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Merger Regulation

Mergers with a Community dimension (companies with a combined worldwide turnover of € 5 billion and a turnover within the European Economic Area of more than € 250 million for each of them, unless each of the companies concerned generates more than 2/3 of its European turnover in one country; in this case, the merger is to be examined by the competition authority of that country) have to be notified to the Commission, which will investigate whether or not a concentration will create or strengthen a “dominant position”. This principle also applies to situations of “joint dominance” or duopolies and to situations of “collective dominance” or oligopolies. In most cases, a firm is considered to have market dominance if its market share exceeds 40%. But mergers that “significantly impede effective competition” (this refers to merger cases that lead to a 20-40% market share), too, can be prohibited if no sufficient competition remains after the merger to provide consumers with sufficient choice. (Source: Council Regulation EC/139/2004 on the control of concentrations between undertakings)

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