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Brussels. 28 July 1993 
COMMUNITY MERGER CONTROL 
pFPDRT FROM THE COMMISSION TO THE COUNCIL 
ON THE IMPLEMENTATION OF THE MERGER REGULATION 
-A -
TABLE OF CONTENTS 
I. INTRODUCTION 
II. PROGRESS ON IMPLEMENTATION 
A. SUMMARY OF DECISIONS 
Decisions under Articles 6(1) and 8 
Article 9(2) referrals and Article 22(3) applications 
Profile of cases notified 
B. EFFECTIVENESS OF IMPLEMENTATION 
The effect on competitive conditions 
Specific impact on national markets 
Situations of joint dominance 
Link between Community and national merger control 
policies 
Use of referrals procedures 
III. SCOPE FOR REGULATION REVISION 
A. TURNOVER THRESHOLDS 
The existing thresholds 
Need for "one-stop" shop and level playing-field 
Operations falling outside the current thresholds 
Survey results 
Forecast number of extra cases 
The two-thirds rule 
Position of Community institutions 
Position of national administration and competition 
agencies 
Observations of national industry associations, 
individual undertakings 
Impact of extra workload for the Commission 
Overall assessment 
Use of other criteria to determine jurisdiction 
B. ARTICLE 9(2) REFERRALS AND ARTICLE 22(3) APPLICATIONS 
C. OTHER IMPROVEMENTS REQUIRING A CHANGE IN THE REGULATION 
Commitments in the first phase 
Improving transparency of commitements in the second 
phase 
Changes with respect to banking and credit institutions 
Assessment criteria 
D. JOINT VENTURES 
IV. GENERAL CONCLUSIONS 
A. THRESHOLDS 
B. REFERRALS 
C. OTHER IMPROVEMENTS REQUIRING A CHANGE IN THE REGULATION 
D. IMPROVEMENTS NOT REQUIRING A CHANGE IN THE REGULATION 
E. PROPOSED ACTION 
- S\ Sx. -
LIST OF ANNEXES 
ANNEX 1 : Analysis of total number of operations 
ANNEX 2 : Enquiry among business associations and individual 
undertakings 
ANNEX 3 : Qualitative assessment of pre-notifications and other­
wise known cases not falling under the existing 
thresholds 
ANNEX 4 : Graphs and tables 
- SI&-
I. INTRODUCTION 
The Merger Regulation which was adopted by the Council on 
21 December 1989, created for the first time an adequate 
legal instrument at Community level for control of mergers 
which could affect trade across the boundaries of the Member 
States. This new framework of Community merger control is 
widely regarded as having been successful. It has provided 
undertakings which are developing their businesses across 
the borders of the Member States with a rapid and efficient 
system of merger control based on a "one-stop" shop and a 
level playing-field of rules equally applied across the 
Community. 
The Regulation establishes exclusive Commission competence 
for the assessment of concentrations having a Community 
dimension. These are mergers, acquisitions or "structural" 
joint ventures where the annual turnover of the undertakings 
concerned exceed certain thresholds. Below these thresholds 
concentrations are only subject to national merger control 
law if it exists. 
After nearly three years of application* of the Regulation 
it is now appropriate for the Commission to report to 
Council and Parliament on specific aspects of its operation 
and effectiveness. 
In the first place there is a legal obligation to conduct a 
review of two important aspects of the Regulation^. These 
are the turnover thresholds under Article 1(3) and case 
referral to the competent national authorities under 
Article 9(10). The former is of prime importance since it 
determines the scope of the Commission's exclusive 
competence; the latter is also of major importance since it 
establishes the circumstances in which cases which are 
notified to the Commission could nevertheless be dealt with 
by national authorities. 
At the time of the adoption of the Regulation, a number of 
specific policy declarations concerning future changes to 
the Regulation were made: 
The Commission itself stated that: 
- the main (i.e. world) turnover threshold should be reduced 
from 5,000 to 2,000 million ECU at the end of the initial 
stage of implementation and that the Community turnover 
threshold of 250 million ECU should also be revised in the 
light of experience and the trend of the main threshold. 
