National security considerations in competition enforcement

2. The analytical boundaries of competition enforcement in a national security context

This section examines how national security considerations may arise within competition analysis across merger control, co-ordinated conduct and unilateral conduct. The same question arises across these forms of enforcement: whether, and if so, how, national security considerations affect competition-relevant facts that can be assessed within established legal frameworks. The focus is not on national security as a free-standing objective within competition law, but on the circumstances in which it affects the competitive conditions that competition authorities must assess. In practice, this may occur at different stages of the analysis, including the identification of relevant competitive constraints, the assessment of competitive effects, the evaluation of efficiency or justification claims, and the design of remedies.

2.1 National security as a constraint on competitors

A first way in which national security considerations may arise within competition analysis is by shaping the set of firms that can constrain one another in practice. This issue is not confined to any single form of enforcement. It may arise in merger control, where authorities assess existing and potential competitive constraints; in unilateral conduct cases, where market power and rivals’ positions must be evaluated; and in cases involving co-ordinated conduct, where the structure of participation and the availability of alternatives may also be relevant. The same considerations also arise outside of enforcement, including in market studies and advocacy, and thus across competition analysis more generally. The analytical question is the same throughout, whether firms that appear relevant in the abstract are, in fact, able to compete under the legal, regulatory and policy conditions that govern the market.

In some sectors, competitive constraints are shaped not only by prices, quality, innovation or other economic factors, but also by procurement rules, export controls, investment screening, security clearances, vendor restrictions or other national security-related measures. These measures may affect whether particular firms can bid, supply, expand, remain active, or be treated as credible suppliers by customers. Where they do, competition authorities must assess competitive constraints on the basis of market realities rather than the mere existence of firms elsewhere (OECD, 2022[37]).

This issue is especially important in sectors where participation depends on regulatory approval, long-term procurement relationships, technical certification or government trust. In such settings, the relevant question is not simply whether a firm has the technical capacity to supply, or competes in other jurisdictions, but whether it can exert a sufficiently credible and timely constraint in the market under investigation. National security-related restrictions are thus relevant not because they redefine the legal test, but because they affect which firms actually constrain the parties or conduct at issue. The Siemens/Alstom case illustrates the point (see Box 6).

Box 6. National security and the assessment of credible competitive constraints: Siemens/Alstom

The 2019 Siemens/Alstom merger in the EU concerned the supply of signalling systems and high-speed rolling stock. The EC identified competition concerns in markets for very high-speed trains and railway signalling systems. The parties argued that the merger should be assessed in light of global competition, including from large Chinese suppliers. The EC instead examined whether those suppliers imposed a credible and timely competitive constraint in the EEA. In relation to signalling, it found that entry by certain Asian suppliers was unlikely in the foreseeable future. The decision referred to the absence of contracts in the EEA, limited contact with customers, and market-investigation evidence indicating that these suppliers would not become credible bidders within five years. It also recorded evidence that awarding major signalling contracts to a Chinese supplier could raise national security concerns for certain infrastructure managers, making procurement less likely. In that context, the EC concluded that such firms were unlikely to constrain the merged entity within the relevant period. The case illustrates that the existence of suppliers at a global level does not, by itself, establish a competitive constraint when regulatory, procurement or security-related conditions limit their ability to compete in practice.

Source: EC (2019[61]), Commission prohibits Siemens' proposed acquisition of Alstom, https://ec.europa.eu/commission/presscorner/detail/en/ip_19_881; EC (2019[62]), Case M.8677 - Siemens/Alstom, https://ec.europa.eu/competition/mergers/cases1/20219/m8677_9376_7.pdf.

The significance of the case extends beyond merger control. It shows that where competition depends on regulatory feasibility, procurement access and customer acceptance, national security considerations may affect whether a firm constitutes an actual or potential constraint. This is a competition question, not because the authority assesses the merits of the underlying security policy, but because those conditions shape the market’s competitive structure. Related policy debates also illustrate a broader institutional point: concerns about foreign subsidies, strategic autonomy or global competitiveness may shape the policy context and the development of complementary instruments, such as the EU Foreign Subsidies Regulation, without displacing the core competition analysis in individual cases (Torres Méndez, 2024[63]).

Comparative practice confirms this approach. In some cases, authorities find that foreign suppliers constrain domestic firms, including where customers source globally and switching is feasible. In others, competitive conditions are narrower because supply depends on regulatory approval, certification, procurement access or other conditions that limit participation. The key issue is not whether competition is global in the abstract, but whether firms can compete effectively under the conditions relevant to the case. This distinction is reflected, for example, in the EC’s treatment of imports in Tata Steel/Thyssenkrupp and the JFTC’s finding in Imabari Shipbuilding/Japan Marine United that shipowners procure vessels globally (EC, 2025[55]; JFTC, 2025[64]).

The issue is particularly salient in telecommunications infrastructure. A number of jurisdictions have adopted measures that prohibit, phase out or otherwise restrict Huawei and other designated vendors from participation in 5G networks on national security grounds. Although those measures are adopted outside competition law, they may materially affect the set of firms that can supply network equipment and therefore the competitive constraints available in practice (see Box 7).

Box 7. National security restrictions and the set of feasible competitors: 5G infrastructure

A number of jurisdictions have adopted measures restricting or excluding Huawei and ZTE from participation in 5G telecommunications networks on national security grounds. In the US, the Federal Communications Commission designated Huawei and ZTE equipment and services as posing an unacceptable national security risk and prohibited their authorisation and use in domestic telecommunications networks. Other jurisdictions adopted comparable measures. The UK prohibited the use of new Huawei and ZTE equipment in 5G networks from 2021 and required its removal by 2027. Canada prohibited the use of Huawei and ZTE equipment in 5G networks and imposed removal timelines. Australia adopted security-based restrictions that effectively exclude certain high-risk vendors from 5G deployment. Germany has introduced phased removal requirements for Huawei and ZTE components in critical parts of its networks.

Source: US Congress (2020[65]), H.R.4998 - Secure and Trusted Communications Networks Act of 2019, https://www.congress.gov/bill/116th-congress/house-bill/4998; FCC (2026[66]), List of Equipment and Services Covered By Section 2 of The Secure Networks Act, https://www.fcc.gov/supplychain/coveredlist; UK Government (2020[67]), Huawei to be removed from UK 5G networks by 2027, https://www.gov.uk/government/news/huawei-to-be-removed-from-uk-5g-networks-by-2027; Government of Canada (2022[68]), Policy Statement – Securing Canada’s Telecommunications System, https://www.canada.ca/en/innovation-science-economic-development/news/2022/05/policy-statement--securing-canadas-telecommunications-system.html; BBC (2018[69]), Huawei and ZTE handed 5G network ban in Australia, https://www.bbc.com/news/technology-45281495; German Federal Ministry of the Interior (2024[70]), Greater security and technological sovereignty for the German 5G mobile network: The Federal Government concludes contracts with telecommunications companies, https://www.bmi.bund.de/SharedDocs/pressemitteilungen/EN/2024/07/5g-en.html.

