This doctoral thesis examines how European merger control law is applied to the energy sector and to which extent its application may facilitate the liberalisation of the electricity, natural gas and petroleum industries so that only those concentrations will be cleared that honour the principles of the liberalisation directives. In 2007, the Commission emphasized that a real internal European energy market is essential to meet Europe’s three energy objectives. These were for example competitiveness to cut costs for citizens and undertakings to foster energy efficiency and investment, sustainability including emissions trading, and security of supply with high standards of public service obligations. The EU issued three pre-liberalisation directives since the 1990s. Dissatisfied with the existing monopolistic structures, in Germany through demarcation and exclusive concession agreements for the supply of electricity and natural gas, which were until 1998 exempted from the cartel prohibition provision, and the prevalence of exclusive rights on the energy markets, the Commission triggered infringement proceedings against four Member States.
The CJEU confirmed that the Commission has the power to abolish monopoly rights under certain circumstances and the rulings had the effect of convincing the member states to enter into negotiations for an opening up of energy markets owing to the internal market energy liberalization directives 1996 / 1998 / 2003 / 2009 / 2019. The 2nd liberalisation package of 2003 brought a widening of market opening and acceleration of pace of market opening to a greater number of eligible customers and an increase in the provisions on management and legal unbundling. The 3rd energy package of 2009 addressed ownership unbundling of key-infrastructure ownership and energy wholesale and retail supply consisting of three regulations and two directives. The 4th liberalization package inter alia consists of a new IEMD2019 and IGMD2019 and addresses energy efficiency and rules on good governance in the Energy Union. A brief analysis of the economic implications of concentrations is followed by an assessment of the evolution of European merger control law since 1989, 1997 and 2004. Then, the theoretical findings are contrasted to the results of recent merger proceedings in the energy sector.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- CONCENTRATION OF UNDERTAKINGS
- Undertaking in Terms of Merger Control Law
- Control
- CATEGORIES OF CONCENTRATIONS
- INCIDENTAL PROVISIONS
- FINE ANALYSIS
- Microeconomic Rationale of Concentrations
- MICROECONOMIC BENEFITS OF MERGERS
- Microeconomic Benefits of Vertical Integration
- Microeconomic Benefits of Horizontal Integration
- Microeconomic Beneficial Effects of Conglomerate Integration
- MICROECONOMIC DRAWBACKS OF MERGERS
- In-transparent Economic Status of the Partner
- Merger Related Expenditure
- Managerial Dis-Economies
- Unreasonable Focus on Integration
- Increase of Barriers to Market Entry
- Increases of Prices and Costs and Slow Innovation
- Drawbacks of Conglomerate Mergers
- Macroeconomic Implications of Mergers
- MACROECONOMIC BENEFITS OF CONCENTRATIONS
- Aggregated Productive Efficiencies
- Reduction of Macroeconomic Barriers to Exit
- Tool to Rescue Weak Undertakings
- Facilitator of Market Integration
- DETRIMENTAL MACROECONOMIC EFFECTS OF MERGERS
- Dominance over Industrial Sectors
- Unemployment and Regional Disparities
- Socio-Economic Concentration of Wealth and Power
- EVALUATION
- Public Interest Theory
- Competition Law Theory
- Structure-Conduct-Performance Model or Consensual Approach to Liberalisation
- Concept of Contestable Markets
- Merger Control under Art. 66 ECSCT and the Euratom Treaty
- PREVENTIVE PROHIBITION OF CONCENTRATIONS ART. 66 § 1 ECSCT
- ALLOWANCES UNDER ART. 66 § 2 ECSCT
- FINES, DIVESTITURE, JUDICIAL REVIEW, ENFORCEMENT
- CARTELS AND ABUSES OF DOMINANT POSITIONS
- EVALUATION
- EURATOM TREATY
- Merger Control under Art. 102 and 101 TFEU (Art. 82 and 81 ECT)
- EC MERGER CONTROL UNDER ART. 102 TFEU (ART. 82 ECT)
- Undertaking
- Relevant Market
- Substantial Part of the Common Market and Effects Doctrine
- Dominant Position and Collective Dominance
- Abuse
- Effect on Trade between Member States
- Legal Consequences
- Concentration
- Arguments Supporting Merger Control: The Continental Can Doctrine
- Application of the Continental Can Doctrine
- Drawbacks of Merger Control under Art. 102 TFEU (Art. 82 ECT)
- EC MERGER CONTROL UNDER ART. 101 TFEU (ART. 81 ECT)
