Both antitrust and merger investigations at the EU level regularly conclude with the European Commission (“Commission”) accepting or imposing remedies. Despite the theories of harm underlying antitrust and merger investigations often being similar, if not identical, remedies in these two areas of competition law vary substantially. The predominance of behavioural remedies in antitrust cases stands in contrast to structural remedies relied upon in most merger investigations.
This is surprising and begs the question of what are the factors driving the Commission’s remedies practice – which is the question that this paper, available here, seeks to address.
Section II provides some background on the application of remedies under EU law.
Under merger control, commitments accepted by the Commission “should be proportionate to the competition problem and entirely eliminate it.” Similarly, in antitrust enforcement the Commission can “impose any […] remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end”.
The broadest classification for remedies distinguishes between structural and behavioural remedies. Structural remedies seek to directly influence the competitive structure of the relevant market(s) in order to maintain or improve the conditions for competition. Behavioural remedies seek to address specific competition concerns by requiring or prohibiting certain conduct from the undertakings concerned. Despite various efforts to clearly distinguish between types of remedies, the distinction is not always clear-cut in practice. Access remedies, for example, are commonly accepted to have both structural and behavioural aspects.
The Commission has long declared its clear preference for structural remedies in merger cases. Simultaneously, the legal hurdles for imposing structural remedies for antitrust infringements are typically deemed higher than those for behavioural remedies. This is reflected in practice, as discussed below.
Section III looks at the Commission’s practice.
The authors reviewed all Commission decisions to accept or impose remedies in antitrust and merger cases from November 2004 to December 2018. They also split them into three periods (November 2004 to January 2010, February 2010 to October 2014 and November 2014 to December 2018), roughly corresponding with the terms of EU Competition Commissioners. Ultimately, this led to the review of 309 Commission decisions – 55 antitrust decisions and 254 merger decisions.
The overwhelming preference for structural remedies in merger cases stands in stark contrast to the very low share of antitrust cases involving structural remedies. In effect, over 80% of conditional merger clearances in either Phase I or in Phase II involve a structural remedy, with behavioural remedies being typically accepted as part of a remedy package that also included structural remedies.
On the other hand, no case has been identified in which an infringement of Article 101 led to structural remedies. The occurrence of structural remedies is also very rare in Article 102 cases. In practice, behavioural remedies were adopted in between 80% and 95% of all cases, depending on the time period at stake – including c. 30% of cease-and-desist orders
Section IV concludes.
The review of the Commission’s case practice in antitrust and merger cases over a period of more than 14 years demonstrates stark differences in the Commission’s approach to remedies in these two areas of competition enforcement. The Commission mainly relies on behavioural remedies to address the competition issues underlying antitrust infringements while it displays a strong preference for structural remedies in merger investigations.
These different approaches to solving competition problems seem inconsistent and difficult to reconcile. The stark differences identified between merger and antitrust remedies seems to be in part driven by a different distribution of competition concerns within these two areas of competition law. While the theories of harm underlying antitrust and merger investigations are often the same, their distribution is different. While in merger cases the concerns are often horizontal, Article 102 cases often involve concerns of a vertical nature. Further, and even though Article 101 cases often also raise vertical concerns, it may be possible to resolve these concerns without resorting to structural remedies.
Nevertheless, the stark contrast found in the review suggests that there is at least a subset of cases where concerns are identical and where one therefore would have expected an identical approach to resolve the identified competition concern.
This slightly verbose piece provides a very interesting overview of the European Commission’s remedy practice. Its quantitative analysis of the Commission’ practice is particularly valuable.
On the other hand, the paper does not really address the main question this overview raises: why are mergers and antitrust subject to different types of remedies? To the possibilities advanced by the authors, I would like to add another one: that the distinction makes perfect sense once one considers the objectives of each set of provisions, instead of the theories of harm underlying each remedy.
In other words, the explanation flows from law, and not from economics. Merger control is concerned with preventing a certain market structure from arising that allows for anticompetitive behaviour or effects – regardless of the actual behaviour of economic agents. Hence, it is only natural that structural remedies are to be preferred. Antitrust, on the other hand, accepts the market structure as a given and merely imposes duties on economic agents not to exploit them – be it through collusive arrangements or unilateral abusive practices. Given this, it is again natural that behavioural remedies will often be deployed. The fact that this is reflected in the drafting of the provisions granting the European Commission powers to impose remedies and commitments seems to add some strength to this hypothesis.