El interés superior y el reconocimiento realizado por el padre no biológico. 46

A merger which the Commission finds, after a second phase investigation, incompatible with the common market, in that it creates or extends a dominant position such that effective competition within the market is impeded, will be prohibited. However, remedies short of outright prohibition are possible, notably when competition concerns arise only over some of the activities of the merging parties. From the outset it was possible for the Commission to accept commitments from the parties that would resolve its concerns in the course of a second phase investigation, and since an amendment of the Merger Regulation in 1997203 the Commission has also been able to accept commitments during phase one “where the competition problem is readily identifiable and can easily be remedied.”

There have in fact been an increasing number of cases since 1997 that have been cleared subject to commitments of one sort or another, including several collective dominance cases.

201

A merger can of course also have positive effects such as efficiency gains which are taken into account by anti-trust authorities.

202

FTC (1999).

203

According to Claude Rakovsky of the Merger Task Force, this is likely to be because companies are “more and more aware of the limits of what can be accepted by the Commission” and willing to consider remedies that would avoid the cost of a failed merger.204 Drawing on its growing experience with remedies of this type, the Commission on 21 December 2000 issued a Remedies Notice which “sets out the general principles applicable to remedies acceptable to the Commission, the main types of commitments that have been accepted by the Commission in cases under the Merger Regulation, the specific requirements which proposals of commitments need to fulfil in both phases of the procedure, and the main requirements for the implementation of commitments.”205

In the US, the merger wave has tripled the number of reported Hart-Scott-Rodino transactions between 1991 and 1999. The total value of these mergers has increased eleven-fold during this period, from $169 billion to over $1.9 trillion.206 Parker and Balto (2000) note that, in this merger wave, it is becoming increasingly difficult to find remedies that provide secure and effective relief to competition concerns. The reason for this, they suggest, lies in the increasingly strategic nature of mergers through which firms attempt to reach a more dominant position in the market. Furthermore, as industry concentration rises, the number of potential acquirers of divested assets decreases.

Remedies, as an alternative to a prohibition decision, should be designed to resolve the competition concerns identified by the anti-trust authority. Depending on the nature of the competition problem, there are several possible remedies which can generally be classified as structural or behavioural remedies.

The former are aimed at ensuring that the structure of the industry within which firms compete does not become one which facilitates anti-competitive behaviour. On the other hand, behavioural remedies, designed to facilitate competition, are geared at shifting firms’ behaviour in a way that promotes effective competition or prevents anti-competitive or exploitative behaviour. Examples include commitments to licence or to supply competitors or putative competitors, and commitments to relax restrictive distribution arrangements207 or not to practice price discrimination.

In the EU as well as in the US it is the responsibility of the anti-trust authority to show that a merger is likely to harm competition. However, in the event the authority finds reasons to object to the merger, the burden is on parties to propose remedies and provide evidence that these will be effective and that they are likely to solve the competition concerns raised by the authority. In both jurisdictions, structural remedies, most importantly divestures, are the preferred form of remedy.

The Commission in its Remedies Notice states that:

204

Rakovsky (2000).

205

Commission Notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98 para3.

206

Parker and Balto (2000).

207

“In assessing whether or not a remedy will restore effective competition, the Commission will consider all relevant factors relating to the remedy itself, including inter alia the type, scale and scope of the remedy proposed, together with the likelihood of its successful, full and timely implementation by the parties”.208

Furthermore, the Commission stresses the importance of analysing these factors in the context of particular market structure including specific market characteristics. An important aspect is the uncertainty of the eventual outcome inherent in any proposed remedy. It is in the interest of the Commission to keep this uncertainty as low as possible, which should be taken into account when parties propose remedies.

Similarly, in the US the:

“first objective [of the FTC] is to determine which remedies will effectively and fully preserve competition. A second objective is to select a remedy that will preserve competition with as much certainty as possible. The risk of inadequate relief, or the burden of untimely relief, should not be borne by consumers.”209

With respect to the suitability of structural and behavioural remedies, the EU Commission’s Notice refers to a principle laid down by the CFI in the Gencor/Lonhro case that the basic aim, where commitments are accepted as a condition of clearing a merger, has to be that a competitive market structure is restored.210 The Commission notes that this suggests that structural remedies such as divestment are to be preferred to behavioural remedies, especially behavioural remedies that would involve the Commission in continual monitoring such as commitments not to engage in discriminatory conduct or to deal with a subsidiary on an arms’ length basis. However, behavioural remedies that would prevent the creation of a dominant position by significantly reducing entry barriers into a market will not be ruled out.

This approach is based on the CFI’s statement in Gencor/Lonhro regarding structural versus behavioural remedies:211

“It is true that commitments which are structural in nature, such as a commitment to reduce the market share of the entity arising from a concentration by the sale of a subsidiary, are, as a rule, preferable from the point of view of the Regulation's objective, inasmuch as they prevent once and for all, or at least for some time, the emergence or strengthening of the dominant position previously identified by the Commission and do not, moreover, require medium or long-term monitoring measures. Nevertheless, the possibility cannot automatically be ruled out that commitments which prima facie are behavioural, for instance not to use a trademark for a certain period, or to make part of the production capacity of the entity arising from the concentration available to third-party competitors, or, more

208

Commission Notice on Remedies Acceptable Under Council Regulation (EEC) No 4064/89 and Under Commission Regulation (EC) No 447/98 published 2000 para7.

209

Parker and Balto (2000.

210

Judgement of the Court of First Instance of 25 March 1999 in Gencor v Commission Case T102/96 [1999] ECR-753 at para 316.

211

generally, to grant access to essential facilities on non-discriminatory terms, may themselves also be capable of preventing the emergence or strengthening of a dominant position.”

Sometimes a package of structural and behavioural remedies will be appropriate.

More generally, the Commission recognises that each case, and the remedy that might be appropriate, has to be addressed on its own merits. Or as Parker and Balto reporting on US experience put it, “there are no absolute rules. We evaluate remedies based on the facts in each case.”212