If the same proportionate reduction is made as for the 
main threshold, this implies a threshold of 100 million 
ECU instead of 250 million ECU; 
Furthermore, the Commission and the Council together stated 
that: 
1 The Regulation entered into force on 21 September 199 0 
2 There is also an implicit review for referral of concen­
trations of non-Comunity dimension by Member States to the 
Commission implied under Article 22(6) 
- 2 -
- they were ready to consider taking other factors into 
account in addition to turnover when the thresholds were 
revised; 
- threshold review should be combined with a special re­
examination of the method of calculation of the turnover 
of joint undertakings for the application of Article 5(5); 
- a more precise concept of banking income should be applied 
either, subsequent to the entry into force of the relevant 
provisions of Directive 86/635 or, at the time of 
threshold review; and 
- the arrangements for the publication of opinions of the 
Advisory Committee should be reviewed. 
The first two declarations concern Article 1 of the Regu­
lation whilst the third declaration bears on Article 5(5). 
The last two relate to Article 5(3)a and Article 19(7) 
respectively. 
Within the framework provided by the above considerations 
the present paper 
- presents a summary on the implementation of the Regulation 
to date, 
- conducts an examination of specific provisions of the 
Regulation (including of turnover thresholds and Article 9 
referral which is legally required) and examines the case 
for the scope for improvements, with and without 
amendments of the Regulation, and assesses the possibility 
of solving problems within the framework of the existing 
Regulation. 
- proposes that the Commission should postpone any formal 
proposal to revise the Regulation until, at the latest, 
the end of 1996. 
II. PROGRESS ON IMPLEMENTATION 
A. SUMMARY OF DECISIONS 
Decisions under Articles 6(1) and 8 
1. As of 30th June 1993, 165 operations had been notified under 
the Merger Regulation and there have been 159 Article 6(1) 
decisions: 
Article 
6(l)a (out­
side scope 
of Regulation) Number of 
cases 
17 - 3 -
% of 
% of cases falling 
all cases notified under Regulation 
11 
Article 6(l)b 
(compatible 
with common 
market) 131 82 92 
Article 6(l)c 
(initiating 
proceedings) 11 
159 100 100 
As can be seen, of all cases falling under the Regulation, 
92% could be cleared in the first Phase whereas Phase 2 
proceedings were initiated in the other 8% of cases. 
However, 8 cases approved under Article 6.1(b) were cleared 
subject to the inclusion of specific undertakings offered by 
the parties. 
Phase 2 proceedings must be closed within a maximum of four 
months by means of a decision under Article 8 declaring 
either that 
- the concentration is compatible with the common market, 
but may be subject to conditions and obligations 
(Article 8(2)); or 
- the concentration is incompatible with the common market 
and is prohibited (Article 8(3)). 
To date there has been one prohibition, but in seven other 
cases the final decision was subject to conditions and/or 
obligations. In the other two cases no conditions or 
obligations were attached. 
Article 9(2) referrals and Article 22(3) applications 
Under Article 9(2), a Member state may request the 
Commission to refer to it notified concentrations which 
threaten to create or strengthen a dominant position in a 
distinct market within its territory. To date five such 
requests have been received. In three cases the Commission 
initiated Phase 2 proceedings and in one case the operation 
was cleared in Phase 1. In the remaining case there was 
partial referral and partial clearance. 
Under Article 22(3) a Member State may request the appli­
cation of the Regulation to concentrations having no 
Community dimension. The only request to date was that of 
the Belgian Government that the Commission investigate the 
effect of the acquisition by British Airways of Dan Air's 
scheduled air service activities on the Belgian market. 
- 4 -
Profile of cases notified 
4. Of those cases notified, the majority were in industrial 
manufacturing particularly the food and drink, chemicals and 
motor vehicle sectors. Nonetheless, nearly half of the 
operations notified included service activities, particu­
larly retailing, insurance, computing, banking and whole­
saling. These results reflect general trends in the merger 
activity of the thousand or so largest companies operating 
in the Community. 
Most of the operations concerned either majority acquisi­
tions or establishment of joint ventures in fairly even 
proportions. 
5. By far the majority of notifications concerned undertakings 
from France, Germany and the United Kingdom, with French 
companies being particularly active (involved in just over 
half of all operations notified). This picture was true of 
acquisitions generally over the same period. 
With regard to non-Community undertakings, the most active 
have been companies from the United States, which were 
involved in about a quarter of all notifications, followed 
by companies from Sweden, Switzerland and Japan. 
Reflecting the aims of the Merger Regulation, nearly three 
quarters of all notified cases concerned undertakings from 
different Member States or from one Member State and a non-
Member State. The balance related to firms of the same 
nationality or extra-Community companies only. 
6. Similarly, analysis of the individual case decisions show 
that 64% of decisions in the first two years involved 
Community-wide markets and a further 11% concerned markets 
extending over more than one Member State. 
B. EFFECTIVENESS OF THE IMPLEMENTATION OF THE REGULATION 
The effect on competitive conditions 
7. Over the last three years the Commission has aimed to apply 
the Regulation in conformity with its fundamental objec­
tives: allowing concentrations which bring about necessary 
corporate reorganisations in the Community as a result of 
the opening of national markets to Community and world 
markets, while prohibiting or modifying concentrations which 
are likely to result in lasting damage to effective compe­
tition in the common market or in a substantial part of it. 
The first category of concentrations must be welcomed 
because they stimulate a dynamic of competition in the 
common market, open up national markets and increase the 
competitiveness of European industry by improving the cost 
structure of the undertakings and by stimulating innovation 
in a wider competitive environment. The second category of 
concentrations is harmful to the development of the internal 
market because they remove the pressure of competition 
necessary to achieve the benefits of the process of reorga­
nisation. The maintenance and development of effective 
competition plays a central role in the functioning of the 
- 5 -
internal market in terms of trade flows and best allocation 
of resources of the economy. 
The very existence of EEC merger control legislation, 
supplemented by the considerable amount of informal guidance 
given to undertakings by the Commission's services, has 
arguably a significant preventive effect on anti-competitive 
business strategies in the Community. With respect to 
formally notified cases the percentage of cases where the 
Commission raised serious doubts leading either to a modifi­
cation of the concentration plan already in Phase 1 or to an 
opening of Phase 2 proceedings amounted to around 15% (20 
cases out of 142 as of 30.06.93). This percentage is 
comparable to that of other merger control agencies. 
The Commission prohibited one merger because no other remedy 
was available to remove the dominant position which would 
have been created by the merger (Alenia-Aérospatiale/de 
Havilland). In all other cases, where the serious doubts 
were confirmed by the outcome of the investigation, the 
parties modified their original concentration plan in such a 
way as to remove the competition problem. In those cases, 
effective competition was preserved and developed through 
mainly three types of remedies : 
- the removal of barriers to entry to the market concerned 
such as the cancellation of exclusive distribution agree­
ments, the opening up of supply or sales markets which 
were previously foreclosed or the severance of vertical 
links between the merging firms and the final customers 
(cf. Fiat/Ford, TNT/Canada Post et.al., Grand 
Metropolitan/ Cinzano, Elf Aquitaine/Minol, 
Air France/Sabena, British Airways/TAT and 
Alcatel/Telettra); 
- the ending of capital, personal or contractual links 
between competitors in oligopolistic markets (cf. 
Courtaulds/SNIA, Varta/Bosch, Nestlé/Perrier); 
- the divestiture of assets or shares to reduce the market 
share of the merging firms and facilitate the entry by new 
competitors (cf. Magneti Marelli/CEAc, Accor/Wagons-Lits, 
Nestlé/Perrier, Du Pont/ICI, KNP/BT/VRG). 
Specific impact on national markets 
National merger control legislations examine mergers, 
including mergers having a cross-border impact, from a 
national perspective (effects on the national market). The 
EEC Regulation on the other hand has entrusted the 
Commission with the task of examining the effect of mergers 
on the structure of competition at Community level, i.e.: 
- the market-partitioning effect of mergers resulting from 
dominant positions on national markets (danger of national 
champions) and 
- the anti-competitive effect of mergers creating dominant 
positions at community level through single-firm dominance 
or oligopolistic dominance resulting from too narrow 
supply structures. 
- 6 -
In its implementation of the Regulation, the Commission has 
prevented a number of dominant positions which could have 
foreclosed national markets (e.g. Fiat/Ford, Alcatel/ 
Telettra, Magneti Marelli/CEAc, Varta/Bosch, Accor/Wagons-
Lits, Nestlé/Perrier). It has also closely examined cases 
with a narrow supply structure at Community level (e.g. 
Du Pont/ICI, Tetrapak/Alfa-Laval, Thorn EMI/Virgin, Rhône-
Poulenc/SNIA). 
Link between Community and national merger control policies 
9. With increasing integration of EC markets, there are less 
and less markets of purely national dimension. This trend 
towards integration of national markets is in itself 
procompetitive and the implementation of the Regulation must 
take this factor into account. It is in part reflected in 
the high number of clearance decisions. However, the 
Commission has to take a realistic view by defining geogra­
phic markets in relation to the area where competition 
actually occurs (national, EEC or even world markets). 
Since the adoption of the EEC Regulation most Member States 
now have merger control laws for mergers below the thres­
holds of the Regulation. This development is welcomed by the 
Commission since it guarantees a complete system of protec­
tion of effective competition at national and Community 
level. 
The main objective of the national legislations is of course 
the prevention of dominant positions at national level. 
However, this control can lead to: 
- authorisations of mergers without taking into account the 
negative effects at Community level, 
- authorisations of mergers in several Member States without 
taking into account the cumulative effect of these 
mergers. 
These effects can only be mitigated by a lowering of the 
thresholds or by according the commission the right to deal 
with concentrations notifiable under the legislation of two 
or more Member States. 
If firms within the community are to be able to develop 
their business on a community-wide basis and subject to a 
common set of rules, it is essential that the objectives and 
methodology and procedures of national and Community merger 
policies should as far as possible converge, otherwise, 
there is the real danger of undertakings seeking to tailor 
their proposed mergers in such a way as to fall under one 
jurisdiction rather than another ("forum-shopping"), whether 
between national jurisdictions, or between national and 
Community jurisdiction. 
Use of referrals procedures 
10. The Regulation has a built-in safeguard for cases where 
action is better carried out at the national level even if 
- 7 -
all the thresholds of the EEC Regulation are fulfilled. 
Article 9 provides for referral of such cases by the 
Commission to the national authorities in accordance with 
the subsidiarity principle. 
Out of the five requests for referral mentioned above four 
were from the Bundeskartellamt; one from the competent UK 
authorities. In three cases (Varta/Bosch, Mannesmann/ Hoesch 
and Siemens/Philips) the Comission recognised the existence 
of a threat to competition. The Commission therefore decided 
to deal with the case itself by initiating Phase 2 
proceedings. In general the reason why the Commission 
decided upon this course of action, notwithstanding the 
particular threat to effective competition in the Member 
State concerned, was that the extent of the geographic 
reference market was not known with certainty at the date of 
the decision particularly having regard to the fact that 
markets were in a state of progressive integration. 
In one of the two remaining requests for referral (Alcatel/ 
AEG Kabel), the Commission concluded that a threat to a 
distinct local or regional market did not exist. The 
Commission therefore cleared the case after first having 
addressed a decision to this effect to the national 
authority concerned. 
In the remaining case (Steetley Tarmac) the Commission 
concluded that for some of the product markets concerned 
(e.g. bricks), a threat to a geographic market of a local 
nature existed. Moreover, given the specific characteristics 
of the other product markets concerned there were no or 
insignificant spillover effects on markets outside the 
Member State concerned. Therefore, the Commission referred 
the assessment of these product markets to the competent 
national authority. 
III. SCOPE OF REGULATION REVISION 
A. TURNOVER THRESHOLDS 
The existing thresholds 
1. The establishment of the existing turnover thresholds in 
1989 was made on the basis of very uncertain forecasts as 
the exact frontiers they would draw between the volume and 
nature of cases which would be notifiable at community level 
and those which would be left to national jurisdiction. The 
Council recognised this uncertainty by agreeing itself to 
review the existing thresholds within four years following 
the adoption of the Regulation and also by stating its 
readiness to consider taking other factors into account in 
addition to turnover when the thresholds were revised. 
The original Commission proposals and declarations were 
based on the assessment that a main threshold of 2 billion 
ECU and a minimum Community turnover threshold of 
100 million ECU would in normal circumstances cover the bulk 
of concentrations having a significant impact on Community 
trade. This is not to say that there would be no significant 
operations below these thresholds. The assumption is that 
below this level concentrations would primarily have a 
- 8 -
national impact and, in accordance with the subsidiarity 
principle, would therefore better be handled at national 
level. 
Need for "one-stop shop" and level playing-field 
2. At the time of the adoption of the Regulation, the major 
advantages of an exclusive Community competence for cross-
border mergers were identified as the establishment of a 
one-stop shop providing a level playing-field for merger 
control combined with rapid decision-making. The need for a 
one-stop shop and level playing-field are even greater 
today. 
