Today's judgment by the Court of Justice overturns the General Court judgment of 2020 annulling the Commission'sdecision to prohibit Hutchison's proposed acquisition of O2 UK in 2016.
The importance of this judgment goes far beyond the specific circumstances and mobile communications sector affected by the Commission's decision, regarding which there have been many changes in the meantime, including the fact that the UK is no longer an EU Member State.
Today's judgment clarifies a fundamental question that was at the heart of the reform leading to the 2004 EU Merger Regulation nearly 20 years ago: when do transactions which do not create or strengthen a dominant market position give rise to a significant impediment of effective competition? This is the first time the Commission's approach to these so-called 'gap' cases has been assessed by the Court of Justice. The Court has now confirmed our interpretation of several crucial elements of our approach to these cases.
The Court also gives some important clarifications on the standard of proof the Commission has to meet when assessing a merger. It is of utmost importance for our work to face the same standard of proof when clearing and when prohibiting a transaction.
The General Court's judgment that the Commission appealed in 2020 had also raised important questions about the margin of discretion of the Commission with regard to economic matters and the value of Commission guidelines. The concepts at stake, such as when do merging parties constitute 'close competitors', or when is a party 'an important competitive force', are the building blocks of our ability to investigate,and intervene, in mergers between competitors. Today, the Court has confirmed that the Commission's approach to these concepts, as set out in our Guidelines, is in line with the EU Merger Regulation.
The Court also clarifies that efficiencies brought by some mergers are to be assessed within the framework set out in the EU Merger Regulation and the Commission's Horizontal Guidelines to review mergers, and that it is for the parties to the concentration to provide evidence as to the existence of such efficiencies.
Overall, today's judgment validates our approach to merger assessment under the EU Merger Regulation and our commitment to protect European consumers by rigorously assessing transactions that give rise to serious competition concerns even while falling short of creating or strengthening a dominant position.
