12 December 2013
In its judgment, the Court ruled that, despite the high market share of the merged entity on the online consumer communication market, the transaction did not raise competition concerns.
It is worth reading this judgment side by side with earlier Microsoft tying decisions/judgments, in which Microsoft was considered to have abused a dominant position because of users’ preferences to use applications pre-loaded onto the operational system. One may wonder what led the Commission and the Court to approve a merger which would allow Microsoft to do exactly this.
The Commission’s and the Court’s answer is to point to the dynamic and innovative nature of the online consumer communication market, on which services are provided to users for free, allowing them to easily switch providers. As the merger analysis looks at the future conduct of the merged entity, the Commission and the Court (perhaps anticipating that this trend will continue into the future) had fewer objections to this merger than may have been the case a few years ago.
It remains to be seen if the Commission will follow the same approach in the Article 102 cases which focus on the past behaviour of the investigated entity. There are quite a few statements in the Court’s judgment suggesting that this approach could have a broader application outside the context of this transaction (e.g. paragraphs 69, 73, 79, 88, 92 and 96). The Commission is conducting a number of antitrust investigations in this area, so we may get some answers soon. Watch this space.
Sophie Lawrance and Damian Pietrzak