Merger Control in the EU: When is an Impediment to Effective Competition Significant?

Sammanfattning: Merger control is an important component of competition law in the EU. There are two levels of merger control in the EU. The first level is EU merger control for transactions that have an EU dimension, which fall within the jurisdiction of the Commission under the EU Merger Regulation. The second level is national merger control for transactions which do not meet the criteria of the EU Merger Regulation, but nonetheless qualify for investigation under the national laws of a Member State. This thesis is concerned with the first level, hence those mergers which have an EU dimension. Mergers which have an EU dimension must face the scrutiny of the Commission which has exclusive jurisdiction over such mergers. The Commission assesses the proposed merger under a substantive assessment based on the so-called Significant Impediment to Effective Competition (‘SIEC’) test. It is this test that the thesis is concerned with. Particular attention is paid to the fact that the impact on competition needs to be substantial. According to the test, a concentration only passes the scrutiny of the Commission if it does not significantly impede effective competition in the internal market. In assessing the impact on competition, particularly in oligopolistic markets where the merger does not necessarily result in the creation or strengthening of a dominant position, the test requires the Commission to carry out highly complex legal and economic assessments. In recent years, legal scholars and practitioners have criticized the Commission for its arbitrary application of the SIEC test. In 2020, the General Court for the first time handed down a judgment which clarified the test, especially for the analysis of unilateral effects in oligopoly cases. This thesis will analyze the SIEC test and its application with the help of case law. It will also critically look at the approach taken by the General Court in its recent decision from the perspective of law and economics. Ultimately, the thesis finds that the General Court has significantly raised the bar for the Commission before it can prohibit a merger, thus setting much needed boundaries for the Commission’s substantive assessment. On the other hand, the thesis finds that the General Court created even more legal and economic uncertainty surrounding the SIEC test because of its arbitrary argumentation on points of law and its review of economic evidence. Finally, the thesis concludes that there is no complete answer to when an impediment to effective competition is ‘significant’. It remains to be seen in the coming years, whether we will receive even more clarification on the substantive assessment and the application of the SIEC test, notably on the notion of ‘significance’.