Economic Lessons from the EU General Court’s Three/O2 Judgment

In the EU, dominance used to be a necessary but, importantly, not a sufficient, condition for finding that a horizontal merger would give rise to competition concerns. But since 2004, EU merger control allows for the possibility of anticompetitive mergers that do not create or enhance a dominant position. This raises the important question: if dominance is no longer a necessary condition, how should we determine whether a horizontal merger is pro-competitive or anti-competitive?

That question was addressed in the recent judgment of the EU General Court, in which the Court annulled the Commission’s decision to prohibit the merger between Three and O2, two of the four main providers of mobile telephony services in the United Kingdom. That judgment provides an important commentary on the Commission’s economic approach to assessing horizontal mergers that goes beyond the specifics of this particular case. This Brief discusses some noteworthy points to emerge from the judgment.