EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
• non-co-ordinated (unilateral) effects, notably (but not only) if the transaction creates or strengthens a dominant position; or • co-ordinated effects, if the remaining market players are better able to tacitly co-ordinate their market activities as a result of the transaction, including due to the creation or strengthening of a position of collective dominance. In practice, the vast majority of the Commis - sion’s concerns relate to unilateral effects aris - ing from the parties having high market shares in markets where they compete. Non-Horizontal Concerns If parties are active on vertically or closely related markets, the Commission will normally consider whether an SIEC may be created through: • incentives for the merged entity to foreclose competitors’ access to inputs or customers; or • anti-competitive conglomerate effects due to the merged entity being able to engage in the bundling of products or services. While it is rare for the Commission to object to a transaction based on vertical or conglomer - ate effects alone (in the absence of any horizon - tal effects), it did so recently in Illumina/GRAIL (though this decision has since been annulled by the Court of Justice on jurisdictional grounds – The Commission also scrutinises transactions’ potential impact on innovation and future com - petition. In particular, the Commission has con - sidered that a merger may problematically hinder competition at the general level of the “innova - tion space” by decreasing incentives for the see 2.1 Notification ). Innovation Concerns
merged entity to compete actively in the devel - opment of new products and services. In addition, the Commission-mandated report from former president of the European Central Bank Mario Draghi (see 4.6 Non-Competition Issues ) stresses the importance of improving innovation in European industries, including in the context of EU merger control. In its ongo - ing review of its Horizontal and Non-Horizontal Merger Guidelines (see 1.1 Merger Control Leg- islation ), the Commission also emphasises the fundamental role of innovation in strengthen - ing Europe’s competitiveness. It considers that innovation should be given adequate weight in the merger control assessment, by assessing both the positive and the negative impact of a concentration on innovation. This may potential - ly lead to clearance of more deals that improve European innovation, although it remains to be seen how this will ultimately play out in practice. 4.5 Economic Efficiencies The Commission will take efficiencies generated by a concentration into account under certain circumstances. Form CO contains a dedicated section in which notifying parties may present any evidence of efficiencies. Any efficiencies claimed must: • be merger-specific, in that they are directly created by the transaction and are not achievable through any other, less anti-com - petitive means; • be quantifiable and verifiable to a reasonable degree of certainty; and • benefit consumers. In practice, this is a difficult standard to meet. The Commission rarely accepts efficiencies put forward by parties to a concentration as being
201 CHAMBERS.COM
Powered by FlippingBook