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  • Cristina Lefter

New European case law in Towercast

The ECJ has decided that “the prohibition of abuse of a dominant position laid down by the Treaties permits an ex-post control, at national level, of a concentration of undertakings with a non-Community dimension” [1]

In other words, the point of view adopted by Advokate General Kokott in her Opinion – which we have discussed here – has been generally adopted by the European Court of Justice (the “ECJ” or the “Court”).

In brief, in its decision dated 16 March 2023 issued in Case C‑449/21 (the Towercast Decision), the Court notes the following:

  1. The fact the EU Merger Regulation[2] constitutes a “one stop shop” for assessing concentrations within the EU ex ante (meaning prior to their completion) does not preclude Art. 102 of the TFUE from being applied by national competition authorities to concentrations which lead to an abuse of dominance ex post (meaning after they have completed) on national markets;

  2. The fact the respective concentration has led to a consolidation of the acquirer’s dominance on the relevant market is not automatically equivalent to finding that an abuse of dominance has occurred. Abuse of dominance following the concentration has to manifest at least in the sense that “the degree of dominance thus reached would substantially impede competition, that is to say, that only undertakings whose behaviour depends on the dominant undertaking would remain in the market”.[3]

  3. As regards the temporal effects of the Towercast Decision, the Court has clarified once again that, as a rule, its interpretation of European law produces effects for situations occurring prior to rendering of new case-law and that such effects shall be limited only for future situations only if: (i) “those concerned must have acted in good faith”; and (ii) “there must be a risk of serious difficulties” in implementing the new case law to the old facts.[4] In Towercast, the Court found none of the two cumulative conditions to be applicable.

This new case-law casts a brand-new light on how mergers and acquisitions need to be assessed from a competition law perspective by counsels and parties looking at such transactions. Assessing a proposed merger or acquisition from the perspective of notification requirements is quite straightforward and clear. How about doing an assessment by looking at what the completion of the transaction will generate – abuse of dominance by any chance? Because if this is the case, then potentially the transaction could be challenged both by the national competition authority and by competitors looking to gain benefit from such transaction being wound up. Practice will tell.

[1] ECJ press release on Towercast Decision: [2] Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation). [3] The Towercast Decision, para. 52. [4] Idem, para. 57.

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