On November 28, 2007, the European Commission adopted guidelines (“Guidelines”) that describe the general analytical framework used by the Commission to evaluate the competitive impact of “non-horizontal” mergers under the EC Merger Regulation. (Non-horizontal mergers include

“vertical” mergers of firms at different levels of the supply chain and “conglomerate” mergers of companies active in closely related, but not directly competing, markets). The Guidelines describe the principal market conditions and scenarios under which the Commission believes competitive

harm can result from these transactions, as well as the conditions that indicate such harm is unlikely to occur.

While most businesses are likely to welcome the Guidelines for providing greater transparency and insight into the Commission’s merger review standards, the principal theories of harm underlying the Guidelines remain controversial among antitrust economists, scholars, and courts. Indeed, the Guidelines have been adopted against a back-drop of criticism leveled at the Commission by the

European Court of First Instance for the analysis of non-horizontal mergers in the Tetra Laval/Sidel and GE/Honeywell judgments.

In addition, while U.S. and European merger enforcement has converged in many ways in recent years, the U.S. agencies have not fully embraced some of the “foreclosure” theories of competitive harm endorsed in the Guidelines. These policy differences among enforcement agencies have

occasionally resulted in different conclusions regarding the lawfulness of transactions (e.g., GE/Honeywell). Thus, despite the welcome transparency offered by the Guidelines, future enforcement efforts against non-horizontal mergers are likely to continue to generate significant debate and criticism given the lack of consensus in this area of law.