SLOVENIA Trends and Developments Contributed by: Tomaž Ilešič, Aljoša Krdžić and Ajas Midžan, Rojs, Peljhan, Prelesnik & Partners
tric producer and the resulting horizontal overlap in the wholesale electricity market, the notifying party argued that the geographic market extended beyond Slovenia given the developed cross-border transmis - sion capacities, the high level of imports, the generic nature of electricity as a commodity, and the homoge - neous trading conditions prevailing on European mar - kets. The CPA did not follow that position and defined the geographic market as national, citing the prevail - ing regulatory, operational and physical conditions (including the structure of balance group accounting, price regulation and network access arrangements) which according to the CPA justify a national deline - ation, notwithstanding the existence of cross-border interconnections. Similarly, in United Media / ASPN , which involved a ver - tical and horizontal concentration in the sports broad - casting sector encompassing the licensing of sports broadcasting rights and the wholesale supply of sports television channels, the notifying party argued for a regional market spanning the former Yugosla - via, on the basis that broadcasting rights are typically acquired in bundles covering that territory. The CPA did not definitively resolve the geographic question, as the transaction did not raise competition concerns on any plausible market definition; it did, however, con - fine its substantive analysis to the domestic market, noting in line with its previous practice that broadcast - ing rights are predominantly licensed on a country-by- country basis, reflecting both language barriers and differing viewer preferences across national territories. That said, it should be acknowledged that the CPA’s approach to market definition remains, in the general - ity of cases, faithfully modelled on Commission prac - tice. The geographic market question is, however, an area where the CPA’s practice in certaincases diverges from what the underlying market evidence might seem to support, and notifying parties should be prepared for the possibility that a national delineation will be adopted even in sectors characterised by meaningful cross-border competitive dynamics. Two Cases at the Frontier of CPA Substantive Practice Among the CPA’s recent decisions, two cases are notable for having raised serious substantive con -
cerns regarding the impediment of effective competi - tion. Neither resulted in a prohibition: one was cleared subject to behavioural commitments, the other on the basis of the failing-firm defence. Each warrants sepa - rate consideration. First , in the SALUS / Farmadent merger, the CPA con - ducted an exhaustive assessment of the wholesale supply of medicines for human use to pharmacies, a highly concentrated oligopolistic market in which pre- merger HHI values already well exceeded the thresh - olds at which the Horizontal Merger Guidelines raise a presumption of competitive harm. The CPA found that the transaction would remove the only remaining competitor to the two leading wholesalers, leaving a duopoly. The CPA identified both (i) unilateral effects (the removal of direct competitive rivalry between the merging parties, enabling the combined entity to raise prices or reduce quality independently) and (ii) co- ordinated effects, reflecting the increased likelihood that the two remaining wholesalers would tacitly align their commercial conduct in the absence of the com - petitive constraint previously exerted by the target. Significantly, the CPA relied on the Court of Justice’s judgment in CK Telecoms for the proposition that a concentration may significantly impede effective com - petition in an oligopolistic market even in the absence of dominance, thereby aligning its practice with the post-2023 jurisprudence on oligopolistic harm that is shaping EU merger assessment. Despite these serious concerns, the CPA ultimately declared the concentration compatible with compe - tition rules. The decisive factor was the failing-firm defence; the CPA concluded that the target company faced imminent market exit as a result of its deteriorat - ing financial position, that no less restrictive acquisi - tion was realistically available, and that the target’s productive assets would be lost to the market in the absence of the merger. The decision represents one of the very few instances in which the CPA has accepted the failing-firm defence. Second , in the Alpacem Cementi / Obrat Fanna case, the CPA examined the acquisition of an Italian cement plant supplying the Slovenian market. Although the
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