European Union: Response To The European Commission's Consultation "Towards More Effective EU Merger Control"

Keywords: European Commission, EU merger control, shareholdings, EEA

I. Introduction

Mayer Brown welcomes the opportunity to comment on the European Commission's consultation documents "Towards more effective EU merger control" ("Consultation Paper"). This document reflects solely the view of Mayer Brown. It does not represent the views of any clients of Mayer Brown.

Our comments below will critically refer to the appropriateness, efficacy and necessity of the proposal to investigate the acquisition of minority shareholdings ("Structural Links") under the EUMR. We will then comment on the contemplated changes to the referral mechanism and the treatment of joint ventures, which have no effect in the EEA.

II. Structural Links


As noted in the preamble to the EUMR, Community law must only include provisions governing those concentrations that may "significantly impede effective competition in the common market" and that "provisions to be adopted in this Regulation should apply to significant structural changes." The word "significant" is of particular relevance, as it is not sufficiently clear that the acquisition of Structural Links would significantly impede effective competition or lead to significant structural changes.

The current ex-ante inapplicability of the EUMR to the acquisition of Structural Links does not mean that it is an area to which antitrust laws do not apply.

  • First, as far as merger control is concerned, it is important to recall that existing shareholdings of 10% or more and interlocking directorships have to be identified in any notification to the Commission as far as they concern affected product markets (see Sections 4.2.1. and 4.2.2. Form CO). Hence, in transactions with a Community dimension, the Commission assesses Structural Links within the substantive analysis of the notified concentration. When anticompetitive concerns pertaining to existing Structural Links arise, the Commission, as it has evidenced in the Consultation Paper, has the power to grant clearances subject to conditions and obligations, and, indeed, Structural Links have to be divested on a consistent basis when a remedy is required.
  • Second, without going into the discussion as to whether or not an acquisition of a minority shareholding is an agreement pursuant to Article 101 TFEU or not, the minority shareholder, the target and the other shareholders remain independent companies. Ex-post enforcement pursuant to Articles 101 and 102 TFEU and the national equivalents are available to analyze anticompetitive conduct associated with Structural Links. Correspondingly, as early as 2001, in its Green Paper on the Review of Council Regulation (EEC) No 4064/891, the Commission had noted that it would "appear disproportionate to subject all acquisitions of minority shareholdings to the ex-ante control of the Merger Regulation." The Commission's conclusion was on the basis that "only a limited number of such transactions would be liable to raise competition concerns that could not be satisfactorily addressed under Articles 81 and 82 EC."
  • Third, existing corporate law in Member States would also constrain the ability of a minority shareholder to exercise influence and access information in relation to the target. To give an example, in Germany, corporate law, in general, prevents a minority shareholder from exercising material influence on business decisions. An exchange of competitively sensitive information may give rise to damage and respected claims, hence,
  • the target has the right to reject any request directed at such information. In addition, antitrust law restricts the information exchange between the minority shareholder and the target, which are independent companies. The scope and depth of the right to information must be interpreted in view of antitrust laws, in particular in the light of the permissible and non-permissible information exchanges pursuant to Article 101 TFEU. Further, the businesses of today have robust compliance programs to detect the exchange of confidential information, and a properly functioning corporate governance mechanism would not enable minority shareholders to influence company policy in a manner contrary to the interests of other shareholders.

Neither the case law nor the situations in the past decade relied on by the Commission in the Consultation Paper merit a shift in the view that subjecting all acquisitions of Structural Links to ex-ante control would be a proportionate remedy to address the perceived enforcement gap. The anticompetitive effects, be it unilateral, coordinated or vertical, are more of a behavioral nature than based on structural changes; an ex-ante structural merger control may involve the Commission too early.

In addition, the assumption of jurisdiction over Structural Links would also need to take into account the identification of undertakings whose turnover is to be taken into account for the determination of the jurisdictional turnover thresholds. The inclusion of any other shareholder, including any other minority shareholder exceeding the relevant test for a Structural Link (e.g., a 10% shareholding), would have the consequence that too many notifications would fall under the ambit of the EUMR.

As enunciated in the Green Paper, the principle underlying the EUMR is the "need to ensure effective, efficient, fair and transparent control of concentrations at the most appropriate level, in accordance with the principle of subsidiarity." It is highly questionable whether the inclusion of the acquisition of Structural Links within the scope of EUMR would provide for the most efficient use of time and resources, not only of the Commission but of all others concerned.

In order to include the acquisition of Structural Links within the ambit of EUMR, substantive amendments would have to be made to the current jurisdictional framework of the assessment of concentrations. The acquisition of Structural Links does not fall within any of these situations, and, hence, the Commission would need to substantively amend the provisions that explain the concept of a concentration. This would consequently mean a significant shift from well- established rules relating to the test of control as also provided in the Commission's Jurisdictional Notice.


