The Official Journal of the European Union (C 265/6 - 18.10.2008) has published the guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings.

The guidelines develop guidance as to how the Commission assesses concentrations where the undertakings concerned are active on different relevant markets. In this document, these concentrations will be called ‘non-horizontal mergers’. The purpose of is to concentrate on the competition aspects that are relevant to the specific context of non-horizontal mergers. In addition, it will set out the Commission's approach to market shares and concentration thresholds in this context.

Two broad types of non-horizontal mergers can be distinguished: vertical mergers and conglomerate mergers.

VERTICAL MERGERS

Vertical mergers involve companies operating at different levels of the supply chain. For example, when a manufacturer of a certain product (the ‘upstream firm’) merges with one of its distributors (the ‘downstream firm’), this is called a vertical merger. The guidelines explain the process by the following way:

A. Non-coordinated effects: foreclosure.
A.1. Input foreclosure.
A.1.A. Ability to foreclose access to inputs.
A.1.B. Incentive to foreclose access to inputs.
A.1.C. Overall likely impact on effective competition.

A.2. Customer foreclosure.
A.2.A. Ability to foreclose access to downstream markets.
A.2.B. Incentive to foreclose access to downstream markets.
A.2.C. Overall likely impact on effective competition.

B. Other non-coordinated effects.

C. Coordinated effects.
- Reaching terms of coordination.
- Monitoring deviations.
- Deterrent mechanisms.
- Reactions of outsiders.

CONGLOMERATE MERGERS

Conglomerate mergers are mergers between firms that are in a relationship which is neither horizontal (as competitors in the same relevant market) nor vertical (as suppliers or customers). In practice, the focus of the present guidelines is on mergers between companies that are active in closely related markets (e.g. mergers involving suppliers of complementary products or products that belong to the same product range). The guidelines explain the process by the following way:

A. Non-coordinated effects: foreclosure.
A.1 Ability to foreclose.
A.2 Incentive to foreclose.
A.3 Overall likely impact on prices and choice.

B. Co-ordinated effects.