- Traditional View
- New Doctrine Introduced by the BAT Judgement
- Evaluation of the BAT Doctrine
- Gillette Case
- E.ON/Ruhrgas
- Evaluation of the Application of Art. 101 TFEU (Art. 81 ECT) to Structural Amendments of the Competitive Environment with Indications of Future Collusion
- THE COMPLEX ASSESSMENT OF JOINT VENTURES UNDER ART. 102 AND 101 TFEU (ART. 82 AND 81 ECT)
- Legal Nature of JVs
- Assessment of Joint Control within Incorporated JVs
- Competition Law Analysis of JVs under Art. 102 and 101 TFEU (Art. 82 and Art. 81 ECT)
- JVs Exclusively Assessed under Art. 102 TFEU (Art. 82 ECT)
- Long Lasting Basis
- Full Function
- Concentrative JV
- JVs Assessed under Art. 101 TFEU (Art. 81 ECT)
- The Chevron Case
- Control of Concentrations under MR1989
- LEGAL BASIS OF MR1989
- RECITALS OF MR1989
- SCOPE FOR MERGER CONTROL PURSUANT TO ART. 1; 3; 22 MR1989
- Concentration under MR1989
- Merger
- Acquisition
- Concentrative JVs under MR1989
- Distinction between Operations Involving Inseparable or Separable Structural and Coordinative Aspects
- Joint Control
- Criteria for Full Function JVs
- Concentrative Operations: Recession of Parents and Group Effect
- Credit Institutions, Insurance Undertakings, Liquidators and Financial Holdings under MR1989
- Community Dimension under Art. 1 MR1989
- Aggregated Global Turnover
- Calculation of Turnover from Ordinary Business Activities
- Intra-Group Transactions Art. 5 12 MR1989
- Acquisition of Parts Art. 5 II MR1989
- Turnovers of Affiliated, Parent and Sister Undertakings
- Turnovers of Jointly controlled Undertakings
- Financial Institutions
- De-Mergers (Break up of companies)
- Joint Bids
- Asset Swaps
- Formation of Concentrative JVs
- Acquisition of Unilateral Control by a JV Partner
- Intermediary Companies
- Aggregated Community Wide Turnover
- Two-Thirds Rule Art. 1 II MR1989
- Modifications of the One-Stop-Shop Principle: Art. 1 II; 22 III - V; 19; 9; 21 III MR1989 and the Residual Application of Art. 101 and 102 TFEU (Art. 81 and 82 ECT)
- One-Stop-Shop Principle
- Mandatory Co-operation under Art. 19 MR1989
- German Clause pursuant to Art. 9 MR1989
- Safeguard under Art. 21 III MR1989
- Dutch Clause Art. 22 III-V MR1989
- Residual Application of Art. 101, 102 pursuant to Art. 109 TFEU (Art. 81, 82 pursuant to Art. 89 ECT)
- Evaluation
- PRE-NOTIFICATION STAGE
- Obligation to Notify a Concentration
- Secretive Talks Regarding Draft Notifications
- PHASE ONE
- Suspension of the Concentration
- Procedural Aspects of Decision-making within Phase One
- Inapplicability Decision Art. 6 1 lit. a MR1989
- Compatibility Decision under Art. 6 1 lit. b MR1989
- Definition of the Relevant Market
- Assessment of Dominance in terms of Art. 2 II MR1989
- Elements of Dominance in Art. 2 1 MR1989 Differing from the Notion of Dominance Relevant to Art. 102 TFEU (Art. 82 ECT)
- The Need to Maintain and Develop Effective Competition Art. 2 1 lit. a MR1989
- Market Position of the Undertakings Concerned
- Economic And Financial Power of the Undertakings Concerned
- Alternatives for Consumers or Suppliers
- Access to Supplies and Markets
- Barriers to Entry
- Supply and Demand Trends
- Interests of Intermediary and Final Consumers
- Technical and Economic Progress
- Efficiency Gains
- The Minol Case
- The Air France/Sabena Case
- Case VIAG/Continental Can
- Rule of Reason under Art. 2 II; I MR1989
- Joint Dominance under Art. 2 II; I MR1989
- Ancillary Restraints
- Initiation of phase two decisions based on Art. 6 1 lit. c MR1989
- Evaluation of Phase One Decisions under Art. 61 MR1989
- PHASE TWO
- Procedural Aspects of Decision-making within Phase Two
- Requests for Information Art. 11 MR1989
- Investigations pursuant to Art. 13 MR1989
- Substantive Analysis and Early Indication of the Course of Action
- Unconditional Clearance Draft Decision or Statement of Objections
- Access to the File
- Hearings
- Preliminary Draft Decision and Advisory Committee on Concentrations
- Final Decision
- Evaluation
- Unconditional Clearance Decision Art. 81 1st Sentence MR1989
- Conditional Clearance Decision Art. 8 II 1-2 MR1989
- Formal Criteria of Conditional Clearance (Art. 8 II MR1989)
- Substantive Criteria of Conditional Clearance
- Incidental Provisions Assuring Compliance with Commitments Proposed by the Parties and Accepted by The Commission
- Incidental Provisions Covering Ancillary Restraints
- Excursus: Conditional Clearance and New Yardsticks for the Assessment of JVs under MR1997
