It is perhaps not surprising that the high level of merger activity in the second half of 2007 threw up some interesting developments in merger control policy in London and Brussels.
The European Commission (EC) has exclusive jurisdiction to examine very large, international mergers in the European Union (EU), under the European Merger Regulation (ECMR). Following a string of high-profile reverses in the European courts, the EC has become more reluctant in recent years to block mergers. Last year nevertheless saw only the second prohibition decision since 2002, when the EC blocked Ryanair’s acrimonious attempted hostile takeover of Aer Lingus. The EC took this decision on the basis that the merger of the two companies would have harmed consumers by creating a monopoly or a dominant position on 35 routes currently operated by both airlines, principally out of Dublin airport. The EC noted that this would have reduced choice and led to higher prices for more than 14 million EU passengers using these routes each year. The EC declined to accept the remedies offered by Ryanair, on the basis that they were inadequate to remove the competition concerns.
