THE PRACTICE OF THE EUROPEAN COMMISSION AND COURT OF JUSTICE CONCERNING THE APPLICATION OF THE FAILING FIRM DEFENCE IN THE CONTROL OF CONCENTRATIONS

Abstract

The article deals with the practice of the European Commission and Court of Justice concerning the application of the failing firm defence. The failing firm argument is a time-honoured defence in assessment of a concentration when merging party is failing firm due to financial difficulties. It allows the Commission to permit an otherwise anticompetitive concentration if one of the parties can demonstrate that it would fail in the absence of the proposed concentration and that it would in any event be forced out of the market. Namely, the parties must demonstrate that there is no causality between concentration and impediment of effective competition, i.e. that concentration does not lead to a deterioration of the competitive structure of the market.