European Commission v CK Telecoms UK Investments Ltd.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2023:561
• Date: 13 July 2023
• Docket Number: C-376/20
• Celex Number: 62020CJ0376
• Court: Court of Justice (European Union)

JUDGMENT OF THE COURT (Grand Chamber)

13 July 2023 (*)

Table of contents

Legal context

Regulation (EC) No 139/2004

Regulation (EC) No 802/2004

The Guidelines on horizontal mergers

Background to the dispute and the decision at issue

The procedure before the General Court and the judgment under appeal

Procedure before the Court

Forms of order sought by the parties

The appeal

The first ground of appeal

Arguments of the parties

Findings of the Court

The second ground of appeal

The first part

– Arguments of the parties

– Findings of the Court

The second part

– Arguments of the parties

– Findings of the Court

The third ground of appeal

The first part

– Arguments of the parties

– Findings of the Court

The second part

– Arguments of the parties

– Findings of the Court

The third part

– Arguments of the parties

– Findings of the Court

The fourth ground of appeal

The first part

– Arguments of the parties

– Findings of the Court

The second part

– Arguments of the parties

– Findings of the Court

The fifth ground of appeal

Arguments of the parties

Findings of the Court

The sixth ground of appeal

Whether the sixth ground of appeal is effective

– Arguments of the parties

– Findings of the Court

The first part

– Arguments of the parties

– Findings of the Court

The second part

– Arguments of the parties

– Findings of the Court

Referral of the case back to the General Court

Costs

(Appeal – Competition – Regulation (EC) No 139/2004 – Control of concentrations of undertakings – Mobile telecommunications services – Decision declaring a concentration incompatible with the internal market – Oligopolistic market – Significant impediment to effective competition – Non-coordinated effects – Standard of proof – European Commission’s margin of discretion with regard to economic matters – Limits of judicial review – Guidelines on horizontal mergers – Factors relevant to demonstrating a significant impediment to effective competition – Concepts of ‘important competitive force’ and ‘close competitors’ – Closeness of competition between the parties to the concentration – Quantitative analysis of the effects of the proposed concentration on prices – Efficiencies – Distortion – Complaint raised by the General Court of the European Union of its own motion – Annulment)

In Case‑376/20 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 7 August 2020,

European Commission, represented initially by G. Conte, M. Farley, J. Szczodrowski and C. Urraca Caviedes, and subsequently by F. Castillo de la Torre, G. Conte, M. Farley, J. Szczodrowski and C. Urraca Caviedes, acting as Agents,

appellant,

supported by:

EFTA Surveillance Authority, represented initially by C. Simpson, M. Sánchez Rydelski and C. Zatschler, and subsequently by C. Simpson and M. Sánchez Rydelski, acting as Agents,

intervener in the appeal,

the other parties to the proceedings being:

CK Telecoms UK Investments Ltd, established in London (United Kingdom), represented initially by J. Aitken, K. Asakura, A. Coe, M. Davis, S. Prichard, Solicitors, O.W. Brouwer, advocaat, B. Kennelly, Senior Counsel, A. Müller, advocate, and T. Wessely, Rechtsanwalt, and subsequently by J. Aitken, K. Asakura, A. Coe, M. Davis, Solicitors, O.W. Brouwer, advocaat, B. Kennelly, Senior Counsel, A. Müller, advocate, and T. Wessely, Rechtsanwalt,

applicant at first instance,

United Kingdom of Great Britain and Northern Ireland, represented initially by S. Brandon, and subsequently by F. Shibli, acting as Agents,

EE Ltd, established in Hatfield (United Kingdom),

interveners at first instance,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, L. Bay Larsen, Vice-President, A. Arabadjiev (Rapporteur), A. Prechal, M. Safjan, P.G. Xuereb, D. Gratsias and M.L. Arastey Sahún, Presidents of Chambers, J.-C. Bonichot, S. Rodin, F. Biltgen, J. Passer and Z. Csehi, Judges

