Over the last few years, the EU courts have produced several rulings that envision a symbiotic relation between competition law and economics. The judgment of the General Court (‘GC’) in CK Telecoms UK Investments v Commission (‘CK Telecoms v Commission’) is the latest illustration of this judicial trend.

The present paper, available here, argues that the concrete message of CK Telecoms v Commission is simple. The Court stresses that not all market power effects from mergers come under legal scrutiny. Only mergers leading to substantial market power effects deserve remediation. CK Telecoms v Commission also sits broadly within the European tradition of competition law. The case formulates a structured rule for the assessment of unilateral effects in merger cases, in line with the usual approach of European case-law.

Section II looks at the requirement that anticompetitive effects must be substantial.

Economic theory is chiefly concerned with a specific class of market power that cannot be dissipated by competitive forces in the short to mid-term. Economic theory uses many concepts to distinguish good from bad market power, but the idea underlying them is the same: above cost prices that can persist under free and open competition are desirable, not least because they produce price signals that spur investment, entry and innovation. A legal requirement of substantiality thus ensures that the costly resources expended on law enforcement, and associated risks of errors, are justified.

Given this, a remarkable feature of modern case-law is that the European courts have elevated ‘substantiality’ to a general principle of EU competition law. The Court now consistently holds that anticompetitive harms are only actionable when they pass a substantiality threshold. CK Telecoms v Commission falls within this trend. In its judgement, the Court emphasised that both statutory merger law and the Commission’s guidelines talk of significant impediments to effective competition, the elimination of an important competitive force, and the elimination of particularly close competitors. These thresholds are meaningless if they can be inferred from a ‘mere decline in competitive pressure’.

Section III explains why context matters when trying to understand CK Telecoms v Commission.

The General Court’s decision was received by a chorus of complaints and criticisms. This might be explained by a growing inhospitality towards industry concentration in economic literature, but that misses the point. Economic theory supplies models that produce general insights at the price of abstraction, generalisation and simplification. These models can certainly help policymakers ask the right questions but they do not necessarily offer clear-cut, let alone reliable, answers in a particular case. In contrast, competition enforcement is all about the idiosyncrasies of each case. Courts need to determine when to allow themselves, as well as competition authorities, to follow a model’s predictions and when the specicities of a case counsel departure from the model. The formulation of legal tests and standards of proof that draw inferences from models, yet provide flexibility in marginal cases is a central aspect of many of the ECJ’s recent competition judgments.

Section IV looks at the evolution of EU case law on merger control.

The European judiciary has slowly but surely incorporated the findings of economics in its competition rulings. The outcome is a body of case-law that is highly idiosyncratic. Rather than rely on an abstract standard, like consumer welfare, the Court opted for a more rule-based approach, conditioning merger liability upon the satisfaction of several structured tests. For example, the demonstration of anti-competitive effects in mergers such as this are now required to meet two cumulative conditions; namely (i) the elimination of important competitive constraints and (ii) a reduction in competition. While this approach and the consumer welfare standard may often lead to similar outcomes in practice, they reflect markedly different judicial philosophies – the EC courts’ mode of analysis notably favours predictability at the expense of some type I and II errors.

The EU Courts’ commitment to an economic interpretation of competition law should not be confused with a conversion to the more laissez faire approach of US courts. European competition law remains much more reliant on presumptions and structured rules than US antitrust. This approach places legal certainty above all other considerations.


This paper seeks to defend the recent General Court’s decision in CK Telecoms v Commission – a 4-to-3 merger in the British telecommunications market – as reflecting a more sophisticated economic approach by the European courts. The paper’s discussions of the challenges of adopting such an economic approach, and how it has been pursued in different areas of competition law other than merger control are quite interesting.

I found the paper’s analysis a bit confusing, though. For example, section one discusses two topics: competition law’s acceptance of market power in certain circumstances, and the value of a concept such as ‘substantiality’ to ensure the administrability of competition law. It is not clear to me how these two topics are linked to one another. This issue goes further – the paper goes on at length about the challenges of incorporating economic insights into competition analysis, but it is not clear why a substantiality threshold is a requirement for this, or even how it is related to economic analysis at all.

In addition, there are a number of assumptions underlying the piece that strike me as being potentially inaccurate. First, it is not true that most criticisms of the decision relate to it departing from economic models instead of looking at the facts of the case. I have heard serious criticisms that the court did not understand the Commission’s models or economics, misapplied them, or ignored evidence adduced by the Commission to support the potential anticompetitive effects of the merger. For example, critics have been particularly trenchant about the taxonomy of efficiencies outlined by the court, which the authors apparently support as providing a ‘structured approach’, as not reflecting economic consensus.  These may be valid criticisms or not, but they are not about the Commission relying excessively on economic models. It would be good if the authors could have provided some references of such criticisms, to be clear who they were addressing.

Further, it is not correct, in my view, to say that substantiality is a general principle of competition law, as is stated there – the dominant concept has long seemed to be whether the effect is appreciable. Further, it is only a few years since the Court ruled in Expedia that an agreement that may affect trade between Member States and that has an anti-competitive object constitutes, by its nature and independently of any concrete effect that it may have, an appreciable restriction on competition.

Finally, the paper completely ignores what is arguably the most far-reaching (and surprising) finding of the judgment: that a prohibition in these circumstances must be supported by evidence of anticompetitive effects to a strong probability standard, instead of on the balance of probabilities. This topic is (unsurprisingly) one of the main subjects of the Commission’s appeal of this judgment. After all, the first paper reviewed above, by a leading practitioner in merger control, makes it clear that, as recently as 2019, it was understood that in ‘respect of the standard of proof, the EU Courts have confirmed a “balance of probabilities” test that must be discharged on the basis of “convincing evidence” that a transaction would “in all likelihood” create or strengthen a dominant position.’ The paper is silent on how this – or the court’s interpretation of various ‘technical’ concepts present in the competition guidelines – relates to a more-economics’ approach. Which is a pity, since these are arguably the main issues that can answer whether the court is actually following economic teachings in its decision. 

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