On 20 April 2023 the European Commission adopted a package of new merger control rules and procedures, which will enter into force on 1 September 2023.
In particular, the rules broaden and clarify the categories of cases that may be dealt with under the simplified and less extensive procedure (so-called "simplified cases") and simplify the normal merger control process.
In addition to extending the scope within which the Commission deals with non-problematic mergers, it simplifies the administrative procedure for merging undertakings. According to the Commission, the initiative is expected to reduce reporting requirements by 25%.
More cases can benefit from the simplified procedure in the future
Firstly, new categories of cases that can be dealt with under
the simplified procedure are identified.
Under the current rules, an operation may be notified to the
Commission under the simplified procedure if none of the
undertakings concerned has individual or combined market shares of
30% or more on a vertically related market.
Under the revised rules, the simplified procedure will also apply
in situations where the merging undertakings are vertically linked
and at least one of the following conditions is met:
(i) the merging parties' market shares are less than 30% of the upstream market, and the merging parties active in the downstream market have a market share of less than 30% of the purchasing market, or
(ii) the merging parties' market shares are less than 50% in both the upstream and downstream markets; the change in market concentration (HHI delta) is less than 150 in both markets, and the participating undertaking with the lowest market share in the upstream and downstream markets is the same.
This is the first time the Commission has introduced a
procurement criterion in relation to when the simplified procedure
may be applied.
Secondly, so-called flexibility clauses are introduced, which allow
the Commission, at the request of the merging parties, to deal with
certain cases under the simplified procedure, even if they do not
meet the conditions for such treatment.
Thus, the undertakings concerned will be able to request for a
simplified procedure in the following cases where the requirements
are not formally met:
(i)In the case of horizontal overlaps where the parties' combined market share is less than 25%,
(ii)In the case of vertical overlaps where the parties' individual or combined upstream and downstream market shares are less than 35% or where the parties' individual or combined market share is less than 50% in one market and lower than 10% in all other vertically related markets, and
(iii)Joint ventures with turnover and assets of less than EUR 150 million in the EEA.
New and simpler notification forms for simplified and normal merger notifications
The implementing regulation introduces a new notification form
to be used for simplified notification. The report form is in
checkbox format and primarily contains multiple choice questions.
In addition, a category of cases that can be dealt with in a
"super simplified" manner will be introduced, which will
lead to parties being invited to notify the merger directly without
prior contact with the Commission.
The notification form for the notification of normal mergers is
clarified, and the disclosure requirements are reduced. The new
form provides clearer information on the possibilities for
derogation and introduces tables with information on the affected
markets. In addition, certain information requirements are
removed.
Optimisation of the method of submission of documents to the Commission
The method of submitting documents to the Commission is optimised by setting electronic transmission as the standard method.
Bech-Bruun's comments
The merger control rules impose a significant administrative burden on merging undertakings, which are obliged to provide a comprehensive amount of information to the Commission and/or to national competition authorities. For merging undertakings, the merger control process can therefore be time-consuming and resource-intensive, even with simplified notifications.
The package of the new rules is therefore a welcome development, and hopefully, national competition authorities in the EU will implement similar changes.
Thirdly, it also establishes a clearer and more detailed list of circumstances allowing the Commission to investigate a case under the normal procedure, even if it technically meets the conditions for simplified treatment.
The extension of the scope of the simplified procedure should make it easier for undertakings in completely non-problematic transactions to get through the notification procedure faster than before.
Originally published 23 June 2023
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