The Consultation Paper suggests three options to deal with competition issues related to Structural Links. In addition to the undesirable complexities described above, each of the proposed systems would create additional uncertainties:

  • The application of the current system of an ex-ante merger control (pre-notification, notification, suspension obligation) to the acquisition of Structural Links would be disproportionately burdensome on businesses. The suspension obligation would considerably interfere with commercial freedom, especially in transactions where minority shareholdings represent purely passive investments. Further, the minority shareholder, the target and other shareholders remain independent, and, since the anticompetitive effects are more of a behavioral nature than based on structural changes, it could be fixed through the imposition of remedies, even after the transaction is closed.
  • The self-assessment system may have relative merits in that it would allow the Commission to choose cases carefully and develop its own internal knowledge as to which are the problematic transactions. However, given the lack of experience in assessing Structural Links, the Commission may be unable to provide detailed and clear guidance on the type of Structural Links that it will investigate. This would result in a situation where parties to a transaction cannot conclusively decide whether or not the acquisition of Structural Links would be subject to an investigation by the Commission. The introduction of a voluntary notification in such instance may encourage businesses to be
  • overcautious, leading to an inefficient use of resources. At any rate, an appropriate limitation period would be needed, which should end at the date of consummation. In case of a voluntary filing, the parties should not be subject to a suspension obligation.
  • In the case of a transparency system that involves the obligation to file a short information notice, it is not clear what would be the "limited information" that the Commission would need for its assessment. It would not be proportionate to request from the parties lengthy submissions on the interpretation of corporate implications (e.g., passive investment versus corporate rights) of a minority shareholding pursuant to the national law of each Member State. Despite the proposal that the transparency system would involve only a short information notice, the purpose may be defeated by several rounds of requests for information and lengthy discussions between the companies and the case team. Like in the self-assessment scenario, if the parties voluntarily make a notification, they should not be punished with the suspension obligation.


Any changes to the current framework must be made only if the perceived enforcement gap is so wide that, on balance, there is a need for change, despite the risk of upsetting the current system which is generally functioning well. If the Commission were to conclude that it would be appropriate to complement the Commission's toolkit by enabling it to investigate transactions involving the acquisition of Structural Links, then the Commission should prescribe thresholds that are clear and easily applicable. Tests applicable in Germany or in the UK, such as the "acquisition of a competitively significant influence" or "material influence" are nebulous concepts that would leave too much scope for interpretation and uncertainty. For example in Germany, the Bundeskartellamt declined jurisdiction in 11% of all formal notifications of the acquisition of a competitively significant influence.

Applying a shareholding threshold would be clear-cut, but the thresholds should be set sufficiently high (25% or more). Any requirement to inform the Commission must (i) be post-acquisition, (ii) have no suspension obligation and (iii) necessitate no formal notification.

III. Referral system

With respect to Article 4(5) EUMR, the initiative of the Commission to remove the need to submit an initial Form RS is fully endorsed. Considering that the Commission is suggesting informal contacts (pre-notification discussions) with Member States, the consultation period can be further reduced from the proposed ten days in the Consultation Paper to five days.

In relation to Article 22 EUMR, since all Member States except Luxembourg have a merger control regime, Article 22 EUMR has lost its initial relevance. A practical downside of the current regime is that even Member States that are not competent to review a transaction in the first place could request a referral and that a successful referral does not automatically lead to the Commission's jurisdiction over the whole of the EEA. The proposal that only competent Member States can refer cases to the Commission, as opposed to the current system, where non-competent Member States can also refer cases to the Commission, is to be endorsed.

IV. Joint Ventures

Similarly, the proposal to consider whether transactions relating to joint ventures without any activity in the EEA should not require notification is also supported.

At present, if two parties satisfying the jurisdictional thresholds for notification to the Commission decide to incorporate a joint venture outside the EU that will have no activities in the EU, this would still constitute a concentration that has to be notified. Although the Commission may be prepared to accept a shorter notification, the parties have to run through the full procedure (including pre-notification, prohibition to close until clearance, etc.), which has negative impacts on timing and cost.

The proposal to consider modification of jurisdictional rules to ensure that joint ventures with activities exclusively outside the EEA and not affecting competition within the EEA is to be commended. In view of the fact that the principle of the EUMR is to be effective, efficient and fair, an amendment could be considered through the insertion of an additional proviso in the EUMR. It should state that the creation of a full-function joint venture that would not have "immediate, substantial and foreseeable effects in the Community" (see Case No COMP/M.1741 – MCI WorldCom/Sprint) would not have a Community dimension.

Originally published 26 September 2013

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.