From a competition perspective, the relevant question is not in the merits of such national security measures, but how they affect competitive constraints.1 A supplier that is technically substitutable under normal conditions may cease to be a relevant constraint where legal or policy restrictions prevent it from supplying, expanding or being considered a viable procurement option. In such cases, the reduction in competitive pressure arises not from product characteristics but from a binding constraint on participation. This may be relevant across merger analysis, dominance assessment and other settings in which authorities must determine which firms meaningfully constrain one another.

Similar issues may arise in digital markets (see Box 8). National security-related restrictions may alter the competitive landscape not by changing user preferences or technical substitutability, but by affecting whether a platform can remain available, operate in its existing form, or continue to compete independently.

Box 8. National security measures and competitive constraints: TikTok

India banned TikTok and other Chinese-origin apps in 2020 on grounds including sovereignty, security of the state and public order. In the United States, measures targeting TikTok have focussed on data security and foreign control, including legislation requiring divestiture or otherwise permitting restrictions on availability. These measures illustrate how national security decisions may affect whether a digital platform remains part of the competitive set.

Source: Hindustan Times (2025[71]), Why TikTok remains banned in India despite thaw in China ties, https://www.hindustantimes.com/india-news/explained-why-tiktok-remains-banned-in-india-despite-thaw-in-china-ties-101755921080333.html; White House (2020[72]), Executive Order on Addressing the Threat Posed by TikTok, https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/; US Congress (2024[73]), H.R.8038 - 21st Century Peace through Strength Act, https://www.congress.gov/bill/118th-congress/house-bill/8038; NPR (2026[74]), TikTok finalises deal to form new American entity, https://www.npr.org/2026/01/22/nx-s1-5685456/tiktok-finalizes-deal-to-form-new-american-entity.

The relevance of these developments is that government action taken on national security grounds may affect whether a platform remains part of the competitive set. This was reflected in the FTC’s monopolisation case against Meta, where TikTok’s competitive significance formed part of the assessment of market power. Evidence that user attention shifted toward Facebook, Instagram and YouTube when TikTok became unavailable is relevant because it shows how such restrictions may affect competitive constraints in practice, not because competition authorities assess the underlying security rationale (D.D.C, 2025[75]).2

The implications for competition analysis are therefore fact specific. They depend on the timing, scope and durability of the restriction, as well as observed substitution patterns, switching behaviour and the likelihood that the affected firm can continue to operate, expand or compete independently. Temporary disruption, permanent exclusion and restructuring through divestiture may each have different implications for the assessment of competitive constraints.

These examples show that national security considerations may enter competition analysis at an early stage by affecting which firms constrain one another in practice. This requires authorities to assess competitive constraints realistically, taking into account binding legal, regulatory and policy conditions that shape market participation.

2.2. Merger control

Merger control is one of the principal contexts in which national security considerations arise in competition enforcement. Mergers involving firms active in strategically significant sectors, such as defence systems, advanced technologies, energy infrastructure, or critical raw materials, may trigger arguments that consolidation supports industrial resilience, technological capability or control over strategic assets. These arguments often emphasise industrial capacity and international competitiveness (Kovacic, 2022[76]; FTC, 2006[77]). At the same time, reduced rivalry may itself generate vulnerabilities. Consolidation that eliminates independent competitors, reduces supplier diversity, or diminishes incentives to innovate may increase reliance on a limited number of firms, thereby increasing exposure to disruption (FTC, 2006[77]; EC, 2025[55]; JFTC, 2026[78]).

From an analytical perspective, national security considerations may enter merger review through two main channels: the assessment of competitive effects and efficiency or justification claims advanced by the parties. These considerations do not modify the legal test but may affect how evidence is interpreted within that framework. Where concerns cannot be expressed as competition-relevant effects, they fall outside merger control. As discussed in Section 1, they may instead be addressed through parallel regimes, including FDI screening, public-interest interventions, trade, procurement, subsidy control or industrial policy.

2.2.1 National security-related anticompetitive effects in mergers

National security considerations may be relevant where they correspond to established anticompetitive effects, including (i) concentration, reduced rivalry and entrenchment; (ii) foreclosure and raising rivals’ costs; and (iii) innovation and capability effects. Best practices on assessing these effects are highlighted in the OECD Recommendation on Merger Review (2025[79]). In strategically significant sectors, such effects may be particularly consequential where demand is concentrated among public authorities or critical industries and where alternative suppliers are limited (EC, 2025[55]; US DoD, 2022[80]).

This assessment is typically informed by structural indicators of concentration, particularly in horizontal mergers. Measures such as market shares and Herfindahl–Hirschman Index (HHI) thresholds provide initial indicators. Higher concentration levels may signal reduced rivalry and, in some cases, entrenchment. At the same time, concentration may in some cases reflect the scale required to support investment or innovation. Where such considerations are advanced by the parties, they may be assessed within the framework for efficiencies or justifications. Higher concentration may also indicate increased reliance on a limited number of suppliers, a concern often framed in policy terms as dependency or vulnerability (US DoD, 2022[80]; EC, 2025[81]). The supply-chain resilience literature also uses concentration metrics to assess disruption risks, confirming that standard merger tools already capture some dimensions of dependency and vulnerability (Carter, Rogers and Choi, 2015[82]).3

Mergers that eliminate independent suppliers of critical inputs or technologies may increase reliance on a limited number of firms, reduce sourcing flexibility and increase exposure to disruption. This is particularly relevant in sectors with high entry barriers or specialised capabilities. Concerns framed in terms of resilience or security of supply often reflect reduced substitutability, increased supplier concentration and entrenchment risks within standard competition analysis (Deutscher, 2022[83]; EC, 2025[55]; US DoD, 2022[80]). They may also arise through the weakening of non-price dimensions of competition, such as reliability, delivery times or continuity of supply, especially where supply failures affect downstream production or critical infrastructure.4 Supply-chain resilience literature may complement this analysis by identifying factors such as supplier criticality, geographic exposure and substitutability (Berry and Waldfogel, 2001[84]; Argentesi et al., 2021[85]).

Economic analysis may also draw on insights from network theory, which can help identify firms that function as critical nodes in supply chains.5 Where a merger increases reliance on such a firm, it may heighten vulnerability to disruption, particularly where switching is difficult or alternatives are limited. These tools do not replace traditional merger analysis but may complement the assessment of supplier importance and substitutability.

A second channel concerns foreclosure or raising rivals’ costs, particularly where a merger confers control over critical inputs, infrastructure or technologies. Where a transaction enables the merged entity to restrict, degrade or discriminate in access to key inputs, it may reduce downstream competition while limiting independent supply options (Coscelli and Thomson, 2024[13]).6 These dynamics are illustrated in NVIDIA/Arm (see Box 9).

