Clifford Chance

The ECJ's Towercast Judgment: Mergers can be challenged as an Abuse of Dominance

30 March 2023

In its Towercast judgment of 16 March 2023, the European Court of Justice ruled that national competition authorities ("NCAs") and courts can review acquisitions by dominant entities under abuse of dominance rules, if those acquisitions are not notifiable under EU or national merger control laws.

The possibility for NCAs and courts to review future and past transactions even after they have closed, creates significant legal uncertainty and risk for dominant businesses, as well as opportunities for rivals and customers to challenge such transactions. If an NCA finds that a transaction substantially impedes competition, dominant companies could face fines, behavioural obligations, damages claims and, in extreme cases, the break-up of the transaction. While there are some options for dominant businesses to mitigate and clarify these risks, there is no one-size-fits-all solution.

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