Structural Links for the detection of Collective Dominance:Analysis of Case Law under the EC Merger Regulation

Abstract: Adoption of ECMR 4064/89 filled a lacuna in European Merger Control. One of the key objectives behind the ECMR is to prevent a concentration leading to the creation or strengthening of a dominant position which may lead to the prohibition in Article 2 (3).The Commission of the European Communities gained some significant powers in order to protect the competitive structure of Common Market. But, Article 2 (3) of ECMR's indication to a single undertaking has raised a number of questions and complexities as to the applicability of the concept of collective dominance under the Regulation. Even where it is conceded that the concept is applicable, uncertainties remain as to the extent of applicability. However, neither the original rules on competition in the EC Treaty, nor the Regulation itself, are expressed so clearly as to put it beyond doubt that behavioural or structural controls could be used to prevent or police collective dominance in oligopolistic markets. Cartel prohibitions seek to preserve independent commercial behaviour among competitors but, main objective of the EC Merger Control is to keep the competitive structure of markets. The earlier versions of the compatibility criteria was only about the preservation of ?effective competition? without mentioning on ?dominance?. This concept is one of the fundamental notions of the EC competition law. As of the late 1970s, this concept was limited to the position of a single company by the ECJ rulings. Early definition of dominant position was not satisfactory since it was including two elements, the power to behave independently of competitors, customers and consumers and the ability to prevent effective competition being maintained on the market. However, the European courts had never drawn distinction between them. One of important questions is whether the assessment of dominance by a group of undertakings is the same as the assessment of dominance by a single firm. The paper attempts to clarify this issue by analysing the relevant EC case law. The concept of a ?joint? dominant position is considerable only when the members of the oligopoly are linked by economic factors in such a way that they present themselves in the market as a single entity. Thus, the paper focuses on the analysis of structural links between the members of oligopoly in order to clarify the necessity of economic links for detection collective dominant position that is significantly impeding the effective competition within the Common Market, which is still unclear in EC Competition Law.