On September 9, in a landmark judgment, the General Court upheld the Commission’s 2023 decision prohibiting Booking’s acquisition of eTraveli. The ruling has far-reaching implications for acquisitions by dominant firms in markets characterized by network effects and allegedly high entry barriers. The Court held that the Commission may rely on novel theories of harm to challenge mergers that consolidate or perpetuate pre-merger competitive conditions, reinforce network effects, and allow an already-dominant company to create an “ecosystem” that rivals cannot replicate, even if that merger involves only a de minimis improvement in the dominant firm’s pre-existing offering or market position.

Background

The German food retail sector has long faced intense scrutiny from the Federal Cartel Office (FCO). Following a major 2014 sector inquiry into buyer power, the regulator has consistently maintained a strict stance on industry dealmaking: blocking EDEKA’s proposed takeover of Kaiser’s Tengelmann in 2015 (a decision later overturned by ministerial permission in 2016), approving Rewe’s acquisition of Coop in 2016 only subject to divestments, and imposing stringent remedies on EDEKA and Kaufland’s acquisition of Real stores in 2020. EDEKA’s acquisition of 178 Tegut stores marks the latest chapter in these ongoing enforcement efforts. Germany’s Monopolies Commission, an advisory body to the government, criticized the FCO’s clearance as a “blow to competition,” targeting in particular the FCO’s finding of no collective dominance in the sales market despite the “Big Four”’s combined market share exceeding 90%. However, despite potential political influence, no formal process exists to overturn the FCO’s decision.

The UK Competition and Markets Authority (CMA) announced on Wednesday that it has opened three new consumer protection investigations into Trainline, Virgin Atlantic, and RED Driving School over concerns that mandatory fees were not included in the headline prices.[1]