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Why the EU Merger Regulation Should Not Enjoy a Monopoly Over Tacit Collusion - A Close Look at Five Common Misconceptions

17 Pages Posted: 1 Feb 2010  

Nicolas Petit

University of Liege - School of Law; International Center for Law & Economics (ICLE); University of South Australia - School of Law

David Henry

Howrey LLP

Date Written: January 31, 2010

Abstract

Over the past two decades, the European Commission (“the Commission”) has adopted a stance whereby the implementation of ex ante, structural merger rules is deemed more appropriate when seeking to challenge tacit collusion than ex post, behavioural instruments (e.g. on the basis of Article 102 of the Treaty on the Functioning of the EU (“TFEU”). As a result, the EU merger regulation (“EUMR”) is the preferred, if not sole, legal instrument deployed by the Commission in order to avert any potential risk of tacit collusion. Since the entry into force of the EUMR, the number of Commission decisions in which the future emergence of risks of collective dominance was examined lies in the region of 130. In stark contrast, and despite pronouncements of the General Court (“GC”, or the Court) that Article 102 TFEU may apply to tacit collusion, the Commission has not yet taken a single decision enforcing Article 102 TFEU against tacitly collusive oligopolies. Similarly, the stillness of the 2009 Guidance Communication on Enforcement Priorities in applying Article 102 TFEU in this context implicitly confirms the Commission’s reluctance to use the abuse of dominance rules in order to address the phenomenon of tacit collusion.

Overall, within the realm of EU competition law, the provisions of the EUMR de facto enjoy a jurisdictional monopoly over issues pertaining to collective dominance. The present article challenges the conventional view that tacit collusion should be exclusively addressed through the use of the EUMR. To this end, it examines and seeks to set straight five widespread misconceptions on which such view is based.

Keywords: Merger Control, Tacit Collusion, Oligopolies, Competition

JEL Classification: K21, L4

Suggested Citation

Petit, Nicolas and Henry, David, Why the EU Merger Regulation Should Not Enjoy a Monopoly Over Tacit Collusion - A Close Look at Five Common Misconceptions (January 31, 2010). Available at SSRN: https://ssrn.com/abstract=1545506 or http://dx.doi.org/10.2139/ssrn.1545506

Nicolas Petit (Contact Author)

University of Liege - School of Law ( email )

B-4000 Liege
Belgium

International Center for Law & Economics (ICLE) ( email )

United States

HOME PAGE: http://www.laweconcenter.org/contact.html

University of South Australia - School of Law ( email )

GPO Box 2471
Adelaide SA 5001
Australia

David Henry

Howrey LLP ( email )

United States

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