On 20 April 2023 the European Commission published a package of measures aimed at simplifying its merger control procedures under the EU merger Regulation (EUMR). The new measures, which will take effect as of 1 September 2023, aim to streamline and make less burdensome the Commission's merger review procedures, in principle reducing the workload and costs merging parties must bear when making some merger notifications.
The package consists of a revised Notice on Simplified Procedure, Implementing Regulation, and Communication on the transmission of documents. The Commission has also published a helpful Q&A with practical information and clarifications on the revised texts.
The new measures represent a major reform, the Commission recognising that EUMR notifications can be very onerous. They therefore seek to ensure a focus on key information that the Commission considers necessary in order to establish its jurisdiction and review the substance of a transaction. The reform will also contribute to the Commission's recently announced goal to streamline regulatory reporting obligations in general and to reduce such burdens by 25%.
Announcing the reforms, Commissioner Vestager stated that "The new rules make the notification process significantly easier for the parties to the benefit not only of companies and advisors but also of the Commission, which will be able to focus its resources on the most complex cases".
Changes to the simplified procedure
The revised Simplified Procedure Notice expands and clarifies the types of cases that can benefit from the simplified procedure (meaning that the information requirements in the notification form are significantly reduced as compared to those applicable in the normal, non-simplified procedure).
Vertical concentrations
Two new categories of vertical concentrations will now benefit from the simplified procedure where, under all plausible market definitions:
- The individual or combined upstream market share of the parties to the concentration is below 30% and their combined purchasing power is below 30%.
- The individual or combined upstream and downstream market shares of the parties to the concentration are below 50%, the market concentration index (HHI delta) is below 150, and the smaller undertaking in terms of market share is the same in the upstream and downstream markets.
Flexibility clauses
In a key change from the current Simplified Procedure Notice, at the request of the notifying parties the Commission will have the discretion to review under the simplified procedure the following concentrations that do not fall within the categories of concentration to which the simplified procedure normally applies:
- Mergers or acquisitions involving horizontal overlaps where the combined market share of the parties is 20 – 25%.
- Mergers or acquisitions involving vertical relationships where the individual or combined upstream or downstream market shares of the parties is 30 – 35%.
- Mergers or acquisitions involving vertical relationships where the individual or combined market shares of the parties do not exceed 50% in one market and 10% in the other market.
- Joint ventures with turnover and assets between €100 million and €150 million in the EEA.
Safeguards and exclusions
The revised Simplified Procedure Notice now contains a clearer and more detailed list of circumstances in which the Commission may investigate a concentration under the normal procedure even though it technically qualifies for simplified treatment.
Super-simplified treatment
The revised Simplified Procedure Notice sets out categories of cases that can benefit from "super-simplified treatment". This comprises extra-EEA joint ventures and cases where there are no horizontal overlaps or non-horizontal relationships between the merging parties' activities. In a notable change to current practice, which should speed up such cases further, the Commission provides that parties may skip pre-notification discussions and notify their transaction directly with the Commission.
New Short Form CO
The Commission has revised the Short Form CO (which is used for cases under the simplified procedure). Rather than comprising mainly open text questions, this now includes primarily multiple-choice questions and tables, and streamlined questions on both the jurisdictional and substantive assessment of cases. This should speed up the simplified notification process and reduce the burden on the notifying parties, although it will be interesting to see what additional information Commission case teams request in practice.
Streamlining normal cases
The revised Implementing Regulation also streamlines the normal, non-simplified procedure by reducing the amount of information that is required to submit a complete Form CO (the Form used for notification of cases not under the simplified procedure). A revised section on waivers makes it easier and clearer to apply for and obtain a waiver, where the information is either not reasonably available and/or not necessary for the assessment. Some information requirements in the current Section 8 (on affected markets) have been removed and there are overview tables to facilitate the submission of the required information on potential horizontal overlaps. However there are also new questions in the Form CO, including for example on data the parties collect which may be useful for a quantitative economic analysis.
The revised Implementing Regulation also includes a revised version of the Form RS (relating to referrals) with some similar changes to the Form CO, and a revised Form RM (relating to remedies), which also includes some additional questions.
Electronic notifications
The Commission's Communication on the transmission of documents specifies the format for submitting notifications, reasoned submissions and commitments to the Commission.
Transmissions of Documents under 10 gigabytes in size should be sent electronically using EU Send Web ('EU Send'), the Commission's online exchange platform for secure transmission of documents. Transmissions of more than 10 gigabytes in size may be hand delivered or sent by registered post to DG Competition using hard disk drives, formatted in Microsoft Windows-compatible, uncompressed data in a USB 2.0 or 3.0 external enclosure.
Documents submitted electronically must be signed using at least one Qualified Electronic Signature (QES) complying with the requirements set out in Regulation (EU) No 910/2014 (the 'eIDAS Regulation'). Only QES are explicitly recognised to have legal effect equivalent to that of hand-written signatures in all Member States. Therefore, other types of electronic signatures, such as scanned signatures or Advanced Electronic Signatures as set out in the eIDAS Regulation, that do not meet the requirements of QES, are not accepted.
The new measures will take effect as of 1 September 2023 and the new notification forms must be used for all transactions notified on or after that date. Companies and advisors will therefore need to start using the forms in pre-notification discussions with the Commission in advance of that date.
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.
