EU Emergency Response Update – Key Policy & Regulatory Developments No. 106

COMPETITION & STATE AID

Competition

European Commission's merger simplification package becomes applicable (see here)

On 1 September 2023, the European Commission's merger simplification package entered into force. Adopted on 20 April 2023, the package's three measures further simplify procedures for reviewing concentrations under the EU Merger Regulation: (1) a revised Merger Implementing Regulation; (2) a Notice on Simplified Procedure; and (3) a Communication on the transmission of documents. The Commission's Merger Policy Brief, dated 1 September 2023, also provides further details on the package.

To recall, the merger simplification package's primary measures aim at streamlining merger review and include, among others:

For the simplified procedure:

• Broadening and/or clarifying cases that can be reviewed under the simplified procedure, e.g.:
  • The Notice identifies two new categories of cases that can benefit from simplified treatment. These comprise cases where under all plausible market definitions:
    • The individual or combined upstream market share of the merging parties is below 30% and their combined purchasing share is below 30%; and
    • The individual or combined upstream and downstream market shares of the merging parties are below 50%, the market concentration index (HHI delta) is below 150, and the company with the smallest market share is the same in the upstream and downstream markets.
      
      
• Facilitating the review of simplified cases. The Implementing Regulation introduces a new notification form (so-called "tick-the-box" Short Form CO) for simplified cases, which includes primarily multiple-choice questions/tables and streamlined questions on the jurisdictional and substantive assessment of cases.
  
  Notably, the following two categories of simplified cases can benefit from "super-simplified" treatment:

For the non-simplified procedure:

• The Implementing Regulation reduces and clarifies the information requirements in the notification form for these cases (Form CO, Annex I of Implementing Regulation), such as by:
  • Clarifying information on possibilities for waivers from certain information requirements, which codifies existing practice;
  • Eliminating certain previous information requirements concerning "Cooperative Agreements", "Trade between Member States and imports from outside the EEA", and "Trade associations".

On transmitting documents to the Commission, the new Communication introduces electronic notifications by default, and notably:

• Following exceptional measures taken due to the COVID-19 pandemic, since May 2020, the Commission has been temporarily accepting (and encouraging) notifications in digital format. Based on this experience and to promote the Commission's digital transformation, it is appropriate to establish permanent rules on digital transmissions of documents in the context of EU merger control.
  
  
• Technical specifications are provided for the signature of documents submitted electronically (where a signature is required). In this respect, documents submitted electronically must be signed using at least one Qualified Electronic Signature (QES) complying with the requirements set out in the eIDAS Regulation (Regulation (EU) No 910/2014).
  
  
• A fall-back mechanism allows for transmitting documents to the Commission's Directorate General for Competition by post or by hand delivery (e.g., in exceptional circumstances, for example, where transmissions exceed 10 gigabytes in size; or where required electronic delivery or signing is technically not possible).

The Commission's webpage on merger simplification provides further details, including a practical information section, with guidance on, e.g.,

• eTrustEx (Trusted Document Exchange), the platform for secure transmission of documents between DG Competition and external stakeholders.
  
  
• eRFI (electronic Request for Information (RFI)) provides respondents with a secure web-based workspace to (co-)draft, and submit their replies to the Commission.
  
  
• Key templates such as a model power of attorney for notifications; and table for turnover data for notifications.

Looking ahead. As stated in the above-referred Merger Policy Brief, the Commission expects that by broadening and clarifying the categories of simplified cases, some 10% of cases previously requiring notification under the ordinary procedure will now be reviewed under the simplified procedure. Thus, the Commission anticipates that at least 80% of all notified cases will be reviewed under the simplified procedure going forward.

By substantially alleviating the procedural burdens within merger control for unproblematic cases, the Commission expects that this will enable a more focused examination of cases deemed as warranting closer scrutiny.