COMPETITION • EUROPEAN LAW • MERGERS
A merger is vertical when it is carried out between operators located at different levels of the production chain. This is the case in the event of the acquisition of a supplier or distributor, which may result in the elimination of a source of supply or an outlet for competitors or the creation of a state of economic dependence.
Vertical mergers are in principle less harmful to competition than horizontal mergers: they do not eliminate competition between the parties and are likely to generate efficiencies. However, they may have negative effects when they make it more difficult for competitors to enter the new entity’s market through input or customer foreclosure.