- Implementation of Incidental Provisions and Evaluation
- Incompatibility Decision and Implementing Orders Art. 8 III-IV MR1989
- Revocation of Clearance Decisions and Subsequent Incompatibility Decision under Art. 8 V-VI MR1989
- PROFESSIONAL SECRECY UNDER ART. 17 MR1989
- PARTICIPATION OF PRIvate Third PERSONS UNDER MR1989
- Amendments of the Merger Regulation in 1997
- CONCENtration in TERMS OF ART. 1 I; 3 I-V MR1997
- The New Assessment of JVs under Art. 3 II; 2 IV MR1997
- Basic JV Definition
- Full Function JVs
- Classic Concentrative JVs and the Inclusion of Coordinative Ones By Means of Art. 3 II MR1997 and Art. 2 IV MR1997
- Evaluation
- Legal Certainty
- Simplicity and Speed
- Exchange of Blanket Terms as to Jurisdiction
- Ongoing Relevance of the Distinction Between Concentrative and Coordinative JVs for The Material Assessment
- Reserved Right to Revoke Clearances Based on a Derogation pursuant to Art. 101 III TFEU (Art. 81 III ECT)
- Uncertainty as to The Assessment of Concentrative Full-Function JVs below the Thresholds
- Uncertainty as to the Assessment of Co-operative Full-Function JVs below the Thresholds
- Uncertainty as to the Assessment of Non-Full-Function JVs
- De Facto Co-ordination of Authorities?
- COMMUNITY DIMENSION
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This dissertation examines the interplay between European merger control law and the liberalisation of European electricity, natural gas, and petroleum markets. It focuses on the critical assessment of market opening incidental provisions within the relevant decisions of the European Commission.
- The impact of merger control on the liberalisation of European energy markets
- The role of incidental provisions in facilitating market opening
- The effectiveness of merger control in preventing anti-competitive outcomes
- The legal framework governing merger control in the European Union
- The interplay between microeconomic and macroeconomic considerations in merger control
Zusammenfassung der Kapitel (Chapter Summaries)
The dissertation begins with an introduction outlining the legal framework of merger control within the European Union, including the definitions of an undertaking, control, and categories of concentrations. It then proceeds to discuss the microeconomic rationale of concentrations, including both the benefits and drawbacks of vertical, horizontal, and conglomerate integration.
Chapter 3 explores the macroeconomic implications of mergers, examining both positive effects such as aggregated productive efficiencies and negative effects like dominance over industrial sectors and unemployment. The chapter also evaluates the different theoretical frameworks that have been employed to understand the relationship between mergers and macroeconomic performance.
Chapter 4 delves into merger control under Article 66 of the ECSC Treaty and the Euratom Treaty, outlining the legal provisions governing the prevention and allowance of concentrations. It also discusses the enforcement mechanisms available to the European Commission.
Chapter 5 focuses on merger control under Articles 102 and 101 of the Treaty on the Functioning of the European Union, examining the application of these articles to various types of mergers, including joint ventures. The chapter explores the specific legal issues associated with assessing dominance, abuse, and the effects on trade between member states.
Finally, Chapter 6 delves into the details of the Merger Regulation (MR1989), analyzing the legal basis of the regulation, the scope for merger control, and the procedural aspects of the notification and decision-making process. It examines the different stages of the merger control process, including Phase One and Phase Two, and discusses the various types of decisions that can be made by the European Commission.
Schlüsselwörter (Keywords)
The core topics and concepts explored in this work include: European merger control law, liberalization of European electricity, natural gas, and petroleum markets, incidental provisions, market opening, anti-competitive outcomes, competition law, microeconomic rationale, macroeconomic implications, dominance, abuse, joint ventures, Merger Regulation (MR1989), and the European Commission.
- Quote paper
- Dr. Henning Matthiesen (Author), 2020, The Interplay between European Merger Control Law and the Liberalisation of European Electricity, Natural Gas and Petroleum Markets, Munich, GRIN Verlag, https://www.grin.com/document/1350854
