Commission Fines Sigma-Aldrich €7.5 Million for Providing Misleading Information
The European Commission has fined Sigma-Aldrich €7.5 million on 3 May 2021 for providing incorrect or misleading information during the Commission's investigation under the EU Merger Regulation of Merck's acquisition of Sigma-Aldrich.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "The effectiveness of our merger control system relies on the accuracy of the information provided by the companies involved. Accurate information is essential for the Commission to take competition decisions in full knowledge of the facts. Today's decision to fine Sigma-Aldrich shows that companies should not withhold or provide misleading information. This is vital for the assessment of a deal, especially for research and development projects, which are by nature secret and for which only the parties have access to relevant information.”
The EU Merger Regulation obliges companies in a merger investigation to provide correct and non-misleading information. This is crucial for the Commission to review mergers and takeovers in a timely and effective manner. This obligation applies, regardless of whether the information has an impact on the ultimate outcome of the merger assessment.
On 21 April 2015, Merck notified the Commission of its plan to acquire Sigma-Aldrich. On 15 June 2015, the Commission approved the proposed acquisition subject to the divestiture of certain Sigma-Aldrich assets, which would address the competition concerns identified in markets for specific laboratory chemicals.
In the context of the divestment process, the Commission was made aware that an innovation project, called iCap was closely linked to the divested business and specifically developed for products included in the divestment business. However, the project had not been disclosed to the Commission.
Not only was the project not disclosed and discussed in remedy submissions, but information about it was also withheld in replies to specific requests for information. Moreover, the Commission found indications that Sigma-Adrich's supply of incorrect or misleading information was intended to avoid the transfer of the relevant project to the purchaser of the divestment business.
Hence, statements provided to the Commission were incorrect or misleading and prevented the Commission from undertaking an informed assessment of the intended scope of the commitments. The Commission can make such an assessment only if it has received from the parties all the information required, particularly when it relates to research and development (R&D) projects. These are typically confidential and the Commission can only learn about their existence through truthful and correct submissions made by the companies involved in merger procedures.
EU Merger Regulation states that the Commission should be informed for concentration threatens to affect significantly competition in a market within that Member State, which presents all the characteristics of a distinct market. Together with the General Electric and Facebook cases, this Sigma-Aldrich is the third time that the Commission has adopted a decision imposing fines on a company for the provision of incorrect or misleading information.
In this decision, the Commission concludes that Sigma-Aldrich committed three distinct infringements by providing, deliberately or at least negligently, incorrect or misleading information in the explanatory submission describing the remedy package and in the replies to two requests for information made pursuant to Article 11(2) of the EU Merger Regulation.
Source: European Commission Press Corner