448 14 Excursion: Merger Control
Article 82, market abuse. Article 82 of the EC Treaty prohibits the abuse of a
dominant position without any prior decision by the competent authorities being
necessary.^4 In Continental Can, the ECJ decided that Article 82 could be applied
to corporate acquisitions. According to the ECJ, Article 82 could be applied where
a previously dominant undertaking “strengthens its dominant position in such a
way that the degree of dominance reached substantially fetters competition, i.e.
that only undertakings remain in the market whose behaviour depends on the
dominant one”.^5 In Hoffmann-La Roche, the ECJ no more required the condition
laid down in Continental Can that any reduction of competition resulting from the
allegedly abusive conduct should be substantial.
The ECJ said: “The concept of abuse is an objective concept relating to the behaviour of an
undertaking in a dominant position which is such a to influence the structure of a market
where, as a result of the very presence of the undertaking in question, the degree of compe-
tition is weakened and which, through recourse to methods different from those which con-
dition normal competition in products or services on the basis of the transactions of com-
mercial operators, has the effect of hindering the maintenance of the degree of competition
still existing in the market or the growth of that competition.”^6
Article 81, competitors, wider application. Although Article 82 could be applied
to business acquisitions, it was still unclear whether Article 81 could be applied to
them. This was clarified in the Philip Morris/Rothmans case in which the ECJ
held that, in principle, an agreement whereby one company acquires a sharehold-
ing in a competitor can fall within Article 81 where it is shown that the acquisition
of such a shareholding can have the effect of restricting competition.
The ECJ said: “Although the acquisition by one company of an equity interest in a competi-
tor does not itself constitute conduct restricting competition, such an acquisition may never-
theless serve as an instrument for influencing the commercial conduct of the companies in
question so as to restrict or distort competition on the market on which they carry on busi-
ness.”^7 The ECJ continued: “That will be true in particular where, by the acquisition of a
shareholding or through subsidiary clauses in the agreement, the investing company obtains
legal or de facto control of the commercial conduct of the other company or where the
agreement provides for commercial cooperation between the companies or creates a struc-
ture likely to be used for such cooperation.”^8
The Philip Morris/Rothmans case opened the door to a wider application of Arti-
cle 81 in this area and contributed to the adoption of the first EC Merger Control
(^4) Article 1(3) of Regulation 1/2003.
(^5) Case 6/72 Europemballage Corporation and Continental Can Company v Commission
[1973] ECR 215, paragraph 26.
(^6) Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 91.
(^7) Joined Cases 142 and 156/84 British-American Tobacco Company Ltd and R. J. Rey-
nolds Industries Inc. v Commission [1987] ECR 4487, paragraph 37.
(^8) Ibid, paragraph 38.