## Facts

- The Commission approved a concentration in the potash sector involving Kali und Salz AG and Mitteldeutsche Kali AG under Regulation 4064/89, subject to conditions and commitments.
- The Commission concluded the transaction would not create or strengthen a dominant position, relying in part on a geographic market broader than Germany and rejecting collective dominance between German and French producers.
- French potash producer SCPA and its shareholder EMC were competitors affected by conditions and by commitments concerning restructuring of a jointly owned marketing company linked to the transaction.
- France brought an action for annulment against the merger-approval decision.
- SCPA and EMC brought actions seeking annulment of (i) the conditional approval decision and (ii) a separate Commission communication that “took note” of certain commitments.
- The applicants argued the Commission’s market definition, causal assessment, and dominance analysis were inadequately reasoned and unsupported, particularly regarding collective dominance.

## Issues

1. Whether SCPA and EMC, as third-party competitors, were directly and individually concerned so as to have standing to challenge the conditional merger-approval decision.
2. Whether the Commission’s “taking note” communication regarding commitments produced binding legal effects and was therefore challengeable.
3. Whether Regulation 4064/89 covers collective (joint) dominant positions.
4. Whether the Commission adequately stated reasons and established facts supporting its geographic market definition and its conclusion that the concentration would not create or strengthen (single or collective) dominance, including whether it showed the absence of a causal link between the concentration and any deterioration in competition.
5. What standard of judicial review applies to the Commission’s complex economic assessments in merger control and whether that standard was satisfied.

## Decision

- The Court held that a third party may have standing to challenge a Commission decision approving a concentration subject to conditions where those conditions directly and individually affect the third party’s legal or economic position.
- The Court held the Commission’s mere “taking note” of commitments, without independent binding legal effects, was not a challengeable act; the related action was inadmissible.
- The Court confirmed that collective dominance is within the scope of Regulation 4064/89.
- Applying limited review for complex economic appraisals, the Court found the Commission’s reasoning and substantiation deficient on key elements, including geographic market definition and the alleged absence of a collective dominant position and of a causal link between the concentration and deterioration of competitive structure.
- The Court annulled the merger-approval decision to the extent affected by those defects and ordered the Commission to bear costs.

## Legal Principles

- Collective (joint) dominant positions are covered by the “dominant position” test in Regulation 4064/89.
- A third party is individually concerned when a measure affects it due to attributes or circumstances that distinguish it from others; conditions attached to a merger approval can create such concern when they directly affect the third party’s position.
- Only measures intended to produce binding legal effects that definitively set the institution’s position are actionable in annulment proceedings; a non-binding “taking note” communication is not.
- The Commission has discretion in complex economic matters, but review examines compliance with procedure and reasoning duties, accurate fact-finding, and absence of manifest error or misuse of powers.
- If competitive structure appears to worsen, the Commission must give a properly reasoned and evidentiary basis for concluding that any deterioration is not attributable to the concentration; unsupported assertions are insufficient.
- Partial annulment of a merger decision is possible where the annulled part is severable and the remaining portion stands as a coherent whole without changing the substance of the decision.

## Conclusion

The Court set aside the Commission’s conditional merger approval for inadequate reasoning and substantiation on market definition, causation, and collective dominance, while confirming that collective dominance falls within EU merger control and clarifying both third-party standing and the limits of review for complex economic assessments.


French Republic v. Commission, Joined Cases C-68/94 & C-30/95, 1998 E.C.R. I-1375 (C.J.E.C. 1998)