United States: European Commission Simplifies Procedures Under The EU Merger Regulation

Last Updated: December 23 2013
Article by Douglas Lahnborg and Till Steinvorth

On 5 December 2013, the European Commission adopted its "Merger Simplification Package" with the stated objective of cutting red tape and reducing costs for businesses in EU merger filings. The package broadens the scope of the simplified procedure for "no issues" cases and generally eases the information requirements connected with EU merger filings. In addition, the Commission has updated its rules on divestiture commitments.

Extending the Scope of the Simplified Procedure

The EU merger rules define certain types of mergers that are generally seen as unproblematic for competition and that may be examined by the Commission under a simplified and streamlined procedure. If the conditions are satisfied, companies responsible for notifying a concentration may use a specific notification form (the "Short Form CO"), which requires less detailed information than the regular notification form (the "Form CO"). In addition, the Commission may clear such cases without investigating the effects of the proposed deal with the parties' customers and competitors. The formal time period of the investigation is, however, the same as that for regular mergers.

The Commission has now expanded the scope of the simplified procedure by raising the market share thresholds below which cases qualify for a short review. As a result, it is expected that 60 to 70 percent of all notified mergers will now qualify for the simplified procedure, around 10 percent more than today. The new market share thresholds are as follows:

(i) For markets in which two merging companies compete ("horizontal overlap markets"), the threshold is raised from 15 percent to 20 percent;

(ii) For markets where one of the merging companies sells an input to a market where another merging company operates ("vertically related markets"), the threshold is raised from 25 percent to 30 percent.

In addition, a new threshold has been introduced. Mergers may now also qualify for the simplified procedure where the companies' combined market shares are between 20 percent and 50 percent, but where the increase in market share after the combination of their activities is limited.

Introduction of a "Super-Simplified Notification"

A "super simplified" procedure has been introduced for joint ventures that are active entirely outside the European Economic Area (EEA). Such joint ventures are caught by the EU merger rules if the parent groups achieve EEA turnover exceeding certain thresholds. The Commission has been criticised for extending its jurisdiction to cover such joint ventures given the lack of any effect in the EEA. While not altogether abolishing the filing requirement for this type of joint venture, the Commission intends to make the notification process more business-friendly. Instead of having to submit a notification form, the companies only need to describe the transaction, their business in general terms and provide turnover figures required for the Commission to establish jurisdiction.

Less-Stringent Information Requirements for Regular Mergers

Regular, non-simplified cases require the submission of extensive data on all markets "affected" by the concentration, for example, information on market volumes and market shares based on both value and volume figures, details of competitors, customers and suppliers and production capacities. This often entails costly and time-consuming data collection exercises for the companies.

Whether a market is affected in this sense is determined by market share thresholds. The Commission has now raised the relevant thresholds, in line with the changes to the simplified procedure, from 15 percent to 20 percent for horizontal overlaps and from 25 percent to 30 percent for vertical links. As a result, it is anticipated that companies will need to provide full market information for fewer markets.

Less-Stringent Information Requirements for Case Referrals

Under certain conditions, where national merger filings are required, a company may request the relevant Member States refer the review of their case to the Commission, or vice-versa. This request is made by way of a standard form (the "Form RS"). The information required by the Form RS has now been substantially reduced and will cover, inter alia, the geographic scope of any relevant markets and the nature of the transaction.

Streamlining the Pre-Notification Process

The changes with the greatest practical impact relate to the pre-notification process. Although this is not required by law, companies that are required to notify a merger to the Commission typically engage in discussions with the Commission case team before making the formal notification. Without such contacts, the parties will not be able to determine the exact scope of information required by the Commission, leading to a significant risk that the notification will be declared "incomplete" and the review process delayed.

There are no set time periods for the duration of such pre-notification contacts. In practice, however, the process may last for a number of weeks, and even months, depending on the complexity of the case, the potential for competition concerns and the workload of Commission case team. The Merger Simplification Package now aims to address this issue by promoting the possibility of "waivers" from the full information requirements set out in the standard notification forms. Parties are encouraged to discuss with the Commission the extent to which the information requirements are relevant to their case, and the notification forms identify certain data that are likely to be good candidates for waiver requests. The Commission has also stated that it will deal with waiver requests promptly and keep the process as short as possible.

Moreover, the new rules provide for cases where companies may forgo the pre-notification phase altogether and proceed directly with the formal filing. This concerns mergers that do not give rise to horizontal overlaps or vertical links between the merging companies in Europe. The Commission expects that around 25 percent of those cases that qualify for the simplified procedure may satisfy the conditions for a filing without pre-notification contacts.

Changes to the Rules on Divestiture Commitments

In order to overcome competition concerns identified by the Commission during an investigation, merging parties often offer to divest parts of their business activities. The Commission has developed model texts for offering such divestiture commitments and for the establishment of a mandate for a trustee who will monitor the implementation of any commitments. While the use of these model texts is not legally required, it is usually expected by the Commission. The Commission has updated these standard texts now to bring them in line with the Commission's 2008 Notice on remedies and to take into account the Commission's experience since the model texts were first published in 2003.

Outlook

The Merger Simplification Package is certainly a step in the right direction to streamline the EU merger control process. However, it remains to be seen whether the changes will translate into faster and less bureaucratic procedures. One of the main reasons for the administrative burden caused by EU merger filings, in particular during the pre-notification phase, has been the Commission's insistence that the parties provide information for "all plausible" relevant product and geographic markets. As a consequence, parties often find themselves confronted with comprehensive request for information, even in cases that ultimately qualify for the simplified procedure. This is unlikely to change, in particular since the Commission has emphasised that it will continue to use the "plausible markets" concept. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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

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

Authors
Events from this Firm
15 Nov 2018, Webinar, Newark, United States

We are now 6 months into this groundbreaking new law which has significant impact on businesses in and outside the EU.

15 Nov 2018, Webinar, Washington, United States

Over the last decade, a new phenomenon in the sports law arena has emerged: from improper drug dispensing to traumatic brain injury to publicity rights, class actions have become a popular vehicle for litigating sports-related claims.

15 Nov 2018, Webinar, New York, United States

In its fifteenth year, this program gives attendees access to more federal judges than any similar program and provides the opportunity to learn at an advanced level from the leading eDiscovery practitioners and academics from across the country.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions