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/ The EU Merger Regulation
Contents
1. Introduction 1
2. Concentrations 3
3. EU dimension 5
4.Pre‑notificationallocationofcasesbetweentheCommissionandNCAs 8
5.ProcedureforthenotificationofcasestotheCommission 11
6.Exclusivejurisdictionandexceptions(includingpost‑notification reallocation of cases) 17
7.Substantiveappraisalofconcentrations 18
Annex 1: Outline of national merger control regimes in the EEA 25
Annex 2: Merger Regulation statistics (1990‑2017) 31
1 / The EU Merger Regulation
1. Introduction
1.1 The EU Merger Regulation provides a mechanism for the control of mergers and acquisitions at the Europeanlevel.TheoriginalMergerRegulationwasadoptedin1989.1ItwasrevisedandreplacedbythecurrentversionoftheMergerRegulationwhichcameintoforceon1May2004.2
When does the Merger Regulation apply?
1.2 TheMergerRegulationappliestoany“concentration”thathas,orisdeemedtohave,an“EUdimension”:
• “concentration”:Thisconceptiswidelydefinedtocovermergers,acquisitionsofcontrolandthecreation of full‑function JVs. The concept is considered further at Chapter 2;
• “EU dimension”:AtransactionhasanEUdimensionwherecertainturnoverthresholdsaremet,asdescribedatChapter 3.
What happens if the Merger Regulation applies?
1.3 Jurisdiction:TheMergerRegulationlaysdowntheconditionsunderwhichtheEuropeanCommissionortheNationalCompetitionAuthorities(NCAs)havejurisdictionoverconcentrations.Generally,concentrationswithanEUdimensionfalltobeinvestigatedbytheCommission,whereasthosewithoutanEUdimensionfalltobeinvestigatedbytheNCAsinaccordancewiththeirdomesticmergercontrolrules;summariesofthosenationalrulesinthe28EUMemberStates(plusthethreeEFTAstatespartyto the EEA Agreement3–Iceland,LiechtensteinandNorway)areincludedatAnnex 1. As an exception tothisgeneralrule,thereareproceduresunderwhichpartiescanengageinpre‑notificationcontactswiththeauthoritieswithaviewtoreallocatingjurisdictionbetweentheCommissionandtheNCAs,asconsidered at Chapter 4.Proceduresalsoexistforthepost‑notificationreallocationofcasesbetweentheCommissionandtheNCAs,andincertainlimitedcircumstancesMemberStatesmaystillapplytheirnational laws to concentrations with an EU dimension (as considered at Chapter 6).
1.4 Mandatory notification and waiting period: Concentrations falling under the Merger Regulation mustinprinciplebenotifiedtotheCommissionandgenerallycannotbeimplementedunlessanduntiltheCommissiondeclaresthemcompatiblewiththeinternalmarket.TheImplementingRegulationincludestheformstobecompletedwhennotifyingconcentrationsundertheMergerRegulation.4TheCommissionhasalsoissuedanumberofNotices(thecurrentversionsofwhicharereferredtointhispublication)explaininghowitappliesvariousaspectsoftheMergerRegulation regime.
1.5 Commission investigations:ConcentrationsnotifiedundertheMergerRegulationareinvestigatedbytheCommissiontodeterminewhetherornottheyarecompatiblewiththeinternalmarket(seeChapter 5). OnceaconcentrationisformallynotifiedtotheCommission,inmostcasestheinvestigationiscompletedwithina“PhaseI”periodof25workingdays.IftheCommissionopensafurtherin‑depth“PhaseII
1 CouncilReg.(EEC)4064/89(OJ1989L395/1,30.12.1989),asamendedbyCouncilReg.(EC)1310/97(OJ1997L180/1,9.7.1997;corrigendumOJ1998L40/17,13.2.1998).
2 CouncilReg.(EC)139/2004(OJ2004L24/1,29.1.2004).3 AgreementontheEuropeanEconomicArea(OJ1999L1/3,3.1.1999),asamended.4 CommissionReg.(EC)802/2004(OJ2004L133/1,30.4.2004),asamendedbyCommissionReg.(EC)1033/2008(OJ2008L279/3,
22.10.2008)andCommissionImplementingReg.(EU)1269/2013(OJ2013L336/1,14.12.2013).
2 The EU Merger Regulation /
investigation”,thiswilltypicallytakeafurthersixmonthsorso.Thevarioustimetablesforthehandlingof cases under the Merger Regulation are outlined in Chapters 4 and 5.AllsignificantMergerRegulationdecisionsarepublished(subjecttoremovalofbusinesssecrets),providingusefulinsightsintohowtheCommissionhasdefinedmarketsinpreviouscases.
Statistics
1.6 SincetheimplementationofthefirstMergerRegulationin1990,theCommissionhasreceivednearly7,000notifications.Inrecentyearsithashandledaround300notificationsayear(witharecordhighof402in2007).ForstatisticsoncasesnotifiedundertheMergerRegulation,seeAnnex 2.
3 / The EU Merger Regulation
2. Concentrations
2.1 Theconceptof“concentration”includes:
• the merger oftwoormorepreviouslyindependentundertakings;
• the acquisition of direct or indirect control(whetherbypurchaseofsecuritiesorassets,bycontractorotherwise)ofthewholeorpartsofoneormoreotherundertakings;or
• theestablishmentofaJVwherethisinvolvestheacquisitionofjoint control of a full‑function JV undertaking.
When is there control?
2.2 Control iswidelydefinedandisconstitutedbyrights,contractsoranyothermeansthat,eitherseparatelyorincombination,conferthepossibilityofexercisingdecisive influence over an undertaking.5Decisiveinfluenceariseswhereapartyacquirestheabilitytodetermineanundertaking’scommercialstrategy.
2.3 Thereisnodefinedshareholdinglevelatwhichdecisiveinfluencearises.Dependingonthecircumstances (including the size of other shareholdings and the existence of veto rights and other powersgrantedtoshareholders),theacquisitionofaminorityshareholdinginanotherundertakingmayconferthepossibilityofexercisingdecisiveinfluence,inparticulariftheminorityshareholderacquirestheabilitytoblockstrategiccommercialdecisions(e.g.theadoptionofannualbudgetsorbusinessplans)ortheappointmentofkeymanagement.6
2.4 Atransactiongivesriseto“sole control” whereitresultsinasingleundertakinghavingthepossibilityofexercisingdecisiveinfluenceoverthewholeorpartofanotherundertaking.Wheretwoormoreundertakingstogetheracquiretheabilitytoexercisedecisiveinfluenceoveranotherundertaking,thereissaidtobe “joint control”.
Full‑function JVs
2.5 TheestablishmentofaJVundertakingwillgiverisetoaconcentrationwherethefollowingconditions are met:
• joint control:TwoormoreparentsmusttogetherexercisedecisiveinfluenceovertheJVundertaking,e.g.throughrightsofvetooverstrategicmatterssuchastheadoptionofannualbudgetsortheappointmentofseniormanagement;
• autonomy:TheJVmusthavesufficientpersonnel,facilitiesandresourcestoenableittoperformthefunctionsnormallycarriedoutbyotherundertakingsoperatingonthesamemarket.IftheJVisrequiredtotakemostofitsrawmaterialrequirementsfromitsparentsortosellitsproductionmainlytoitsparents,thiswillgenerallyindicatethattheJVisnotsufficientlyautonomous;and
• durability:TheJVmustbeestablishedona“lastingbasis”.
5 Forfurtherguidance,seetheCommission’s2007ConsolidatedJurisdictionalNotice(OJ2008C95/1,16.4.2008).6 InJuly2014theCommissionpublishedaWhitePaperentitledTowards more effective EU merger control,outliningproposalstoamend
theMergerRegulationtobringminorityshareholdingsthatfallshortofcontrolwithinitsscope.InMarch2015itpublishedtheresultsofapublicconsultation,butcurrentlynolegislativechangeshavebeenintroducedanditisnotcurrentlyapriorityfortheCommission.
4 The EU Merger Regulation /
2.6 JVsthatdonotfallwithintheMergerRegulation–becausetheyarenot“full‑function”inthissense(orbecausetheylackan“EUdimension”)–maybesubjecttoreviewbytheNCAsundernationalmergercontrolrules.Insomecases,theymayalsobesubjecttoinvestigation(bytheCommissionortheNCAs)underArticle101and/or102TFEU.7
Changes in the nature of control
2.7 Aconcentrationwillalsoarisewherethereisadurablechangeinthequalityornatureofcontrolofanundertaking.Thus,therewillbeaconcentrationwhereapartywithjointcontrolofanundertakingmovestoapositionofsolecontrol.
2.8 Similarly,theremaybeaconcentrationasaresultofchangesinthenumberofshareholdersthatjointlycontrolaJVundertakingfollowingthewithdrawalorentryofoneormorecontrollingshareholders.
7 Paragraph91oftheConsolidatedJurisdictionalNoticealsostates:“...atransactioninvolvingseveralundertakingsacquiringjointcontrolofanotherundertakingorpartsofanotherundertaking...fromthirdpartieswillconstituteaconcentration...withoutitbeingnecessarytoconsiderthefull‑functionalitycriterion.”
5 / The EU Merger Regulation
3. EU dimension
3.1 TheMergerRegulationappliestoconcentrationswithan“EUdimension”.WhetheratransactionhasanEUdimensiondependsonwhetheritsatisfiescertainturnoverthresholds.Thesethresholdsarepurelyjurisdictional innature.Theyareappliedwithoutregardtosubstantivecompetitionissues,tothenationalityoftheparties,tothecountrywherethetransactiontakesplaceortothelawapplicabletothetransaction.Asaresult,theMergerRegulationcanapplytotransactionswithlittleor no EU connection.
Turnover thresholds
3.2 There are two alternative setsofthresholds(asillustratedbytheflowchartonpage7):
• Original thresholds:Theoriginalthresholds(whichdatebackto1989)remaininforce.Theyapplytheconceptof“one‑stopshopping”attheEuropeanleveltoanydealthatmeetsthefollowingtests:
– Worldwide turnover test:Thecombinedworldwideturnoverofalltheundertakingsconcernedis more than €5,000 million;
– EU‑wide turnover test:EachofatleasttwooftheundertakingsconcernedhasEU‑wideturnover of more than €250 million; and
– Two‑thirds rule:Thereisno“EUdimension”ifeachoftheundertakingsconcernedachievedmore than two‑thirdsofitsEU‑wideturnoverinoneandthesameMemberState.
• Alternative thresholds:WhentheoperationoftheoriginalMergerRegulationwasreviewedinthemid‑1990s,therewasbroadsupportforthe“one‑stopshop”principletobeextendedtodealsthatwouldotherwisebesubjecttomergercontrolbythreeormoreNCAsintheEU.Therewasconsiderabledebateabouthowthismightbeachieved.Eventuallysomefairlycomplexchangeswereintroducedin1998andtheseremaininplaceunderthecurrentMergerRegulation.Dealsthatdonotmeettheoriginalthresholdsneverthelesshavean“EUdimension”iftheymeetallthefollowing tests:
– Lower worldwide turnover test:Thecombinedworldwideturnoverofalltheundertakingsconcerned is more than €2,500 million;
– Lower EU‑wide turnover test:EachofatleasttwooftheundertakingsconcernedhasEU‑wideturnover of more than €100 million;
– Additional three Member States test: In each of at least three EU Member States:
> thecombinednationalturnoverofalltheundertakingsconcernedismorethan€100 million; and
> eachofatleasttwooftheundertakingsconcernedhasnationalturnoverofmorethan €25 million; and
– Two‑thirds rule:Thereisno“EUdimension”ifeachoftheundertakingsconcernedachievedmore than two‑thirdsofitsEU‑wideturnoverinoneandthesameMemberState.
6 The EU Merger Regulation /
Undertakings concerned
3.3 Ingeneral,the“undertakingsconcerned”forthesepurposesaretheundertaking(s)acquiringsole(orjoint)controlandtheundertakingoverwhichcontrolisbeingacquired.8Forthepurposeofcalculatingtheturnoveroftheundertaking(s)acquiringcontrol,theturnoverrelatingtoallentitiesbelongingtothegroupmustbeconsidered.Thisiswiderthantheconceptoflegalcontrol,andmayresultintheinclusionofcompaniesthatwouldnotinothercontextsbeconsideredaspartofthe group.
3.4 Whereanacquisitionismadebya JV,theCommissionlooksattheeconomicrealityoftheoperation.IftheJVissimplyanacquisitionvehicleforitsparentcompanies,theCommissiontreatseachparentasanundertakingconcerned.Ontheotherhand,wheretheacquisitioniscarriedoutbyapre‑existingfull‑functionJVundertaking,theCommissionusuallytreatstheJVasasingleacquiringundertaking.
Calculation of turnover
3.5 Theturnovertobeconsideredistheamountderivedfromthesaleofproductsandtheprovisionofservices.Turnovermustbeallocatedaccordingtowherethegoodsorservicesaredelivered;thisisgenerallythegeographiclocationofthecustomer.Itmustcorrespondtotheordinaryactivitiesofeachundertakingconcernedinitspreviousauditedfinancialyear,adjustedtoaccountforacquisitionsanddivestmentsthatoccurredafterthedateoftheauditedaccounts.Theturnoverconsideredis“net”turnover,aftersalesrebates,valueaddedtaxandothertaxesdirectlyrelatedtoturnover;intra‑groupturnovershouldbedisregarded.9
3.6 Thewholeturnoverofallcompaniesunderthesolecontrolofanundertakingconcernedmustbeaggregated.ForJVundertakingsjointlycontrolledbyanundertakingconcernedandthirdparties,theJV’sturnoverisattributedequallybetweenitscontrollingparents,irrespectiveofthesizeoftheirfinancialorvotinginterests.
8 Accordingly,forthepurposeofcalculatingthevendor’sturnover,onlytheturnoverattributabletothepartsthatarethesubjectofthetransactionistobetakenintoaccount.
9 Therearespecialrulesforcalculatingtheturnoverofbanks(andotherfinancialinstitutions)andinsurancecompanies.
7 / The EU Merger Regulation
EU Merger Regulation thresholds
No No
No No
No
No
Original Test Alternative Test
IneachofatleastthreeMemberStatesisthecombinednationalturnoverofallundertakingsconcerned more than €100 million?
EU Merger Regulation applies EU Merger Regulation does not apply
Is the EU turnover of each of at leasttwoundertakingsconcernedmore than €250 million?
Is the EU turnover of each of at leasttwoundertakingsconcernedmore than €100 million?
Isthecombinedworldwideturnoverofallundertakingsconcerned more than €5,000million?
Doeseachoftheundertakingsconcerned achieve more than two‑thirds of its EU turnover in oneandthesameMemberState?
Isthecombinedworldwideturnoverofallundertakingsconcerned more than €2,500million?
IneachofthosethreeMemberStates is the turnover of each of atleasttwoundertakingsmorethan €25 million?
Yes
YesNo
Yes
Yes
Yes
Yes
Yes
8 The EU Merger Regulation /
4. Pre‑notification allocation of cases between the Commission and NCAs
4.1 Concentrationswithan“EUdimension”mustinprinciplebenotifiedtotheCommission,whichhasexclusivejurisdictiontoinvestigate,withouttheNCAsbeingabletoapplytheirnationalmergercontrolrules.ByvirtueoftheEEAAgreement,theCommission’sexclusivejurisdictionisalsoextendedtocoverthethreeEFTAcontractingstatesifsuchan“EUdimension”isestablished.10Conversely,theNCAsareinprinciplecompetenttoinvestigatemergersthatdonothaveanEUdimension(subjecttotheirnationalrules,summarisedatAnnex 1,beingapplicable),withouttheCommissionhavinganyjurisdiction to investigate.
4.2 Thissimpleallocationofjurisdictionis,however,subjecttoanumberofexceptions(asillustratedon page 10).11Forthesepurposes,itisconvenienttodistinguish:
• pre‑notification reallocation of jurisdiction: The Article 4(4) and 4(5) referral procedures allow forthepossibilityofcasestobereallocatedattheinitiativeoftheparties.Theseproceduresareconsideredbelow;and
• post‑notification reallocation of jurisdiction: The Article 9 and 22 referral procedures allow for notifiedcasestobereferredfromtheCommissiontotheNCAsorviceversa.Theseproceduresareconsidered at Chapter 6.
Article 4(4) pre‑notification referrals from the Commission to a NCA
4.3 TheremaybesomecircumstancesinwhichpartiestoaproposedconcentrationwithanEUdimensionconcludethatitwouldbesimplerormoreadvantageousiftheirtransactioncouldbereviewed(eitherinwholeorinpart)attheMemberStatelevelratherthanbytheCommissionundertheMergerRegulation.Thismightbethecase,forexample,iftheonlycompetitionissuesofanysignificancearelimitedtooneMemberState(particularlyiftheyareissuesoverwhichtherelevantNCAwouldlikelyseektoassertjurisdiction under Article 9 – see Chapter 6).
4.4 Forsuchcases,avoluntaryprocedureexistsunderwhichthepartiesmayopttohavethecasereferredtotheNCAinquestioninsteadofnotifyingittotheCommission.Tousethisprocedure,thepartiesmustsubmitareasonedsubmission(usingFormRS)12totheCommission,whichwillthenforwardcopiestoalltheNCAs.13TheidentifiedNCAthenhas15workingdaysfromreceiptoftheFormRSinwhichtoagreeorobjecttotheproposedreferral.IftheNCAagrees,theCommissionmustthendecide(withinamaximumof25workingdaysfromthesubmissionoftheFormRS)whetherornottomakethereferral.14
10 SeeArt.57oftheEEAAgreement:theturnoverthresholdsappliedrelatetotheactivitiesoftheundertakingsconcernedintheEUonly.However,theparties’turnoverintheEFTAStateswillberelevanttoestablishingthedegreeofinvolvementoftheEFTASurveillanceAuthorityandEFTANCAsunderProtocol24oftheEEAAgreement.
11 Forfurtherguidance,seeCommissionNoticeoncasereferralinrespectofconcentrations(OJ2005C56/2,5.3.2005).12 FormRSisannexedtotheCommission’s2004ImplementingRegulation,asamended.TheFormRSandexplanatorynotespublished
bytheCommission(availableonDGCompetition’swebsite)includeinformationontheextensionoftheproceduretotheEFTAcontracting states.
13 TheCommissionisobligedtodothis“withoutdelay”.14 InitsWhitePaperofJuly2014entitledTowards more effective EU merger control (see footnote 6above),theCommission
proposedreformstomakethecasereferralsystemmoreefficient.
9 / The EU Merger Regulation
4.5 IftheCommissionrefersthecaseinwhole,itwillthenonlybenecessaryforthepartiestonotifythecasetotheNCAinquestion(whichwillreviewthecaseunderitsapplicablenationalmergercontrolrules).IftheCommissionagreestoapartialreferral,theaspectsconcernedwillbereviewedbytheNCAinquestionandthepartieswillneedtomakeanotificationtotheCommissionundertheMergerRegulationinrespectoftheremainingaspectsoftheconcentration.Ineithercase,theconcentrationcontinuestohavean“EUdimension”suchthattheotherNCAswillnotbeabletoapplytheirnationalmergercontrolrules(unlesstheCommissionweretoagreetoasubsequentArticle 9 request).
Article 4(5) pre‑notification referrals to the Commission
4.6 Manycross‑bordermergersthatfallbelowtheMergerRegulation’sthresholdswillinsteadbesubjecttonotificationandreviewbyanumberofNCAswithintheEEA.Recognisingthattherecouldbeadvantagestobusinessifsomeofthesetransactionscouldbenefitfromthe“one‑stopshop”principle,avoluntaryprocedureexistsunderwhichpartiesmayseektohavecaseshandledbytheCommissioniftheywouldotherwisehavebeensubjecttoinvestigationbytheNCAsinatleastthreeMemberStates.
4.7 Totakeadvantageofthesepre‑notificationprocedures,beforenotifyingtoanyoftheNCAs,thepartiesmustprepareandsubmitareasonedsubmissiontotheCommission(usingFormRS),whichwillthenbeforwardedtoalltheNCAs.EachoftheNCAsthatwould,inprinciple,havejurisdictiontoinvestigateunderitsnationalmergercontrolrulesthenhas15workingdaysfromreceiptoftheFormRSinwhichtoobject.IfnoNCAobjects,thetransactionisdeemedtohaveanEUdimensionandmustbenotifiedtotheCommission.ButifanyoftheMemberStatesobjects(evenifonlyoneofthem)thenjurisdictionisnottransferredandthedealremainssubjecttonotificationandreviewattheMemberStatelevel.
10 The EU Merger Regulation /
Pre‑notification and post‑notification referral procedures (and Phase I procedure)
Note:“WD”indicatesworkingdays,i.e.excludingofficialCommissionholidays.
