General Electric Company v Commission of the European Communities.

• Jurisdiction: European Union
• ECLI: ECLI:EU:T:2005:456
• Court: General Court (European Union)
• Docket Number: T-210/01
• Date: 14 December 2005
• Celex Number: 62001TJ0210
• Procedure Type: Recurso de anulación - infundado

Case T-210/01

General Electric Company

v

Commission of the European Communities

(Action for annulment – Competition – Commission decision declaring a concentration incompatible with the common market – Regulation (EEC) No 4064/89 – Aeronautical markets – Acquisition of Honeywell by General Electric – Vertical integration – Bundling – Foreclosure – Horizontal overlaps – Rights of the defence)

Judgment of the Court of First Instance (Second Chamber, Extended Composition), 14 December 2005

Summary of the Judgment

1. Actions for annulment – Subject-matter – Merger control decision – Decision based on several pillars of reasoning, each sufficient to justify the operative part – Criteria of incompatibility with the common market fulfilled in relation to at least one of the markets in question – Action unfounded

(Art. 230 EC; Council Regulation No 4064/89, Arts 2(1)(a) and (3))

2. Competition – Concentrations – Examination by the Commission – Economic assessments – Discretion – Judicial review – Scope – Limits

(Council Regulation No 4064/89, Art. 2)

3. Competition – Concentrations – Assessment of compatibility with the common market – No presumption

(Council Regulation No 4064/89)

4. Competition – Concentrations – Assessment of compatibility with the common market – Prospective analysis of potential developments on the market concerned – Need for a rigorous analysis – Judicial review – Scope

(Council Regulation No 4064/89, Art. 2(2) and (3))

5. Competition – Concentrations – Assessment of compatibility with the common market – Conglomerate-type concentrations – Concept – Account taken of the likelihood of a dominant position being created or strengthened on the reference market of one of the undertakings party to the operation – Lawfulness – Whether the Commission may rely on the foreseeable conduct of the entity arising from the concentration – Conditions – Production of a rigorous analysis based on solid evidence

(Council Regulation No 4064/89, Art. 2(2) and (3))

6. Competition – Concentrations – Assessment of compatibility with the common market – Conglomerate-type concentrations – Account taken of foreseeable anti-competitive conduct – Lawfulness – No obligation on the Commission to assess its likelihood in the light of the risks inherent in its adoption by an undertaking

(Art. 82 EC; Council Regulation No 4064/89, Art. 2(2) and (3))

7. Competition – Concentrations – Assessment of compatibility with the common market – Criteria – Creation or strengthening of a dominant position significantly impeding effective competition in the common market – Cumulative nature – Interaction – Obligation expressly to link findings made in relation to the first criterion, but equally relevant to the second, to the latter – None

(Arts 82 EC and 253 EC; Council Regulation No 4064/89, Art. 2(2) and (3))

8. Competition – Dominant position – Concept

(Art. 82 CE)

9. Competition – Dominant position – Holding of a very large market share an indicator – Assessment of the strengthening of market shares in a bidding market characterised by the award of a limited number of high-value contracts

(Art. 82 EC)

10. Competition – Dominant position – Existence – Relevance of lively competition on the market concerned – Not relevant where there is an undertaking able to act without having to take it into account – Financial concessions granted in order to win certain bids concerning high-value products – Not relevant

(Art. 82 EC)

11. Competition – Community rules – Application by the Commission – Independent of assessments by the authorities of non-member States

12. Competition – Concentrations – Assessment of compatibility with the common market – Anti-competitive effects arising from a direct vertical relationship – Effects depending on the future behaviour of the merged entity – Onus on the Commission to produce convincing evidence as to the likelihood of the alleged anti-competitive behaviour – Unfettered evaluation of evidence

(Council Regulation No 4064/89)

13. Competition – Dominant position in the sale of essential components – Refusal to sell – Abuse

(Art. 82 CE)

14. Competition – Concentrations – Examination by the Commission – Demonstration that conduct will take place in the near future, creating or strengthening a dominant position – Duty to produce convincing evidence

(Council Regulation No 4064/89)

15. Procedure – Introduction of new pleas during the proceedings – New plea – Definition – Reply to a question put by the Court of First Instance as a measure of organisation of procedure – Not included

