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The Impala Judgment: Does EC Merger Control Need to Be Fixed or Fine-Tuned?

By  |  April 19, 2007

Rachel Brandenburger, Thomas Janssens, Apr 19, 2007

In its Impala judgment last year, the Court of First Instance annulled a European Commission unconditional merger clearance decision for the first time. As a result, the Commission is having to carry out a new investigation into a transaction that closed over two years ago. In this judgment, the Court applied the three-limbed test for collective dominance from Airtours judgment. But this time it assessed strengthening, as opposed to creation, of collective dominance. Importantly, the Court made it clear that the Commission must base a clearance on equally solid grounds as a prohibition. We examine a number of the fundamental issues that the Impala judgment has raised. These have significance beyond the factual context of the case itself, both for the way the Commission must conduct its investigations and for the role of judicial review by the EC courts. We conclude by suggesting some changes in Court and Commission practices that would, we believe, strengthen the effectiveness of EC merger control.

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