The Commission cleared the proposed merger unconditionally finding the parties would not gain market power to harm competition.Retained by Cleary Gottlieb Steen & Hamilton and by BonelliErede Counsel for Essilor and Luxottica, the merging parties, retained Cornerstone Research and Ravi Dhar of Yale University to investigate the validity of specific claims made by the European Commission in its Phase II investigation of the proposed merger.
Essilor is the world’s largest supplier of ophthalmic lenses, and Luxottica is the world’s largest supplier of eyewear with well-known brands such as Ray-Ban and Oakley. The parties sell their products to opticians, who then sell spectacles and sunglasses to consumers. The Commission opened its in-depth (Phase II) investigation to determine whether the merged entity would have the ability to successfully tie or bundle Essilor lenses to Ray-Ban branded products and thus exclude other lens suppliers from the markets. Specifically, the EC claimed:
In order to investigate the EC’s claims from the perspective of the end consumers, Professor Dhar designed and administered double-blind online end-consumer surveys in France, Germany, Italy, Spain and the UK, each in the respondents’ native language. The Commission cleared the merger unconditionally. On the theories of harm assessed by Professor Dhar, the EC noted that “Luxottica’s strongest brands in frames and sunglasses, including Ray-Ban, are generally not essential products for opticians”, and that “[t]he merged company would have limited incentives to engage in practices such as bundling and tying because of the risk of losing customers”. |