One consequence of the advent of additional national systems 
for merger control (e.g. in Belgium, Italy and Portugal) 
will be an increase in the number of potential 'stops' at 
which regulatory approval will be required for a given 
concentration. This will be particularly true for those 
operations having a competitive impact reaching across 
several Member States but which, because of failure to 
satisfy the existing threshold criteria, do not benefit from 
the "one-stop shop" control available under the Merger 
Regulation. 
At the same time, the need for a level playing-field is not 
restricted to the largest companies and sectors. With 
progressive integration in the single market, cross-border 
trade will increase in more and more sectors and involve 
firms of smaller size. The relevant geographic market3 will 
increasingly be the Community as a whole. The changes 
induced by the single market program have arguably already 
provoked an unprecedented wave of cross-border merger 
activity. This is amply demonstrated by an analysis of 
merger activity4 as shown in Annex 1. After the launch of 
the single market programme in 1985, and encouraged by a 
favourable economic climate, there was a very substantial 
increase in merger activity rising to a peak in 1989/90. Due 
to the general economic downturn, this has now decreased, 
but merger activity is still running at a level which is 
approximately 25% above its 19 86/87 level. 
However, the significant point is that this peak and the 
maintained high level of overall merger activity is prima­
rily due to the very substantial increase in Community-wide 
as opposed to national operations. Examination of the first 
graph in Annex 1 shows that the peak for national mergers 
was only 30% above its 86/87 level and that this activity 
has now returned to that level. For Community-wide mergers 
the peak was 250% above the 86/87 level and is now still 
double that level. Moreover, there would still appear to be 
a large number of mergers of Community interest falling 
outside the Regulation. Currently only about 50 to 6 0 
mergers a year fall under the Regulation. This has to be 
compared with the 282 Community mergers identified in the 
Commission's latest Annual Competition Report for the period 
91/92. 
3 Exceptions will of course remain, e.g. non-tradeable 
services such as local retailing or construction 
4 Cf. Annual Competition Reports for the corresponding years 
- 9 -
Operations falling outside the current thresholds 
In addition to increasing cross-border activity in the 
community, there is other evidence which shows that there 
are still cases falling below the current thresholds, which 
have a size and nature which are likely to affect compe­
titive conditions in the community as a whole and therefore, 
in accordance with the subsidiarity principle, would be 
better examined under a single Community jurisdiction. 
During the course of the application of the existing 
Regulation, the Commission has frequently encountered cases, 
usually through case presentation by parties during pre-
notification meetings, where, although the operation was 
likely to have a strong impact on competitive conditions 
throughout the Community, the operation nevertheless did not 
fall under the Regulation because the existing thresholds 
represented by the 5 billion, 250 million and two-thirds 
rule were not all satisfied. Specific examples demonstrating 
this point are listed in Annex 3. 
The list in Annex 3 covers a wide variety of sectors. 
Particularly important cases are likely to arrive in cases 
involving specific chemicals or high technology products 
where total turnover for the whole product market concerned 
can be relatively small compared to the existing thresholds 
or where turnover for the sector is low generally, e.g. 
textiles, carpets and paper products. In such types of 
cases, even if a very large company with annual turnover 
exceeding 2 billion ECU acquires a smaller company having a 
high Community market share, the fact that the latter has a 
Community turnover below the threshold of 250 mECU, will 
mean that the operation falls completely outside the scope 
of the Community Merger Regulation. Consequently, it is not 
sufficient just to reduce the main world turnover threshold. 
There is in fact an even greater need to reduce the 
Community threshold. 
Traditionally analysis has focused on the industrial sector 
but appropriate regard must also be had to the increasingly 
important service sector. Although a large part of these 
service activities relate to non-tradeable services, there 
remain key activities in the service sector such as 
publishing, advertising and computer services, which are 
increasingly being structured on cross-border lines but, 
with the existing thresholds, remain outside the scope of 
Community jurisdiction. 
Survey results 
In order to investigate the practical impact of threshold 
reduction the commission lias conducted a special survey 
among nearly 300 of the Community's largest business under­
takings as well as among associations representing the views 
of the business community. This survey was felt necessary 
because the available data bases on merger and acquisitions 
were ill-adapted to the analysis required, primarily because 
of the absence of Community and Member state data which is 
- 10 -
critical for the application of the two-thirds rule. A 
further difficulty was obtaining data on joint venture 
operations. 
i 
The survey aimed to establish what additional operations 
would have fallen under the Merger Regulation in 1991 and 
1992 had the various thresholds been relaxed by: 
- lowering the world-wide turnover threshold from 5 to 
2 billion ECU, 
- reducing the Community turnover from 250 to 100 million 
ECU, 
- abolishing the two-thirds rule. 
