Defence Spending Needs a Shake-Up
23 April 2025
Press Release: Defence Spending Needs a Shake-Up, Says Monopolies Commission
In light of the European Union's "Readiness 2030" goal, the Monopolies Commission is calling for an urgent transformation of defence procurement to remove bureaucratic barriers while safeguarding competition. With €800 billion of planned defence investment at stake, Europe cannot afford procurement processes that stifle innovation and delay the delivery of innovative capabilities. The independent advisory body to the German government calls for cutting red tape, prioritising European solutions and creating fast-track pathways for innovative technologies - all while ensuring robust competition safeguards remain in place.
"Competition is not just a peacetime luxury - it is the fundamental pillar of Europe's economic order and the engine that drives innovation and efficiency in defence procurement as well," said Professor Tomaso Duso, Chair of the Monopolies Commission. "Without a robust competition framework that opens up opportunities for start-ups and innovation in strategic enabler technologies such as AI, cybersecurity and unmanned systems, we risk creating entrenched monopolies that will hamper our security capabilities for decades to come."
In its statement, the Commission presents specific recommendations for ensuring a competition-friendly procurement approach, based on three core demands:
- Stronger European coordination and interoperability
Member States must align and coordinate their procurement strategies to bundle demand, create economies of scale, and prevent fragmentation of the European defence industrial base. Defence systems should be designed with interoperability as a fundamental requirement, not an afterthought, enabling seamless coordination across EU military forces. - Simplification and acceleration of procurement procedures
Current procurement processes often favor established contractors and exclude innovative solutions. By implementing more flexible, innovation-friendly formats, procurement authorities can tap into the agility and creativity of small and medium-sized enterprises (SMEs). This would diversify the supplier base and accelerate technological advancement. - A balanced approach between urgency and innovation
While immediate security needs may require reliance on proven suppliers, the Commission recommends implementing dual sourcing strategies and competitive innovation programs in parallel. This two-track approach ensures both short-term readiness and long-term technological superiority.
The Monopolies Commission further stresses that the allocation of public funds must be firmly rooted in the rule of law. Public procurement and state aid rules should be simplified, but not abandoned. Regulatory authorities must be equipped to effectively detect and address anti-competitive conduct, corruption, and collusion—without impeding innovation.
“Transparent procedures are essential to ensure that the defence sector operates in an innovative, efficient, and publicly accountable manner,” Professor Duso concluded.
Professor Dr Tomaso Duso new Chairman of the Monopolies Commission
Bonn, September 25, 2024
Today, the Monopolies Commission unanimously elected Professor Dr Tomaso Duso as the new Chairman of the Monopolies Commission.
Tomaso Duso has been a member of the Monopolies Commission since July 1, 2022. Since 2013, he has headed the Department of Firms and Markets at the German Institute for Economic Research (DIW Berlin). Tomaso Duso has been Professor of Empirical Industrial Organization at the Technical University (TU) Berlin since 2018. From 2011 to 2018, he was Professor at the Düsseldorf Institute for Competition Economics (DICE) at HHU Düsseldorf. He is spokesperson of the Berlin Centre for Consumer Policies (BCCP) and Research Fellow at the Centre for Economic Policy Research (CEPR) and the Centre for Economic Studies (CESIfo) as well as member of the Economic Advisory Group on Competition Policy (EAGCP) of the European Commission. Tomaso Duso advises numerous institutions on competition policy issues, including several Directorates-General of the European Commission, the UK and Dutch competition authorities, the OECD and the European Bank for Reconstruction and Development. His research focuses on applied econometrics in the areas of industrial organization, competition policy, regulation and management.
Tomaso Duso replaces Professor Dr Jürgen Kühling LL.M. as Chairman. Jürgen Kühling was a member of the Monopolies Commission from July 2016 to June 2024 and Chairman from September 2020 to June 2024. His term ended in mid-2024 as scheduled.
Chapter III and IV of the XXV. Biennial Report are now available in English language
Bonn, September 4, 2024
Today, the Monopolies Commission publishes chapter III “An economic test concept for digital ecosystems” and chapter IV “Data access from a competition policy perspective” of the latest XXV. Biennial Report in English language. Both chapters are now available for download.
Biennial Report XXV: Competition 2024
Biennial Report of the Monopolies Commission under § 44(1) ARC, Berlin/Bonn, July 01, 2024
Today, The Monopolies Commission handed over its bi-annual report "Competition 2024" to the Federal Ministry for Economic Affairs and Climate Action. The report sheds light on numerous policy-relevant issues that are crucial for strengthening effective competition in Germany and provides policymakers with concrete recommendations for action. "The digital and socio-ecological transformation in Germany will only succeed if the price-dampening and innovative power of competition is utilized," said the Chairman of the Monopolies Commission, Professor Jürgen Kühling.
