26
markets and (b) the ability of the holders of capital to move money around the world in search of higher
rates of return.”
15 This is precisely the argument that found itself at the forefront of European debates in the 1990s
regarding the crisis of the welfare state and its dependence on capital.
16 Before the MCR was established as the third strand of European Competition Policy, the EU regulated
its market via articles 81 (ex 85), 82 (ex 86) and 86 (ex 90), which made up its antitrust policy. The
second strand is the regulation of state aids of which articles 87 to 89 (ex 92 to 94) apply.
17 Both the Commission and capital wanted all joint ventures to be considered under the MCR. However it
was negotiated that only concentrative joint ventures would be scrutinized under the merger rules. All
other co-operative joint ventures would have to be scrutinized under Article 81. The other concession
was the raising of the original 2000 million Euro world-wide turnover threshold to 5000 million Euro.
18 Since the MCR came into force in 1990 there have been two Commission led Green Papers that have
amended it. The first 1997 Green Paper focused on three main issues: the expansion of the MTF’s
jurisdiction by adding a new turnover threshold; allowing all full function joint ventures to be analyzed
under the MCR; and the adding of a provision so that companies can propose commitments during the
first stage of proceedings. The Green Paper of 2002 saw a review of the merits of the ‘dominance test’
used under the MCR and the ‘significant lessening of competition test’ used in the US. It considered the
possibility of amending the MCR because of the desirability of international convergence of merger
control. It also recognized the need for the Commission to move from ‘soft’ qualitative analysis to the
use of more econometric tools for quantitative analysis. Concerns regarding the combined role of
investigator and decision maker were also acknowledged.
19 Although Nestle/Perrier was the first major collective dominance case considered by the MTF, there
were preceding cases where this topic did come up; most notably in Alcatel/AEG Kabel and Thorn
EMI/Virgin Music.
20 Collective dominance is a term broadly used to describe a market situation where a small
number of large firms in a given market are able to co-ordinate their actions and maintain prices above
the competitive level. Collective dominance differs from a cartel because co-ordination need not be
explicit.
21 It is worth noting that these processes - Phase I and II investigations - are set out by the MCR and are
accompanied by strict time lines. See Council Regulation 4064 (1989).
22 The most notable collective dominance cases after Nestlé/Perrier were the Kali + Salz (1993),
Gencor/Lonrho (1996), and Air Tours/First Choice(1999a) merger cases. However, one of the most
Important decisions came from the ECJ in the form of the Gencor/Lonrho appeal case (1999b) where
the Court gave the Commission a legal basis from which it could actively pursue a collective dominance
policy.
23 Statistics were formulated by Morgan Stanley for the Commission.
24 One of the findings by the MTF here was that the French bottled water market was a mature and
stable one dominated by long-time established brands which attracted great consumer loyalty. In the
past there have been numerous efforts by other non-French companies to enter the market: all of them
failed. This made for a ‘great prize’ for Nestlé if the merger was allowed.
25 It is an established norm that the MTF does not consider employment concerns when reviewing mergers.
Another high-profile merger decision that was openly questioned by labour was the WorldCom/Sprint
merger of 1999 where unions protested outside Commission headquarters.