Seeing vertical mergers through a different lens? Implications from EssilorLuxottica/GrandVision

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In 2021, the European Commission concluded its in-depth review of EssilorLuxottica/GrandVision, in which it required structural remedies to approve the transaction. Contrary to previous vertical mergers, the Commission’s concerns did not entail a refusal to supply downstream rivals (total input foreclosure); rather, its concerns were exclusively focused on a more gradual theory of harm, related to the changes in pricing incentives that the merger could bring about. Such changes in pricing incentives were measured with vertical price pressure tests, which were used by the Commission for the first time in this investigation.

This Brief discusses the Commission’s assessment of this case and its possible implications for future vertical merger investigations.