Everywhere you turn, the competition authorities are sharpening their claws.

Calling himself a 21st century “trust thing”, US President Joe Biden on Friday unveiled a sweeping crackdown on everything from airline ticket pricing to non-compete clauses in employment contracts. The next day, China’s competition regulator for the first time blocked a nationwide merger, a deal proposed by Tencent to create a dominant video game streaming operator. On Tuesday, France imposed a record fine of 500 million euros on Google for its use of news content.

After years of growing concern over corporate consolidation and corporate dominance, governments are taking action. For the most part, this is long overdue, but there can be difficult tradeoffs when taking unprecedented action, as two recent examples show.

Last week, the EU presented its first-ever cartel case focusing on technical cooperation in technology, rather than usual pricing. He imposed a total fine of 875 million euros on BMW and Volkswagen and let Daimler pay a fine of 727 million euros because he alerted the commission to the collusion. The facts deserve to be punished. Several German automakers came together to set uniform tank sizes for a pollution control ingredient and standardize other measures, and ended up conspiring to delay the introduction of better technology.

But the crackdown has thrilled companies trying to collaborate on electric cars and green energy. The punishment of BMW, which first fought the case because the the discussions did not affect his product decisions, particularly worries some executives who say they no longer know clearly what type of cooperation is acceptable.

It matters. Done well, consistent standards accelerate commercialization and adoption. Imagine if we had generic car batteries. You can go to a gas station and redeem a new one rather than having to wait for your car to charge. Done poorly, they exclude new players and slow progress: what if shared batteries were inefficient and heavy but no one was trying to improve them?

Meanwhile, another case of groundbreaking competition also pits future innovation against rapid adoption, this time in the medical industry. In just its second vertical merger lawsuit in 40 years, the US Federal Trade Commission is trying to block Grail’s purchase by biotech company Illumina, which manufactures cancer screening tests. The EU has reversed decades of fusion politics to investigate the $ 8 billion deal.

Illumina is the market leader in genome sequencing; Grail uses his machines. Such integration can improve efficiency. It can also stifle competition if a company that provides critical infrastructure – like Google does with search – competes with its customers. The FTC says Illumina could hamper businesses who want to compete with Grail’s screening tests by charging them more or denying them access to Illumina’s technology.

Illumina chief executive Francis deSouza says his biggest company would save lives by bringing Grail’s new tests to global markets more quickly and speeding up their acceptance by insurers. This would make it easier for other groups to follow. He says that when Illumina started producing prenatal tests, his rivals did so too rather than being dissuaded.

To appease the FTC, Illumina would commit to reducing its prices over time and charging external customers what Grail pays. But critics say regulators are failing to enforce such behavioral remedies. The EU is considering a more detailed investigation and the US case will be heard next month.

Authorities need to give serious thought to whether faster promulgation of cancer tests or life-saving electric cars should outweigh fears of future consolidation. Evidence of the pandemic is mixed: The government-sanctioned collaboration has proven vital to the development and manufacture of Covid-19 vaccines, but competition has ensured there are multiple candidates.

Philippe Aghion, author of The power of creative destruction, argues that the best option may be to let companies experiment and then take punitive action afterwards if necessary. “Look ex post rather than ex ante. Have you or haven’t you reduced the competition?” He says.

But application cases tend to produce “don’ts” lists at a time when the industry really needs to “do”. Tackling excessive corporate concentration while simultaneously facilitating rapid advancements in healthcare and green energy will require a skillful twist. Margrethe Vestager, who heads EU competition policy, recognized last year that businesses need more guidance to tackle climate change. Watchdogs must intervene and provide it.

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