Is the standard of proof imposed by the Community Courts undermining the efficiency of EC merger control? The Sony BMG joint venture case in perspective

Van Rompuy, Ben, and Pauwels, Caroline. (2007) Is the standard of proof imposed by the Community Courts undermining the efficiency of EC merger control? The Sony BMG joint venture case in perspective. In: UNSPECIFIED, Montreal, Canada. (Unpublished)

Preview

PDF Download (270Kb) | Preview

Abstract

On 13 July 2006, the European Court of First Instance (CFI) annulled the European Commission’s approval of the merger between the music units of Sony and Bertelsmann. In its Impala ruling, the CFI severely criticized the 2004 Commission decision because it found that the evidence relied upon by the Commission was not capable of substantiating its conclusion that the Sony BMG joint venture would not create or strengthen a collective dominant position. This judgment is highly significant for at least two reasons. First of all, it has potential implications for the future shape of the music industry, since the already completed concentration, which reduced the major players from five to four, is now being re-examined by the Commission. Secondly, and more importantly, the CFI judgment raises fundamental questions about the standard of proof incumbent on the European Commission when dealing with merger cases. After the CFI’s annulment of three prohibition decisions in 2002 (Airtours, Schneider Electric and Tetra Laval), the Sony BMG decision could in fact be seen as an attempt by the Commission to take into account the high burden of proof imposed on it by the Community Courts. The fact that this decision was annulled for not meeting the requisite legal standard for authorizing a merger, is therefore both ironic and challenging because it puts the Commission on a knife-edge. This paper will address this issue by assessing (1) to what extent the Impala judgment has actually raised the standard of proof incumbent on the Commission and, subsequently, (2) whether or not Impala - seen together with other recent jurisprudence concerning the required standard of proof in merger control - is imposing a too heavy burden on the Commission. Or, to put it more colloquially, this paper will seek to find out whether or not the CFI is imposing a too high standard of proof that the Commission, due to lack of the necessary resources, perhaps cannot meet. First, the concept of collective dominance will be explained and an overview will be given of the case law on the assessment of collective dominant positions in EC merger control. Second, the Commission’s 2004 clearance decision will be discussed. Where relevant, references will be made to previous merger cases in the music industry. Third, the Impala judgment will be summarized. Fourth, the judgment will be analyzed, and this in light of the recent jurisprudence of the Community Courts concerning the standard of proof incumbent on the Commission. On the basis of these findings, an answer to the two research questions will be formulated.

Actions (login required)