European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Horizontal mergers are transactions carried out between actual or potential competitors on the same market . Those mergers harm competition as they increase the market power of the undertakings which carry them out, i.e. their power to increase prices and reduce output . The market power of the new merged entity will vary according to the combined market shares of the parties to the transaction an …

Concept

Horizontal mergers are transactions carried out between actual or potential competitors on the same market . Those mergers harm competition as they increase the market power of the undertakings which carry them out, i.e. their power to increase prices and reduce output . The market power of the new merged entity will vary according to the combined market shares of the parties to the transaction and the structure of the market on which it is carried out.

In its guidelines on the assessment of horizontal mergers , the Commission states that horizontal mergers may significantly impede effective competition in two main ways: by eliminating important competitive constraints on one or more firms, which consequently would have increased market power, without resorting to coordinated behavior (non-coordinated effects); by changing the nature of competition in such a way that firms that previously were not coordinating their behavior, are now significantly more likely to do do so or by making coordination easier, more stable or more effective for firms which were coordinating prior to the merger (coordinated effects).

See Commission Notice No 2004/C 31/03, Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, at pt 5. Although the concept of undertaking concerned makes it possible to include groups to which the parties to the merger belong within the scope of application of control, in some cases the supervisory authorities extend the perimeter of the competitive analysis beyond those groups to other related undertakings (Commission Decision JV.37 of 21 March 2000, B Sky B/Kirch Pay TV, LawLex200800000564JBJ, which states that the turnover of a third party to the concentration is taken into consideration as part of the competitive analysis where that third party exercises decisive influence over one of the parties; M.2690 of 29 April 2002, Solvay/Montedison-Ausimont, LawLex200500004194JBJ, indicating that account must be taken of the market share of the undertaking over which one of the parties to the concentration has joint control with the new entity's main competitor; M.3280 of 11 February 2004, Air France/KLM, LawLex200500004208JBJ, taking account of the market shares of the notifying parties but also of the market shares of the airlines with which they have entered into partnership agreements; M.3935 of 10 November 2005, Jefferson Smurfit/Kappa, LawLex200700001763JBJ, which underlines that the market shares of third parties can be added only where the parties' interests in those third parties give them control over the latter). Likewise, the competitive analysis, which is always prospective, takes into consideration the foreseeable changes in behavior and market structure: See Case T-342/00 Petrolessence and SG2R v Commission [2003] ECR II-1161, LawLex200500004272JBJ, at pt 102. However, the fact that a State is the majority shareholder of one of the parties and the sole shareholder of another company active on the relevant market does not mean that the market shares of the two companies must be added together where evidence is not produced that the State encourages them to coordinate their action on the market: See Commission Decision M.511 of 9 January 1995, Texaco/Norsk Hydro, LawLex200400003191JBJ.

By contrast, in the case of a buyer, the market power which is identified to the supplier's market power (See Commission Notice No 2004/C 31/03, at pt 8), consists in determining a price reduction thanks to the decrease in the quantities purchased. See for example Commission Decision M.7292 of 5 May 2015, DEMB/Mondelez/Charger OpCo, LawLex201800000345JBJ, holding that the transaction bringing together two producers of consumables in "open" or "semi-open" systems for single-serve coffee machines, both present across the whole spectrum of products and price points with a market share of  50-60% on the French Roast and Ground coffee (R&G) market, against 20-30% and 5% for their competitors, puts the merged entity in a position to raise prices above competitive levels.

Point 22. cf. point  17 et seq of the Guidelines on non-horizontal mergers according to which there are two main ways in which non-horizontal mergers may significantly impede effective competition: non-coordinated effects which may principally arise when non-horizontal mergers give rise to foreclosure, and coordinated effects, where the merger changes the nature of competition in such a way that firms that previously were not coordinating their behaviour, are now significantly more likely to coordinate or makes coordination easier, if it already existed prior to the merger. 

European Competition Law

335. Concept

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335. Concept

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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