Marina Androulakakis and Tania Patsalia contribute an article to the Vogel Competition Newsletter in relation to the Hellenic Competition Commission’s first merger clearance decision based on the failing firm defense.
By means of its decision 827/2023, the Hellenic Competition Commission (HCC) unanimously approved, in August 2023, the merger by absorption of ANEK LINES SA (ANEK), one of the oldest Greek passenger shipping companies, by Attica Group (Attica), a leader in the provision of passenger and cargo ferry services in the Eastern Mediterranean Sea. According to the press release of 7.8.2023, the HCC found that the transaction does not raise serious doubts as to its compatibility with the requirements for the functioning of competition in the relevant markets as per the provisions of the Greek Competition Act. The cleared concentration involves the markets for the provision of maritime transport services for passengers, vehicles and trucks in the Greek territory and in port pairs in both Crete and the Adriatic and the market for the provision of maritime transport services through public service contracts.
In clearing the transaction, the HCC took into account the target’s status (firm in difficulty) and applied for the first time the failing firm defense. In particular, the HCC applied the three criteria of the failing firm defense, as these have been formulated by the European Commission’s precedent, and considered that: (i) the target company would be forced to exit the market in the near future due to its financial distress, (ii) there was no other alternative acquisition option, less harmful to competition, other than the notified concentration, and (iii) there was no credible interest in acquiring the target’s assets which, therefore, would exit the market. In approving the transaction, the HCC concluded that the competitive structure in the affected markets would not be worse as a result of the merger and, as such, was not causally related to it. This is the first failing firm defense approval decision of the HCC and, therefore, forms a significant precedent.