UK & EU Competition Law

Question 4: Airtours Case Effects on EU Merger Control - Coordinated Effects and Tacit Collusion By[Student’s Name] Course Professor's Name University Location of the University Date The Airtours case was vital in the context of European Union (EU) merger control, which necessitates discussion concerning competition and coordinated effects since this is where antitrust focuses on curbing unhealthy competition. Also, the EU Merger Regulation (EUMR) and state laws are other critical factors influencing merger control, precisely tacit collusion. This paper will look at what coordinated effects entail under law, put them into perspective by going through the Airtours case, and finally discuss the consequences of blocking powers given to the European Commission regarding mergers. Also, it brings out a broad framework of laws on competition that safeguard competitive markets and how EU merger control opposes secretive collusion, according to which this paper argues that Airtours' ruling affects EU Merger Control, resulting in changing scrutinising coordinated effects and enhancing the ability of Commission's prohibition against anti-competitive consolidation. Understanding Coordinated Effects Coordinated effects in antitrust occur when corporations cooperate to restrict competition and hurt consumers rather than compete fiercely. This coordination can take the shape of price-fixing, market sharing, output limits, or other collusions. Unlike unilateral effects from a single merger entity, coordinated impacts occur from market interactions. Coordination effects are essential for assessing a merger's anticompetitive implications in merger control. Mergers can benefit consumers but reduce competition and raise prices by facilitating cooperation between merging firms and their competitors. Thus, competition regulators must carefully assess whether a merger will increase company coordination ability and incentive. The EUMR and its opinions govern collective effects in the EU. The EUMR's Article 2(2) states that a merger is incompatible with the internal market if it restricts competition, especially by creating or strengthening a dominant position. For the European Commission (2004), the Horizontal Merger Guidelines emphasise openness, structures, and likelihood of coordination post-merger in analysing collusive effects.[Jonathan B Baker and Joseph Farrell, “Oligopoly Coordination, Economic Analysis, and the Prophylactic Role of Horizontal Merger Enforcement” [2020] Social Science Research Network 1985 <https://doi.org/10.2139/ssrn.3605713>.] [Iiris Tuohimaa, “Merger Control in the EU: When Is an Impediment to Effective Competition Significant?” (MA Thesis, Lund University 2022). < https://www.konkurrensverket.se/globalassets/dokument/kunskap-och-forskning/uppsatstavling/uppsatser/uppsats_2022_iiris-tuohimaa.pdf>] [ibid.] [Lea Bernhardt and Ralf Dewenter, “The Impact of the More Economic Approach on EU Merger Decisions” [2022] Diskussionspapier 1 <https://www.econstor.eu/bitstream/10419/266504/1/WP195.pdf>.] In United Brands v. Commission (1978), the European Court of Justice (ECJ) adopted coordinated effects as a central concern in merger analysis. A merger may be illegal even if there is no monopoly, provi...