By Chance or a Trend? The European Commission’s Approach to Merger Review

Vol. 43 No. 1

By

David Anderson, a partner on the Competition, EU & Trade Law team of Berwin Leighton Paisner LLP, leads the firm’s Brussels office. His practice focuses on EU and international antitrust aspects of mergers, acquisitions, joint ventures, cartels, commercial agreements, and abuses of dominant positions. Paul Johnson, a Brussels-based senior associate in BLP’s Competition, EU & Trade team, advises clients on a wide range of competition law issues and specializes in EU and international antitrust aspects of mergers, joint ventures, cartels, and abuse of dominance. Stuart Stock, a London-based associate in BLP’s Competition, EU & Trade team, advises clients on competition and public procurement law and has acted for parties in transactions requiring EC clearance and clearance from regulators in a number of other jurisdictions.

As a general rule, the European Commission is skeptical about the use of both efficiency arguments and failing firm defenses to address the potential loss of competition caused by a merger. However, as  will be seen from the examination below, an identifiable trend is emerging: the Commission is increasingly willing to recognize efficiency arguments to justify a proposed merger.

The three proposed mergers that have been prohibited by the Commission since February 2012 share a number of commonalities that highlight the Commission’s developing view of efficiency arguments and the role of remedies. See Deutsche Börse/NYSE Euronext (Case COMP/M.6166), UPS/TNT Express (Case COMP/M.6570) and Ryanair/Aer Lingus (Case COMP/M.6663).

The Commission has also cleared two mergers since September 2013 on the basis of the failing firm defense. Despite the successful use of the failing firm defense in these two cases, it is still too early to identify a trend in this area. See Nynas/Shell Harburg (Case COMP/M.6360) and Olympic Air/Aegean Airlines (Case COMP/M.6796).

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