This two-part article, published in Competition Law Insight, looks at the types of remedies that EU and national competition authorities (NCA) prefer, and what they have been willing to accept, to address competition issues arising from vertical mergers (i.e. mergers between companies in the same supply chain). Some recent cases at national level suggest a greater willingness to accept purely behavioural undertakings regulating the future strategic and commercial conduct of the merged entity, rather than requiring structural or quasi-structural solutions including divestments and licenses.
Part I outlines the basic theories of harm which competition authorities focus on in their investigations of vertical mergers, the distinction between structural and behavioural remedies and how in practice the Commission and many NCAs have a strong preference for structural or quasi-structural fixes which avoid ongoing monitoring of the merged entity.
Part II examines in detail some recent cases at national level in Ireland, Austria and the Netherlands. These demonstrate a more creative and, in some regards, more intrusive approach than we have seen in other behavioural remedies cases.
Ultimately this is the price companies have been willing to pay to gain approval for a complex deal without having to sacrifice the deal synergies through divestments or other more far reaching structural remedies. It remains to be seen whether this could signal a broader trend, allowing companies greater scope to achieve efficiencies through vertical mergers while addressing potential adverse effects on competition through behavioural commitments.
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