Tetra Laval, a Swedish company that is the world's largest carton-packaging manufacturer, decided to expand into the field of plastic bottle plugs. It sought to buy the French company Sidel, which makes the equipment that blows plastic plugs into milk and soft drink bottles, commonly known as PET technology. The proposed deal was valued at 1.7 billion euros. Tetra purchased Sidel prior to EC approval. The EC Merger Task Force later prohibited the merger on the grounds that the union would be able to "leverage" its dominance in carton packaging to also become dominant in the PET packaging equipment market, thus reducing competition horizontally and vertically. This so-called "leveraging" theory had been used earlier by the Merger Task Force to reject the highly controversial GE/Honeywell merger, despite the fact that the United States does not utilize the concept in antitrust review.
1. What evidence would have supported the Merger Task Force's decision and led to a different result?
2. Is "leveraging" now wrong in the absence of anticompetitive effect in the EU? How could the vertical restrictions have posed more of a competitive threat?