Brief 32: Nokia/NAVTEQ – navigating the non-horizontal merger guidelines 30.09.08
EThe Nokia/NAVTEQ and TomTom/Tele Atlas vertical mergers were considered by the European Commission at the same time as the publication of the Commission’s new Guidelines on non-horizontal mergers (the Guidelines 1), providing an early test of the application of the new regime. The Commission’s main concern was the likelihood of total and partial vertical input foreclosure. Eventually both mergers were cleared without remedies following phase II investigations.
Unlike horizontal mergers, vertical mergers do not combine firms that compete at the same level of the supply chain and so are far less likely to restrict competition. In certain circumstances, however, harmful effects may occur. This Brief considers some of the key issues arising in the analysis of total and partial input foreclosure, with particular reference to the Nokia/NAVTEQ merger. We explain the new terminology adopted by the Commission which distinguishes between ‘foreclosure’ and ‘anticompetitive foreclosure’ and highlight the theory and evidence that the Commission is likely to consider in future cases where input foreclosure is a concern.