Wednesday 9 July: Towards more effective EU merger control, Brussel - Hoofdinhoud

The news:

On 9 July 2014, the European Commission adopts the White Paper "Towards more effective EU merger control" suggesting possible improvements to the EU merger control rules, ten years after the entry into force of the revised EU Merger Regulation in 2004. The 2004 reform has worked well and has contributed to a more efficient and predictable merger regime in the EU. On the other hand, experience form the last 10 years also shows that some improvements could be envisaged. The White Paper starts a public consultation of stakeholders on these proposals.

The changes proposed in the White Paper would allow the Commission to better address potential sources of harm for competition and consumers by also reviewing certain acquisitions of non-controlling minority shareholdings that could be problematic from a competition point of view, without creating undue additional burden on businesses. In addition, options are proposed to simplify the current Merger Regulation by cutting red tape for businesses, for example by further simplifying the procedure for non-problematic cases and by streamlining the case referral system from Member States to the Commission so that it can better and faster achieve its objective to ensure that merger cases are dealt with by the most appropriate authority. Finally, the White paper takes stock of the use of the current EU merger control rules and generally reflects on ways to improve coherence and convergence between merger control rules and practice on EU and Member State level.

The background:

10 years after the last overhaul of the Merger Regulation, the Commission considers that it is time to reflect on how merger control on the EU level could be made even more effective in the interest of European businesses and consumers.

In 2013 the Commission published a Staff Working Document outlining a relatively wide spectrum of policy options primarily relating to the topics of minority shareholdings and case referrals with a view of seeking stakeholders' comments (see IP 13/584). Taking these into account, the White Paper presents a more detailed and fine-tuned proposal outlining the proposed design of the revised system.

The effectiveness of EU merger control may in particular be enhanced by its application to certain potentially problematic transactions involving the acquisition of non-controlling minority shareholdings. By acquiring stakes in their competitors, companies can influence their behaviour and reduce competition in the market. The Merger Regulation does not allow the Commission to examine these effects, while some national rules do. The proposals in the White Paper would allow the Commission to review some of these transactions. The system would only target certain specific transactions, i.e. those that prima facie appear to be problematic from a competition point of view. Benign investments and restructuring efforts would not be concerned by the reform. This would establish a one-stop shop for the control of the acquisitions of minority shareholdings that might have a cross border impact within the EU.

At the same time, the initiative aims at streamlining and simplifying the referral process, dealing with issues which require a revision of the Merger Regulation. The White Paper also reflects on ways to improve convergence and enhanced cooperation between the national competition authorities and the Commission. Finally, other technical proposals aim at streamlining or improving various other provisions of the EU Merger Regulation particularly with a view towards simplifying procedures.

The initiative should be seen in the context of the Commission’s commitment to regularly review the functioning of existing legislation under the new Regulatory Fitness and Performance Programme (“REFIT-programme ) in order to make rules and procedure less burdensome for business (see IP 14/682).

The White Paper goes one step further than the recently adopted Merger Simplification Package that simplifies procedures for unproblematic mergers within the framework of the current Merger Regulation, resulting in a net substantial net reduction in information requirements for merging companies and an increased use of a so-called 'simplified' procedure (see IP 13/1214).

The event:

Vice-president Joaquín Almunia, the European Commissioner for Competition, will present the main elements of the proposals in a press conference in the Commission's press room. A press release and other documents will be available on the day.

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The contacts:

Antoine Colombani +32 (0)2 297 45 13 antoine.colombani@ec.europa.eu

Marisa Gonzalez Iglesias +32 (0)2 295 19 25 marisa.gonzalez-iglesias@ec.europa.eu