Given the difficulties in the application of the turnover 
rules to the financial sector, banks and insurance companies 
were purposely excluded from the sample. Non Community com­
panies were also excluded. Although the identified sample is 
not comprehensive, it is believed to cover, subject to the 
exceptions mentioned, the vast majority of companies in the 
Community having an annual turnover exceeding 2 billion ECU. 
France, Germany and the United Kingdom - the three countries 
representing the great bulk of merger activity in the 
Community - represent over 80% of the 276 companies 
contacted. Participation in the survey was on a voluntary 
basis and 174 companies have replied to date. This corres­
ponds to a response rate of 6 3%. 
Forecast number of extra cases 
Extrapolating from the results of this survey, a forecast 
can be made of the expected number of extra cases falling 
within the scope of the Regulation if the world-wide 
turnover threshold were reduced from 5 to 2 billion ECU, in 
accordance with the commission's declaration at the time of 
adoption of the Regulation, and if a corresponding reduction 
were made in the Community turnover threshold from 250 to 
100 million ECU. The forecast extra annual number of cases 
falling under the Regulation is 50 extra cases if the two-
thirds rule is maintained. 
As merger activity is subject to considerable fluctuation it 
is impossible to predict precisely the extra number of cases 
which would be covered. However the above orders of magni-
- 11 -
tude are comparable to the forecasts of the British and 
German merger control authorities. Both estimated that if 
the current thresholds were reduced there would be an 
approximate doubling of the 50-6 0 cases a year currently 
handled by the Commission. 
The two-thirds rule 
6. In the survey, the current two-thirds rule did not play a 
role in 33 operations, of which 24 had a cross-border 
impact. 
In 20 operations the two-thirds exclusion rule came into 
play. Nine cases concerned sectors such as retailing or 
construction and building products where normally the 
geographical reference market would be local or regional and 
where the competitive assessment of such operations would in 
general be better handled at the national level. On the 
other hand for the remaining 11 cases, the geographical 
reference market concerned by the operation was almost 
always much wider than the Member State for which the two-
thirds rule applied. For example, these cases concerned 
sectors such as steel, textiles, automobile components, 
machine tools and electric equipment for railways. 
If the two-thirds rule were replaced by a three-quarters 
rule, all 9 cases where a geographical reference market was 
of a national nature would still all be excluded, whereas of 
the 11 other cases, 7 would now no longer be excluded. More 
particularly, each case specifically mentioned above concer­
ning a sector having a geographical reference market typi­
cally much wider than the national level, would not be 
excluded. 
The three-quarters rule could therefore arguably represent a 
better calibration of the existing rule for separating those 
cases having only a national dimension and better dealt with 
at the national level from those cases where a wider 
Community dimension was involved. A further possibility 
would be a derogation of the two-thirds rule in cases where 
the merging companies have a substantial absolute Community 
turnover outside the Member State where the requirements of 
the two-thirds rule are fulfilled. This would mean that the 
two-thirds rule would not apply where the turnover in other 
Member States exceeds a certain threshold. This proposal 
would in particular solve the problem that large groups of 
companies such as Siemens or Daimler Benz come frequently 
under the two-thirds rule, given their strong home markets 
and considerable exports to countries outside the EC, 
although the mergers where they are involved have frequently 
substantial repercussions across the Community. 
Position of Community institutions 
7. The European Parliament has already formally stated that it 
is in favour of reducing thresholds. More specifically, in 
its Resolution on the Nineteenth Report on Competition 
Policy5, which was adopted on 24th January 1991, Parliament 
cf. Point 26 of the Resolution as well as Point 25 of the 
preceeding DESMOND Report (Document A3-0374/90). 
- 12 -
considered that the aggregate world turnover threshold of 
ECU 5 billion was unrealistically high and that, having 
regard to the inadequate basis provided by Article 89 of the 
EEC Treaty for the assessment of concentrations below the 
thresholds, it would support any proposal to reduce the 
thresholds provided for in Article 1 of the Regulation. 