Box 9. Foreclosure and access to critical inputs: NVIDIA/Arm

In 2021, NVIDIA’s proposed acquisition of Arm Holdings was reviewed by the UK CMA under competition law, while the government separately issued a public interest intervention notice on national security grounds. Competition concerns centred on whether NVIDIA could restrict or degrade access to Arm’s semiconductor architecture and intellectual property, which are widely licensed to firms competing with NVIDIA in downstream semiconductor markets. Because Arm’s technology is a critical input for many chip manufacturers and for applications including AI, the CMA was concerned that the merged entity could have the ability and incentive to disadvantage rivals. NVIDIA ultimately abandoned the merger.

Note: The FTC also challenged the NVIDIA/Arm merger. A public interest intervention notice allows the government to require a report from the CMA and to take account of specified public-interest considerations alongside the competition assessment. In the UK, national security is now primarily assessed under a separate statutory regime established by the National Security and Investment Act, as discussed in Section 1.

Source: CMA (2022[86]), NVIDIA abandons takeover of Arm during CMA investigation, https://www.gov.uk/government/news/nvidia-abandons-takeover-of-arm-during-cma-investigation; UK Government (2021[87]), NVIDIA – Arm: Summary of the CMA’s report to the Secretary of State for Digital, Culture, Media & Sport on the anticipated acquisition by NVIDIA Corporation of Arm Limited, https://www.gov.uk/government/publications/summary-of-the-cm.

A third set of effects concerns innovation and technological capability. In strategically significant sectors, competition may take place through R&D, bidding processes or competing technological trajectories rather than current sales. Mergers that eliminate innovation rivals, reduce technological diversity or weaken incentives to invest may reduce innovation rivalry and long-term capability development, particularly where innovation is central to competition (EC, 2025[55]; US DoD, 2022[80]).

These issues have long been recognised in defence markets, where capable suppliers are often limited and entry barriers are high. In such contexts, the loss of an independent supplier may affect current competition, future procurement options, technological diversity and independent capability. Historical defence mergers illustrate how reduced supplier diversity and diminished innovation rivalry can affect both.7

2.2.2 National security arguments, justifications and efficiency claims in mergers

Mergers may generate efficiencies including cost savings, improved products or services, and enhanced innovation or investment, which may be passed on to consumers. National security considerations may arise through efficiency or justification claims advanced by merging parties. Firms may argue that consolidation enables investment in critical technologies, combines complementary assets, preserves production capabilities, improves supply-chain resilience, secures access to critical inputs, or creates scale needed to compete globally. Such claims may be relevant where they are substantiated and correspond to recognised efficiencies (Micheletti, 2026[88]).8 In defence and advanced-technology sectors, they often concern scale, integration of complementary assets and investment incentives (see Box 10) (FTC, 2020[89]).

Box 10. Efficiencies and remedies in naval defence: Hanwha/DSME

In 2023, the KFTC in Korea conditionally approved Hanwha Group’s acquisition of Daewoo Shipbuilding & Marine Engineering, despite identifying risks of vertical foreclosure in naval defence markets. The parties argued that the transaction would generate efficiencies by strengthening Korea’s naval defence industry through vertical integration, and that foreclosure risks were limited given the Defence Acquisition Program Administration’s role as a monopsony buyer overseeing pricing and technical specifications. The KFTC concluded that competition concerns remained and imposed behavioural remedies, including non-discrimination obligations and information firewalls, rather than prohibiting the transaction.

Note: The merger was also reviewed and cleared by multiple other jurisdictions, including the EC and JFTC.

Source: Jung, S (2023[90]), KFTC Gives Conditional Approval for Hanwha’s Takeover of DSME, https://www.businesskorea.co.kr/news/articleView.html?idxno=113727; Shipbuilding (2023[91]), KFTC Gives Conditional Approval for Hanwha’s Takeover of DSME, https://www.hellenicshippingnews.com/kftc-gives-conditional-approval-for-hanwhas-takeover-of-dsme/.

Such arguments also arise outside defence, where scale, integration and investment may be presented as necessary to compete globally or ensure strategic autonomy. Recent policy debates emphasise that mergers may facilitate large-scale investment, support the combination of complementary capabilities, or enable innovation projects that would be difficult to undertake independently.9 They may also generate efficiencies through vertical integration, including improved coordination or elimination of double marginalisation. However, these effects are case-specific and cannot be presumed. When advanced as efficiencies, they must satisfy established evidentiary standards: they must be merger-specific, verifiable and likely to benefit consumers. In T-Mobile/Sprint, for example, the parties argued that the transaction would accelerate 5G deployment and strengthen technological leadership. The case illustrates how efficiency arguments may be framed in strategic terms while remaining subject to standard efficiency analysis (T-Mobile, 2018[92]).

National security considerations may also intersect with established merger defences, such as the failing firm defence. However, they do not alter the strict legal conditions of such defences, which remain grounded in counterfactual analysis. Arguments relating to the preservation of industrial capability or strategic assets cannot substitute for evidence that those conditions are met.10

Several principles follow. National security considerations can be assessed within the ordinary merger-control framework, where they can be expressed in terms of competition-relevant effects. They do not introduce new theories of harm, but may influence how established concerns, including concentration, foreclosure, raising rivals’ costs and reduced innovation, are evidenced in strategically significant sectors. At the same time, mergers may generate efficiencies, including in relation to scale, investment, innovation, resilience, or access to critical inputs. Where such claims are advanced and correspond to recognised efficiencies, they may be assessed within the merger-control framework. Claims relating to resilience, technological capability, scale or strategic autonomy must satisfy the same evidentiary standards as efficiencies and be supported by clear, verifiable and merger-specific evidence demonstrating benefits likely to be passed on to consumers. Where considerations instead reflect broader geopolitical or industrial policy objectives, they fall outside merger control and should be addressed through separate institutional mechanisms.

2.3 Co-ordinated conduct

In strategically significant sectors, co-ordination among competitors may arise in ways that are closely linked to national security considerations. In industries such as defence, energy infrastructure and advanced technologies, governments often act simultaneously as regulators, funders, owners or dominant purchasers. State ownership is particularly relevant in this context: OECD evidence from across 56 jurisdictions shows that governments frequently justify continued ownership by reference to national security or strategic interests (84%) and industrial policy objectives in sectors considered vital for long-term competitiveness or technological development (79%) (OECD, Forthcoming[93]). This institutional configuration may shape market structure by standardising technical requirements, influencing investment incentives, concentrating demand, or facilitating industry co-operation. As a result, it may increase the opportunities for repeated interaction among a limited number of suppliers, which may increase the risk of anticompetitive outcomes (Anderson and Luiz, 2025[94]).

In this context, co-ordination is often framed by firms and policymakers as a response to security-related objectives, including ensuring continuity of supply, interoperability of complex systems, or the development of critical technological capabilities. Such arguments are increasingly articulated in terms of competitiveness, strategic autonomy, or technological leadership. The central analytical question is whether the conduct falls within ordinary competition-law analysis, including as efficiency-enhancing co-operation, or instead reflects a broader policy choice for governments or specialised bodies.

