Policy Formulation, Implementation and Feedback in EU Merger Control

18

institutional power to deal with mergers that were hitherto not clearly defined. Moreover,
prohibiting a merger could have been costly to the MTF because the firms in question
may have threatened to appeal the merger decision to the ECJ or Court of First Instance
(CFI). If such a threat were successful, then the MTF faced the costs of time, trouble, and
loss of credibility at this early stage of MCR implementation. The magnitude and
significance of these costs are particularly high in this case precisely because
Nestlé/Perrier was hand picked by the agency to further its ‘collective dominance’
agenda. This adds strength to Broscheid and Coen’s (2002) argument that Commission
actors are sometimes political entrepreneurs in certain situations. Based on previously
raised ideas of ‘macro’ and ‘micro’ communities, the actions of the MTF also point to the
theoretical conceptualisation that although members of the ‘micro’ community may form
part of the larger ‘macro’ one, their actions are not static: they have the ability to
influence the nature of the policy itself that was previously negotiated by the macro-
community, reflecting a type of dynamism or ‘feedback’ between both communities (as
indicated by the arrows in Figure 1). One could argue that this insight was clearly
reflected in the MTF’s desire to use the Nestlé/Perrier case to carve out a new niche of
‘collective dominance’ previously undefined in the MCR.

In a similar vein, economic actors, seeking to increase market shares and hence
profits, had to be fearful of the potential threat that the MTF represented if it would have
blocked the deal outright, while being respectful of the MTF’s institutional goals. Had
business been stubborn and not respected the idea of pursuing a remedy solution in order
to meet the MTF’s goals, an approved merger would have not been achieved ultimately
leading to decreased profits. Avoiding this scenario, business took a reasonable strategy
by seeking a ‘Commission demanded compromise’ in order to attain increased market
power. Analysing the French markets for both still and sparkling water before the merger
bid, Nestlé had a 20% and 5% share in those markets respectively. Perrier for the same
markets had a 35% and 50% share (Fleming 1992).²³ The approved merger, despite not
developing as Nestlé originally envisioned, entailed the disappearance and acquisition of
a rival firm in Perrier while enabling Nestlé to firmly establish itself in the lucrative
French bottled water market where it would have otherwise remained marginal.²⁴

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