “Hoovergate” scandal (Crisp 2016), this time targeting German home appliance manufacturers. Dyson sued competitors for alleged misleading advertising of energy efficiency standards and challenged the European Commission for regulatory requirements concerning energy efficiency tests under unrealistic laboratory conditions (with empty receptacle), which he considered inappropriate. The European Commission in 2015 issued a standardisation mandate to review the testing requirements for vacuum cleaners, and NGOs voiced concerns whether testing methods were to undermine consumers’ trust. While in a first ruling in 2015 the General Court rejected Dyson’s request to annul a Commission regulation laying down the energy labelling requirements for vacuum cleaners, in its final November 2018 ruling the General Court upheld Dyson’s argument.

* * *

From mid-January to March 2018, electric clocks slowed across 25 European countries, and power deviations were persisting throughout 2018. The change was caused by a decrease in the electric frequency in the continental transmission network. The imbalance in the continental European power system originated in Serbia and Kosovo: Serbia prevented Kosovo from importing energy from neighbouring Albania. Concurrently, Serbia’s electrical power grid company blamed Kosovo to withdraw uncontracted electric energy from the synchronised European grid. A more dramatic energy crisis occurred in 2006, when several Western European countries were hit by a blackout . It started off in north-west Germany , when a ship ran into a set of overhead cables during a river crossing. Failure to communicate this routine interruption of cross-border electricity flows ahead of time to the neighbouring grid operator led to continued disruption, eventually causing a domino effect across Europe. Previously, in 2003, Italy was hit by a blackout due to a transmission line connecting Italy to Switzerland being damaged, leading to many trains being cancelled and numerous airports being closed across Europe. These incidents in 2003, 2006 and 2018 disrupted the technical, behind-the-scenes routines of network operators and brought their apparent failures to cooperate across national borders into the spotlight. Policymakers were alerted to prioritise security of supply issues and adopt measures in order to safeguard uninterrupted provision.

* * *

In June 2016, a majority of voters in the UK voted to leave the EU. The decision was made despite the many warnings that voting to leave would have a detrimental impact on the domestic economy. In the ensuing domestic debate, high profile Brexiteers brushed off corporate criticism about Brexit. It became apparent that politics had trumped economic reasoning. This outcome was particularly surprising given the business-friendly legacy of the Anglo-Saxon liberal market economy. The consequences that this political decision to disintegrate will have in the long run for the future business environment are at this stage uncertain, both with respect to regulatory decisions and trading patterns. Moreover, the continuous political struggles on acceptable conditions of an exit deal have created a level of uncertainty which in itself is detrimental in the short and medium run.

* * *

What all of these four examples have in common is that these are cases where corporate power is under pressure. In times of heightened media attention and targeted NGO campaigning industry has come into the spotlight in regard to the environmental and health damage caused by their products (plastics); alleged non-compliance with environmental regulatory standards (automobiles, vacuum cleaners); and a failure to secure reliable technical operation of essential infrastructure (electricity ). Even worse, it seems ...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. The Regulatory Power of Corporations
• 3. Protecting Consumers and the Environment in Europe
• 4. The Expert: Striving for a Circular Economy
• 5. The Innovator: Boosting Resource Efficiency
• 6. The Operator: Providing an Essential Service
• 7. Brexit: Corporate Power Undone?
• 8. Conclusion: The Corporate Challenge to Regulators
• Back Matter