LAW & ECONOMICS: NON-HORIZONTAL MERGER GUIDELINES - DRAFT GUIDELINES - COMPETITIVE ASSESSMENT

What can be expected from the Commission’s non-horizontal merger guidelines?

Three years after the publication of the 2004 Horizontal Merger Guidelines, the Commission is expected to publish soon draft guidelines on the competitive assessment of non-horizontal mergers. The Commission’s thinking has been unveiled over the last few months through presentations by DG Comp officials which provided insights into the main aspects of the forthcoming draft guidelines. This article discusses the economics of non-horizontal mergers and assesses the changes that can be expected based on recent public declarations by the Commission about the guidelines.

1. In the last five years, the Commission's analysis of non-horizontal mergers (NHM hereafter ) has been harshly criticized by the European Courts. In 2002, the CFI annulled the Tetra Laval / Sidel merger prohibition in which the Commission's theory of harm relied on anti-competitive conglomerate effects. Then, in 2005, the CFI rejected the Commission's analysis of non-horizontal (vertical and conglomerate) effects in the GE/Honeywell prohibition decision (the decision was upheld on the basis of “traditional” horizontal effects). Following these severe rebuttals, it was time for the Commission to reflect on the principles that should guide its analyses of NHM and a team within DG Comp has been working on the preparation of draft guidelines, expected to be published in the coming months.

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Penelope Papandropoulos, What can be expected from the Commission’s non-horizontal merger guidelines?, February 2007, Concurrences Review N° 1-2007, Art. N° 13164, pp. 31-37

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