This chapter explores the fundamental tension between competition policy, which aims to ensure market efficiency and neutrality, and the assertion of national interests, which often leads to state intervention. Tracing the evolution of competition law from its ancient roots in Roman and Islamic traditions to the distinct antitrust models of the United States and the European Union, the analysis establishes that this conflict is not new but has been continuously renegotiated throughout history. At the heart of this negotiation lies the Regulated Conduct Doctrine (RCD), a legal principle that exempts conduct compelled by state regulation from competition scrutiny, thereby providing a framework for balancing sovereign prerogatives with market discipline.

The chapter examines two critical contemporary arenas where this tension is most acute. First, it analyzes the regulation of state aid and subsidies, highlighting the clash between the pursuit of "strategic autonomy" in key sectors and the principle of competitive neutrality. Second, it addresses the challenges posed by transnational corporations (TNCs), particularly digital platforms, whose global scale and complex business models defy traditional enforcement. The study details how TNCs use regulatory arbitrage to circumvent oversight and how new instruments like the EU’s Digital Markets Act and Foreign Subsidies Regulation represent innovative responses. The chapter argues that competition policy is not a static legal field but a dynamic area of political economy, concluding that effective governance requires a multi-layered approach combining robust domestic institutions, international cooperation, and a pragmatic balance between industrial policy and competition norms.