Keywords

Summary



Keywords

1 Actions for annulment - Natural or legal persons - Measures of direct and individual concern to them - Commission decision making the compatibility of a concentration with the common market subject to compliance with certain conditions - Third party affected by the commitments entered into by the undertakings involved in the concentration - Whether admissible

(EC Treaty, Art. 173, fourth para.; Council Regulation No 4064/89, Art. 8(5)(b))

2 Actions for annulment - Actionable measures - Definition - Measures producing binding legal effects - Decision taking note of the commitment by an undertaking involved in a concentration to alter the structure of a company in which it owns a shareholding - Action brought by the other shareholder of that company - Inadmissible

(EC Treaty, Art. 173; Council Regulation No 4064/89, Art. 8(2))

3 Actions for annulment - Interest in bringing proceedings - Not possible to comply with the judgment annulling the measure - No effect - Basis for a possible action for damages

(EC Treaty, Arts 173 and 176)

4 Competition - Concentrations - Assessment of compatibility with the common market - Conditions for concluding that there is no link between the concentration and the deterioration of the competitive structure

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

5 Competition - Concentrations - Assessment of compatibility with the common market - Relevant market - Geographical definition

(Council Regulation No 4064/89)

6 Competition - Concentrations - Scope of Regulation No 4064/89 - Collective dominant positions - Included

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

7 Competition - Concentrations - Examination by the Commission - Assessments of an economic nature - Discretion with respect to assessments - Judicial review - Limits

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

8 Actions for annulment - Commission decision concerning the control of concentrations - Partial annulment - Conditions

(EC Treaty, Art. 173; Council Regulation No 4064/89, Art. 10(5))

Summary

9 A decision of the Commission by which the compatibility of a concentration with the common market is made subject to compliance with certain conditions is of direct concern, within the meaning of the fourth paragraph of Article 173 of the Treaty, to an undertaking not involved in the concentration, where those conditions relate to commitments entered into by the parties to the concentration vis-à-vis the Commission, the implementation of which affects the position of that undertaking in law and in fact. In this respect, while the conditions attached to the Commission's decision can admittedly affect that undertaking's interests only in so far as the commitments referred to therein are implemented by the parties to the concentration, where those parties have undertaken vis-à-vis the Commission to take certain measures in return for a declaration that the concentration is compatible with the common market, they will be firmly resolved to comply with those commitments, especially as under Article 8(5)(b) of Regulation No 4064/89 the Commission may revoke its decision if the undertakings concerned commit a breach of an obligation attached thereto.

In addition, such a decision is of individual concern to the undertaking not involved in the concentration, where, first, it submitted observations in the administrative procedure before the Commission, which took them into account for the purposes of its decision, second, the conditions attached to the declaration of compatibility are the result of the Commission's assessment of the competitive situation after the concentration, taking account principally of that undertaking's position as a constituent of a duopoly with the joint venture created by the concentration, and, finally, those conditions, which are aimed at dissolving the links between one of the parties to the concentration and the third party undertaking, touch primarily the interests of the latter and are liable to have an appreciable effect on its position on the market.

10 The part of a decision concerning the control of concentrations in which the Commission takes note of the commitment by an undertaking involved in a concentration to adapt the structure of a company in which it and a third party undertaking each have a half share cannot produce binding legal effects of such a kind as to affect the interests of the latter by bringing about a distinct change in its legal position, since even if that part of the decision is legally binding on the undertaking involved in the concentration, the legal position of the third party undertaking cannot be affected thereby except of its own volition.

11 An application for annulment is not inadmissible on the ground of lack of interest in bringing proceedings merely because, if the contested act were annulled, it might prove impossible in the circumstances for the institution from which the act emanated to fulfil its obligation under the first paragraph of Article 176 of the Treaty. In such a case, an interest in making the application still subsists, at least as the basis for a possible action for damages.

12 Under Article 2(2) of Regulation No 4064/89, if a concentration is not the cause of the creation or strengthening of a dominant position which has a significant impact on the competitive situation on the relevant market, it must be declared compatible with the common market.

The Commission is entitled to adopt a decision in which it considers that a concentration satisfies the criterion of the absence of a causal link referred to in Article 2(2) of Regulation No 4064/89 and declares it compatible with the common market, if it is clear that:

- the acquired undertaking would in the near future be forced out of the market if not taken over by another undertaking,

- the acquiring undertaking would gain the market share of the acquired undertaking if it were forced out of the market, and

- there is no less anticompetitive alternative purchase.