(Rules of Procedure of the Court of First Instance, Arts 48 and 64(3))

16. Acts of the Community institutions – Statement of reasons – Obligation – Decision different from that previously taken in a case concerning similar or identical situations or the same market participants – Scope

(Art. 253 EC)

17. Competition – Community rules – Implementation – Rules for that purpose drawn up by the Commission – Duty of the Commission to comply with them – Notice on market definition – Scope

(Art. 82 EC; Commission Communication 97/C 372/03)

18. Competition – Concentrations – Examination by the Commission – Definition of the market in question – Criteria – Substitution of products – Concept

(Council Regulation No 4064/89; Commission Communication 97/C 372/03, point 36)

19. Competition – Concentrations – Assessment of compatibility with the common market – Market characterised by indirect and relatively weak competition – Acquisition by an undertaking in a dominant position of its sole competitor – Lawfulness – Conditions – Demonstration that there was no effective competition on the market before the operation

(Art. 82 EC; Council Regulation No 4064/89)

20. Competition – Concentrations – Examination by the Commission – Commitments by the undertakings concerned to render the notified transaction compatible with the common market

(Council Regulation No 4064/89)

21. Procedure – Application initiating proceedings – Formal requirements – Identification of the subject-matter of the dispute – Brief summary of the pleas in law on which the application is based

(Rules of Procedure of the Court of First Instance, Art. 44(1))

22. Competition – Concentrations – Administrative procedure – Access to the file – Observance of the rights of the defence – Limits

(Council Regulation No 4064/89)

23. Competition – Administrative procedure – Access to the file – Distinction between adverse and favourable factors

24. Competition – Administrative procedure – Access to the file – Observance of the rights of the defence – Limits

25. Competition – Concentrations – Administrative procedure – Access to the file – Refusal of access between the decision to bring proceedings and the statement of objections – Infringement of the right to a fair hearing – None

(Council Regulation No 4064/89, Art. 6(1)(c))

26. Competition – Concentrations – Administrative procedure – Access to the file – No right for the parties to the concentration to have access, in portions, throughout the proceedings

(Council Regulation No 4064/89, Art. 18(1))

27. Competition – Concentrations – Administrative procedure – Brevity of intermediate periods laid down at each stage of the procedure – Account to be taken, when assessing alleged infringement of defence rights, of the requirement for speed

(Council Regulation No 4064/89; Commission Regulation No 447/98, Arts 13 and 21)

28. Competition – Administrative procedure – Intervention of the hearing officer – Decision altering his status during the proceedings – Direct substitution of the new function for the old

(Commission Decision 2001/462, Art. 2(1) and (2))

29. Community law – Principles – Fundamental rights – Observance ensured by the Community judicature – Account to be taken of the European Convention on Human Rights

(Art. 6(2) EU)

1. Where some of the grounds in a decision on their own provide a sufficient legal basis for the decision, any errors in the other grounds of the decision have no effect on its operative part.

Moreover, where the operative part of a Commission decision is based on several pillars of reasoning, each of which would in itself be sufficient to justify that operative part, that decision should, in principle, be annulled only if each of those pillars is vitiated by an illegality. In such a case, an error or other illegality which affects only one of the pillars of reasoning cannot be sufficient to justify annulment of the decision at issue because that error could not have had a decisive effect on the operative part adopted by the Commission.

That rule applies in particular in the context of merger control decisions. In that regard, the Commission must prohibit a concentration where the latter satisfies the criteria in Article 2(3) of Regulation No 4064/89. It follows from Article 2(1)(a) of that regulation that the Commission must take account, in the course of its appraisal of a concentration, of, inter alia, the need to maintain and develop effective competition within the common market in view of, among other things, the structure of all the markets concerned. Thus, the Commission’s appraisal of whether a transaction creates or strengthens one or more dominant positions as a result of which effective competition would be significantly impeded must be carried out by reference to the conditions on each of the markets liable to be affected by the merger notified. Therefore, if it finds that the criteria are satisfied with regard to just one of the markets concerned, the concentration must be declared incompatible with the common market.

It follows that such a decision can be annulled only if it is found not only that certain of its grounds are vitiated by illegality, but also that those grounds which are not so vitiated do not provide a sufficient legal basis for the merger to be declared incompatible with the common market...