LAW & ECONOMICS: VERTICAL MERGERS - RISKS OF INPUT - CUSTOMER FORECLOSURE - REMEDIES - COMMITMENTS - KEY INFRASTRUCTURE

How to remedy anticompetitive effects of vertical mergers? Two recent French cases

This article presents two mergers of vertically integrated firms that have been investigated in depth by the Conseil the la concurrence. These two operations created risks of input and customer foreclosure on several markets under scrutiny. The Conseil contributed to the design of remedies to restore effective competition after the merger. In both instances, the Conseil’s main objective was to develop opportunities for third parties to access key infrastructure or contents. The Conseil considered that the commitments offered by the parties, most of them behavioural, were sufficient to address its competition concerns.

I. Introduction 1. The Conseil de la concurrence recently examined two mergers of vertically integrated firms that raised both horizontal and non-horizontal concerns. The increased concentration at each level and the stronger vertical integration had potential effects that were difficult to disentangle. The two mergers concerned very different sectors: the pay-TV industry and the convention-exhibition sector. In both cases, the Conseil identified risks of input and customer foreclosure, and suggested behavioural remedies to meet the competition concerns. The remedies were designed to grant third parties access to key contents or infrastructure. In one case, the parties offered to invest in new capacities, which the Conseil analysed as a form of structural remedy. 2. The

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Valérie Meunier, Philippe Choné, How to remedy anticompetitive effects of vertical mergers? Two recent French cases, September 2008, Concurrences Review N° 3-2008, Art. N° 19912, www.concurrences.com

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