IsimpactofconcentrationmainlyinoneMemberState? (i.e. prima facie local or national impact)
IsconcentrationnotifiabletothreeormoreNCAs? (i.e.primafaciecross‑borderimpact)
Art. 4(4) pre‑notification referral procedure to NCAs• InformalcontactswithCommissionandNCAs• FormallysubmitFormRStoCommission
(identifyingNCA(s)towhichwholeorpartialreferral requested) following which: – identifiedNCAhas15WDs(fromreceipt)inwhichtoobject
– Commissionthenhasupto25WDs(fromsubmissionofFormRS)inwhichtomakereferral
• Even if referral made (in whole or in part) concentrationcontinuestohave“EUdimension”,suchthatnotnotifiabletootherNCAs
Art. 4(5) pre‑notification referral procedure to Commission• InformalcontactswithCommissionandNCAs• FormallysubmitFormRStoCommission
(identifyingNCAswithjurisdiction)followingwhich: – NCAswithjurisdictionhave15WDs(fromreceipt)inwhichtoobject
– absenceofobjections(fromanyNCAwith jurisdiction) is treated as approval (“positivesilence”)
• Nonationalnotificationsshouldbemadebeforereferraldecision
IdentifiedNCAorCommissionobjects(orifonlypartialreferral made)
One (or more)ofNCAswith
jurisdictionobjects
possibleArt.9post‑notificationreferral(s)toNCAs
NoNCAsobject(concentration
deemed to have “EUdimension”)
Commission agrees to referral
(in whole or in part)
possibleArt.22post‑notificationreferral(s) to Commission
DoesconcentrationsatisfytheMergerRegulationthresholdssuchthatithasan“EUdimension”?(seeChapter 3)
No No
Yes
Yes Yes
Yes Yes
Notify identified NCAs• Dealshouldbenotifiedto,and
investigatedby,identifiedNCAsinaccordance with national merger controlrules(jurisdictional,proceduralandsubstantiverules)
• IfArt.9referralmade,NCAmustinformpartiesofpreliminaryresultswithin45WDs
• NCAhas15WDsfromnationalnotification(orknowledgeoftransaction)tomakeArt.22referraltoCommission
• IffullreferralmadeunderArt.4(4),then no need for EU Merger Regulation notification
Merger Regulation Phase I procedure• Informalpre‑notificationcontactswith
Commission• FormallysubmitFormCOnotification
(orShortFormnotification)• NCAshave15WDs(fromreceiptof
notification)tomakeArt.9request• Notifyingpartieshave20WDs(from
notification)tosubmitPhaseIcommitments
• FinalPhaseIdecisionwithin25WDsofformalnotification(35WDsifArt.9request made or Phase I commitments offered): – Phase I clearance (unconditional or subjecttocommitments),or
– Phase II proceedings
Option:Dopartiesinsteadwanttotrytonotifyatnationallevel?
Option:Dopartiesinsteadwanttotrytobenefitfromone‑stopshopprinciple?
No
No No
11 / The EU Merger Regulation
5. Procedure for the notification of cases to the Commission
5.1 Aconcentrationwithan“EUdimension”shouldbeformallynotifiedtotheCommissionbeforeitsimplementation(unlessithasbeenreferredinwholetoaNCApursuanttotheArticle4(4)proceduresconsidered at Chapter 4).Thenotificationshouldbemadefollowingtheconclusionoftheagreement,theannouncementofthepublicbid,ortheacquisitionofacontrollinginterest.Thenotificationcanalsobemadeatanearlierstage:
• if the parties demonstrate to the Commission a good faith intentiontoconcludeanagreement,forexampleonthebasisofamemorandumofunderstandingorletterofintent;or
• in public bids,ifthebidderhaspubliclyannouncedanintentiontomakethebid.
5.2 TheCommissionhasextensivepowersofinvestigationundertheMergerRegulation.Inparticular,itcanseekinformationfromthepartiesandthirdparties,eitherbysimplerequestsorbyformaldecision.Itcanalsoconductinspectionsatpremisesandexaminebooksandrecords(butnotconductsearchesatprivatehomes).Furthermore,itcaninterviewanynaturalorlegalpersonwhoconsents,inordertocollectinformationinrelationtoaninvestigation.
Pre‑notification discussions
5.3 WithinDGCompetition,eachoperationalDirectoratehasamergersunitwithofficialswhofocusonhandlingMergerRegulationcases(includinganumberofofficialssecondedfromtheNCAs).Inaddition,therearesomestaffoperatingundertheDeputyDirector‑GeneralforMergerswithresponsibilityforallocatingnewcasesandensuringthattheyareadequatelyresourced.15
5.4 TheCommissionstronglyencouragespartiesandtheiradviserstohavepre‑notificationcontactswiththe Commission.16SuchcontactsusuallybeginbyprovidingtheCommissionwithanoutlineofthetermsoftheproposedtransactionwithaviewtotheearlyallocationofaCommissioncaseteamanddiscussionsbyreferencetodraftnotifications.However,inparticularlystraightforwardcases,whichdo not give rise to horizontal overlaps or vertical relationships17betweenmergingpartiesintheEEA,theCommissionacknowledgesthatnotifyingpartiesmayprefertonotifyimmediatelywithoutfirstsubmittingadraftnotification.18
15 Currently,theoperationalDirectorates’primeareasofresponsibilityareasfollows:DirectorateB–Energyandenvironment;DirectorateC–Information,communicationandmedia(includingtelecommunicationsandmedia,informationtechnology,internetandconsumerelectronics);DirectorateD–Financialservices;DirectorateE–Basicindustries,manufacturingandagriculture(includingpharmaandhealthservices,consumergoods,basicindustries,agricultureandmanufacturing)andDirectorateF–Transport,postandotherservices.TheDeputyDirector‑GeneralforMergers(currentlyCarlesEstevaMosso)isresponsiblefortheworkundertakenbythoseDirectoratesasregardsMergerRegulationcasesandreportstotheDirector‑General(currentlyJohannesLaitenberger).NewcasesaregenerallyallocatedtocaseteamsatDGCompetition’sMergerManagementMeetings,usuallyheldonMondayafternoons.
16 Forfurtherguidance,seetheCommission’sBestPracticesontheconductofEUmergercontrolproceedings(the2004BestPracticesGuidelines),availableonDGCompetition’swebsite.Forcaseswithastrongtransatlanticelement,seealsotheEU‑USBestPracticesoncooperationinmergerinvestigationsalsoavailableonDGCompetition’swebsite.
17 ‘Horizontal’overlapsarisebetweencompetitorsatthesameleveloftheproductionordistributionchainwhile‘vertical’relationshipsexistbetweencompaniesthatoperateatdifferentlevelsofthechain(e.g.betweenmanufactureranddistributor).
18 CommissionNoticeonasimplifiedprocedurefortreatmentofcertainconcentrationsunderCouncilReg.(EC)139/2004(OJ2013C366/4,14.12.2013);Corrigendum(OJ2014C11/6,15.1.2014).
12 The EU Merger Regulation /
5.5 Thesepre‑notificationdiscussionsareconfidentialandsometimesbeginbeforethetransactionisannounced(ingeneralatleasttwoweeksbeforenotificationandinsomecasesmanymonthsinadvance).Thesediscussionscanbehelpfultothepartiesforanumberofreasons,including:
• theyenablethepartiestoobtaininformaladviceonjurisdictionalissuessuchasthecalculationofturnoverorwhetheraJVundertakingis“full‑function”;
• insomecases,theycanbeusedtodiscusswhetheritmaybeappropriatetousethepre‑notificationreferralproceduresofArticle4(4)or4(5)(seeChapter 4);
• theyallowthepartiestodiscusswaiversfromtherequirementsoftheFormCOquestionnaire,therebyminimisingtheriskofaformalnotificationbeingsubsequentlydeclaredincomplete;
• theyassistinidentifyinganyspecialconcernsofficialsmayhave,therebyenablingthepartiestoaddresstheseinthenotificationand,ifappropriate,toconsiderchangestothetransaction;and
• ifthepartiesconsent,theCommissionmaystarttheprocessofthirdpartyconsultationbeforeformalnotification.
The notification forms
5.6 TheImplementingRegulation(asamended)includestheformstobeused.19 Form RS istobeusedbypartiesrequestinguseofthepre‑notificationreferralprocedures(seeChapter 4).Forformalnotifications,theformsareasfollows:
• Form COspecifiestheinformationthatnotifyingpartiesmustgenerallyprovidewhensubmittingafull‑formnotification.Itrequiresextensiveinformationontheparties,thetransactionandtherelevantmarkets,aswellascontactdetailsforcustomers,competitors,tradeassociationsandpotentiallysuppliers,whomtheCommissionwillconsultaspartofitsinvestigations;and
• the alternative Short Form COmaybeusedwhennotifyingconcentrationsthatareunlikelytoraisecompetitionconcerns,i.e.thosethatarelikelytoqualifyfortheCommission’ssimplifiedprocedure(forwhichonlyashort‑formclearancedecisionwillbeissued).20
19 Aspartofitspackagetosimplifyitsmergerreviewprocedures,theCommissionamendedtheseformsin2014toreducetheamountofinformationrequiredtocompletetheform(althoughinpracticemorepre‑existinginternaldocumentsmayneedtobeprovidedthanwaspreviouslythecase).Inaddition,theFormCOandShortFormCOnowclearlyidentifycategoriesofinformationthatmaybegoodcandidatesforwaiverrequests.
20 Thesimplifiedprocedureisavailablefor:(a)JVswithEEAturnoverandassetsbelow€100million;(b)concentrationswherethereisnohorizontalmarketoverlaporverticalrelationshipbetweentheparties;(c)concentrationswherethereisahorizontaloverlapbutwithcombinedmarketsharesbelow20%orwherethereisaverticalrelationshipbutmarketsharesarebelow30%;and(d)concentrationsinvolvingamovefromjointtosolecontrolofapre‑existingJV.TheCommissionmayalsoapplythesimplifiedproceduretocombinationswherethecombinedmarketshareoftheundertakingsconcernedislessthan50%andtheincreaseinmarketshareresultingfromthemerger is de minimis(i.e.,wheretheHerfindahl‑HirschmanIndex(HHI)deltaislessthan150).Inaddition,transactionsthatfailtogiverisetoanyreportablemarketsintheEEA(includingJVsthathavenoactivityintheEEA)areexemptedfromtheneedtoprovidethemarketinformationanddatarequestedatSections6and7oftheShortFormCO.Forfurtherguidance,seeCommissionNoticeonasimplifiedprocedurefortreatmentofcertainconcentrationsunderCouncilReg.(EC)No139/2005(OJ2013/C366/04,14.12.2013).
