Rethinking Antitrust

44: Cristina Caffarra on Europe’s Antitrust Delusion

Episode Summary

The Draghi Report warned of Europe’s “slow agony” in a world dominated by American scale and Chinese state-backed industrial power. Is competition policy part of the answer — or part of the problem? In this episode, Bilal Sayyed sits down with Dr. Cristina Caffarra, one of the most influential competition economists of the past 25 years and founder of the EuroStack movement, for a candid reckoning with her own field. Caffarra argues that Europe fell into a “collective delusion” — treating antitrust enforcement and ex ante regulation of American tech giants as a substitute for the economic policy Europe actually needs: investment, scale, and homegrown capability. She’s blunt on the draft EU merger guidelines (“lip service”), the institutional standoff between von der Leyen and DG COMP, why the DMA disappointed, and what it means to build a European tech stack. Part policy critique, part love letter to Europe.

Episode Notes

Bilal Sayyed talks with Dr. Cristina Caffarra — competition economist behind many of the last quarter-century’s landmark cases, founder of EuroStack, and host of the Escape Forward podcast — about whether European competition policy can answer the challenges laid out in the Draghi Report, and why she’s increasingly convinced it can’t.

The conversation traces Caffarra’s own evolution: from defending European enforcement in 2018, to growing doubt about toothless remedies and “self-enforcing” regulation, to the realization that taming the American platforms was never going to build a European industry.

Topics discussed

• Whether Europe used antitrust and regulation as a substitute for growth-oriented economic policy — the “collective incantation” that containing the giants was the whole answer
• The Draghi Report and the sub-scale problem: why European companies struggle to compete globally, and how much of it merger control actually explains (fewer than one deal blocked per year)
• The draft EU merger guidelines: eight pages of geopolitical framing over ninety pages of business-as-usual, and the “theory of benefit” as more of the same
• The institutional standoff between President von der Leyen’s push for scale and consolidation and DG COMP’s “church-like” orthodoxy; Caffarra’s candid read on Commissioner Ribera
• Why competition analysis needs to reckon with the “second China shock,” subsidized exports, and global competitive constraints rather than parochial market definition
• EuroStack explained: reclaiming a larger share of Europe’s own market (European cloud suppliers are down to ~10%), framed as capability-building, not protectionism, autarky, or decoupling
• “Old Europe vs. new Europe”: the Weimar triangle (Poland, Germany, France), the Dutch, and divergent threat perceptions across the continent
• Reading the Trump administration correctly — the Vance speeches, the “basement teenager” framing, and the “time to start adulting” moment as a spur to action
• Europe’s capital paradox: €1.3 trillion in annual savings, ~€300 billion sent to the US each year to fund American innovation, and signs that pension funds and family offices may be shifting
• Caffarra’s “second mountain”: stepping back from antitrust toward Europe’s digital autonomy, and a closing case against writing Europe off

Guest

Dr. Cristina Caffarra — founder, EuroStack; host, Escape Forward. Named by Politico among the women who shaped Brussels.