The European Commission is vested with a responsibility of assessing compatibility between the markets and the various merging firms. In its decision of 6th October 2004, the Commission has assessed the compatibility with the common market of the concentration of two firms from the nuclear industry sector, following the procedure laid down in the merger regulation. This concentration was proposed by the French company, Areva and was aimed at the creation of a joint venture, by a common control of ETC (Enrichment Technology Company Limited), a British undertaking which used to be wholly controlled by the British holding, Urenco Limited. In this case, the Commission assessed the potential effects of this concentration on competition, since it raises serious doubts about the compatibility of this operation with the common market. In order to comment on this case, we will summarize the facts at stake, examine the arguments of the commission and arrive at the conclusion. We will also have a closer look at the remedies proposed before weighing the advantages and drawbacks of the Commission's proposition.
[...] Bishop and Walker, op.cit., note 10, p.113-115. Commission notice on the definition of the relevant market. OJ No C372 p 1997/12/09 Notice 97/C372/03 Available at http://europa.eu.int/comm/competition/antitrust/relevma_en.html, 02/04/2006. Such an approach can bring about some negative side-effects by limiting the competitive evaluation to a “calculation of post-merger market shares”. Moreover, the definition of the relevant market should only be a first step, which should be followed by a more consistent one, assessing the competitive position of the companies in the defined market. e.g. [...]
[...] Case No COMP/M.3099. (p. 17) However, the Commission also analyses the geographical repartition of market shares of these four supplying firms and the variations of the market shares according to the regions seem to acknowledge the thesis of different regional markets. the evolution of prices according to the area analysed. If the market would have been larger than community-wide, prices charged within the Community would have affected prices in other regions and reciprocally; a certain similarity of price movements should have been noticeable. [...]
[...] However concretely the competitive assessment consists first in the assessment of the market and concentration and second of the impact of the merger on competition. Thus the proceeding follows the same reasoning. Simon Bishop and Mike Walker, The economics of EC competition law: concepts, application and measurement, Sweet and Maxwell, London, 2d edition p.89. It is true that some references are made to the supply-side, but they are less pointed out than the demand-side factors. Such an approach tends to define narrowly the relevant product market and it can lead to a too narrow definition of the relevant geographic market. Ibid. p. [...]
[...] It has thus stopped its investigation and has authorized the merger between Areva and Urenco. The Commission appears to be quite conciliatory with the parties and admits fully their commitments. It may be linked to the fact that the concentration is not deemed to have community dimension, even if due to the structure of the relevant market, it may affect the competition within the Community. However, it appears a bit surprising that at few clue points of the reasoning the Commission does not bring a clear conclusion, justifying its approach by the fact it has received commitments that remove the serious doubts its has. [...]
[...] Available at: http://europa.eu.int/smartapi/cgi/sga_doc?smartapi celexapi prod CELEXnumdoc &lg=EN&numdoc=31989R4064&model=guichett, 6/04/2006. Case, No COMP/M.3099 Areva / Urenco/ ETC JV, 06/10/2004. 7. Available at: http://www.europa.eu.int/comm/competition/mergers/cases/decisions/m3099_2004 1006_600_en.pdf, 1/04/2006. Ibid. The development of this new technology by Areva would necessitate a lot of time and investments in R&D. Therefore, the acquisition of a part of ETC seemed to be the cheapest and the quickest way to reach its target. Ibid. 11. [...]
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