Mergers: Commission announces evaluation results and follow-up measures



The European Commission has published a Staff Working Document on 26 March 2021 that summarises the findings of the evaluation of procedural and jurisdictional aspects of EU merger control. Following the results of the evaluation, the Commission decided to adopt a communication providing guidance on the application of the referral mechanism between Member States and the Commission set out in Article 22 of the Merger Regulation, and launch an impact assessment on exploring policy options for further targeting and simplification of merger procedures.


Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The EU merger procedures have served us well so far. Our evaluation however has identified some areas for improvement. A number of transactions involving companies with low turnover, but high competitive potential in the internal market are not reviewed by either the Commission or the Member States. A more frequent use of the existing tool of referrals under Article 22 of the Merger Regulation can help us capture concentrations which may have a significant impact on competition in the internal market. In parallel, we are also looking at the possible revision of certain procedural aspects of EU merger control. To this end, we invite input from stakeholders on different policy options to achieve further targeting and simplification of the EU merger control procedures.


ECOPNET (European Cooperation and Partnership Network) is ready to guide its partners on the issue with its working group specialized on trade regulations. Please contact us for further questions that you may have.


Findings of the evaluation of procedural and jurisdictional aspects of EU merger control


The objective of the evaluation was to assess the functioning of selected aspects of EU merger control to understand how the rules have worked in changing market realities. The evaluation focused on two topics in particular:

  • the effectiveness of the turnover-based jurisdictional thresholds in capturing concentrations which may have a significant impact on competition in the internal market, and

  • the effectiveness of simplification measures introduced in 2013.

To inform the evaluation process, the Commission carried out a public consultation, held numerous meetings with stakeholders, carried out extensive research into deal activity and analysed its own enforcement practice. The Commission also relied on evidence from a separate work stream on the effects of digitisation on competition policy, and closely monitored the introduction and application of additional jurisdictional thresholds based on transaction value in some of the Member States.


Background


EU merger control aims to ensure that major corporate reorganisations do not result in lasting damage to competition in the internal market. To achieve this aim, the EU Merger Regulation grants the Commission exclusive jurisdiction to review whether such concentrations may significantly impede effective competition in the internal market or a substantial part of it.


The scope of application of EU merger control is determined using turnover thresholds. If the merging companies' turnover at worldwide, EU and Member State level exceeds certain thresholds, they have to notify their concentrations to the Commission and must not implement them before receiving approval. Concentrations not captured by EU merger control may still come within the jurisdiction of one or several EU Member States. To ensure that the most appropriate authority carries out the assessment, and as long as certain conditions are met, the review can be referred from the Commission to the Member States or vice versa under the Merger Regulation's referral system.



Source: European Commission Press Corner