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February 14, 2007

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KNeefs

If I recall correctly, Tetra Laval indeed mentions the ex post application of article 82 EC to conglomerate and vertical exclusionary conducts (as it would to horizontal mergers as well). But was it really more than imposing a duty of diligence on the Commission by raising the standard of proof in the economic appraisal of non-horizontal mergers?

This of course implies some minor "intrusion" by 82CE, but in my view the significant distinction between the ECMR and 82CE remains: the ECMR will block the acquisition of a dominant position which was not attained by competition "by the merits", whilst article 82 CE sanctions only abuse of such a position, once acquired.

I doubt the Commission has not taken the Tetra Laval decision into account, but not so much as a true interaction between these regimes, but more as a warning that blocking conglomeral and vertical mergers requires solid argumentation. What are your thoughts?

Nico

Kristoff, thanks for the interesting comment. Quickly, my interpretation of Tetra Laval is that behavioural theories of harm (e.g. input foreclosure, tying strategies) that only arise of vertical/conglomerate mergers should be assessed in light of the fact that 82 may come into play and bring a decent answer to these issues. In turn, this affects the market player's incentives to adopt such conduct. So, when assessing a merger, the Commission must not jump to easily to the conclusion that the merged entity will seek to foreclose its rivals, or tie its product to leverage its position.

Now, this is completely difft for horizontal mergers, where the typical theory of harm is in a way less behavioural (or conduct-oriented): the main area of concern is that the merged entity will increase its prices on the market, that's it. And 82 cannot do much about this as only excessive pricing can be deemed abusive... and we all know the intricacies of bringing such cases.

Marco Slotboom

See para. 44 of the draft which gives expression to para. 74 of Tetra Pak.

Nico

Thanks Marco, I will have a look.

Nicolas

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