At the most restrictive end of the spectrum, horizontal agreements on prices, output, customers, or territories remain among the most serious infringements of competition law. Such conduct replaces independent decision making with co-ordinated outcomes and is treated as inherently harmful. The invocation of national security, resilience, or strategic necessity does not alter this assessment. Claims that co-ordination is required to ensure supply stability, technological capability, or industrial strength cannot justify price fixing, bid rigging, or market allocation within the competition law framework.

Beyond these clearly anticompetitive forms of conduct, co-ordination may in some cases generate efficiencies, particularly in sectors characterised by high fixed costs, technological complexity and interdependence among firms. This may include technical collaboration, standard-setting, joint R&D, or co-ordination necessary for system integration. In such cases, the analytical task is to assess whether the co-operation is necessary and proportionate to achieve identifiable efficiencies and whether it preserves meaningful scope for independent competition across relevant parameters, including price, quality, innovation and capacity.

For example, the development of common technical standards in telecommunications has enabled interoperability across networks and devices, supporting competition among multiple suppliers within a shared technological framework. 3GPP provides a relevant example: organised through regional standards bodies, its technical specifications are developed through contributions from participating companies, including operators, equipment vendors and technology suppliers. In strategically significant sectors, such arrangements may also contribute to system compatibility, supply continuity and technological development (3GPP, 2024[95]; OECD, 2025[96]).

However, these efficiencies do not eliminate competition concerns. Co-ordination may reduce incentives for independent innovation, limit alternative technological pathways, or facilitate alignment of market behaviour, including through governance arrangements or information exchange, particularly where participation is restricted or governance structures are opaque. National security considerations do not alter this analysis but may affect how necessity and proportionality are assessed in practice, as illustrated by the United Launch Alliance joint venture (see Box 11).

Box 11. United Launch Alliance: National security, efficiencies and safeguards

In 2006, Boeing and Lockheed Martin combined their launch operations to form the United Launch Alliance (ULA), merging the only two providers of medium-to-heavy launch services to the US Government. The transaction eliminated direct rivalry in a highly concentrated market and raised concerns about reduced competitive pressure and potential spillovers into adjacent spacecraft markets through the exchange of sensitive information.

The US DoD supported the joint venture on national security grounds, arguing that consolidation would improve reliability, quality and efficiency in a context of declining demand and high fixed costs. The FTC recognised these efficiencies as credible and substantial, but also emphasised the long-term risks of eliminating rivalry, including weaker incentives to maintain performance over time.

The FTC cleared the transaction subject to safeguards limiting the exchange of competitively sensitive information and addressing vertical foreclosure risks. The decision also rested on an expectation, supported by discussions with the DoD and NASA, that government purchasers would facilitate future entry into launch services.

Subsequent developments illustrate the significance of this approach. ULA achieved reliability improvements, while SpaceX later emerged as a major supplier of launch services for NASA and US national security agencies. The case highlights how, in exceptional circumstances, competition authorities may permit co-operation linked to national security objectives where efficiencies are credible, safeguards are imposed and complementary government action supports future competition.

Note: The FTC’s decision was shaped by the broader institutional context: challenging the merger in court without DoD support would have been difficult, and government purchasers retained the ability to influence market outcomes through procurement policy.

Source: FTC (2006[97]), FTC Intervenes in Formation of ULA Joint Venture by Boeing and Lockheed Martin, https://www.ftc.gov/news-events/news/press-releases/2006/10/ftc-intervenes-formation-ula-joint-venture-boeing-lockheed-martin; Kovacic, W (2020[98]), Competition Policy Retrospective: the Formation of the United Launch Alliance and the Ascent of SpaceX, https://ssrn.com/abstract=3670742; FTC (2006[99]), Concurring Statement of Commissioner Pamela Jones Harbour, https://www.ftc.gov/sites/default/files/documents/cases/2006/10/0510165concurringstatementcommharbour.pdf.

In practice, co-ordination justified on security or resilience grounds may carry particular risks in concentrated and high-barrier sectors, including where such co-operation is permitted or facilitated by public authorities. Where co-operation extends beyond what is strictly necessary, it may entrench market power, heighten barriers to entry or expansion and weaken incentives to innovate or diversify supply. Over time, such arrangements may increase dependency on a limited number of suppliers or platforms, thereby reinforcing both market power and the conditions for co-ordinated outcomes, potentially weakening the resilience they were intended to support (Kovacic, 2022[76]; Monopolkommission, 2025[100]; US DoD, 2022[80]).

These concerns are increasingly relevant in AI and other technology-intensive ecosystems, where national security debates already emphasise technological leadership, compute capacity and strategic rivalry, as discussed in Box 1. In competition terms, the relevant issue is not the geopolitical importance of AI as such, but whether partnerships among cloud providers, model developers, infrastructure providers and downstream firms reduce strategic independence, facilitate information exchange, or align incentives in ways that weaken competition. Such arrangements may also raise national security concerns where access to critical inputs, including compute, data, chips or energy, becomes concentrated among a small number of firms, increasing strategic dependencies and narrowing technological development pathways (Sandoval et al., 2026[101]).

In some cases, co-ordination in strategically significant sectors arises not from firm-led initiatives but from government-directed frameworks, including defence procurement programmes or industrial policy initiatives. Governments may facilitate co-operation through statutory exceptions, as discussed in Section 1, procurement design, funding conditions, standard-setting mandates, SOE ownership or crisis-response mechanisms. Competition law in some jurisdictions provides mechanisms to permit co-ordination on a case-specific basis, subject to conditions and oversight (see Box 12).11 Where such co-ordination reflects broader policy choices, such as ensuring domestic capability, managing strategic dependencies, or responding to geopolitical risks, it may fall outside the scope of competition enforcement.

Box 12. Authorised co-ordination in response to supply disruption: The Australian fuel sector

In 2026, the Australian Competition and Consumer Commission (ACCC) granted urgent interim authorisation to the Australian Institute of Petroleum, its members and other industry participants to co-ordinate in managing disruptions to Australia’s fuel supply chain linked to the conflict in the Middle East.

The authorisation permits co-ordination on fuel supply logistics, including information exchange and operational co-ordination to alleviate shortages, but does not allow co-ordination on prices. It is subject to conditions, including requirements to support independent distributors and align conduct with government priorities in maintaining supply continuity.

Note: Under Australian competition law, authorisation provides statutory protection from legal action for conduct that might otherwise breach competition rules, where the ACCC is satisfied that the likely public benefits outweigh the likely public detriment. The case highlights that, even where co-ordination is permitted, its scope, duration and governance remain central to limiting risks to competition.

This case also illustrates a distinct competition-law mechanism through which co-ordination may be temporarily permitted in response to supply disruptions. Unlike statutory exemptions or immunities discussed in Section 1, which are established ex ante in legislation, authorisation is granted ex post by the competition authority, based on a public-benefit assessment and subject to conditions, monitoring and potential revocation.

Source: ACCC (2026[102]), ACCC authorises fuel majors to coordinate to ensure fuel supplies, with conditions, https://www.accc.gov.au/media-release/accc-authorises-fuel-majors-to-coordinate-to-ensure-fuel-supplies-with-conditions; ACCC (2026[103]), Authorisation, https://www.accc.gov.au/business/competition-and-exemptions/exemptions-from-competition-law/authorisation.

