EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

transaction. On 1 May 2004, Council Regulation 139/2004 on the control of concentrations between undertakings entered into force and one of the key issues covered by the new regulation was the establishment of a different construction of substantive law assessment of a merger (Council Regulation, 2004). Under the first Merger Regulation dominance was the main criterion for assessing a concentration (Council Regulation, 1989). The transaction was allowed as long as it did not create or strengthen a dominant position, as a result of which effective competition in the common market, or part of it, would have been significantly impeded (Case United Brands v Commission ; case BA v Commission ). However, in 2004 the Council implemented a new test (Council Regulation, 2004). Currently, Article 2(2) of such Regulation provides that “concentration which would not significantly impede effective competition in the common market, or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, shall be declared compatible with the common market”. This change in the substantive law test, which was the basis for merger control in the EU for the first 14 years, was implemented to eliminate a gap in the previous legislation. The idea was that certain mergers which caused anti-competitive effects but did not result in the creation or strengthening of a dominant position, would not be covered by the previously applicable dominance test (Case Airtours v Commission ). However, it is currently doubtful whether such a gap has actually been eliminated (Heimler, 2008). On the basis of the first Merger Regulation (Council Regulation, 1989), the dominance test was interpreted by the Court of First Instance (CFI) (cases Kali und Salz ; Gencor v Commission ; Airtours v Commission ) and it noted that not only individual dominance was important, but also collective dominance (when more than one undertaking jointly maintain a dominant position). The CFI proved that the dominance test was applied in cases where the combined enterprise will not be a market leader but will be part of an oligopoly. The currently used test of “significant impediment to effective competition” fills the previous gap, but it does not eliminate the use of dominance as a key evaluation criterion. Therefore, the size of the market share (over 50% according to the European Commission), the level of Herfindahl Hirschman Index and its change after concentration are important. In addition to these quantitative indicators, merger assessment requires a qualitative analysis to predict whether the transaction will lead to coordinated and/or unilateral effects and in consequence will significantly distort competition. Moreover, to the extent that the aim or the effect of the concentration is to coordinate the competitive behaviour of undertakings that remain independent, such coordination is to be assessed in accordance with the criteria of Article 101(1) and (3) TFEU, in order to determine whether this action is (or is not) compatible with the internal market (Council Regulation, 2004, Article 2(4)). This mean

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