Based on the third article of the PDEU, the European Union is exclusively competent in establishing the rules of competition, which are necessary for the common market to function. The Law of EU determines, that the concentrations, which have the dimensions of the European Community, have to notify the European Commission beforehand. Vertical concentrations are formed among companies which function on different, yet complementary levels of the supply chain. In most cases vertical integrations are beneficiary to consumers, because they allow for lower end product prices and for a better quality of delivery. On the other hand, the consequences that affect the competition can also be harmful. The main concern is the possibility of exclusion from the market, especially on markets, where the number of suppliers or distributers is low. We separate two forms of exclusions. Exclusion with raw materials occurs, when it is likely that because of the prevention of access to important materials, the integration raises costs for the competition in the bottom section of the supply chain, meanwhile when in the exclusion of customers is likely, that the merged subject will exclude the competition on the upper section of the supply chain and limit their access to a sufficient client network. The Commission has formed a so called three step approach, to judge the compliance of concentrations with the EU Law, where it studies the abilities to foreclose, incentives and the alleged common impact on an effective competition. In case of a likely anticompetitive effects, the merged subject will have to accept certain commitment, or the Commission will forbid the merger.
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