1. Exploring the Role of Legal Presumptions under the Convincing Evidence Standard in EC Merger Control Alexandr Svetlicinii European University Institute CLEEN Workshop Panel: Mergers ESRC Centre for Competition Policy, University of East Anglia, Norwich, UK 11-13 June 2008

2. 2 Structure Sophistication of merger assessment Concept of legal presumptions Substantive presumptions: non-horizontals, conduct analysis Procedural presumptions: source of evidence, prospective and retrospective analysis Illegality and its deterrent effect on future conduct Concluding remarks

3. 3 Background SIEC test under new ECMR: reasons and implications Jurisprudence of Community courts Sophistication of merger assessment: - non-horizontals (conduct, effects) - efficiency defence - institutional conflicts

4. 4 Scope of Research Application of economic theories and economic evidence in the legal context of merger assessment: - Assessment of non-horizontal concentrations - Methodology for conduct analysis - Efficiency defence Institutional balance: role of Commission and Community courts in merger assessment

5. 5 Concept of Legal Presumptions US antitrust: per se rules and rule of reason EC merger control: structural presumptions – market share thresholds Present work: Soft presumptions? – substantive/procedural Convincing evidence as rebuttal?

6. 6 Substantive Presumptions Non-Horizontals Tetra Laval: generally neutral or even beneficial for consumers, proof to the opposite – convincing evidence? Chicago and Post-Chicago approaches in Non- Horizontal Guidelines (relevant distinction?) Room for efficiency defence?

7. 7 Substantive Presumptions Conduct Analysis Ability-Incentive-Impact in Community jurisprudence and Non-Horizontal Guidelines Incentives = Commercial interests? (trade-off between costs and profits of foreclosure practices) Correlation with other factors influencing future conduct?

8. 8 Procedural Presumptions: Source of Evidence Specifics of Impala: new legal test for collective dominance? convincing evidence for proving the absence of convincing evidence? Merging parties v. third parties: campaign discounts and PPDs Third party evidence under scrutiny: Commissions questionnaires

9. 9 Procedural Presumptions: Retaliation Mechanism Retrospective v. prospective investigation as the assessment of the risk of the creation of a collective dominance position is not, by definition, based on the existence of a prior common policy, the criterion related to absence of retaliatory measures in the past is wholly irrelevant Theoretic heterogeneity of economic science Inconsistency?: presumption of common pricing policy based on the evidence of past conduct Implications for merger investigations

10. 10 Substantive Presumptions: Illegality and Its Deterrent Effect Taking illegality into account (from Tetra Laval to General Electric): convincing evidence or summary evidence? Established presumption? although it cannot be presumed that Community law will not be complied with…such a possibility cannot be excluded by the Commission Chances? CFI will take account only of conduct which would, at least probably, not be illegal

11. 11 Substantive Presumptions: Illegality and Its Deterrent Effect Presumption of legality – inconsistency with economics Practical difficulties Conceptual disagreement: ex ante v. ex post, enforcement policy and diverging burden of proof Correlation with other factors

12. 12 Concluding Remarks Legal presumptions: tendencies in creation, modification and codification of legal standards Legal presumptions: possible response for increasing sophistication of merger assessment, key tools in the emerging methodology Convincing evidence: framework for rebuttal of legal presumptions? Monitoring and guiding the development of legal presumptions in EC merger control