13 / The EU Merger Regulation
5.7 Thenotificationmustalsoincludesupportingdocumentation,suchascopiesoftheagreementsbringingabouttheconcentration,relevantboardmeetingminutes,reportsandaccountsandvariousanalyses,reports,studies,surveysandcomparabledocumentsthatassessoranalysetheconcentrationortheaffectedmarketswithrespecttomarketshares,competitiveconditions,rationaleforthedeal,etc.ThecompletenotificationandsupportingdocumentsmustbesubmittedtotheCommissioninhardcopytogetherwiththreepapercopiesandtwoCDorDVDcopies(tofacilitateelectronictransmissioninter aliatotheNCAs).
Suspension of the transaction
5.8 AconcentrationfallingundertheMergerRegulationcannotbeimplementedunlessanduntiltheCommissiondeclaresitcompatiblewiththeinternalmarket(Article7)except:
• in a public bid(oraseriesoftransactionsinsecuritieslistedonastockexchange)–providedtheconcentrationisnotifiedtotheCommissionwithoutdelayandtheacquireronlyexercisesvotingrights attached to the securities to maintain the full value of its investment; or
• where the Commission has granted a derogation following a reasoned request from the parties (which maybemadebeforetheformalnotificationofthedeal).SuchderogationsareveryrareanddependontheCommission’sviewoftheeffectofthesuspensionandthethreattocompetitionposedbytheconcentration.TheCommissionmayattachconditionsandobligationstosuchderogations.
5.9 ThevalidityofatransactioncompletedinbreachofthestandstillobligationwilldependontheCommission’sdecisionastoitscompatibilitywiththeinternalmarket.TheMergerRegulationenablestheCommissiontodissolveaconcentrationthathasalreadybeenimplementedifitconcludesthatthedealisincompatiblewiththeinternalmarket.
Formal Phase I investigations
5.10 FollowingreceiptoftheformalFormCOnotification,subjecttobeingsatisfiedthatthenotificationiscomplete,theCommissionhasaninitialperiodof25workingdaystoundertakeaformalinvestigation.ThistimeperiodcanbesuspendediftheCommissionadoptsadecisionpursuanttoArticle11formallyaskingformoreinformation(havingfailedtoreceivetheinformationunderapreviousrequestunderArticle11).TheCommission’sreviewinPhaseIusuallyinvolvessendingdetailedrequestsforinformationtothepartiesandtothirdparties,includingcustomersandcompetitors;itmayalsoholdmeetingsaspart of this process.21
5.11 At the end of the Phase I process the Commission will reach one or more of the following decisions (see Annex 2 for statistics):
• clearance:Thedealmayproceedbecauseitdoesnotgiverisetoseriousdoubtsaboutitscompatibilitywiththeinternalmarket;
• clearance subject to commitments:Evenwhereadealraisesseriouscompetitionconcerns,itmayneverthelessbeclearedsubjecttoconditions,e.g.thatthepartiesmustdivestcertainbusinesses
21 Thepartiesmustprovidecorrectinformationthatisnotmisleading.On18May2017theCommissionfinedFacebook€110millionforprovidingmisleadinginformationduringtheCommission’sinvestigationaboutitsacquisitionofWhatsApp.Forfurtherguidance,seetheCommission’sBestPracticesforthesubmissionofeconomicevidenceanddatacollectionincasesconcerningtheapplicationofArt.101and102TFEUandinmergercases(availableonDGCompetition’swebsite).
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within a certain period following completion or must give commitments regarding their future behaviour.IfpartieswishtosecureaPhaseIclearancesubjecttosuchconditions,theymustofferappropriatecommitmentsnolaterthan20workingdaysfollowingnotification–inwhicheventthePhaseIperiodisextendedtoatotalof35workingdays;
• no jurisdiction:ThedealdoesnotfallwithintheMergerRegulationbecauseitisnota“concentration”orbecauseitlacksan“EUdimension”;
• Article 9 referral:Thedeal“threatenstoaffectsignificantlycompetition”inadistinctmarketwithinaMemberStateandcanbemoreappropriatelyinvestigatedatanationallevel.AreferralwillbemadeonlyifaNCAhasmadeaformalrequesttothateffect,whetheronitsowninitiativeorbecauseitwasinvitedbytheCommissiontodoso(seeChapter 6 for more information). Deals maybereferredtoNCAsinwholeorinpart:inthecaseofapartialreferral,theCommissionwillassess the non‑referred part of the deal; or
• launch of Phase II investigation:Thedealraises“seriousdoubts”astoitscompatibilitywiththeinternalmarketsuchthatamoredetailedCommissioninvestigationisnecessary.
Formal Phase II investigations
5.12 PhaseIIproceedingsinvolvedetailedin‑depthinvestigationsthatplacesignificantburdensontheparties,theCommissionandinterestedthirdpartiesinvolvedintheprocess.Theyinvolveanumberof formal steps:
• Followingfurtherinvestigations,iftheCommissionstillretainsconcernsitwillissueaformalwritten Statement of ObjectionstowhichthepartieswillgenerallyrespondinawrittenReply. OnissuingtheStatementofObjections,theCommissionisunderaformalobligationtogranttheparties access to the file.AtthisstagethepartiesareentitledtoobtaincopiesofinformationsubmittedtotheCommissionbythirdparties(subjecttoremovalofbusinesssecrets)duringthecourseoftheCommission’sinvestigation,soastoassisttheminpreparingtheirReplytotheStatementofObjections.22
• FollowingtheStatementofObjectionsandtheReply,aformalOral Hearing cantakeplaceinBrusselsshouldthepartiesrequestone.ThisischairedbyaHearingOfficerwhoisresponsibleforoverseeingtheproceedings.TheOralHearingisattendedbytheDGCompetitioncaseteamandvariousotherCommissionofficials(includingfromtheLegalServiceandtheChiefEconomist’sTeam).Interestedthirdparties(usuallycomplainants)maybepermittedtoattend.ItisalsoattendedbyrepresentativesfromtheNCAs(forwhomthiscanbethefirstopportunitytofocusontheargumentsofallsides).
• BeforeadoptionofthefinalPhaseIIdecision,whetherornottherehasbeenaStatementofObjections,theCommissionmustconsulttheAdvisory Committee (made up of representatives of theNCAs),whichissuesanopiniononthedraftdecision.TheEFTAstatesmayalsobeinvitedtopresent their views.
22 Inaccordancewiththe2004BestPracticesGuidelines,theCommissionmaygivepartiesaccesstonon‑confidentialversionsofkeydocumentsreceivedfromthirdparties(notablesubstantiatedsubmissionsrunningcountertotheparties’ownsubmissions)earlierin the Phase II proceedings (and even in some cases at Phase I).
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• Thereisalsothepossibilityof“State of Play”meetingsbetweenthepartiesandtheCommissionstaff(inadditiontolessformalmeetings),whichmaybeheldatcertainpointsintheprocess.ItwouldbenormalforthepartiestohavetheopportunityofsuchameetingduringthecourseofPhaseIifthecaselookslikelytoraise“seriousdoubts”(sothatthepartieshavetheopportunitytotablePhaseIcommitmentsbeforetheexpiryofthe20working‑daydeadline).StateofPlaymeetingsmayalsotakeplaceduringPhaseIIinvestigations.The2004BestPracticesGuidelinesprovide for these at the following stages:
– withinacoupleofweeksoftheopeningofPhaseIIproceedings(tofacilitatetheparties’understandingoftheCommission’sconcerns,andtheCommission’sunderstandingoftheparties’reactions,aswellastodiscussthelikelytimeframeforthePhaseIIproceedings);
– shortlyinadvanceoftheStatementofObjections(tohelpclarifycertainissuesandfacts);
– followingtheReplytotheStatementofObjectionsandtheOralHearing(whichmayserveasabasisfordiscussingthescopeandtimingofanyremedialcommitments);and
– inadvanceoftheAdvisoryCommitteemeeting(whichshouldenableadiscussionofthemarket‑testingofanycommitmentstabledbythepartiesandpossiblefinalimprovements).
• DGCompetitionalsogenerallyestablishesaPeer Review Panel comprising three or so Commission officialswithnopriorinvolvementinthecaseunderreview.TheseofficialsaregivenaccesstothefileandscrutinisethedraftStatementofObjectionspreparedbytheircolleagues,actingasa“freshpairofeyes”or“devil’sadvocates”,withaviewtoimprovingthequalityoftheStatementofObjectionsandtheprospectofthefinalPhaseIIdecisionstandinguptochallengebeforetheEuropeanCourts(e.g.intheeventofasubsequentappealbythepartiesorbythirdparties).TheseareinternalcheckswithintheCommission,sothepartiesdonothaveformalcontactwiththePanel.
5.13 TheMergerRegulationprovidesforastandardPhaseIIinvestigationperiodof90workingdays.Ifthepartiesoffercommitments,thisPhaseIItimeperiodisautomaticallyextendedto105workingdays,unlessthepartiesoffercommitmentslessthan55workingdaysfromthestartofPhaseII.Thegeneraldeadlineforofferingcommitmentsis65workingdaysfromthestartofPhaseII.ThePhaseIItimetablemayalsobeextendedbyupto20workingdaysincomplexcasesattherequestoftheparties(ifrequestedwithin15workingdaysofthestartofPhaseII)or,atanytime,bythe Commission with the consent of the parties.23 There are also procedures for the Commission to stop the clock ifthepartieshavenotsuppliedinformationrequiredbytheCommissionforitsinvestigations.Insomecases,thiscanresultinasignificantlylengthierreviewprocess.
5.14 TheCommissionmaybeabletoclearacase(conditionallyorunconditionally)soonerthanthestandard90workingsdays,subjecttoresolvingalloutstandingissuesrapidly,usuallyasaresultofthepartyofferingsatisfactoryremedies,socircumventingsomeoftheintermediateformalstepsinthePhaseIIproceedings.Insomecases,clearancecanbesecuredwithouttheCommissionissuingaStatementofObjections.
23 ThusitwouldnotbeunusualforPhaseIIproceedingstoextendto125workingdaysplusCommissionholidays,whichcanequateintotaltosixtosevenmonths,andpotentiallylongeriftheCommission“stopstheclock”.
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5.15 FollowingaPhaseIIinvestigation,theCommissionwilleitherclearthedeal(oftensubjecttoconditions)orprohibitit(unlessthedealhasalreadybeenabandonedbytheparties).PhaseIIdecisionsareformallyadoptedbythefullCollegeofCommissioners.
