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DuBois (1992, 3) states, “after the remedy, both Nestlé and BSN would have roughly
30% of the market.”
From this perspective, it is difficult to explain the remedy based solely on
economic grounds. Deeper economic analysis shows that both the pre-and post merger
market shares of Nestlé and BSN were significantly high. By prescribing a remedy -
taking from Nestlé and creating a third entity - the market positions of the two firms were
effectively more symmetrical without their combined market share falling at all. This,
according to standard economic analysis, would increase the temptation for Nestlé and
BSN to collude. In other words, the divestiture actually strengthened the duopolistic
structure of the market: the very thing the MTF was supposedly trying to remedy. With
this in mind, allowing Nestlé to re-negotiate and alter the original merger bid indicates
that the MTF preferred not to create difficulties for the merger proposals and exercised its
discretion towards merger approval (Neven 1993).
Accordingly, the ultimate decision to approve the merger, in which both MTF
officials and representatives of the merging firms participated in less than transparent
conditions, can be explained based on the self-supporting private interests of the
participants: the MTF had an interest in extending its (and ultimately DG Competition’s)
institutional power while economic actors had an interest in breaking into new markets
and thus increasing market power. Both actors could not have achieved their own goals
unless there was respect for each others’ goals, coupled with fear of the threat that each
represented should a satisfactory solution to both parties not be achieved. This points to
the interdependent nature between the negotiating parties, where the outcomes
represented a positive-sum game for both actors that comprised the community.
In more detail, the MTF’s ultimate interest was to use Nestlé/Perrier as a test case
to establish a precedent in which it could investigate and possibly prohibit mergers that
would lead to oligopolistic market structures. Such a power was not clearly defined in the
MCR and it would have not been possible to achieve had the MTF not accepted the
remedy solution given by economic actors who sought to increase their market power.
Subsequent merger decisions by the MTF dealing with potential oligopolist markets have
firmly established a ‘collective dominance policy’ within the MCR framework that has
been confirmed by the ECJ.22 Given this, the MTF was able to effectively extend its