Caution is warranted because historical experience also shows how co-ordination mechanisms introduced for stability or security-related reasons may become entrenched. In the liner shipping sector, conference agreements were long permitted on the basis that co-ordination was necessary to ensure reliable maritime transport. Over time, however, these arrangements facilitated persistent price co-ordination and reduced competitive pressure, leading several jurisdictions, including the European Union, to abolish such exemptions (EC, 2008[104]). This experience underscores the importance of limiting the duration and scope of authorised co-operation.

Several principles emerge. Co-ordinated conduct remains subject to the ordinary competition law framework, and national security does not alter the prohibition of hardcore restrictions. Where co-operation generates efficiencies, these must be necessary, proportionate and verifiable. Where co-operation is permitted through competition-law mechanisms, including authorisation, it should be limited to what is strictly necessary, subject to clear conditions, and capable of review or withdrawal. Where co-ordination reflects broader policy choices, including government-facilitated industry co-operation, procurement, or SOE-led arrangements that pursue public policy mandates, it should be addressed through appropriate institutional mechanisms rather than by stretching competition-law analysis. Particular caution is required to ensure that arrangements introduced on security or resilience grounds do not become entrenched and ultimately weaken competition, resilience and long-term capability.

2.4 Unilateral conduct

National security considerations do not alter the legal framework in unilateral conduct cases but may affect how competitive conditions are assessed in practice. Such considerations may arise in the assessment of anticompetitive effects and the evaluation of pro-competitive justifications or efficiencies, particularly where conduct affects access to critical inputs, infrastructure or technologies relevant to security, resilience or technological capability.

2.4.1 National security-related anticompetitive effects

National security considerations enter unilateral conduct analysis where they correspond to established theories of harm. In practice, this may occur where conduct by a dominant firm restricts access to critical inputs, infrastructure, interfaces or technologies; entrenches market power; raises rivals’ costs; or steers innovation toward the dominant firm’s preferred path. In strategically significant sectors, the same conduct may raise national security concerns by increasing dependence on the dominant firm, limiting alternative sources of supply or reducing the development of competing technological pathways. They do not give rise to distinct legal standards but may affect how existing theories of harm are evidenced and assessed.

Exclusionary practices, including exclusive dealing, refusal to supply, or discriminatory access to inputs, may limit rivals’ ability to compete. Where such conduct concerns a critical input or infrastructure controlled by a dominant firm, it may entrench market power and reduce supply diversification. In sectors linked to national security, this may translate into reduced resilience and increased exposure to disruption, particularly where switching suppliers is costly, slow or subject to regulatory constraints.

In markets characterised by control over infrastructure, interfaces or technological ecosystems, conduct that restricts interoperability, limits access to essential inputs, or degrades compatibility may foreclose rivals or raise their costs (Motta, 2023[105]). In digital and telecommunications markets, such practices may also constrain the development of alternative technologies, reducing both competition and the diversity of innovation pathways, which may be relevant where technological diversity is linked to resilience or strategic autonomy.

These effects may extend beyond price and output to non-price dimensions of competition, including reliability, continuity of supply, system integrity and innovation. Where exclusionary conduct limits access to key inputs or constrains technological development, it may reduce the ability of customers and downstream firms to switch, multi-source or adopt alternative technical solutions. In this sense, concerns framed in terms of resilience or technological sovereignty may correspond to reduced competition across both static and dynamic dimensions. Enforcement practice illustrates these dynamics (see Box 13).

Box 13. Unilateral conduct in critical infrastructure and strategic sectors

Brazil. CADE approved a cease-and-desist agreement requiring Petrobras to divest refineries and related infrastructure to facilitate entry into fuel markets following investigations into exclusionary conduct, including predatory pricing.

EU. The EC accepted commitments from Gazprom after concerns that its conduct restricted cross-border gas sales and contributed to market segmentation in Central and Eastern Europe.

Israel. ICA found that Bezeq had abused its control over passive telecommunications infrastructure by obstructing competitors seeking access to deploy competing networks.

South Africa. The Competition Tribunal found that Telkom abused its dominant position by refusing to supply essential facilities and discriminating against downstream internet service providers.

Source: Brazil Justice Ministry (2025[106]), Cade e Petrobras celebram acordo para venda de refinarias de petróleo, https://www.gov.br/cade/pt-br/assuntos/noticias/cade-e-petrobras-celebram-acordo-para-venda-de-refinarias-de-petroleo; EC (2018[107]), Antitrust: Commission imposes binding obligations on Gazprom to enable free flow of gas at competitive prices in Central and Eastern European gas markets, https://ec.europa.eu/commission/presscorner/detail/en/ip_18_3921; ICA (2019[108]), The Antitrust Authority announces its intention to impose financial sanctions totalling around NIS 30 million on Bezeq, https://www.gov.il/en/pages/bezeqnotic; South African Competition Tribunal (2012[109]), Competition Tribunal imposes R449 million penalty on Telkom for ‘bullying’ its Competitors, https://www.compcom.co.za/wp-content/uploads/2014/09/Tribunal-imposes-R449M-on-Telkom.pdf.

These examples do not establish separate national security theories of harm. Their relevance is that they show how unilateral conduct analysis can capture security-relevant concerns where conduct by a dominant firm in critical sectors restricts access to essential infrastructure, deepens dependency, limits interoperability or reduces alternative technological pathways in strategically significant sectors.

2.4.2 National security arguments, justifications and efficiency claims

The efficiency analysis raises a different question: whether conduct that appears exclusionary is nevertheless competition on the merits or generates cognisable benefits under the applicable legal framework. In national security-related cases, this requires authorities to distinguish between benefits that can be assessed as part of the competition analysis and broader national security claims that fall outside its scope.

Firms investigated for unilateral conduct may argue that their conduct is justified by efficiencies or other pro-competitive benefits. In strategically significant sectors, those arguments may be framed in national security terms, for example, by claiming that the conduct is necessary to protect cybersecurity, preserve critical infrastructure, maintain system integrity or sustain investment in domestic technological capabilities. Such claims may be advanced by the firm itself or supported by public authorities.

Legal tests differ across jurisdictions, and the assessment depends on the conduct at issue. However, competition law frameworks generally require a clear connection between the conduct and a competition-relevant benefit, evidence that the benefit is likely, and an assessment of whether the same objective could be achieved through less restrictive means. Three recurring analytical lenses are useful, without assuming that each applies in the same way across jurisdictions:

• Under a market-failure approach, the firm must (i) identify a specific market failure, (ii) demonstrate that the market exhibits that failure absent the restraint and (iii) show that the challenged conduct materially alleviates it.

• Under a competitive-process approach, the focus is on whether the conduct enhances or impairs the functioning of the competitive process itself, rather than on welfare outcomes alone; conduct that plausibly strengthens rivalry may therefore be treated as justified.

