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

Some market structures are more favorable than others to coordinated behavior . This is the case where cost structures are similar , there is symmetry of positions , the market is mature or has excess capacity  and the demand is inelastic . According to the EU authorities in the Airtours ruling , three conditions must be fulfilled for a possible coordination or - which amounts to the same thing -  …

Market structure

Some market structures are more favorable than others to coordinated behavior . This is the case where cost structures are similar , there is symmetry of positions , the market is mature or has excess capacity  and the demand is inelastic . According to the EU authorities in the Airtours ruling , three conditions must be fulfilled for a possible coordination or - which amounts to the same thing - for a finding of a collective dominant position: (i)sufficient market transparency  and product homogeneity  for all members of the dominant oligopoly to be able to find out, sufficiently precisely and quickly, how the other members' conduct is evolving in order to monitor whether they are adopting the same common policy, (ii) an incentive for members of the oligopoly not to depart from the common policy with the setting-up of retaliatory or deterrent mechanisms  and (iii) the impossibility for current or future competitors or consumers to jeopardize the results expected of the common policy due to lack of countervailing power . In the Impala case , the Court of Justice confirmed the Airtours solution adding that “Such tacit coordination is more likely to emerge if competitors can easily arrive at a common perception as to how the coordination should work, and, in particular, of the parameters that lend themselves to being a focal point of the proposed coordination”. Furthermore, according to the Court , when the European judicature applies those criteria, it is necessary to avoid a mechanical approach involving the separate verification of each of those criteria taken in isolation, while taking no account of the overall economic mechanism of a hypothetical tacit coordination. 

Although coordinated behavior between competitors can easily be imagined, coordinated effects may also arise in case of non-horizontal mergers  as a result of a reduction in the number of competitors and an increase in the degree of symmetry between undertakings to which such transactions may lead . However, a merger is not likely to generate coordinated effects where, by breaking up the capital links uniting the two groups into six joint subsidiaries, it renders all tacit collusion more difficult  or when, in the absence of evidence that the performance of the market is determined by the existence of a mechanism for the sharing of customers between four major producers, it is unlikely that it would make coordination easier, more stable or more effective to such a degree that it could impede the exercise of effective competition . Such effects are improbable on a market characterized by the multitude of products and by non-transparent bidding contests on which the parties would be unlikely to put in place a process of tacitly reaching the terms of coordination .

Commission Decision M.6992 of 28 May 2014, Hutchison 3G UK/Telefonica Ireland, LawLex201700000669JBJ.

See in particular, Commission Decision M.619 of 24 April 1996, Gencor/Lonrho, LawLex200500004381JBJ; M.1939 of 19 July 2000, Rexam (PLM)/American National CAN, LawLex200400003076JBJ; M.3625 of 13 July 2005, Blackstone/Acetex, LawLex200600001256JBJ; M.4300 of 7 November 2006, Philips/Intermagnetics, LawLex200900000157JBJ.

Case C-413/06 P Impala, Judgment of 10 July 2008, LawLex200900001988JBJ: "A collective dominant position significantly impeding effective competition in the common market or a substantial part of it may thus arise as the result of a concentration where, in view of the actual characteristics of the relevant market and of the alteration to those characteristics that the concentration would entail, the latter would make each member of the oligopoly in question, as it becomes aware of common interests, consider it possible, economically rational, and hence preferable, to adopt on a lasting basis a common policy on the market with the aim of selling at above competitive prices, without having to enter into an agreement or resort to a concerted practice within the meaning of Article 81 EC and without any actual or potential competitors, let alone customers or consumers, being able to react effectively".

In the Impala ruling the Court of Justice (Case C-413/06 P, cited above)) annulled the judgment of the Court of First Instance (Case T-464/04 Independent Music Publishers and Labels Association, Judgment of 13 July 2006, LawLex200700001433JBJ), for this reason.

Commission Notice No 2008/C 265/07, at pts 79 et seq.

Commission Decision M.2389 of 20 December 2001, Shell/DEA, LawLex200400002679JBJ; M.2533 of 20 December 2001, BP/E.ON, LawLex200400002685JBJ.

Commission Decision M.5461 of 5 August 2009, Lyonnaise des eaux/Sociétés de distribution d'eau et d'assainissement (not available in English).

Commission Decision M.7054 of 9 September 2014, Cemex/Holcim Assets, 

Commission Decision M. 6203 of 23 November 2011, Western Digital Ireland/Viviti Technologies, LawLex201700000655JBJ.

