EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

1. Introduction Mergers between undertakings are one of the tools for their development and restructuring. The main purpose of purchasing a company is to create shareholder value beyond the sum of both companies. This happens when a merger (or acquisition) presents an opportunity for a new or acquiring company to increase revenues or reduce costs. In order to ensure that such reorganization of cooperation does not cause lasting harm to competition, it is important to control concentrations (mergers or acquisitions) that significantly impede effective competition within the market. The purpose of merger control by competition authorities is to detect mergers and acquisitions that may have a negative impact on market structure and in consequence on competition. The article is divided into five parts, and it successively discuss: the essence of the significant impediment of effective competition test (further: the SIEC test), merger assessment tools, the unilateral effects and competitors’ proximity in terms of the negative impact on the relevant market. Later it will discuss the core of the coordinated effects and the effectiveness of concentration, which should balance the negative effects of the transaction. As a result of a merger, competitive pressure decreases as there is one competitor less on the market, but the existing degree of competition may mitigate the tendency to raise prices. The same effect occurs when market entry restrictions are small, and the risk of new entry increases the competitive pressure among existing competitors. For this reason, when analysing the distortion of effective competition after a merger, the effectiveness of the transaction should also be assessed. It is not specified what the efficiency requirement means, but it is obvious that this concept should be related to the anti-competitive effects of the planned merger on the relevant market. However, it can be assumed that in order to assess effectiveness of a merger, the impact of the transaction on consumers must be examined also. The post-merger restriction of competition can therefore be considered significant if the analysis of the coordinated and unilateral effects and the closeness of competitors confirms the risk of distortion of competition. The article is a contribution to the discussion on the notion of a “significant impediment of effective competition”. It is based on the method of analysing legal acts, documents, literature, and jurisprudence. 2. Merger assessment tools Under Council Regulation No 4064/89 on the control of concentrations between undertakings, the key tool for assessing a merger was the creation or strengthening of a dominant position (Council Regulation, 1989). However, it did not cover other forms of distortion of competition that could result from the

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