The substantive test under the EC merger control regime

Abstract

On the first of May 2004, Council Regulation (EC) No. 139/2004 on the Control of Concentrations Between Undertakings entered into force and one of its main innovative features was the fact that it introduced a new substantive test within the EC merger review regime. This Dissertation seeks to examine what led the European Community (the 'EC') to abandon the 'dominance' test that had been the substantive test under the Council Regulation (EEC) No. 4064/89 on theControl of Concentrations Between Undertakings, in favour of a 'significant impediment to effective competition' ('SIEC') test. At the beginning of this Dissertation, the rationale underlying the control of mergers and the different types of mergers are discussed. Eventually this will lead to a detailed analysis of, on the one hand the dominance test and on the other hand of the 'substantial lessening of competition test' (SLC) test which is basically identical to the SIEC test, the only difference being one of wording. The analysis will involve a comparison between the two substantive tests, where the respective merits and flaws will be highlighted. The Dissertation then proceeds to discuss in detail the EC Guidelines on the Assessment of Horizontal Mergers Under the Council Regulation on the Control of Concentrations Between Undertakings thatwere issued to complement the new substantive test but which also contain various innovative features as regards the assessment of horizontal mergers. Subsequently, there is an analysis of the merger laws in the United States, Australia and New Zealand, the objective of such an analysis being to verify whether there are any lessons that can be learnt by the EC from the experience of these three countries in the field of merger control, all of which currently adopt a SLC test but two of which in the past, like the EC, applied the dominance test for the assessment of mergers. Eventually, a brief discussion of the local legislation that is applicable to mergers is undertaken and this will also include a discussion of the local Guidelines on 'Efficiencies' and on the 'Failing Firm Defence', that are attached to the local Control of Concentrations Regulations. Finally, a chapter is dedicated to the complications that arise from transnational mergers and to the ongoing international efforts that seek to minimise divergent decisions between the various national competition authorities that may simultaneously be assessing the same merger. Such international efforts mainly seek to achieve a degree of uniformity in the decisions of the relevant national competition authorities, through international convergence and cooperation. The Dissertation ends with a brief Chapter where the author gives his general opinion on the recent reforms to the EC merger review regime and makes his concluding remarks.