In this respect, the fact that the conditions thus set by the Commission for concluding that there is no causal link between the concentration and the deterioration of the competitive structure do not entirely coincide with the conditions applied in connection with the United States' `failing company defence' is not in itself a ground of invalidity of such a decision.

With respect to the criterion of absorption of market shares, although not considered by the Commission as sufficient in itself to preclude any adverse effect of the concentration on competition, it helps to ensure the neutral effects of the concentration as regards the deterioration of the competitive structure of the market, which is consistent with the concept of causal connection set out in Article 2(2) of Regulation No 4064/89. In the absence of that criterion, a concentration could, provided the other criteria were satisfied, be considered as not being the cause of the deterioration of the competitive structure of the market even though it appeared that, in the event of the concentration not proceeding, the acquiring undertaking would not gain the entire market share of the acquired undertaking. It would thus be possible to deny the existence of such a causal link even though the competitive structure of the market would deteriorate to a lesser extent if the concentration did not proceed. The introduction of that criterion is intended to ensure that the existence of that causal link can be excluded only if the deterioration in competitive structure resulting from the concentration would occur in similar fashion even if the concentration did not proceed.

13 A proper definition of the relevant market is a necessary precondition for any assessment of the effect of a concentration on competition. The geographical market is a defined geographical area in which the product concerned is marketed and where the conditions of competition are sufficiently homogeneous for all economic operators, so that the effect on competition of the concentration notified can be evaluated rationally.

14 In the light of its purpose and general structure, Regulation No 4064/89 on the control of concentrations between undertakings applies to collective dominant positions. That regulation, unlike Articles 85 and 86 of the Treaty, is intended to apply to all concentrations with a Community dimension in so far as they are likely, because of their effect on the structure of competition within the Community, to 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 with an entity not involved in the concentration is liable to prove incompatible with the system of undistorted competition which the Treaty seeks to secure. 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.

While the regulation does not expressly provide that undertakings, not involved in the concentration, which are regarded as the external members of the dominant oligopoly must be given an opportunity to make their views known effectively where the Commission intends to attach to the `authorisation' of the concentration obligations or conditions specifically affecting them, the same applies in a situation where the Commission intends to attach conditions or obligations affecting third parties to a concentration which will lead simply to the creation or strengthening of an individual dominant position.

Finally, even on the assumption that a finding by the Commission that the proposed concentration creates or strengthens a collective dominant position involving the undertakings concerned on the one hand and a third party on the other may in itself adversely affect that third party, observance of the right to be heard is, in all proceedings liable to culminate in a measure adversely affecting a particular person, a fundamental principle of Community law which must be guaranteed even in the absence of any rules governing the procedure. Given the existence of that principle and in view of the purpose of the regulation, the fact that the Community legislature did not expressly provide in the regulation for a procedure safeguarding the right to be heard of third party undertakings alleged to hold a collective dominant position together with the undertakings involved in the concentration cannot be regarded as decisive evidence of the regulation's inapplicability to collective dominant positions.

15 In the context of the control of concentrations between undertakings under Regulation No 4064/89, the Commission is obliged to assess, using a prospective analysis of the reference market, whether the concentration which has been referred to it leads to a situation in which effective competition in the relevant market is significantly impeded by the undertakings involved in the concentration and one or more other undertakings which together, in particular because of correlative factors which exist 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 also of consumers. Such an approach warrants close examination in particular of the circumstances which, in each individual case, are relevant for assessing the effects of the concentration on competition in the reference market. In this respect, 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.

16 Partial annulment of a decision, limited solely to the conditions it imposes, is possible if those conditions may be severed from the remainder of the decision. In this respect, the partial annulment of a Commission decision concerning the control of concentrations is one of the cases expressly provided for in Article 10(5) of Regulation No 4064/89.

However, since the conditions set by the Commission for declaring the concentration compatible with the common market are the result of a negative assessment by the Commission of the concentration as notified, and are regarded by that institution as essential if the concentration is to be declared compatible with the common market, those conditions and the declaration of compatibility in the operative part form an indivisible whole, and annulment limited to the section of the operative part of the decision which relates to those conditions and obligations is not possible without the substance of the decision being altered.