Keywords
Summary

Keywords

1 Actions for annulment - Interest in bringing proceedings - Addressee of a decision declaring a concentration incompatible with the common market

(EC Treaty, Art. 173, fourth para.)

2 Competition - Concentrations between undertakings - Regulation No 4064/89 - Territorial scope

(Council Regulation No 4064/89, Art. 1)

3 Competition - Concentrations between undertakings - Concentration planned by undertakings established outside the Community - Concentration producing effects within the Community - Application of Regulation No 4064/89 - Whether permissible under public international law

(Council Regulation No 4064/89)

4 Community law - Interpretation - Acts of the institutions - Positions adopted at the drafting stage - Of less importance than the measure's wording and purpose

5 Competition - Concentrations between undertakings - Regulation No 4064/89 - Scope - Collective dominant position - Covered

(EC Treaty, Arts 85 and 86; Council Regulation No 4064/89)

6 Competition - Concentrations between undertakings - Investigation by the Commission - Assessments of an economic nature - Discretion - Judicial review - Limits

(Council Regulation No 4064/89, Art. 2)

7 Competition - Concentrations between undertakings - Assessment of compatibility with the common market - Existence of structural links before the concentration operation - Alteration of competitive relationships following the concentration

(Council Regulation No 4064/89)

8 Competition - Concentrations between undertakings - Assessment of compatibility with the common market - Existence of a dominant position impeding effective competition - Evidence - Market shares

(EC Treaty, Art. 3(g); Council Regulation No 4064/89, Art. 2(3))

9 Competition - Concentrations between undertakings - Assessment of compatibility with the common market - Collective dominant position - Criteria - Structural links between the undertakings concerned - Not a necessary condition

(Council Regulation No 4064/89, Art. 2(3))

10 Competition - Concentrations between undertakings - Investigation by the Commission - Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common market

(Council Regulation No 4064/89, Art. 2(2) and (3) and Art. 8(2))

Summary

1 An action for annulment brought by a natural or legal person is admissible only in so far as that person has an interest in the contested measure being annulled; that is the position where annulment would enable future repetition of the alleged illegality to be avoided.

The undertaking to which a decision declaring a concentration incompatible with the common market was addressed has an interest in bringing proceedings and in having the legality of that decision examined by the Community judicature.

2 Article 1 of Regulation No 4064/89 does not require, in order for a concentration to be regarded as having a Community dimension and, accordingly, for it to fall within the scope of that Regulation, that the undertakings in question must be established within the Community or that the production activities covered by the concentration must be carried out in Community territory.

3 Application of Regulation No 4064/89 is justified under public international law when it is foreseeable that a proposed concentration between undertakings established outside the Community will have an immediate and substantial effect within the Community.

The fact that, in a world market, other parts of the world are affected by the concentration cannot prevent the Community from exercising its control over a concentration which substantially affects competition within the common market by creating a dominant position.

4 It is necessary, when interpreting a legislative measure, to attach less importance to the position taken by one or other Member State when the measure was drawn up than to its wording and objectives. The fact that, after the adoption of a measure, certain Member States contest a particular interpretation cannot mean that it is inaccurate. Since Member States are not bound by positions which they may accept at the time of the debate within the Council, the possibility cannot be ruled out that one of them may subsequently change its view or decide to raise the question of the measure's legality before the Community judicature.

Since interpretations based on the wording, history and conceptual structure of a measure do not permit its precise scope to be assessed, that measure must be interpreted by reference to its purpose.

5 Given its purpose, Regulation No 4064/89 on the control of concentrations between undertakings applies to collective dominant positions. Unlike Articles 85 and 86 of the Treaty, that measure is intended to apply to all concentrations with a Community dimension in so far as, because of their effect on the structure of competition within the Community, they may prove incompatible with the system of undistorted competition envisaged by the Treaty. A concentration which creates or strengthens a dominant position on the part of the parties concerned together with an entity not involved in the concentration is liable to prove incompatible with the system of undistorted competition laid down by the Treaty. Consequently, if it were accepted that only concentrations creating or strengthening a dominant position on the part of the parties to the concentration were covered by the Regulation, its purpose would be partially frustrated. The Regulation would thus be deprived of a not insignificant aspect of its effectiveness, without that being necessary from the perspective of the general structure of the Community system of control of concentrations.

