EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

that the assessment of concentration includes various forms of anti-competitive practices that should be analysed both in a behavioural and a structural context, and thus should include uncoordinated (unilateral) and coordinated effects. 3. Unilateral effects One of the arguments justifying the introduce of the SIEC test was that merger provisions should cover unilateral effects of the concentration in oligopolistic markets (Council Regulation, 2004). These effects did not fall within the scope of the previous dominance test, as they do not result in the emergence or strengthening of a dominant position of the merging parties. They mainly occur after a merger, but they are not dependent on the creation or strengthening of a dominant position of a combined company (Werden, 2008). They can be generated in the absence of individual domination of the undertaking. According to The European Commission, they may take place primarily within the oligopolistic market, even if there are no coordinated effects (or tacit collusion), if the merger eliminates the competitive pressure ( EDF/Segebel ). As a result, the market power of enterprises participating in the merger is strengthened which is conducive to raising prices (European Commission, 2004). The most direct effect of the merger will be the loss of competition between the merging parties (Faul, Nikpay, 2017). In other words, the EU Commission may prohibit a concentration which does not create or strengthen individual or collective dominance if, by eliminating one undertaking from the market, competition may be significantly distorted (Thomas, 2017). Unilateral effects will therefore be defined as a change in the market structure resulting from a concentration that has an adverse effect on the buyer. A detailed analysis of such effects was undertaken by the EU Commission e.g., in the case INEOS/SOLVAY/JV . The Swiss producer of petrochemicals, chemicals, and oils – Ineos AG and the Belgian producer of alkali metal chlorides, Solvay SA have formed a joint venture ( INEOS/SOLVAY/JV ). As INEOS was the largest supplier in the S-PVC market and Solvay was the second largest company in the relevant market, The European Commission was concerned about the risk of unilateral effects after the transaction. It decided that the competitive pressure would be limited and, as a result, the market power of the parent companies would increase. There was a risk that the parent companies would give up mutual competition. For example, they could raise the prices of their products. This would initially cause customers to switch to products manufactured by their competitors, but in the long run competitors could also raise prices. Such a reaction from the rivals could act as an incentive for the joint venture to raise its prices further. As a result, the market power of the joint venture would increase. The European Commission noted that INEOS had acquired several competitors in the past and thus gained a considerable opportunity to expand its portfolio.

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