Advocate General: J. Kokott,

Registrar: M. Longar, Administrator,

having regard to the written procedure and further to the hearing on 14 June 2022,

after hearing the Opinion of the Advocate General at the sitting on 20 October 2022,

gives the following

Judgment

1 By its appeal, the European Commission asks the Court of Justice to set aside the judgment of the General Court of the European Union of 28 May 2020, CK Telecoms UK Investments v Commission (T‑399/16, ‘the judgment under appeal’, EU:T:2020:217), by which the General Court annulled Commission Decision C(2016) 2796 final of 11 May 2016 declaring a concentration incompatible with the internal market (Case COMP/M.7612 – Hutchison 3G UK/Telefónica UK) which was published in summary form in the Official Journal of the European Union of 29 September 2016 (OJ 2016 C 357, p. 15; ‘the decision at issue’).

Legal context

Regulation (EC) No 139/2004

2 Recitals 5, 6, 24, 25, 28 and 29 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (OJ 2004 L 24, p. 1) state:

‘(5) … it should be ensured that the process of reorganisation does not result in lasting damage to competition; Community law must therefore include provisions governing those concentrations which may significantly impede effective competition in the common market or in a substantial part of it.

(6) A specific legal instrument is therefore necessary to permit effective control of all concentrations in terms of their effect on the structure of competition in the Community and to be the only instrument applicable to such concentrations. Regulation (EEC) No 4064/89 [of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1)] has allowed a Community policy to develop in this field. In the light of experience, however, that Regulation should now be recast into legislation designed to meet the challenges of a more integrated market and the future enlargement of the European Union. In accordance with the principles of subsidiarity and of proportionality as set out in Article 5 [TEU], this Regulation does not go beyond what is necessary in order to achieve the objective of ensuring that competition in the common market is not distorted, in accordance with the principle of an open market economy with free competition.

…

(24) In order to ensure a system of undistorted competition in the common market, in furtherance of a policy conducted in accordance with the principle of an open market economy with free competition, this Regulation must permit effective control of all concentrations from the point of view of their effect on competition in the Community. Accordingly, Regulation [No 4064/89] established the principle that a concentration with a Community dimension which creates or strengthens a dominant position as a result of which effective competition in the common market or in a substantial part of it would be significantly impeded should be declared incompatible with the common market.

(25) In view of the consequences that concentrations in oligopolistic market structures may have, it is all the more necessary to maintain effective competition in such markets. Many oligopolistic markets exhibit a healthy degree of competition. However, under certain circumstances, concentrations involving the elimination of important competitive constraints that the merging parties had exerted upon each other, as well as a reduction of competitive pressure on the remaining competitors, may, even in the absence of a likelihood of coordination between the members of the oligopoly, result in a significant impediment to effective competition. The Community courts have, however, not to date expressly interpreted Regulation [No 4064/89] as requiring concentrations giving rise to such non-coordinated effects to be declared incompatible with the common market. Therefore, in the interests of legal certainty, it should be made clear that this Regulation permits effective control of all such concentrations by providing that any concentration which would significantly impede effective competition, in the common market or in a substantial part of it, should be declared incompatible with the common market. The notion of “significant impediment to effective competition” in Article 2(2) and (3) should be interpreted as extending, beyond the concept of dominance, only to the anti-competitive effects of a concentration resulting from the non-coordinated behaviour of undertakings which would not have a dominant position on the market concerned.

…

(28) In order to clarify and explain the Commission’s appraisal of concentrations under this Regulation, it is appropriate for the Commission to publish guidance which should provide a sound economic framework for the assessment of concentrations with a view to determining whether or not they may be declared compatible with the common market.

(29) In order to determine the impact of a concentration on competition in the common market, it is appropriate to take account of any substantiated and likely efficiencies put forward by the undertakings concerned. It is possible that the efficiencies brought about by the concentration counteract the effects on competition, and in particular the potential harm to consumers, that it might otherwise have and that, as a consequence, the concentration would not significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position. The Commission should publish guidance on the conditions under which it may take efficiencies into account in the assessment of a concentration.’

3 Article 2 of that regulation, entitled ‘Appraisal of concentrations’, provides:

‘1. Concentrations within the scope of this Regulation shall be appraised in accordance with the objectives of this Regulation and the following provisions with a view to establishing whether or not they are compatible with the common market.

In...