So­met­hing New, So­met­hing Old, So­met­hing Pen­ding Ap­pe­al

13:00-13:15
Welcome and introduction: Christian Bergqvist, Associate Professor, University of Copenhagen

13:15-13:45
Entrenchment and ecosystem leveraging as a theory of harm: Sergey Khodjamirian, Partner, RBB Economics 

The draft new Merger Guidelines present entrenchment and ecosystem leveraging as a distinct and novel theory of harm, under which the anticompetitive concern is not the extension of an existing dominant position into adjacent markets, but rather the protection and reinforcement of an existing position of market power. This theory of harm came to the forefront in the Commission’s prohibition of the Booking Holdings/eTraveli Group merger, which is currently under appeal before the General Court. However, the concept is neither entirely novel nor as pristine as sometimes suggested. It is unclear how this concept differs from leveraging / foreclosure through bundling under a traditional conglomerate effects theory of harm, which was established in the case law more than two decades ago (in Tetra Laval/Sidel and General Electric/Honeywell). In this presentation, we explore the economics behind this theory of harm and attempt to unpack where the Commission may be heading.

13:45-14:15
Vertical foreclosure as a theory of harm: Dr. Dr. Pascal Hildebrand, Partner, EE&MC - Munich

Under the one-monopoly-profit theory, vertical foreclosure is generally irrational, as a monopolist can more efficiently extract monopoly profits upstream than by engaging in exclusionary conduct downstream. Although this theory largely fell out of favor during the 1990s with the rise of New Industrial Organization economics, its influence nevertheless persisted in the 2008 Non-Horizontal Merger Guidelines. Those Guidelines emphasized that the mere ability to foreclose was insufficient; competition authorities also had to establish that the merged entity would have an incentive to do so. This required an assessment of whether the additional profits generated downstream through foreclosure would outweigh the upstream profits lost by restricting sales to rivals. The draft Merger Guidelines appear to retain this profitability test - now styled 'direct incentives‘ - but strip it of its decisive force: a newly introduced 'dynamic incentives' route allows the Commission to establish a foreclosure theory of harm whenever a merger helps the company protect or expand its market power over time, even when the numbers show that foreclosure would not be profitable. Has the evidentiary bar for vertical theories of harm quietly been lowered? Is it a recalibration or capitulation of economic discipline? The answer determines how foreclosure must be proved - and disproved - for the next twenty years.

14:15-14:45
Horizontal market power and how to evaluate this: N.N., (TBD)

The creation or strengthening of a dominant position remains the cornerstone of merger assessment, confirming horizontal market power as the principal theory of harm in EU merger control. However, concerns are not confined to transactions involving very high market shares. The draft Merger Guidelines provides a safe harbor only for mergers resulting in a combined market share below 25%, while expressly reserving the possibility of intervention even in cases that fall below that threshold. This broader approach highlights the need to consider concepts such as killer acquisitions and to more carefully assess the availability of economic-effects simulations using analytical tools such as Upward Pricing Pressure (UPP), which measure the incentives and ability of the merged entity to raise prices post-transaction.

14.45–15:00
Break – Coffee and Cake!

15:00–15:30
Innovation as a theory of harm: Martin Wickens, principal, Econic Partners 

Nearly a decade after the Dow/DuPont and Bayer/Monsanto decisions, innovation theories of harm have returned to centre stage. The draft EC Merger Guidelines signal a readiness to focus on dynamic competition, recognising that in some markets companies with low or even zero market shares may nonetheless be an important competitive force if they have promising R&D projects, innovation capabilities, or R&D organisations. The Guidelines now distinguish between the loss of “specific” and “general” innovation competition, providing a more structured framework for assessing these concerns. Whether this emphasis will substantially change outcomes in innovation-intensive markets, or simply formalise existing practice, remains to be seen. 

15:30-16:00
What is the legal standard of review per case law: Beret Sundet, Partner, BAHR Law Firm

No economic theory is stronger than the evidence adduced in its support, which underscores the need for competition authorities to substantiate any theory of harm on which they seek to rely when challenging a merger. In this regard, enforcers enjoy a degree of discretion. The Court of Justice has held that it must be more likely than not that the merger will result in a significant impediment to effective competition under the proposed theory of harm. At the same time, the Court has indicated that the inherent complexity of a theory can influence the plausibility of accepting it, without necessarily imposing a higher evidential burden. What does this mean in practice when evaluating the suggested theory of harm and the evidence put forward in its support?

16:00-16:30
Closing Remarks and Questions: Kathrine Søs Jacobsen Cesko, Assistant Professor, Department of Business Humanities and Law, CBS

16:30-17:00
Networking and Reception
The seminar will be followed by an informal networking reception with wine and snacks.