ECFI Council Regulation 4064/89, Article 2(3) provided that there should be declared to be incompatible with the common market: ‘A concentration which creates or strengthens a dominant position as a result of which effective competition would be significantly impeded in the common market or in a substantial part of it..’ There had been a merger through wholly-owned subsidiaries incorporated and carrying on business in South Africa of the platinum interests of Gencor and Lonrho, undertakings carrying on business in the European Community. It was contended that the merger was beyond the jurisdiction of the European Commission.
Held: The court considered the territorial scope of the regulation. The regulation applied to concentrations which, while relating to activities outside the Community, have the effect of creating or strengthening a dominant position as a result of which effective competition in the common market is significantly impeded. A submission that the finding of the Commission was inconsistent with Ahlstrom Osakeyhtio was rejected: ‘Compatibility of the contested decision with public international law
Following the concentration agreement, the previously existing competitive relationship between Implats and LPD, in particular so far as concerns their sales in the Community, would have come to an end. That would have altered the competitive structure within the common market since, instead of three South African PGM suppliers, there would have remained only two. The implementation of the proposed concentration would have led to the merger not only of the parties’ PGM mining and production operations in South Africa but also of their marketing operations throughout the world, particularly in the Community where Implats and LPD achieved significant sales.
Application of the Regulation is justified under public international law when it is foreseeable that a proposed concentration will have an immediate and substantial effect in the Community.
In that regard, the concentration would, according to the contested decision, have led to the creation of a dominant duopoly on the part of Amplats and Implats/LPD in the platinum and rhodium markets, as a result of which effective competition would have been significantly impeded in the common market within the meaning of Article 2(3) of the Regulation.
It is therefore necessary to verify whether the three criteria of immediate, substantial and foreseeable effect are satisfied in this case.’
Citations:
T-102/96, [1999] EUECJ T-102/96, [1999] ECR II-753
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Citing:
Cited – A Ahlstrom Osakeyhtio And Others v Commission Of The European Communities ECJ 27-Sep-1988
The court considered the territorial scope of Articles 81 and 82. in the context of producers outside the Community selling to purchasers established in the Community. The external producers had engaged in price fixing and therefore restricted . .
Cited by:
Cited – Adidas-Salomon Ag v Drape and others ChD 7-Jun-2006
The claimants had sponsored tennis players to wear their logo. The respondents organised tennis tournaments whose intended rules would prevent the display of the claimant’s logos. The claimants said that the restriction interfered with their rights . .
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European
Updated: 06 June 2022; Ref: scu.173230