Lorenzo Coppi contributed to a webinar hosted by Concurrences on 17 September with speakers from DG COMP, the UK CMA and Skadden.
In the Telefónica UK/ Hutchison 3G UK merger case, the General Court did not find any error of fact which would require a revision of the economic tools, including GUPPI analysis. However, the General Court focussed on what “significant” means for the SIEC test. It highlighted that it is not sufficient to argue that a market with four players is concentrated and a reduction from four to three competitors would lead to a reduction in competition to meet automatically the threshold for a ”significant impediment to effective competition”. The General Court requires the European Commission to prove that the impediment to competition is indeed “significant”.
The General Court is right to rule that not all price effects are significant enough to meet the legal threshold. The question is: what is the specific economic threshold for enforcement? Economic tools will always show a pre-efficiency unilateral price effect from a merger and, until recently, it was not clear what level of price effect was acceptable. This case is interesting because it provides guidance in this respect.
Concerning broader trends in merger enforcement, Lorenzo considered that there has been more robust merger enforcement in the European Union and the UK over recent years, as a result of regulators’ policy choices. However, the General Court is now signaling that the intensity of enforcement should not be left to the regulator’s discretion but instead is enshrined in law.