INTRODUCTION

In 2013, at the peak of the ongoing Greek economic crisis, the Greek air carrier Aegean Airlines notified its acquisition of Olympic Air, a subsidiary of the investment group Marfin. Both companies provided services in the air transport market. Olympic Air had not been profitable since 2009 and had received financial support from its shareholder Marfin. According to the Commission's market investigation, Olympic Air would have been forced out of the market in the near future due to financial difficulties. The Commission's market investigation also found that the takeover of Olympic Air would result in a monopoly in the Greek air transport market on several air routes. Nonetheless, the Commission cleared the transaction unconditionally.

The decision caught a lot of attention considering the serious competitive impact of the transaction. The decision was based on the so-called failing firm defence. According to this analytic model an “anti-competitive” merger is to be cleared if – absent the merger – competition would be the same or even worse. The Commission's investigation found that if Olympic had not been acquired by Aegean, it would have left the market in the near future and Aegean would have become a monopolist anyway.

In this chapter I focus on merger control during and after the financial crisis with special regard to so-called rescue mergers and the failing firm defence. I argue that there is evidence in recent decisions that the European Commission relaxed its stance on mergers after the financial crisis. Therefore I provide some background considering the Commission's concept of the failing firm defence. I also discuss the recent developments with regard to counterfactual concepts. Recent cases suggest that the Commission is shifting towards a more relaxed approach to the failing firm defence and is opening the doors for a wider counterfactual analysis.

EUROPEAN MERGER CONTROL REGIME

In Europe, all EU Member States, with the exception of Luxembourg, employ a national merger control system. With the exception of the United Kingdom, all national merger control laws stipulate a mandatory preventive notification system; hence, qualified transactions have to be notified to the relevant authorities prior to the implementation of the transaction.