The EU merger regulation - Slaughter and May · PDF fileThe EU Merger Regulation ... with the authorities with a view to reallocating jurisdiction between the Commission and the NCAs,

The EU Merger RegulationAn overview of the European merger control rulesJanuary 2018

/ 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.


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.


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.”


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.


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.


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


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.


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.


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


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).


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).


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).


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).


• 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”.


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).


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.


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.


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).


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.


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.


• 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.


• 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.


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.


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)



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)



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



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)



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)



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


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.


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


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


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


Unconditional clearance ‑ not simplified

Unconditional clearance ‑ simplified

Referred to Phase II


No jurisdiction


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


Unconditional clearance

Prohibition



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

© Slaughter and May 2018

This material is for general information only and is not intended to provide legal advice. For further information, please speak to your usual Slaughter and May contact.

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