In the present study we provide an interpretation of a general narrative of transnational governance of higher education. All the elements of the narrative--competition, ranking autonomy and accountability--are visibly present in contemporary higher education policy agenda. We examine these not as separate ideas and practices but as an interlinked whole, bringing an amount of coherence to transnational governance of higher education in Europe. All the elements, as they are currently represented in policy statements by the European higher education establishment, are premised on social atomist ontology and ideology of competition. Consequently, drawing on textual evidence we argue that the recent trend for increasing universities' institutional autonomy and accountability has been justified by reference to competitive logic, which, in turn, has been strengthened by the practice of comparative ranking. The article contributes to diagnosing potential misconceptions that frame the current higher education policy-making in Europe.