The CK Telecoms judgement: four is (not) a magic number
For the legal journal Markt & Mededinging (“Market & Competition”), Pepijn van Ginneken and Gaëlle Béquet wrote an annotation about a landmark decision of the General Court of the Court of Justice of the European Union of 28 May 2020 in a case between CK Telecoms UK and the European Commission (case T-399/16).
The General Court annuls the European Commission’s merger decision, in which the Commission blocked the acquisition of O2 UK by Hutchison 3G UK. That acquisition was a “four-to-three” merger, that is to say, a merger which would reduce the number of market players from four to three. The acquisition would have made the merged entity a leading (but not dominant) player in the UK mobile telephony market.
This is the first decision of the General Court with respect to the so-called SIEC test (“significant impediment of effective competition”), that has to be applied since 2004, when assessing a merger that does not lead to a dominant position. The Court ruled that for such a merger to lead to a significant impediment of competition, and thus be prohibited, it must produce effects equivalent to the creation or strengthening of a dominant position. The judgment is important because it provides guidance on the norms and concepts in the Merger Regulation that should be applied to establish a SIEC.