EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

Significant Impediment of Effective Competition – an old tool and unresolved doubts Daria Kostecka-Jurczyk Faculty of Law, Administration and Economics University of Wrocław ul. Uniwersytecka 22/26, Wrocław, 50-145 Poland e-mail: daira.kostecka-jurczyk@uwr.edu.pl Abstract The process of merger control by antitrust authorities requires the examination of all negative effects of the transaction, both from the structural and behavioural point of view. For this reason, the “significant restriction of effective competition” test (the SIEC test) was implemented. However, it is difficult to define what “significant” actually means. This concept is vague and may give the competition authorities a large margin of discretion in assessing the transaction. For that reason, it raises fears about excessive interference of administration bodies in the market structure. It is difficult to clearly define when the economic effects of a merger should be considered “significant” within the meaning of Article 2 of the Regulation 139/2004. In the Guidelines on horizontal mergers, the EU Commission stated that a horizontal mergers harm competition in that it may result a significant increase in prices within the relevant market. The EU Commission is of the opinion that the closer the competition between the merging parties, the more probable is price increase after the transaction. However, it does not indicate when the price increase should be considered significant. Therefore, it is not known when this standard is met. The article focuses on horizontal mergers and formulates the hypothesis that the notion “significant impediment of effective competition” in merger control means ineffective from structural and behavioural points of view. As a result, merger assessment encompasses different economic effects of a merger as the creation or strengthening of a dominant position, coordinated and unilateral effects, the proximity of competitors in the relevant market, potential competition, and efficiency. All these elements, except domination, are difficult to verify ex ante , especially considering that their evaluation is based mainly on qualitative tools. The article indicates that the main tool of merger assessment should be the market position of merging parties as the other elements of the significant impediment of effective competition are too blurred to be decisive. Keywords: horizontal mergers, merger control, significant impediment of effective competition. JEL Classification: K 2, K21, L4, L41

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