IP/03/1621
Brussels, 27 November 2003
Commission welcomes agreement on new Merger
Regulation
Mr Monti, the Competition Commissioner, today welcomed the adoption by
the Competitiveness Council of the proposal for review of the Regulation on
the control of concentrations ("Merger Regulation"). "The new Regulation
and the changes made since last year will, and I am convinced of this,
provide the European Union with an unrivalled system for vetting mergers
and acquisitions in a Union of 25 members", said Mr Monti.
The Council of Ministers responsible for EU competitiveness today gave its
unanimous political agreement to the amended text of the Merger Regulation, which
is due to enter into force on 1 May 2004, the date for enlargement of the Union.
The new Regulation, the definitive version of which still has to receive formal Council
approval, introduces some flexibility into the investigation timeframes although their
predictability is unaffected, reinforces the "one-stop shop" concept so that it benefits
firms, and clarifies that the substantive test contained in the regulation covers all
types of harmful scenarios, whether dominance by a single firm or effects stemming
from a situation of oligopoly that might harm the interests of European consumers.
This clarification creates an improved legal security given that the new test
(significant impediment of effective competition) clearly defines the assessment
criteria by, on the one hand, covering all forms of concentration that could be harmful
for the consumer and, on the other hand, by clearly defining the limits of the
Commission’s scope for intervention.
The Merger Regulation was first adopted in 1989 and took effect on
21 December 1990.1 Under a regular review clause, the Commission launched in
December 2001 a consultation exercise that resulted in the adoption a year later of a
package of wide-ranging reforms for improving a merger control regime that was
already highly rated.
In addition to the proposal amending the Merger Regulation, these reforms involve a
package of non-legislative measures designed to streamline the decision-making
process and, in particular, to strengthen the economic analysis and respect the rights
of the defence more effectively (see IP/02/1856 of 11 December 2002).
Some of these reforms are already in place, such as the appointment of a Chief
Competition Economist and the setting up of a panel to scrutinise the investigating
team's conclusions with a "pair of fresh eyes".
1
Under the Merger Regulation, the Commission has exclusive jurisdiction for mergers
between firms with an aggregate turnover of at least €5 billion and a turnover within the
European Economic Area of more than €250 million for each of them.
It has vetted over 2 300 mergers since September 1990. It cleared the vast majority of
them (over 90%) after a routine one-month investigation prohibited 18 mergers in total.
Other reforms are at the final stage of adoption, such as a set of best practices for
the conduct of investigations and guidelines on the appraisal of horizontal mergers,
i.e. mergers between direct competitors. Other guidelines are planned for 2004
(review of the existing notices and drafting of guidelines on "non-horizontal"
mergers).
The changes approved by the Council include:
- abolition of the requirement of a binding merger agreement as a pre-condition of
notification. It is thus sufficient to demonstrate a genuine intention to merge.
This change is in accordance with the "Recommended Practices" developed
within the International Competition Network;
- the possibility for firms party to a merger for which the Commission does not
have automatic jurisdiction to ask to benefit from the "one-stop shop" if, failing
an appraisal by the Commission, the transaction would have to be notified in
three or more Member States;
- strengthening of the Commission's investigating powers, which will thus be
broadly aligned on the powers agreed to last year by the Council in connection
with the new Regulation implementing Articles 81 and 82;
- extension of the Phase II investigation period by three weeks where the parties
to the merger submit remedies. Phase II may also be extended by four weeks at
the request of the parties or at the request of the Commission, but with the
consent of the parties, to look more closely into difficult aspects of particularly
complex cases.
2