EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

cooperation can stabilize collusion between companies as each of them anticipates that a one-sided deviation is only profitable in the short term. For the stability of coordination, the profitability of coordination, the benefits of breaking away, and the benefits of retaliation, are theoretically important. Coordination is the more stable the greater the benefit of coordinated behaviour and the lower the benefit of breaking away. Practically every merger weakens competitive pressure, and it is therefore more difficult to find cases of retaliation. A breakthrough judgment regarding coordinated effects was theCourt of First Instance (CFI) judgment in case of Airtours vCommission in 2002. In its judgment, CFI stated that an oligopolistic market [S]tructures may result from the existence of economic links in the strict sense argued by the applicant or from market structures of an oligopolistic kind where each undertaking may become aware of common interests and, in particular, cause prices to increase without having to enter into an agreement or resort to a concerted practice ( Airtours v Commission , 2002). For this reason, when assessing the merger, competition authorities examine the possibility of the emergence of collective domination. The definition of a collective dominant position is therefore based on tacit coordination between companies and not on a structural or economic relationship between them. The determination of a collective dominant position facilitates certain factors: • mutual awareness of the colluding parties as to the implementation and execution of the common policy, • balance, meaning that there must be a retaliatory mechanism to ensure consistency within the oligopoly and to prevent members from deviating from their common policy in the relevant market, • no competitive constraints that allow companies within the dominant oligopoly to operate independently of their current and potential customers and consumers. It should be noted that companies in the oligopolistic market are, on the one hand, independent from each other and, on the other hand, interdependent. If one of them raises prices, the others do the same. Also, any actions increasing its share in the relevant market, e.g., by significantly lowering prices, will result in similar actions by competitors. Therefore, undertakings in the oligopolistic market know that they will not receive any benefits from such behaviour because they will all bear the costs of collective price reductions. In order to ensure high profits, they are aware that they should not take any decisions affecting a change of the situation in the relevant market. However, this is not sufficient to establish a violation of Article 102 TFEU; therefore, the other conditions set out in the judgment in Airtours v Commission must be met.

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