Collective Dominance: A Mechanism for the Control of Oligopolistic Markets?

Extract

In Gencor v. Commission (Case T-102/96, judgment of 25 March 1999, not yet reported) the Court of First Instance of the European Communities favoured a bold construction of the jurisdiction of the Commission and of the concept of joint dominance in merger cases. The judgment is also likely to have implications beyond the context of mergers for the use of Article 82 EC to control oligopolies. The case concerned the proposed merger of the platinum and rhodium operations of Gencor, a South African company, and of Lonrho, a company incorporated under English law. In particular, Gencor and Lonrho sought to acquire joint control of Implats, the South African company that brought together Gencor's activities in the platinum and rhodium sector, and through Implats, of the two South African companies that brought together Lonrho's activities in the same sector. The arrangements were notified to the South African competition authorities and to the EC Commission. The South African authorities did not oppose the merger. The Commission, however, issued a decision (Commission Decision 97/26/EC (O.J. 1997 L 11/30)) pursuant to the EC Merger Regulation (Council Regulation 4064/89 (O.J. [1989] L 395/1)) declaring that the proposed concentration was incompatible with the Common Market because it would lead to the creation of a collective dominant position between the entity arising from the concentration and Amplats, the leading world-wide supplier of platinum metal. Gencor challenged the decision of the Commission before the Court of First Instance.