See in particular, Commission Decision M.2348 of 27 March 2001, Outokumpu/Norzink, LawLex200500004187JBJ, which excludes the collective dominant position due to the asymmetric structure of undertakings; M.2533 of 20 December 2001, BP/E.ON, LawLex200400002685JBJ, which retains the collective dominant position due to the symmetry of market shares, capacities and costs of the two merged entities and the similarity of their interests on the downstream markets; M.2690 of 29 April 2002, Solvay/Montedison-Ausimont, LawLex200500004194JBJ, on the almost perfect symmetry of positions of the members of a duopoly; M.3916 of 26 April 2006, T-Mobile Austria/Tele.Ring,  LawLex200700001348JBJ, anticompetitive nature of a concentration which leads to the creation of a parallel market structure with two leading, symmetrical network operators.

Commission Decision M.358 of 21 December 1993, Pilkington- Techint/SIV, LawLex200400002502JBJ, increasing surplus capacity of the market; M.1524 of 22 September 1999, Airtours/First Choice, LawLex200400002633JBJ: Low market growth, close to zero; M.1313 of 9 March 1999, Danish Crown/Vestjyske Slagterier, LawLex200400002628JBJ, technologic maturity of the market having contributed to the creation of a duopolistically dominant position.

Commission Decision M.358 of 21 December 1993, Pilkington- Techint/SIV, LawLex200400002502JBJ; M.315 of 31 January 1994, Mannesmann/Vallourec/Ilva, LawLex200500004378JBJ: market on which a significant increase in prices is unlikely to result in a large drop in demand as the products concerned have no substitutes and their costs form only a small part of total costs; M.619 of 24 April 1996, Gencor/Lonrho, LawLex200500004381JBJ: market on which the demand is inelastic due to the indispensable nature of the product concerned for many uses; M.1524 of 22 September 1999, Airtours/First Choice, LawLex200400002633JBJ, low demand growth and low price sensitivity of demand; M.1673 of 13 June 2000, VEBA/VIAG, LawLex200500004484JBJ: on a market having very little short-term elasticity which makes the creation of a dominant duopoly seem likely. M. 6992 of 28 May 2014, Hutchison 3G UK/Telefónica Ireland, LawLex201700000669JBJ: concentration giving rise to a market on which, given the public availability of retail prices, the coordination of prices like the deviation from the terms of coordination could be immediately detected.

Case T-342/99 Airtours v Commission [2002] ECR II-2585, LawLex200500004265JBJ.

Case T-464/04 Impala v Commission [2006] ECR II-2289, LawLex200700001433JBJ; Commission Decision M.308 of 14 December 1993, Kali - Salz/MdK/Treuhand, LawLex200700001998JBJ, for a mature market characterized by largely homogeneous products, the lack of technological innovation and price transparency; M.358 of 21 December 1993, Pilkington- Techint/SIV, LawLex200400002502JBJ, for a market where the asymmetric position of the members of the oligopoly and the insufficient market transparency render anti-competitive parallel behavior difficult; M.484 of 21 December 1994, Krupp/Thyssen/Riva/Falck/Tadfin/AST, LawLex200300000925JBJ, for a market characterized by a strong growth and a low price transparency; M.1383 of 22 September 1999, Exxon/Mobil, LawLex200400002629JBJ, for a market where each operator knows immediately when one of its clients changes supplier; M.1939 of 19 July 2000, Rexam (PLM)/American National CAN, LawLex200400003076JBJ, for a concentration which gives the new entity a similar market share to that of its main competitor and which is likely to create a duopolistic situation given, in particular, the market transparency characterized by public bids and a competition which is mainly on prices, all factors that favor coordinated behavior; M.3333 of 19 July 2004, Sony/BMG, LawLex200500004211JBJ, lack of transparency in the market and makes tacit collusion more difficult; M.3216 of 26 October 2004, Oracle/PeopleSoft, LawLex200500010196JBJ, impossibility of coordinating competitive behavior where transparency is reduced by the very heterogeneous nature of the products sold and the differentiation of those products develops over time due to the improvement of products and the adding of functionality; M.3975 of 29 March 2006, Cargill/Degussa Food Ingredients, LawLex200800000215JBJ, not enough transparency to create coordinated effects where prices are negotiated individually between the supplier and its customers on a bilateral basis without published price lists being available and vary significantly between individual customers, even those of a comparable size; Case T-282/06 Sun Chemical Group and others v Commission [2007] ECR II-2149, LawLex200700001350JBJ, on the low level of transparency of the market, characterized by a high number of producers which excludes the adoption of a coordinated anticompetitive behavior post-merger.

