The Court of Justice of the European Union (CJEU) has issued a judgment in Case C-376/20 P, concerning the acquisition of Telefónica Europe, known as O2, by Hutchison 3G UK Investments, now CK Telecoms UK Investments Ltd. The CJEU annulled a prior ruling by the General Court that had set aside the European Commission's decision to block the merger.

The CJEU found that the General Court had applied an incorrect standard of proof, requiring the Commission to demonstrate a 'strong probability' of significant impediments to competition, which is stricter than the standard outlined in the Merger Regulation. The Court emphasized that the Commission's economic analysis should not be burdened by such a high threshold when assessing potential competition impacts.

Additionally, the CJEU criticized the General Court for its interpretation of the Merger Regulation, particularly regarding the conditions under which a significant impediment to competition could be established. The Court stated that the General Court's requirement for the Commission to prove both the elimination of competitive constraints and a reduction in competitive pressure was overly restrictive and inconsistent with the regulation's objectives.

The CJEU also pointed out errors in the General Court's assessment of the competitive dynamics between Hutchison and O2, including the misinterpretation of what constitutes an 'important competitive force.' The Court clarified that it is sufficient for a company to have a greater influence on competition than its market share suggests, without needing to demonstrate particularly aggressive pricing strategies.

Furthermore, the CJEU noted that the General Court had distorted the Commission's analysis regarding potential price increases resulting from the merger and had incorrectly assumed that all concentrations lead to standard efficiencies. The CJEU concluded that the General Court failed to conduct a comprehensive assessment of the relevant factors in determining whether the merger would significantly impede competition.

As a result of these findings, the CJEU has referred the case back to the General Court for a complete re-evaluation, taking into account the clarifications provided in this judgment.