Compliance with commitments
5.16 WheretheCommission’sfinalclearancedecision(atPhaseIorPhaseII)ismadesubjecttoconditions,compliancewiththosecommitmentsisvigorouslyenforcedbytheCommission.Thisalmostinvariablyinvolvesthepartiesappointingamonitoring trustee to monitor compliance. Furthermore,adivestiture trusteemaybeappointedtodivesttheidentifieddivestmentpackage(atnominimumprice)ifthepartiesareunabletofindanacceptablepurchaserwithinthespecifiedperiod.24Failuretocomplywithremedialcommitmentscanbepunishablebyafineofupto10%ofturnover.Inthecaseofconcentrationsthathavebeenimplementedincontraventionofaconditionattachedtotheclearancedecision,theCommissionhasthepowertotakemeasuresnecessarytoensurethattheconcentrationisdissolvedandtorestorethepre‑concentrationmarketpositionandconditions of effective competition.
24 Forfurtherguidanceonremediesacceptabletosolvecompetitionproblems,seetheCommissionNoticeonremediesacceptableunderCouncilReg.(EC)139/2004andunderCouncilReg.(EC)802/2004(OJC2008C267/1,22.10.2008),andtheCommission’sBestPracticeGuidelinesforDivestitureCommitments(availableonDGCompetition’swebsite).
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6. Exclusive jurisdiction and exceptions (including post‑notification reallocation of cases)
6.1 Concentrationswithan“EUdimension”generallyfallundertheexclusivejurisdictionoftheCommission,totheexclusionoftheNCAsthroughouttheEEA.25MemberStatesmay,however,intervene in the following exceptional cases:
• under the Article 9 procedure,aMemberStatecanrequestthataconcentrationnotifiedtotheCommissionundertheMergerRegulationbereferredtoit(inwholeorpart)ifthedeal(a)threatenstoaffectsignificantlycompetitioninamarketwithinthatMemberStatethatpresentsallthecharacteristicsofadistinctmarket,or(b)affectscompetitioninamarketwithinthatMemberStatethatpresentsallthecharacteristicsofadistinctmarketanddoesnotconstituteasubstantialpartoftheinternalmarket.TheMemberStateshave15workingdays(fromreceiptoftheircopyofthenotification)inwhichtomakesucharequest.Ifsucharequestismade,thePhaseItimetableisextendedfrom25to35workingdays.TheCommissionmustthen accept or reject the request. If the Commission accepts the request and the case is referred totheMemberState,theNCAhasnofixedtimeframewithinwhichtoreachitsfinaldecision;however,itmustinformthepartiesofitspreliminaryassessmentandproposedfutureactionswithin45workingdays(andmustreachafinaldecisionwithoutunduedelay);
• MemberStatescanalsointervenetotakeappropriatemeasurestoprotectlegitimateinterestsotherthancompetition,e.g.public security,plurality of the media and prudential rules for financial services suchasinthebankingandinsurancesectors(Article21(4)oftheMergerRegulation); and
• in the defence sector,theMemberStatesmaypreventpartiesfromnotifyingmilitaryaspectsofmergerdealstotheCommission(Article346oftheTFEU).
6.2 Article 22 oftheMergerRegulationprovidesthatoneormoreNCAsmayrequesttheCommissionto review a concentration without an EU dimension provided the concentration affects trade betweenMemberStatesandthreatenstoaffectsignificantlycompetitionwithintheterritoryoftheMemberStateorStatesmakingtherequest.TheArticle22procedureincludestimelimitsfortheconsiderationofcases:arequestmustbemadetotheCommissionwithin15workingdaysoftheconcentrationbeingnotifiedtotheMemberState.26
25 TransactionsfallingwithintheMergerRegulationmayalsoraiseissuesinjurisdictionsoutsidetheEEA.Ininternationalmergercases,theCommissionseekstocooperatewiththecompetitionauthoritiesinrelevantthirdcountryjurisdictions.SeealsoChapter 4,whichdescribesthepossibilityforaconcentrationwithanEUdimensiontobereferredtoaNCAunderArt.4(4).
26 IfnonotificationisrequiredinaparticularMemberState,thetimelimitwillrunfromwhentheconcentrationwasotherwisemadeknowntotheMemberStateconcerned.In2002theNCAsagreedanumberofprinciplesontheapplicationofArt.22(availableonseveraloftheNCAs’websites).SeealsoChapter 4,whichdescribesthepossibilityforaconcentrationwithoutanEUdimensiontobereferredtotheCommissionunderArt.4(5),inwhichcaseitwillbedeemedtohaveanEUdimension.
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7. Substantive appraisal of concentrations
7.1 InappraisingthecompatibilityofaconcentrationwiththeinternalmarketundertheMergerRegulation,theCommissionmustmakeaprospectiveanalysisofwhethertheconcentrationwould“significantlyimpedeeffectivecompetition,intheinternalmarketorinasubstantialpartofit,inparticularasaresultofthecreationorstrengtheningofadominantposition”(Article2(2)and(3)).
The SIEC test
7.2 Thissubstantivetestissometimesreferredtoasthe“SIEC”test(todistinguishitfromtheearlier“dominance”test,whichexistedundertheoriginalMergerRegulation).Itissimilartothe“SLC”(substantiallesseningofcompetition)test,whichexistsinanumberofotherjurisdictionsincludingtheUKandtheUSA.TheEuropeanCourtshaveinterpretedthenotionof“dominance”toincludecollectivedominance,includingmergersinoligopolisticmarketsgivingriseto“coordinatedeffects”(or“tacitcollusion”).Recital25totheMergerRegulationexplainstherationalebehindtheSIECtestintermsofadesiretoensurethatthenon‑coordinatedeffectsofamergerinanoligopolisticmarketcanbecaught.Itstatesthatthenotionofasignificantimpedimenttoeffectivecompetitionshouldbeextendedbeyondtheestablishedconceptofdominance“onlytotheanti‑competitiveeffectsofaconcentrationresultingfromthenon‑coordinatedbehaviourofundertakingswhichwouldnothaveadominantpositiononthemarketsconcerned.”
7.3 IftheconcentrationinvolvestheestablishmentofacooperativeJVundertaking,theCommissionmustalsodeterminewhetheritiscompatiblewiththeprovisionsofArticle101TFEU(Article2(4)and(5))(see paragraph 7.19below).
7.4 TherewasmuchdiscussionanddebateoverwhethertheintroductionoftheSIECtestwouldhaveasignificanteffectonthestandardsappliedbytheCommissionindecidingwhethertoopenPhaseIIproceedingsorwhethertoseekcommitmentsfromthepartiesoreventoprohibitdeals.Muchofthisdebatefocusedonwhethertherewasa“gap”undertheolddominancetest,inparticularifamergerraisedseriouscompetitionconcernsbutresultedneitherinafirmenjoyingastrongNo.1positionofaround40‑50%ormoreinamarket(indicativeofsingle‑firm dominance) nor in the creationorstrengtheningofanoligopolisticmarketstructureconducivetotacitcollusionbetweenasmallgroupofplayers(indicativeofcollective dominance). Some of these concerns were driven bythefactthatin2002theGeneralCourt(GC)annulledthreePhaseIIprohibitiondecisionsonthebasisthattheCommissionhadfailedtoprovethatthedealswerecaughtbytheoldMergerRegulation’sdominancetest.27
7.5 TheCommissionhascontinuedtoapplyaneconomics‑focusedapproach,indicatingthatitspolicytowardsmergershasnotchangedasaresultofthemovetotheSIECtest;however,itisgenerallyperceivedthattheSIECtestgivesawiderdegreeofdiscretiontotheCommission.Foranyprohibitioncasesthatarethesubjectofappealproceedings,theGCwillcontinuetorequiretheCommissiontoputforwardconvincingevidencethatthemergerwouldbeincompatiblewiththemaintenanceanddevelopmentofeffectivecompetition–anditcanbeexpectedthatthestandardswillbeparticularlyhighifthecasedoesnotinvolvethecreationorstrengtheningofsingle‑firmdominanceorthelikelihoodoftacitcoordinationbetweenthemembersofanoligopoly.Thisultimatecheckimposed
27 JudgmentsregardingtheCommission’sPhaseIIprohibitionsofAirtours/First Choice,Schneider/Legrand and Tetra Laval/Sidel: CaseT‑342/99,Airtours v Commission,judgmentof6June2002;CaseT310/01,Schneider v Commission,judgmentof22October2002;CaseT‑5/02,Tetra Laval v Commission,judgmentof25October2002.
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bythepossibilityofanappealtotheGCmayprovidesomecomforttonotifyingparties;however,theCommissiondoesnotneedtogotocourttoprohibitadeal.
7.6 TheCommissionhassoughttoallayconcernsabouttheexerciseofitswidepowersbyintroducinganumberofproceduralchecksandbalancestoitsadministrativeprocess.28Ithasalsopublishedguidelinesprovidingasoundeconomicframeworkfortheapplicationofitsmergercontrolpolicy:theHorizontalMergerGuidelines29andtheNon‑HorizontalMergerGuidelines(thelattercoveringvertical mergers and conglomerate mergers).30
Horizontal mergers
7.7 TheHorizontalMergerGuidelinessetoutthefactorsthattheCommissiongenerallyconsiderswhenappraisingwhetheramergerislikelytohaveanti‑competitiveeffects.Thissubstantiveappraisalinvolvesadynamicapproach,inwhichtheCommissioncomparesthelikelypost‑mergermarketstructurewiththe“counterfactual”,i.e.themarketstructurethatwouldbelikelytodevelopifthemergerdidnotproceed.TheGuidelinesidentifytwomainwaysinwhichhorizontalmergersresultina SIEC:
• in the case of non‑coordinated (or“unilateral”)effects,theCommissionexamineswhetherthemergerwilleliminateimportantcompetitiveconstraintsononeormorefirms,whichconsequentlywouldenjoyincreasedmarketpower.Theseconcernscanariseinsituationsof“single‑firm dominance”orpotentiallyinsomemergersinoligopolisticmarkets;and/or
• in the case of coordinated effects,theCommissionexamineswhetherthepre‑and/orpost‑mergermarketstructureisoligopolistic(e.g.limitedtosayonlythreeorfourmajorplayers)andwhetherthemergerwillfacilitate“tacitcollusion”betweenthemembersofthatoligopolywiththeconsequenceofpricesbeingraised,outputbeingreducedorotherharmfuleffectsoncompetition.Inmakingthisassessment,theCommissionexaminesthestructureofthemarketandthepastbehaviouroffirmsonthemarket(notablywhetherthereisastableeconomicenvironmentconducivetotacitcollusion,whetheritispossibletomonitorcompliancewiththetermsoftacitcoordinationandwhetherthereis a form of deterrent mechanism to prevent deviation).
