General Electric v. Commission

General Electric (GE) (defendant) wanted to merge with Honeywell, a vertical merger that would create conglomerate effects in various aviation markets. GE had a dominant position in the markets for making jet engines for commercial and regional airplanes, and its subsidiary GECAS was the largest leaser of airplanes to airlines. GECAS and GE engaged in reciprocal dealing; GECAS bought and leased planes only with GE engines. Honeywell had a leading position in the avionics and non-avionics equipment markets. Avionics equipment included products used for aircraft control, navigating, and communication. Non-avionics products included airplane parts like wheels, brakes, and power systems. The European Commission (commission) (plaintiff) opposed the merger, arguing that it would impede competition by creating or strengthening the merged firm’s dominant position in the jet engines, avionics, and non-avionics markets due to conglomerate effects. Specifically, the commission argued that the merged firm would continue GE’s practice of reciprocity by buying and leasing only aircraft using GE and Honeywell products going forward, reducing competition in the jet engine, avionics, and non-avionics markets. GE argued that it did not intend to take any anticompetitive steps after the merger and that the commission had not conducted any analysis demonstrating that its reciprocal-dealing practice would impede competition. GE appealed the commission’s decision to block the merger to the European Union Court of Justice.