The Towercast Judgment: the baseless criticism : Has the Towercast judgment created a materially uncertain

On March 16, 2023, the CJEU issued its preliminary ruling in the Towercast case. The answer given by the CJEU was that Article 21(1) of the Merger Regulation did not prevent national competition authorities in the Member States from ap-plying Article 102 TFEU to acquisitions. The background to the case before the CJEU was that Towercast considered that its competitor, TDF, had abused its dominant position by acquiring its competitor, Itas. Towercast appealed to the Paris Court of Appeal against the decision of the French competition authority, which stated that it did not have the power to review the acquisition under Article 102 TFEU. The CJEU concluded that national competition authorities in the EU may apply Article 102 TFEU to merger control. Following the judgment, legal scholars and practitioners have argued that the decision has led to a materially uncertain legal situation for undertakings. Legal scholars and practitioners have further argued that the legal uncertainty may lead to increased financial and administrative burdens for undertakings acquiring other undertakings. In light of the criticism raised, the overarching question has arisen as to whether and in what way the Towercast judgment has created a ma-terially uncertain legal situation. The paper critically analyzes the legal conse-quences of the Towercast judgment in the light of the alleged criticism. The paper aims to clarify whether and to what extent the Towercast judgment has indeed created a materially uncertain legal situation. To answer the overall question, the paper analyzes several issues raised by critics. These are whether the Towercast judgment has changed the substantive test in Article 102 TFEU regarding acquisitions as abuse, what type of sanctions undertakings risk in the event of a breach of Article 102 TFEU as a result of acquisitions, whether undertakings risk double control, and whether the Tower-cast judgment’s retroactive effect is consistent with EU law. The paper uses the EU legal method to investigate whether and the extent to which the legal situa-tion as a result of the Towercast judgment is consistent with EU law in light of the criticism raised. The paper concludes that the Towercast judgment has not led to an uncertain legal situation for undertakings, despite the extensive criticism raised in the wake of the Towercast case. The analysis shows that the Towercast judgment has not changed the substantive test, that undertakings that violate Article 102 TFEU, as a result of acquisitions, can expect high fines and structural remedies, that under-takings do not risk double control, and that the Towercast judgment’s retroactive effect is consistent with EU law.