• A third approach focusses on effects-based indicators of market performance, assessing whether the conduct results in verifiable improvements such as increased output, lower prices, higher quality, or enhanced innovation.

These approaches are not mutually exclusive and may overlap in practice. Their value in national security-related cases is that they structure and discipline the analysis: the claimed benefit must be identified precisely, translated into a competition-relevant effect, and tested against the scope and necessity of the restriction (Newman, 2019[110]; OECD, 2021[111]). This is especially important when security-related claims are advanced, because such claims may be difficult to verify and may overlap with broader policy objectives beyond competition legal frameworks.

For enforcement purposes, three questions are useful. First, what precise risk or efficiency, such as cybersecurity, investment incentives or supply continuity, does the conduct address? Second, how does the restriction materially address that risk in a way that improves competition-relevant outcomes? Third, is the restriction no broader than necessary, in scope, duration and affected counterparties?

The nature of the claimed benefit will depend on the conduct. Exclusive dealing may, in some limited circumstances, protect relationship-specific investment, address free-riding or support quality assurance. Restrictions on access or interoperability may, in some limited settings, protect cybersecurity, prevent fraud or preserve system integrity. Tying, bundling or integrated supply may generate efficiencies where products or services are technically complementary. But these benefits cannot be presumed. Authorities should test whether the restriction protects a legitimate investment or security function, or instead entrenches the dominant firm’s control over customers, inputs or complementary markets (OECD, 2021[111]).

The analytical task is therefore not to determine whether a national security objective is desirable in the abstract, but whether the conduct at issue is necessary to achieve a verifiable competition-relevant benefit and whether less restrictive alternatives are available. Where the asserted benefit concerns product security, network integrity, investment incentives or innovation, it may be possible to assess the claim using ordinary competition tools. Where the claim rests primarily on geopolitical strategy, industrial policy or broader state interests that cannot be operationalised as market effects, it generally lies outside unilateral conduct analysis.

At the same time, national security arguments may be invoked strategically to defend conduct that is in substance exclusionary. Competition authorities should therefore distinguish carefully between claims that can be tested within established analytical frameworks and broader policy arguments that are not susceptible to competition-law verification. Otherwise, unilateral conduct analysis may be stretched beyond its legal function and used to resolve policy choices that belong to governments or specialised security bodies.

These issues arise frequently in digital and communications markets, where dominant firms may invoke privacy, security, or system integrity to justify restricting interoperability, limiting access to interfaces, or maintaining closed ecosystems (FTC, 2023[112]). Such claims are not inherently implausible. In some settings, tighter control over access may reduce operational vulnerabilities. The competition-law question, however, remains whether the restriction is technically necessary and proportionate, or whether it unnecessarily excludes rivals or complementary services.

The same logic applies to innovation-based arguments. Dominant firms in sectors such as telecommunications, semiconductors, AI and digital platforms may contend that scale, integration, or control over key technologies is needed to sustain R&D and compete globally (ICN, 2023[113]; FTC, 2020[89]; USDOJ, 2025[54]). Where those arguments are advanced to defend exclusionary conduct, however, the relevant question is whether the conduct genuinely protects innovation incentives or instead shields the incumbent from competitive pressure. Restrictions on interoperability, distribution, or access to essential inputs may weaken current competition and future innovation by limiting entry, experimentation and alternative technological pathways (OECD, 2023[14]).

The FTC v Qualcomm litigation illustrates how national security arguments can arise in unilateral conduct cases. They may be framed as claims about innovation incentives and technological leadership, advanced by public authorities outside the competition agency, and considered by courts while the dispute is ultimately resolved on conventional antitrust grounds (see Box 14).

Box 14. FTC v. Qualcomm: Unilateral conduct, innovation and national security

In 2017, the FTC filed a complaint against Qualcomm, alleging monopolisation in modem-chip markets through its licensing and chip-supply practices. After trial concluded in 2019, the DOJ filed a Statement of Interest urging the district court, if liability were found, to hold a remedies hearing and consider the implications of any remedy. The district court found liability without conducting a remedies hearing and imposed a broad injunction requiring changes to Qualcomm’s global licensing practices.

On appeal, Qualcomm requested a stay of the injunction. It argued that the district court had mischaracterised its business model and condemned conduct that reflected competition on the merits rather than exclusion. It also argued that its licensing and chip-supply practices promoted innovation and sustained R&D investment. In parallel, national security concerns were raised through DOJ filings and supported by declarations from the DoD and the Department of Energy. Those declarations stated that weakening Qualcomm’s position in 5G innovation and standard setting could adversely affect US national security.

When the Ninth Circuit granted a stay, it emphasised that the case was unusual because the US Government itself was divided on the judgment and its public-interest implications. The DOJ later argued that the remedy should be vacated and remanded because the district court had failed to consider national security, which it described as a public interest of “the highest order.”

The FTC responded that such arguments were not cognisable within modern economics-focussed antitrust analysis. It argued that even if preserving Qualcomm’s profitability or technological position served broader national interests, such objectives should be pursued through other policy instruments rather than by permitting conduct that violates the Sherman Act.

The Ninth Circuit ultimately reversed the district court’s finding of liability and vacated the injunction on antitrust grounds, without relying on national security arguments. It held, among other things, that the FTC had not adequately shown that Qualcomm’s challenged practices impaired rivals’ opportunities.

Note: Pursuant to 28 U.S.C. § 517, the DOJ may file a Statement of Interest to attend to the interests of the United States in pending litigation. Such a filing does not make the United States a party to the proceeding. An amicus curiae brief is likewise a submission by a non-party that provides legal arguments or policy perspectives for the court’s consideration.

Source: FTC (2019[114]), Brief of the Fed. Trade Comm’n, FTC v. Qualcomm, Inc., No. 19-16122 (9th Cir.), https://www.ftc.gov/system/files/documents/cases/144_2019_11_22_ftc_answering_brief.pdf; Ninth Circuit (2019[115]), FTC. v. Qualcomm Inc., No. 19-16122, https://cdn.ca9.uscourts.gov/datastore/opinions/2019/08/23/19-16122%20%282%29.pdf; Ninth Circuit (2020[116]), FTC. v. Qualcomm Inc., No. 19-16122 (9^th Cir.), https://cdn.ca9.uscourts.gov/datastore/opinions/2020/08/11/19-16122.pdf; DOJ (2019[117]), Brief of the United States of America as Amicus Curiae in Support of Appellant, FTC v. Qualcomm Inc., No. 19-16122 (9th Cir.); https://www.justice.gov/atr/case-document/file/1199191/dll; DOJ (2019[118]), Statement of Interest of the United States of America, No. 5:17-cv-00220 (NDCA), https://www.justice.gov/atr/case-document/file/1236026/dl, DOJ (2019[119]), United States' Statement of Interest Concerning Qualcomm's Motion for Partial Stay of Injunction Pending Appeal, No. 19-16122 (9^th Cir.),https://www.justice.gov/atr/case-document/file/1183936/dl.

