Introduction

Mergers and acquisitions (M&As) can have important effects on competitive conditions. At the same time, they can generate significant efficiencies, and so are often a natural part of industry evolution. In economic theory, an important distinction is made between horizontal, vertical, and conglomerate mergers. In horizontal mergers, there is a distinction between two types of possible anticompetitive effects: unilateral effects and coordinated effects. In vertical mergers, there are concerns about upstream or downstream foreclosure of rivals as part of the strategic considerations to merge. In conglomerate mergers, there may be combinations of these concerns at play.

Empirical reviews of the ex post effects of mergers on profitability, sales, and market shares have found that the economic effects of mergers can vary considerably from case to case.

The FEU Treaty does not provide any specific rule expressly installing merger control in Europe. Consequently, until the adoption of the first Merger Regulation in 1989, the control of potential anticompetitive effects of mergers could be achieved only by application of Article 101 and Article 102. As a result, the merging parties did not have a strict obligation to notify their merger plans to the Commission. Only by means of a broad interpretation of the Treaty provisions could anticompetitive mergers be controlled. Article 102, in particular, was utilized as an instrument to challenge possible abuses of dominance after the strengthening of an already dominant position via acquisition of competitors in markets in which competition is not sufficiently protected by, for example, low barriers to entry and supply-side substitution.