Commission Decision M.190 of 22 July 1992, Nestlé/Perrier, LawLex200500004234JBJ, homogeneity of products whose size and packaging are the same in the whole market and transparency of tariffs, allowing the mutual monitoring of pricing policies of competitors; M.1524 of 22 September 1999, Airtours/First Choice, LawLex200400002633JBJ, on the homogeneity of the services offered in the market, which include the same key elements and are standardized so as to produce economies of scale and scope; M.1673 of 13 June 2000, VEBA/VIAG, LawLex200500004484JBJ, for homogenous products which possess the same physical or subjective features that do not require further technological development; M.2533 of 20 December 2001, BP/E.ON, LawLex200400002685JBJ, homogenous product without significant innovation; see also, on the heterogeneity of products: M.580 of 18 October 1995, ABB/Daimler-Benz, LawLex200400002522JBJ; M.1684 of 25 January 2000, Carrefour/Promodes (not avaiblable in English); Commission Decision M.5406 of 13 March 2009,  Ipic/Man Ferrostaal AG, LawLex201000000463JBJ, where the market is highly concentrated and has as its object a highly homogeneous product, there is great price transparency.

Commission Notice No 2004/C 31/03, at pts 41 et seq.; Case T-342/99 Airtours v Commission [2002] ECR II-2585, LawLex200500004265JBJ; See also Commission Decision M.1524 of 22 September 1999, Airtours/First Choice, LawLex200400002633JBJ; M.2420 of 30 October 2001, Mitsui/CVRD/Caemi, LawLex200400002681JBJ; M.2533 of 20 December 2001, BP/E.ON, LawLex200400002685JBJ; M.3333 of 19 July 2004, Sony/BMG, LawLex200500004211JBJ.

Case T-342/99 Airtours v Commission [2002] ECR II-2585, LawLex200500004265JBJ: the existence of a dominant position is established, in particular, where the foreseeable reaction of current and future competitors, as well as of consumers, would not jeopardize the results expected from the common policy; Case T-282/06 Sun Chemical Group and others v Commission [2007] ECR II-2149, LawLex200700001350JBJ: the growing impact of competing producers from outside of the EEA is likely to make both the achievement of a mutual understanding on the terms of coordination and the monitoring of non-compliance even more difficult post-merger; See also Commission Decision M.2348 of 27 March 2001, Outokumpu/Norzink, LawLex200500004187JBJ: although the market has an oligopolistic structure and high entry barriers, the concentration is found compatible with the common market where any tacit collusion between the members of the oligopoly is excluded due, in particular, to end-users' non-negligible bargaining power; M.3060 of 31 January 2003, UCB/Solutia, LawLex200500004199JBJ: a concentration neither creates nor strengthens a collective dominant position where the new entity has to face potential competition and the incontestable bargaining power of customers; M.2201 of 20 June 2001, MAN/Auwärter, LawLex200400002654JBJ: a merger between two bus manufacturers does not result in a collective dominant position insofar as the EC public procurement regulations create competitive pressure between manufacturers and as large customers frequently adopt a, "diversified procurement strategy"; M.2420 of 30 October 2001, Mitsui/CVRD/Caemi, LawLex200400002681JBJ: given asymmetric competitive incentives between Australian iron ore mining undertakings and Brazilian producers and where any retaliatory action would have no effect on a maverick's behavior, the concentration does not lead to the creation or strengthening of a collective dominant position; M.2498 and M.2499 of 21 November 2001, UPM-Kymmene/Haindl/Norske Skog, LawLex200400002682JBJ: a concentration which results, inter alia, in four competing market players holding a 70%-80% market share does not lead to the creation of a collective dominant position where there are five fringe players capable of taking aggressive action; M.2389 of 20 December 2001, Shell/DEA, LawLex200400002679JBJ: a concentration leads to the creation of a collective dominant position where it gives the parties control over 55% to 65% of a market in which they are not exposed to comparably strong vertically integrated competitors or to undertakings with countervailing buying power; M.3216 of 26 October 2004, Oracle/PeopleSoft, LawLex200500010196JBJ: a concentration does not raise any anticompetitive concerns given that the major competitor of the new structure remains the leader and given the non-negligible competitive pressure from other sellers.

European Competition Law

344. Market structure

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344. Market structure

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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