Several analytical points follow from this case. National security claims may be framed in terms of innovation capacity, particularly in industries where technological leadership is seen as strategically significant. Such claims may be advanced not only by the firm but also by public authorities external to the competition authority, reflecting broader policy considerations. Courts and authorities may be required to engage with such arguments, including at interim stages, while ultimately resolving the case within established competition-law frameworks.

Taken together, several principles follow. National security considerations can be assessed within the existing framework for unilateral conduct wherever they can be expressed as competition-relevant effects. They do not create distinct theories of harm, but may reinforce established concerns relating to foreclosure, raising rivals’ costs, dependency on a dominant firm and reduced innovation, including along non-price dimensions such as resilience and technological diversity. Claims based on security, resilience, or technological capability must satisfy the ordinary evidentiary standards applicable to objective justification or efficiencies and require careful scrutiny where they cannot be substantiated or are disproportionate. Where such claims instead reflect broader geopolitical or industrial policy objectives that cannot be expressed in competition-relevant terms, they fall outside the scope of unilateral conduct analysis and should be addressed through separate institutional mechanisms.

2.5 Remedy design

National security considerations may also arise at the remedy stage across different areas of competition enforcement. At this stage, the focus shifts to designing remedies capable of restoring competitive conditions. Effective remedies address the source of harm, restore competition and remain proportionate and implementable.12 Remedies, whether structural, behavioural, or hybrid, may be argued to affect national security by altering the organisation of critical industries, reshaping control over strategic assets, or weakening domestic firms in global competition. Such claims may be advanced to resist, shape, or limit the scope of remedies (see Box 15).

Box 15. Remedy design and national security: US v AT&T

United States v AT&T

In 1974, the US Department of Justice filed a monopolisation case against AT&T, which controlled local and long-distance telecommunications services as well as equipment manufacturing through the vertically integrated Bell System. During the proceedings, AT&T and government stakeholders, including officials from the Departments of Defence and Commerce, argued that structural separation could undermine the integrity of the US communications network and harm national security in the context of Cold War geopolitical competition. A task force representing several Cabinet departments formally recommended that the case be abandoned. Despite these arguments, the DOJ pursued the case. The 1982 Modified Final Judgment imposed a structural divestiture separating local exchange operations from long-distance and equipment markets.

Ex post evidence indicates that the remedy did not weaken network resilience or national security. Instead, it facilitated entry and innovation across telecommunications markets, including long-distance services, mobile communications and data networks. The AT&T case remains a central example of effective remedy design in a strategically important sector, illustrating both the prominence of national security arguments in opposing structural remedies and the importance of testing such claims against evidence.

Note: In a pivotal opinion denying AT&T’s motion to dismiss, Judge Greene concluded that the government had presented substantial evidence supporting its monopolisation theory, thereby narrowing the path toward trial and strengthening the government’s bargaining position in the negotiations that culminated in the Modified Final Judgment. Earlier antitrust enforcement against AT&T, including the 1956 consent decree, required licensing of key patents (including semiconductor technologies), contributing to the diffusion of computing technologies and the emergence of downstream industries.

Source: USDOJ (1974[120]), The Department of Justice today filed a civil antitrust suit charging American Telephone and Telegraph Company,https://www.justice.gov/archive/atr/public/press_releases/1974/338834.pdf; D.D.C (1981[121]), United States v. AT&T, https://law.justia.com/cases/federal/district-courts/FSupp/524/1336/1430246/; D.D.C (1983[122]), United States v. AT&T, https://law.justia.com/cases/federal/district-courts/FSupp/552/131/1525975/; D.D.C (1974[123]), United States v. American Telephone & Telegraph Co., Western Electric Co., Inc. and Bell Telephone Laboratories, Inc., Civil Action No. 74-1698, https://www.justice.gov/jmd/media/1237211/dl.

Other jurisdictions have also experienced national security considerations in remedy design, including in cases involving key energy infrastructure (see Box 16).

Box 16. Remedy design and national security: EC’s ENI commitment decision

From 2006 until its commitment decision, the EC investigated ENI, a vertically integrated and state-controlled company that controlled key pipeline infrastructure necessary to import gas into Italy, for a potential abuse of dominance in gas transmission markets. To address concerns relating to capacity hoarding, degradation and underinvestment, ENI committed to divest shareholdings in major international pipelines (TAG, TENP, Transitgas). The structural remedy aimed to eliminate foreclosure incentives arising from vertical integration.

Issues relating to the security of gas supply and the strategic importance of infrastructure were raised, including the involvement of a state-controlled purchaser for certain assets. In particular, the Italian Ministry of Economy and Finance emphasised the strategic importance of the TAG pipeline for national security. The purchaser was deemed to meet the Commission’s criteria (independence, capability and absence of competition concerns), although its links to ENI later raised questions regarding effective independence. Ex post evaluation indicates that while the divestitures were implemented effectively, their impact on competition depended in part on broader regulatory developments (e.g. EU energy market integration) and was partly limited by contractual arrangements such as long-term capacity bookings. The EC’s ex post evaluation of the remedy suggests that a combination of structural and behavioural measures may have improved effectiveness.

Source: EC (2025[124]), Ex post evaluation of the implementation and effectiveness of EU antitrust remedies, https://competition-policy.ec.europa.eu/document/download/53e9348d-4f11-46ef-9098-526e24313ee8_en?filename=kd0125000enn_ex-post_evaluation_antitrust_remedies_study_e-version.pdf.

The ENI case demonstrates that national security considerations may affect not only the design of remedies but also their feasibility and implementation in practice. In particular, in national security-sensitive sectors, identifying a suitable divestiture buyer may require coordination with parallel review mechanisms (e.g. FDI) and may constrain the set of viable purchasers. This highlights that remedy effectiveness depends not only on design, but also on practical constraints relating to ownership, governance and regulatory approval.

Related implementation constraints can also arise in sectors characterised by state ownership and vertically integrated infrastructure. In such settings, remedy design and execution may be constrained by ownership structures, asset indivisibilities and a limited pool of viable purchasers. These constraints may affect both the feasibility of structural remedies and their effectiveness over time, as illustrated by the Petrobras case in Brazil (see Box 17).

Box 17. Remedy design, implementation and revision: CADE’s Petrobras divestment remedy

As discussed in Box 13, in 2019, Brazil’s Administrative Council for Economic Defence (CADE) concluded agreements with Petrobras, the state-controlled oil and gas company, requiring the divestment of refineries and associated infrastructure to address concerns about dominance in refining and gas markets and to facilitate entry. Implementation proved complex. CADE extended divestment deadlines, reflecting challenges in executing transactions involving large, integrated infrastructure assets and identifying suitable purchasers capable of operating them independently. In 2024, CADE revised aspects of the commitments, allowing Petrobras to retain certain assets and relying more on behavioural and governance measures.

Source: Brazil Justice Ministry (2025[106]), Cade e Petrobras celebram acordo para venda de refinarias de petróleo, https://www.gov.br/cade/pt-br/assuntos/noticias/cade-e-petrobras-celebram-acordo-para-venda-de-refinarias-de-petroleo.

