Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC proposes improvements to EU merger control rules, (Jul 9, 2014)

By Linda O’Brien, J.D., LL.M.

The European Commission is seeking a public consultation on proposals to improve European Union (EU) merger control, as outlined in a White Paper, the EC announced today. The reform of the Merger Regulation in 2004 has made the EU’s merger control regime more efficient and predictable, preserving effective competition in the Single Market for the benefit of businesses and consumers, according to the EC. However, experience in the last ten years has shown that further improvement of some aspects of EU merger control may be needed.

In its White Paper, titled "Towards More Effective EU Merger Control," the Commission sets forth proposals that would allow it to better deal with non-controlling minority shareholdings, which may affect competition and that would make referral procedures simpler and faster.

Key proposals of the White Paper include (1) implementing a light and tailor-made review of acquisitions of non-controlling minority shareholdings which could harm competition; (2) making case referrals between Member States and the Commission more business-friendly and effective; (3) making procedures simpler for non-problematic transactions; and (4) fostering coherence and convergence between Member States.

Comments can be submitted through October 3, 2014. In light of the comments received, the Commission may then put forward a legislative proposal to revise the EU Merger Regulation. The White Paper is accompanied by a Staff Working Document, explaining the proposals in more detail.

In 2009, following a public consultation, the EC issued a report to the EU Council of Ministers on the functioning of the Merger Regulation, in particular the allocation of cases between the Commission and Member States. In 2013, the Commission published a Staff Working Document outlining a relatively wide spectrum of policy options relating to the topics of minority shareholdings and case referrals with a view of seeking stakeholders' comments.

Both public consultations confirmed that the Merger Regulation generally works well and that no fundamental overhaul is needed. However, the public consultation showed that there is room for improvements in certain areas. In light of the submissions received, the Commission has now fine-tuned and detailed the reform proposals in the White Paper.

The proposals complement a procedural simplification package adopted in December 2013 that resulted in an increased use of a simplified procedure for non-problematic mergers and a substantial reduction in information requirements for all notified cases. Further steps towards making EU merger control simpler and more efficient require an amendment of the Merger Regulation and are outlined in the White Paper.

“Merger control at the EU level should be equipped with a modern toolkit to protect businesses and consumers against transactions that may harm competition,” said Joaquín Almunia, Commission Vice-President in charge of competition policy. “The proposals in this White Paper would allow the Commission to better preserve competition while making sure that the administrative burden by the system is kept light for the companies concerned.”

News: AcquisitionsMergers Antitrust