Non‑coordinated effects
7.8 Dominance equatestoapositionofmarketpowerthatallowsaparty(orparties)tobehavetoaconsiderableextentindependentlyofothercompetitors,customersandultimatelyconsumers.Inthecontextofamergeroracquisition,thecriticalfactortendstobetheextenttowhichthemergedentitymay,asaresultofthemerger,beabletoraiseprices(orreducechoiceorlevelsofinnovation)withoutlosingcustomers.Inmakingthisassessment,theCommissionplacesconsiderable
28 ThesehaveincludedthecreationofaChiefEconomistpositionin2003,withastaffofqualifiedeconomistswhocanbecalledupontoassisttheDGCompetitioncaseteams;thecurrentChiefEconomistisTommasoValletti(whostartedhisthreeyearterminSeptember2016).OtherchecksandbalancesinvolvetheintroductionofPeerReviewPanelsformorechallengingPhaseIIcasesandvariousotherproceduralimprovementsoutlinedinits2004BestPracticesGuidelines(seeChapter 5).
29 GuidelinesontheassessmentofhorizontalmergersundertheCouncilRegulationonthecontrolofconcentrationsbetweenundertakings(OJ2004C31/5,5.2.2004).
30 Guidelinesontheassessmentofnon‑horizontalmergersundertheCouncilRegulationonthecontrolofconcentrationsbetweenundertakings(OJ2008C265/6,18.10.2008).
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relianceontheparties’marketsharesonmarketsaffectedbythemerger.31Traditionally,marketsharefiguresofmorethan40%mayberegardedasindicativeofsingle‑firm dominance. There is atendencyfortheCommissiontodefineproductmarketsnarrowlyforthesepurposes.However,dependingontheproductsorservicesconcerned,theCommissionmaybepreparedtodefinetherelevantgeographicmarketasEU‑wideorevenglobal.InothercasestheCommissionwilllookatmarketsattheMemberStatelevelorevenlocally.
7.9 TheCommissionalsoenvisagessituationsinoligopolisticmarketswhere,despitetheabsenceofsingle‑firmdominance,amergermayresultintheeliminationofimportantcompetitiveconstraintsthatthepartiespreviouslyexertedoneachother.This,combinedwithareductionofcompetitivepressureontheremainingundertakingsmayresultinnon‑coordinated(orunilateral)effects,sogivingrisetoaSIECevenifthereislittlelikelihoodofcoordinationbetweenthemembersoftheoligopoly.
7.10 Indefiningrelevantmarketsandappraisingtheparties’marketpositionsforthesepurposes,theCommissionalsotakesaccountoffactorssuchas:
• Closeness of competition:Iftheparties’productsareparticularlyclosesubstitutes(comparedwiththoseofothercompetitors),thiswillgenerallyincreasetheriskofsignificantpricerisesfollowingthemergerasrivals’productsarelesslikelytoactasaconstraintonpricing.
• Entry and expansion conditions:Ifbarrierstomarketentryorexpansionbyotherplayersarelow(andsuchentryorexpansionisrealistic)asubstantialincreaseinmarketshareandconcentrationmayneverthelessnotraisecompetitionconcerns.
• Actual or potential competition:Theabilityofthemergedgrouptoraisepricesmaybeconstrainedbyactualorpotentialcompetitionfromotherundertakings(withinoroutsidetheEU),includingtheirabilitytoincreaseoutput(e.g.iftheyhavesparecapacity)andincreasesalesifthemergedgroupweretoseektoincreaseprices.
• Buyer power:Themergedgroupmayalsobeconstrainedbycountervailingpowerofcustomers(includingtheirabilitytoswitchtoothersuppliers).
• Otherrelevantsupplyanddemandconsiderations:Thesemayincludewhetherthemergingpartiesare vertically integrated orotherwisecontrolorexerciseinfluenceoverthesupplyofinputsordemandforoutputs,e.g.throughownershipofintellectual property rights.
• Whetherthemergereliminatesanimportantcompetitive force:Somefirmsmayhavemoreofaninfluenceonthecompetitiveprocessthantheirmarketsharesmaysuggest,e.g.arecentnewentrantthatmayhaveinnovativenewproductsormaybeexpectedtoplaytheroleofamaverick inaconcentratedmarket.
7.11 Ineffect,theCommissiontendstoapplythe“dominance”and“unilateraleffects”assessmentsinparalleltoanygivencase.ThisincreasesthescopeforinterventionbytheCommissionunderunilateraleffecttheoriesincaseswheretheparties’proformacombinedmarketsharefalls
31 Forfurtherguidanceonmarketdefinition,seetheCommissionNoticeonthedefinitionoftherelevantmarketforthepurposesofEUcompetitionlaw(OJ1997C372/5,9.12.1997).TheCommission’sHorizontalGuidelinesalsorefertotheuseoftestssuchastheHHIasanindicativemeasureofconcentrationlevels.
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shortofsingle‑firmdominancebutisabovethe25%safeharbourprovidedbytheGuidelines.ItalsoincreasesthescopefortheCommissiontohave“seriousdoubts”thatwarrantanin‑depthPhase II investigation.
Collective dominance and coordinated effects
7.12 Anoligopolisticmarketisonethatisdominatedbyarelativelysmallnumberofmajorplayers,evenifnoneenjoysapositionof single‑firm dominance.Theterm“duopoly”maybeusedtodescribeatwo‑firmoligopoly;“oligopolies”maybefoundtoexistevenwherethreeormoresubstantialplayersareactiveintherelevantmarket.In1999theGCupheldtheCommission’sviewthatapositionofcollective dominance can occur “whereamereadaptationbymembersoftheoligopolytomarketconditionscausesanti‑competitiveparallelbehaviourwherebytheoligopolybecomesdominant.Activecollusionwouldthereforenotberequiredformembersoftheoligopolytobecomedominantandtobehavetoanappreciableextentindependentlyoftheirremainingcompetitors,theircustomersand,ultimately,theconsumers”.32
7.13 Anoligopolisticmarketmayprovideopportunitiesfor“tacitcollusion”bythemembersoftheoligopolywhere“cheating”(i.e.deviationsfromthetacitlycoordinatedpricingoroutputlevels)canbe“monitored”(becauseofmarkettransparency)and“punished”(throughsomeformofdeterrentmechanismorretaliationmeasures).ThustheCommissiontakesthelinethatitcanprohibitaconcentrationinanoligopolisticmarketifitwouldresultinorreinforceamarketstructurewhereitwouldbeeconomicallyrational(ormorerational)formembersoftheoligopoly,inadaptingthemselvestomarketconditions,toactinwaysthatwillsubstantiallyreducecompetitionbetweenthem.
7.14 Accordingly,whereaconcentrationmayraiseoligopolyconcerns,thepartiesneedtodemonstratethatitwillnotresultinamarketstructurethatwouldcreateincentivesfortheremainingmajorplayersontherelevantmarketstoconstraincapacity,discouragemarketentryorotherwisedistort competition – to the detriment of customers (e.g. higher prices) or of smaller competitors or“mavericks”outsidetheoligopoly(e.g.reducingtheircompetitivenessorevendrivingthemoutofthemarketinthelongerterm).Forthesepurposes,historicalanalysesofthepastlevelofcompetitionintherelevantmarket(includingvariationsinmarketsharesandprices)mayassist.Whilecautioningagainstadoptingamechanical“checklist”approach,theCommissiontypicallyexpectstofindsomeofthefollowingcharacteristicsinanoligopolisticmarket:
• product homogeneity (e.g.“commodity”markets)withlimiteddifferentiationinthenatureandpricingoftheproducts.Oligopolyconcernsarelesslikelytoarisewheresuppliersofferdifferentiatedproductrangesand/ordifferentdistributionmethodsandassociatedserviceswithdifferentcustomershavingdifferentrequirements(e.g.intermsofproductquality,reliabilityofsupply,contractterms);
• high market transparencyregardingkeycompetitiveparameters(e.g.productioncapacities,output or prices);
• stagnant and inelastic demand growth,giventhatvolatiledemandwillgenerallymakecoordinationlesslikely;
32 Case M.619 Gencor/Lonrho,Commissiondecisionof24April1996,upheldinCaseT‑102/96,Gencor v Commission,judgmentof25 March 1999.
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• low levels of technological change,recognisingthatinmarketswhereinnovationisimportantitwillbepossibleforonefirmtogainamajoradvantageoveritsrivals,soitwillnotbeattractivetoseekatacitlycoordinatedoutcome;
• substantialentry barriers;
• interdependenceandextensivecommerciallinks,givingrisetomulti‑market contactsbetweenthe major suppliers;
• symmetries or similarities betweenthemajorsuppliers’businessactivitiesintermsof:
– coststructures,
– marketshares,
– capacitylevels,
– levels of vertical integration; and
• insignificant buyer power.
Efficiencies and deal rationale
7.15 InappraisingconcentrationsundertheMergerRegulation,theCommissionwillalsoconsidertheparties’rationaleforthetransactionandanyefficiencies thattheyexpecttoflowfromthemerger.Thus,ifthepartiescanputforwardsubstantiatedandverifiableevidenceofcost‑savingsorothermerger‑specificefficiencies,theCommissionmayrelyonthesetofindthatthemergedentity willbebetterplacedtoactpro‑competitivelyforthebenefitofconsumers(therebycounteracting theadverseeffectsoncompetitionthatthemergermightotherwisehave).Withregardtothemerger‑specificaspect,itisnecessarytodemonstratethattherearenolessanti‑competitive,realistic andattainablealternativestoachievetheclaimedefficiencies,i.e.alternativesofanon‑concentrativenature(e.g. a licensing agreement or a cooperative JV) or of a concentrative nature (e.g. a concentrative JVoradifferentlystructuredmerger).Ingeneral,thereisgreaterscopefornon‑horizontalmergerstoofferdemonstrableefficiencies,e.g.intheformofsynergiesarisingfromthecombinationofcomplementaryassets.
Failing firm defence
7.16 InveryexceptionalcircumstancestheCommissionmayconcludethatanotherwiseproblematicmergerisneverthelesscompatiblewiththeinternalmarketifoneofthemergingpartiesisafailing firm.33Forthesepurposes,however,itisnecessarytodemonstratethat:
• thefailingfirmwouldsoonbeforcedoutofthemarketbecauseoffinancialdifficulties;
• thereisnolessanti‑competitivealternativedeal(asmaybeverifiablebythefactthatvariousotherscenarioshavebeenexploredwithoutsuccess);and
33 Forexample,in2013theCommissionclearedboththeacquisitionofShell’sHarburgrefineryassetsbyNynasABofSwedenandtheacquisitionofOlympicAirbyAegeanAirlinesonthebasisofthefailingfirmdefence.
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• withoutthedeal,thefailingfirm’sassetswouldinevitablyexitthemarket(whichmay,foramergerbetweentheonlytwoplayersinamarket,justifysuchamerger‑to‑monopolyonthebasisthatthemarketshareofthefailingfirmwouldinanyeventhaveaccruedtotheothermergingparty).