The case illustrates how, in sectors characterised by state ownership and strategic infrastructure, remedy feasibility and effectiveness may depend on implementation constraints and may require adjustment over time. Subsequent analysis has also linked Petrobras’ downstream restructuring to broader concerns relating to energy security and national sovereignty (Leal and Gallo, 2026[125]). This highlights that remedies affecting strategic infrastructure may have wider policy implications, even where the competition authority’s legal assessment should remain focussed on competition effects.

More broadly, remedy design may benefit from structured co-operation between competition authorities and relevant national security bodies. Such co-operation is particularly relevant where remedies affect assets subject to national security constraints, including ownership restrictions, foreign investment screening, or security clearances. In these cases, national security frameworks may constrain the set of feasible remedy options, including the pool of eligible purchasers or governance arrangements. Compared to other forms of regulatory co-ordination, these constraints may operate as binding conditions on remedy design, requiring alignment between competition remedies and parallel national security review processes. Box 11, Section 2.3, illustrates how such constraints may arise in practice, including where government purchasers retain the ability to influence market outcomes through procurement policy. Early integration of these considerations can reduce the risk that remedies later prove infeasible or inconsistent with binding national security requirements.

From an analytical perspective, such co-operation can improve remedy design in two main respects. First, it may improve the identification and specification of risks relevant to both competition and national security, including security of supply, resilience, and control over critical inputs or infrastructure. Second, it may improve feasibility and implementation by ensuring that remedies are compatible with binding national security constraints, including restrictions on ownership, governance or access. Co-operation may also facilitate the design of remedies that are both competition-effective and operationally viable, including by combining structural and behavioural measures where appropriate. However, co-operation should not displace competition-based analysis. National security considerations can therefore be incorporated within established analytical frameworks and cannot justify remedies that are ineffective, disproportionate, or misaligned with the theory of harm.

Several principles follow for remedy design. Remedies must remain grounded in the objectives of competition law, addressing the source of harm, restoring competitive constraints, and preventing recurrence. Authorities should distinguish between firm-level protection and system-level resilience: remedies that diversify supply may strengthen both competition and security. In national security-sensitive sectors, effectiveness depends on implementation constraints, including the availability of suitable purchasers and interaction with national security frameworks. Structured co-operation with national security authorities can improve both feasibility and precision, particularly where it occurs early, but does not displace competition-based analysis. Finally, ex post evaluation remains essential: experience shows that predicted harms to national security may not materialise and that well-designed remedies can enhance both competition and resilience.

Notes

← 1.  These measures have been imposed in telecommunications infrastructure markets that are already concentrated and characterised by entry barriers (UK Department for Science, 2024[142]). In radio access network (RAN) equipment, participation requires not only manufacturing capability but also access to intellectual property, interoperability and involvement in standard-setting. These features are reinforced by high switching costs, long investment cycles and complex integration requirements. As a result, exclusion of a supplier on security grounds may reduce the set of feasible competitors and increase dependence on a smaller number of remaining vendors, at least in the short to medium term (3GPP, 2022[144]; LexisNexisIP, 2025[145]; Dell’Oro Group, 2026[141]). Public programmes such as the US “rip and replace” initiative illustrate the scale and cost of such transitions, underscoring that substitution between suppliers may be limited even where alternatives exist (FCC, 2022[143]).

← 2.  In the Meta litigation, the court heard evidence showing increased usage of Facebook and Instagram following India’s 2020 TikTok ban and during TikTok’s temporary unavailability in the US in January 2025 (D.D.C, 2025[75]; Library of Congress, 2025[146]).

← 3.  That said, some standard quantitative indicators may be less informative in cases involving potential or nascent competition, where firms may have limited or no current in-market sales (Hemphill and Wu, 2020[131]). This is particularly relevant in defence and advanced-technology sectors, where firms compete not only through current sales but also through R&D and bids for future procurement programmes. In such cases, other forms of evidence may be particularly important, including firms’ capabilities and incentives, internal innovation programmes, specialised assets, intellectual property portfolios or bidding behaviour.

← 4.  This was reflected in the EC’s assessment of the proposed Tata Steel/ThyssenKrupp joint venture, which emphasised competition on delivery conditions that were important for downstream industrial production (CJEU, 2024[130])

← 5.  Measures such as degree centrality or betweenness centrality can help identify firms that function as critical nodes within these networks. Degree centrality” refers to the number of incoming and outgoing connections (edges) of a node with other nodes of specific agents. “Betweenness centrality” refers to how often nodes in a network lie on the shortest path between all combinations of network node pairs (Li et al., 2020[134]; Deutscher, 2022[83]).

← 6.  For example, in its ongoing in-depth investigation into MMG’s proposed acquisition of Anglo American’s nickel business, the EC expressed concern that the transaction could enable the diversion of ferronickel supply away from European customers. Combined with limited alternative sources of supply, this could adversely affect the price and quality of a substantial share of European stainless-steel production and diminish the ability of European producers to compete (EC, 2025[132]). This underscores how control over critical inputs may give rise simultaneously to foreclosure risks and broader dependency concerns in strategically important supply chains.

← 7.  In 1998, the US DOJ challenged Lockheed Martin’s proposed acquisition of Northrop Grumman, arguing it would substantially lessen competition in markets for advanced defence systems such as airborne early warning radar, military aircraft electronics, and missile-defence technologies where few firms could supply the US DoD. The DOJ warned the merger would eliminate direct competition in future procurement, reduce innovation incentives, and risk government dependence on a single supplier. Lockheed abandoned the deal after the DOJ filed suit (USDOJ, 1998[148]).

← 8.  Most jurisdictions limit efficiencies to the affected market, and out-of-market efficiencies are only rarely considered; where they are, this may in principle allow broader consideration of national security-related benefits (OECD, 2023[150]).

← 9.  The EC’s draft revised Merger Guidelines similarly recognise scale, investment, innovation, resilience and security of supply as possible merger benefits, while reiterating that such benefits must be verifiable, merger-specific and passed on to consumers (EC, 2026[32]).

← 10.  For example, in Boeing/McDonnell Douglas, the FTC accepted a failing firm argument based on the absence of competitive constraint, while emphasising that the assessment rested on competition analysis. However, subsequent assessments have debated the merger’s longer-term effects on competition and innovation in aerospace markets, and concerns that the merger led to geopolitical vulnerabilities have also been raised (FTC, 2024[18]; FTC, 1997[149]).

← 11.  See supra note 8 and Section 1.3 for a discussion of how statutory exceptions differ from case-specific authorisation mechanisms.

← 12.  “When the purpose to restrain trade appears from a clear violation of law, it is not necessary that all of the untraveled roads to that end be left open and that only the worn one be closed” (SCOTUS, 1947[135]). Remedial “action is not limited to prohibition of the proven means by which the evil was accomplished, but may range broadly through practices connected with acts actually found to be illegal. Acts entirely proper when viewed alone may be prohibited” (SCOTUS, 1950[136]).