6 In assessing, in the context of its endeavours to control concentrations, whether there is a collective dominant position, the Commission is obliged to establish, using a prospective analysis of the relevant market, whether the concentration under investigation would lead to a situation in which effective competition in the relevant market would be significantly impeded by the undertakings involved in the concentration and one or more other undertakings which together, in particular because of factors giving rise to a connection between them, are able to adopt a common policy on the market and act to a considerable extent independently of their competitors, their customers and, ultimately, of consumers. In that connection, the basic provisions of the Regulation, in particular Article 2 thereof, confer on the Commission a certain discretion, especially with respect to assessments of an economic nature. Consequently, review by the Community judicature of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the discretionary margin implicit in the provisions of an economic nature which form part of the rules on concentrations.

7 The fact that, jointly with other undertakings, one undertaking exercises a considerable, even decisive, influence over another does not by definition preclude competition between them; nor does it rule out the possibility that their competitive relationship could be altered or even eliminated following a concentration which alters their control structure.

8 The prohibition enacted in Article 2(3) of Regulation No 4064/89 reflects the general objective assigned by Article 3(g) of the Treaty, that is to say, the establishment of a system ensuring that competition in the common market is not distorted. The prohibition relates to concentrations which create or strengthen a dominant position, a situation where one or more undertakings wield economic power which would enable them to prevent effective competition from being maintained in the relevant market by giving them the opportunity to act to a considerable extent independently of their competitors, their customers and, ultimately, of consumers.

The existence of a dominant position may derive from several factors which, taken separately, are not necessarily decisive. Among those factors, the existence of very large market shares is highly important. Nevertheless, a substantial market share as evidence of the existence of a dominant position is not a constant factor. Its importance varies from market to market according to the structure of those markets, especially so far as production, supply and demand are concerned.

However, very large market shares are in themselves, save in exceptional circumstances, evidence of the existence of a dominant position. An undertaking which has a very large market share and holds it for some time, by means of the volume of production and the scale of the supply which it stands for - without those having much smaller market shares being able rapidly to meet the demand from those who would like to break away from the undertaking which has the largest market share - is in a position of strength which makes it an unavoidable trading partner and which, already because of this, secures for it, at the very least during relatively long periods, that freedom of action which is the special feature of a dominant position.

In the context of an oligopoly, the fact that the parties to the oligopoly hold large market shares does not necessarily have the same significance, compared to the analysis of an individual dominant position, with regard to the opportunities for those parties, as a group, to act to a considerable extent independently of their competitors, their customers and, ultimately, of consumers. Nevertheless, particularly in the case of a duopoly, a large market share is, in the absence of evidence to the contrary, likewise a strong indication of the existence of a collective dominant position.

9 Two or more independent economic entities may be united by economic links in a specific market and, by virtue of that fact, may together hold a dominant position vis-à-vis the other operators on the same market. The existence of structural links is not a necessary condition for the existence of a dominant position of that nature. There is no reason whatsoever in legal or economic terms to exclude from the notion of economic links the relationship of interdependence existing between the parties to a tight oligopoly within which, in a market with the appropriate characteristics, in particular in terms of market concentration, transparency and product homogeneity, those parties are in a position to anticipate one another's behaviour and are therefore strongly encouraged to align their conduct in the market, in particular in such a way as to maximise their joint profits by restricting production with a view to increasing prices.

10 Under Regulation No 4064/89 the Commission has power to accept only such commitments as are capable of rendering the notified transaction compatible with the common market. In other words, the commitments offered by the undertakings concerned must enable the Commission to conclude that the concentration at issue would not create or strengthen a dominant position within the meaning of Article 2(2) and (3) of the Regulation.

The categorisation of a proposed commitment as behavioural or structural is therefore immaterial. It is true that commitments which are structural in nature, such as a commitment to reduce the market share of the entity arising from a concentration by the sale of a subsidiary, are, as a rule, preferable from the point of view of the Regulation's objective, inasmuch as they prevent once and for all, or at least for some time, the emergence or strengthening of the dominant position previously identified by the Commission and do not, moreover, require medium or long-term monitoring measures. Nevertheless, the possibility cannot automatically be ruled out that commitments which prima facie are behavioural - for instance, not to use a trade mark for a certain period, or to make part of the production capacity of the entity arising from the concentration available to third-party competitors, or, more generally, to grant access to essential facilities on non-discriminatory terms - may themselves also be capable of preventing the emergence or strengthening of a dominant position.