Vertical mergers and conglomerate mergers
7.17 Vertical mergers:Verticalmergersaremergersbetweenfirmsthatoperateatdifferent,butcomplementary,levelsinthechainofproductionand/ordistribution.Theymaygiverisetocompetitionconcerns,inparticulariftheycouldhavetheeffectofforeclosingmarketaccessby,forexample,limitingcompetitoraccesstoupstreamrawmaterialsorcomponents(“inputforeclosure”),ortodownstreamdistributionchannels(“customerforeclosure”),orbymakingsuchaccessmoreexpensive,therebyincreasingrivals’costs.Thefocusshouldbeonwhether,post‑transaction,competitorswillhavesufficientaccesstoalternativesuppliersoroutletsandonwhetherthenotifiedconcentrationislikelytochangetheincentivesofthepartiestocontinuetodealwiththirdparties,orwhetherverticalintegrationislikelytofacilitatecollusionamongcompetitors.Seriouscompetitionconcernsshouldonlyariseifthepartiestotheconcentrationhaveasubstantiallevelofmarketpowerinoneormorerelevantmarketsinthesupplychain,incircumstanceswhereconsumersmaybeadverselyaffectedbytheconcentration.
7.18 Conglomerate mergers:Conglomeratemergersinvolvefirmsthatoperateindifferentproductmarkets.Ingeneral,theydonotraisecompetitionissues.However,incircumstanceswheretheproductsacquiredarecomplementarytotheacquirer’sownproducts,suchamergermaygiverisetoconcernsabout“portfoliopower”.Thismayoccurwhenthemarketpowerderivingfromaportfolioofbrandsexceedsthesumofitsparts,therebyenablingthemergedgrouptoexercisemarketpowerinindividualmarketsmoreeasily.Forthesepurposes,theCommissionhasinthepastassessedtheriskofmarketforeclosurethrough“bundling”,“tying”and,inrespectofconsumergoods,“categorymanagement”;however,itfacesahighevidentiaryburdenwhenseekingtodeveloptheoriesofharmbasedonconglomerateeffects.
Cooperative JVs
7.19 AJVis“cooperative”whereithasasitsobjectoreffectthecoordinationofthecompetitivebehaviourofitsparents.Inmakingthisappraisal,theCommissionhasregardtotherisksofanyspillover effects arising from the presence (to a material extent) of two or more of its parents:
• in the same marketsastheJV;
• inmarketsdownstream or upstream from that of the JV; or
• in neighbouring marketscloselyrelatedtotheJV’smarket.
7.20 WhereaJVis“cooperative”inthissense,itmaybecaughtbytheArticle101(1)prohibition;insuchcases,theCommissionmustalsoexamine(inaccordancewithArticle2(4)oftheMergerRegulation)whetheranycoordinativeaspectssatisfytheexemptioncriteriaofArticle101(3).Ineffect,theCommissionconductsaneconomicbalancesheetanalysis.Itappraiseswhetheranypotentialforeliminationofcompetition(throughcoordinationbetweentheparents)isoutweighedbylikelybenefitsthatmayresult(e.g.throughimprovementsinproduction,technologyordistribution);afairshareofthosebenefitsshouldflowtoconsumers.
24 The EU Merger Regulation /
7.21 WhereaJVraisessignificantspillovereffects,therewillbeahighpossibilityofaPhaseIIinvestigation to appraise these Article 101 issues. If a JV involves two or more parents retaining significantactivitiesonthesamemarketastheJV,thentherewillbearealriskofaprohibitiondecision.ItmayprovenecessaryforthepartiestooffercommitmentstoensureeitherthattheriskofspillovereffectsisremovedorthattheArticle101(3)criteriaaresatisfied.
Ancillary restraints
7.22 The Merger Regulation also provides that a decision approving a merger (whether at Phase I or Phase II)shallbedeemedtocoveranyrestrictionsthatare“ancillary”totheconcentration,i.e.“directlyrelatedandnecessarytotheimplementationoftheconcentration”suchthattheywillnotbecaughtbyArticle101(1).Thismaycover,forexample,typicalvendornon‑competeclauses,interimpurchaseandsupplyagreementsortechnologylicencesbetweentheparties,etc.TheCommissionisnotrequiredtoruleonsuchissuesaspartofitsMergerRegulationappraisal;onlyinexceptionalcircumstances,whereacaseraisesnovelandunresolvedquestionsgivingrisetogenuineuncertainty,willtheCommissionconsidersuchissuesifrequestedbythenotifyingparties.34
7.23 Whererestrictionsarenotancillarytoaconcentration,theymaybecaughtbyArticle101(1)iftheyhaveanappreciableeffectoncompetitionintheEUandontradebetweenMemberStates.Anysuchagreementswillbesubjecttoscrutinyunderthegeneralcompetitionrules(includingwhethertheymaysatisfytheexemptioncriteriaofArticle101(3)).
Judicial review
7.24 TheGChasthepowertoreviewthelegalityofallCommissiondecisions,includingdecisionsundertheMergerRegulation.Anappealcanbebroughtnotonlybythemergingparties,butalsobythirdparties“directlyandindividuallyconcerned”bythedecision.35Thefilingofanappealdoesnotsuspendtheapplicationofthedecision,butpartiesmayapplytotheGCforanorderthattheapplicationofthedecisionbesuspendedandforanynecessary“interimmeasures”.
7.25 TheGCalsohasjurisdictiontoreviewdecisionsimposingpenaltypaymentsorfinesand,whereappropriate,itmayincrease,reduceorcancelanysuchsanction.
7.26 AppealsfromtheGCtotheCourtofJusticemayonlybemadeonpointsoflaw.Theonlypossiblegroundsforappealare:lackofcompetenceoftheGC;breachoftheGCprocedure,adverselyaffectingtheappellant;orbreachofEUlaw.
34 Forfurtherguidance,seetheCommissionNoticeonrestrictionsdirectlyrelatedandnecessarytoconcentrations(OJ2005C56/24,5.3.2005).
35 RelativelyfewMergerRegulationdecisionshavebeensubjecttoappeal.Subjecttosomenotableexceptions(e.g. case T-194/13 United Parcel Service v Commission,inwhichin2017theGCannulledtheCommission’sdecisiontoprohibitUPS’stakeoverofTNT),theCommissionhasagoodrecordofsuccessfullydefendingitsdecisions.
25 / The EU Merger Regulation
Annex 1: Outline of national merger control regimes in the EEA
Thislistisforindicativepurposesonly.Specialrulesmayapplyforcertainsectors,e.g.banks,insurance,mediaandregulatedutilities.Nationalrulesandexchangeratesaresubjecttochange;forcountriesnotintheeurozone,theapproximateeurofiguresbelowarecalculatedbyreferencetoaverage2017exchange rates.
A. The 28 EU Member States
Jurisdiction Jurisdictional criteria Notification requirements
Austria • Combinedworldwideturnoverof€300m;and• CombinedturnoverinAustriaof€30m;and• At least two parties each have worldwide
turnover of €5mHowever,evenifabovethresholdsaremet,transactionisnotnotifiable(de minimis exemption) if: • Onlyoneofthepartieshasturnoverof€5m
within Austria; and • Allotherpartieshavecombinedworldwide
turnover of less than €30mAlternativesizeoftransaction(from1November2017):• Combinedworldwideturnoverof€300m;and• CombinedturnoverinAustriaof€15m;and• Value of consideration for concentration
exceeds€200m,andtargetisactiveinAustriatoaconsiderableextent
MandatorypriornotificationtoBundeswettbewerbsbehörde(FederalCompetitionAuthority)
Belgium • CombinedturnoverinBelgiumof€100m;and• At least two parties each have turnover in
Belgium of €40m
Mandatorypriornotificationtol’AutoritébelgedelaConcurrence/Belgische Mededingingsautoriteit (Belgian CompetitionAuthority)
Bulgaria • CombinedturnoverinBulgariaofBGN25m(c.€12.8m);and
• Either (1) at least two parties each have turnoverinBulgariaofBGN3m(c.€1.5m);or(2)targethasturnoverinBulgariaofBGN3m(c. €1.5m)
MandatorypriornotificationtoCommission on Protection of Competition
Croatia • CombinedworldwideturnoverofHRK1,000m(c. €134m); and
• At least two parties each have turnover in CroatiaofHRK100m(c.€13.4m)
Mandatorypriornotificationto Agencija za Zaštitu TržišnogNatjecanja(CroatianCompetitionAgency)
26 The EU Merger Regulation /
Jurisdiction Jurisdictional criteria Notification requirements
Cyprus • At least two parties each have worldwide turnover of €3.5m; and
• At least two of the participating undertakingshaveturnoverinCyprus;and
• CombinedturnoverinCyprusof€3.5m
MandatorypriornotificationtoCommission for the Protection of Competition
Czech Republic
• CombinedturnoverinCzechRepublicofCZK1,500m(c.€57m);and
• At least two parties each have turnover of CZK250m(c.€9.5m)inCzechRepublic;
or• Atleastoneparty(whichmustbethetarget
in case of share or asset acquisition) has turnoverinCzechRepublicofCZK1,500m(c. €57m); and
• AtleastoneotherpartyhasworldwideturnoverofCZK1,500m(c.€57m)
MandatorypriornotificationtoÚradproOchranuHospodárskéSouteže(OfficefortheProtection of Competition)
Denmark • CombinedturnoverinDenmarkofDKK900m (c. €121m); and
• At least two parties each have turnover in DenmarkofDKK100m(c.€13.4m)
or• AtleastonepartyhasturnoverinDenmark
ofDKK3,800m(c.€510.7m);and• Atleastoneotherpartyhasworldwide
turnoverofDKK3,800m(c.€510.7m)
MandatorypriornotificationtoKonkurrence–ogForbrugerstyrelsen(Competition and Consumer Authority)
Estonia • CombinedturnoverinEstoniaof€6m;and• At least two parties each have turnover in
Estonia of €2m
MandatorypriornotificationtoKonkurentsiamet(CompetitionAuthority)
Finland • Combinedworldwideturnoverof€350m;and• At least two parties each have turnover in
Finlandof€20m
Mandatorypriornotificationto Kilpailu‑ja Kulluttajavirasto (Competition and Consumer Authority)
France • Combinedworldwideturnoverof€150m;and• At least two parties each have turnover in
Franceof€50mSpecial thresholds for concentrations in theretailtradesectororintheFrenchDépartementsorCollectivitésd’Outre‑Mer
Mandatorypriornotificationtol’Autoritédelaconcurrence(CompetitionAuthority)
27 / The EU Merger Regulation
Jurisdiction Jurisdictional criteria Notification requirements
Germany • Combinedworldwideturnoverof€500m;and• AtleastonepartyhasturnoverinGermany
of €25m; and Either a. atleastoneotherpartyhasturnoverin
