On 3 July 2001 the European Commission declared the proposed merger between General Electric and Honeywell incompatible with the common market (Commission, Decision of 3 July 2001, Case no COMP/M.2220).
It was the first interdiction of a merger of two US companies by the European Commission where the US authorities had previously allowed it. The main reason for this contradiction is the different perception of the concept of market power. As the merging companies produced complementary goods, the merger led to a decrease of prices. In the US an increase of market power is tolerated if the consumers profit of lower prices. The EC-concept condemns an increase of market power irrespective its consequences.
This thesis aims to explain this conceptual difference by analyzing the EC-system of competition law.