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Outlook for 2011 of Merger Control in the EU: First Prohibition Decision in More Than Three Years

February 15, 2011

By Paul Hastings Professional

For just the 21st time in the 20-year history of EU merger control and the first time in more than three years, the European Commission has prohibited a proposed merger outright. On January 26, 2011, the Commission prohibited, on the basis of the EU Merger Regulation, a proposed merger between Greeces two largest airlines: Aegean Airlines and Olympic Air. The Commission considered that the merger would have resulted in a quasi-monopoly on the relevant air transport market since, together, the two carriers control more than 90% of the Greek domestic market.

This is the first prohibition decision since the Ryanair/Aer Lingus case in 2007, which also concerned the air transport market.

These two most recent prohibition decisions show striking similarities, in that in both cases the proposed merger involved airlines that operated out of a hub in a national capital: Dublin in the case of the 2007 decision, Athens in the case of the 2011 decision.