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Merger Control - Essay Example

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The European Community has devised rules to ensure free competition in the Single Market. It is the European Commission's responsibility to ensure the application of these rules throughout the Community, in active collaboration with national governments. The EC competition rules are set out in Article 81 (formerly Article 85) and Article 82 (formerly Article 86) of the Treaty of Rome…
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Merger Control
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Download file to see previous pages In order to ensure free competition in the Single Market, agreements which not only have a significant effect on the trade between the Member States but also prevent, restrict or distort competition in the Single Market are prohibited by Article 81.
Prohibition of behaviour which discourages competition is described in Article 81 (1) of the EC Treaty. In respect of investigations relating to mergers, to determine whether Article 81 EC will be applcable and to justify exceptions to the rule that there exists a distinction between merger control and the general competition law, a casual link must be established between the merger and the restriction of competition. In the absence of such a link, "the relevant coordination of the participants must be assessed in a separate proceeding under Article 81 (1) EC rather than as part of the merger control investigation under the E.C.M.R." An assessment under Article 81 of the EC, leads to the stoppage of the merger from going through and this constitutes an early attack on the parties.
Investigation under Article 81 EC results in leaving the concentration untouched and this necessitates the intervention of the European Commission to correct this behaviour. ...
The European Commission, while analyzing a merger under Article 81 (1) of the EC, considers in particular whether "two or more participating companies retain to a significant extent activities in the same market as the joint venture, or in a market which is downstream or upstream from that of the joint venture, or in a neighbouring market closely related to the relevant market." The final issue to be decided is whether the coordination, resulting from the creation of the joint venture, enables the participants to eliminate competition in respect of a major portion of the products or services being dealt with. The interstate clause defines the boundary in-between the areas respectively covered by the law of the Member States and the Community law.
Agreements which do not affect trade between member states are not covered by Article 81 EC. These agreements are the exclusive domain of the national authorities. This basic test of whether or not interstate trade was affected or not was dealt with by the E.C.J. in Socit Technique Minire v. Maschinenbau Ulm1, the E.C.J. held that "it must be possible to foresee with a sufficient degree of probability on the basis of a set of objective factors of law or of fact that the agreement in question may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States."
In respect of B2Bs, the test developed in Socit Technique Minire v. Maschinenbau Ulm, is apparently cleared without much difficulty, because of the type of the platforms, which function by utilizing the Internet. It is required by Article 81 (1) EC for every agreement to have as its objective or effect the prevention, restriction or distortion of fair competition. "The E.C.J. has held that these ...Download file to see next pagesRead More
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