Germanyof€5m(“turnovertest”);orb. value of consideration exceeds €400m;
andthetargetis“significantlyactive”inGermany(“sizeoftransactiontest”)
MandatorypriornotificationtoBundeskartellamt(FederalCartelOffice)
Greece • Combinedturnoverof€150mworldwide;and• At least two parties each have turnover in
Greeceof€15mSpecial threshold for concentrations in the media sector
MandatorypriornotificationtoHellenicCompetitionCommission
Hungary • At least two groups of parties have turnover inHungaryofHUF1000m(c.€3.2m);and
• CombinedturnoverinHungaryofallthepartiesisHUF15,000m(c.€48m)
NB Authority has power to review transactions below the thresholds if parties’ combined turnover of HUF5000m (c. €16m), and it is not obvious that transaction does not significantly restrict competition
MandatorypriornotificationtoGazdaságiVersenyhivatal(OfficeofEconomicCompetition)
Ireland • CombinedturnoverinIrelandof€50m;and• Each of at least two parties has turnover in
Ireland of €3m
Mandatorypriornotificationto Competition and Consumer Protection Commission
Italy • CombinedturnoverinItalyof€492m;and• Eachofatleasttwoundertakingsinvolvedin
thetransactionhasturnoverinItalyof€30m(Thresholds are revised annually to take account of inflation; above figures were effective from September 2017)
MandatorypriornotificationtoAutoritàGarantedellaConcorrenza e del Mercato (CompetitionAuthority)
Latvia • CombinedturnoverinLatviaof€30mandturnoverofeachpartyexceeds€1.5minLatvia
MandatorypriornotificationtoKonkurencesPadome(Competition Council)
Lithuania • Combinedturnover(worldwideforLithuaniancompanies,inLithuaniaforforeign companies) of €20m; and
• At least two parties each have turnover (worldwideforLithuaniancompanies,inLithuaniaforforeigncompanies)of€2m
MandatorypriornotificationtoKonkurencijosTaryba(Competition Council)
Luxembourg Nospecificmergercontrolregime Notapplicable
28 The EU Merger Regulation /
Jurisdiction Jurisdictional criteria Notification requirements
Malta • CombinedturnoverinMaltaof€2.3m;and• EachpartyhasturnoverinMaltaequivalent
toatleast10%ofparties’combinedturnover
MandatorypriornotificationtoDirectorGeneraloftheOfficefor Competition
Netherlands • Combinedworldwideturnoverof€150mand• Each of at least two parties has turnover in
theNetherlandsof€30m
MandatorypriornotificationtoAutoriteitConsumentenMarkt(AuthorityforConsumersandMarkets)
Poland • Combinedworldwideturnoverof€1,000m;or
• CombinedturnoverinPolandof€50mDe minimis exemptions:• InthecaseofbothmergersandJVs,the
domestic turnover of each of the parties does notexceed€10mineachofthetwofinancialyearsprecedingthetransaction;and
• Inthecaseofthetakeoverofcontroloracquisitionofassets,the€10mthresholdapplies to the turnover of the target in the twofinancialyearsprecedingthetransaction
MandatorypriornotificationtothePrezesUrzęduOchronyKonkurencjiiKonsumentów(PresidentoftheOfficeofCompetition and Consumer Protection)
Portugal • CombinedturnoverinPortugalof€100m;and
• At least two parties each have turnover in Portugal of €5m;
or• Concentrationresultsintheacquisition,
creationorincreaseofamarketshareinPortugalequaltoorgreaterthan50%;
or• Concentrationresultsintheacquisition,
creationorincreaseofamarketshareinPortugalequaltoorgreaterthan30%andlessthan50%,providedthatatleasttwoparties each have turnover in Portugal of €5m
Mandatorypriornotificationto Autoridade de Concorrência (CompetitionAuthority)
Romania • Combinedworldwideturnoverof€10m;and• At least two parties each have turnover in
Romania of €4m
Mandatorypriornotificationto Consiliul Concurentei (Competition Council)
29 / The EU Merger Regulation
Jurisdiction Jurisdictional criteria Notification requirements
Slovakia • CombinedturnoverintheSlovakRepublic of €46m; and
• At least two parties each have turnover in theSlovakRepublicof€14m;
or• TurnoverofatleastonepartyintheSlovak
Republicof€14m;and• Worldwideturnoverofatleastoneother
partyof€46m
MandatorypriornotificationtoProtimonopolnyúrad(AntimonopolyOffice)
Slovenia • CombinedturnoverinSloveniaof€35m;and either• Target has turnover in Slovenia of €1m;or• InthecaseofthecreationofaJV,atleast
twoparties,includingaffiliatedcompanies,have turnover in Slovenia of €1m
NB If thresholds are not met, but parties and affiliated companies have more than 60% market share in the Slovenian market, the parties are obliged to inform the CPA of the concentration (but need not submit a formal notification)
MandatorypriornotificationtoJavnaagencijaRepublikeSlovenije za Varstvo Konkurence(CompetitionProtectionAgency)
Spain • CombinedturnoverinSpainof€240m;and• At least two parties each have turnover in
Spain of €60m;or• Creationorstrengtheningofcombined
marketshareinSpainof30%,oracquisitionoftargetthathas30%marketshare(evenifno overlap)
NB The market share threshold will not apply when target’s turnover in Spain was under €10m in the last financial year, provided that the parties’ individual or combined market share is under 50%
MandatorypriornotificationtoComisiónNacionaldelosMercadosylaCompetencia(NationalCompetitionandMarketsCommission)
Sweden • CombinedturnoverinSwedenofSEK1,000m(c.€103.8m);and
• At least two parties each have turnover in SwedenofSEK200m(c.€20.8m)
NB Where there are particular substantive competition concerns, the Swedish Competition Authority may require notification even if the second threshold is not met
MandatorypriornotificationtoKonkurrensverket(SwedishCompetitionAuthority)
30 The EU Merger Regulation /
Jurisdiction Jurisdictional criteria Notification requirements
United Kingdom36
• Target has UK turnover of £70m (c. €79.9m) (“turnovertest”);or
• Asaresultofthetransaction,partieshaveashareofsupplyofgoodsorservicesofanydescriptionof25%ormoreinUK(orasubstantialpartoftheUK)(“shareofsupplytest”)
VoluntarynotificationtotheCompetitionandMarketsAuthority
B. The three contracting EFTA States
Jurisdiction Jurisdictional criteria Notification requirements
Iceland Priornotificationif:• CombinedturnoverinIcelandof
ISK2,000m(c.€16.6m);and• At least two parties each have
turnover in Iceland of ISK200m (c. €1.7m)
Post‑mergernotificationmayberequiredformergersnotmeetingtheabovethresholdsiftheCompetitionAuthoritybelievesthatthereisasignificantprobabilitythatthemergerwillsubstantiallyreducecompetition.ThisissubjecttothepartieshavingcombinedturnoverinIcelandofISK1,000m(c.€8.3m)
Mandatorypriororpost‑mergernotificationtoSamkeppniseftirlitið(CompetitionAuthority)
Liechtenstein Nospecificmergercontrolregime Notapplicable
Norway • CombinedturnoverinNorwayofNOK1,000m(c.€107.2m);and
• At least two parties each have turnoverinNorwayofNOK100m(c. €10.7m)
MandatorypriornotificationtoKonkurransetilsynet(CompetitionAuthority)
36 TheUKisexpectedtoleavetheEUin2019,havingservedtwoyears’noticeofitsintentiontowithdraw(underArt.50oftheTreatyon European Union) on 29 March 2017.
31 / The EU Merger Regulation
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
64 59 59
95110
131
168
224
276 277
211
330 335
11
100
200
300
0
350
250
150
50
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
247
318
356
402
348
274
309
283 277
303
337
362
380
259
300
400
200
100
0
50
150
250
350
450
Annex 2: Merger Regulation statistics (1990‑2017)
A. Total number of notifications by year
32 The EU Merger Regulation /
Post‑notification
Pre‑notification
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2
22
2
3
3
4
3
7
11 1113 5 9 6
6
7 10 12 9 14 1412
1
11
1
1
1
1
1
2
3
2
2
22
24 25 1139 24 1950 17 1916 22 22 1522Refe
rral
s fr
om
Mem
berStates
to C
omm
issi
on
Refe
rral
s fr
om
Com
mis
sion
to
Mem
berStates
5
5
10
10
15
15
20
20
25
30
45
35
50
40
55
Refe
rral
s fr
om
Mem
berStates
to C
omm
issi
on
Refe
rral
s fr
om
Com
mis
sion
to
Mem
berStates
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1 1 1 3 7 4 5 5 7 11 91 1 1 1 12
5
10
5
1
B. Total number of referrals by year
33 / The EU Merger Regulation
0
6
65
109
411
12
5
196
200
150
100
50
300
250
Unconditional clearance ‑ not simplified
Unconditional clearance ‑ simplified
Referred to Phase II
Conditional clearance
No jurisdiction
Notification withdrawn
52
65
473
7
49
903
6
6
5
782
411
9
1182
44
9
43
3
4449
1
7
20
16
225
1
110
9
11
93
141
8
21
11
158
1
103
3
7
10
135
1
41
8
18
26
237
1
82
12
83
138
15
10
6
107
169
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
C. Different Phase I outcomes by year
34 The EU Merger Regulation /
Unconditional clearance ‑ not simplified
Unconditional clearance ‑ simplified
Referred to Phase II
Conditional clearance
No jurisdiction
Notification withdrawn
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170
116
86
1
166
4
9
10
83
171
5
8
9
108
191
6
135
82
143
1444
110
143
19
10
10
117
190
18
155
130
238
13
13
7
112
211207
12
8
6
73
1
200
150
100
50
222
6
13
11
75
18
8
247
80
19
1
278
75
18
300
250
7
7
35 / The EU Merger Regulation
Unconditional clearance
Prohibition
Conditional clearance
Notification withdrawn
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
43
6
3
1
7
2
5
2 2
4
1 1 1
9
6 65
2
22 2
5
4
4
1
1
12
1 1
2 2
23
2
1
1 1
3
1 2
2
5
10
15
20
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
3 32
3
4 57
3
1 1 1 1 12
76
912
3
5
22
23
2
1 1
111
5
1
1
4 5
45
2
2
2
3
5
10
15
20
25
0
2
D. Different Phase II outcomes by year