Similarly, the Economic and social committee has raised the 
question of whether the threshold at which merger control is 
triggered is not unduly high. In its Opinion6 on the 
Twenty-first Report on Competition Policy it expressed the 
view that the main threshold of ECU 5 billion was too high 
and that it gave rise to a major series of doubts. 
Furthermore, it considered that this threshold could neither 
be justified from an economic nor from a competition policy 
point of view. 
Position of national administration and competition agencies 
Experts from the Member States and representatives of 
naional competition agencies were consulted extensively on 
the result of the Commission's survey and the advisability 
of the threshold reduction, in particular at a multilateral 
meeting on 21st June 1993. 
A majority of national authorities expressed satisfaction 
with the existing Regulation but were reluctant to envisage 
threshold reduction without further experience of the impact 
of the Regulation. While acknowleding the benefits of the 
"one-stop" shop and level playing field, they remained 
unconvinced that there was a sufficient number of cases 
below the existing thresholds which raised problems, either 
in terms of operations being covered by several 
jurisdictions or because the operations concerned genuinely 
endangered competitive conditions in the Community as a 
whole and would not be dealt with adequately by national 
authorities. In this context they recalled the recent 
strengthening of national merger control policies in 
Belgium, Italy, Portugal and Spain. 
Some national authorities suggested too that inflation would 
gradually erode the real value of thresholds and that the 
addition of turnover in the new Member States after enlar­
gement in 1995 would mean that some operations would be 
eligible that are not eligible now. The Commission 
acknowledges these factors but is of the view that their 
potential impact on jurisdiction is limited. 
Two authorities link the question of threshold reduction to 
the establishment of an independent investigation procedure, 
including, in the longer term, the creation of a European 
Cartel office. 
Some authorities believe that any extension of community 
competence for mergers should be examined in the wider 
context of a general review of the share-out of tasks 
between the commission and the Member states in the appli­
cation of the Treaty articles on competition. 
cf. Point 1.3.2 of the Opinion on the Twenty-first Report on 
Competition Policy adopted by the Economic and Social 
Committee on 25th November 1992. 
- 13 -
Observations of national industry associations, individual 
undertakings 
9. The UNICE and International Chamber of Commerce favour only 
a reduction of the main threshold from 5 to 2 bECU, with no 
other changes for the moment. 
The BDI, CBI and VNO/NCW-Netherlands are strongly in favour 
of reduction of the world turnover threshold and the 
removal/relaxation of the two-thirds rule. With exception of 
the BDI, they do not wish to see a reduction of the 
Community threshold of 250 mECU. The CNPF, AGREF and 
Confindustria are broadly against threshold reduction, 
although Confindustria would appear in favour of a step-wise 
increase in future Community competence. The Danish and 
Greek Industry Associations appear against lowering 
thresholds. 
All industry associations are opposed to an enlargement of 
the current scope of Article 9, largely on the basis that it 
would undermine the one-stop shop principle. 
The positions are summarised in Annex 2 Part B. The indivi­
dual comments of the large undertakings indicated in Annex 2 
Part C, generally reflect the position of the national 
industry associations. 
Impact of extra workload for the Commission 
10. Representatives of business, of legal firms and of national 
authorities have raised concern as to whether the Commission 
would be able to maintain the effectivess of the existing 
control procedures if it had to deal with the increased 
workload which threshold reduction would bring with it. 
Due to a number of factors the Commission believes that the 
increase in staffing necessary to deal with extra cases 
following threshold reduction would be significantly less 
than the proportionate increase in the number of cases (from 
+ 60 to 110 a year). However it is clear that the additional 
resources required would have to be taken into account by 
the Council and the Commission in their final decision on 
the question. 
Overall assessment 
11. If the turnover thresholds were reduced in accordance with 
the Commission's declaration, an additional 50 cases' would 
fall under the Regulation. However, if no change were made 
to the Community turnover threshold, which generally seems 
to be the preference of the business community, the number 
of extra cases is likely to be much smaller (up to 20 
cases). 
12. From an economic point of view, there are strong arguments 
for a reduction of the current thresholds in Article 1(2). 
The progressive integration of the markets within the 
or 60 cases if the two-thirds rule is replaced by a three-
quarters rule 
- 14 -
Community and, linked to this, the increase in the number of 
cross-border transactions require an extended scope of the 
Community rules on mergers in order that cross-border 
operations can be dealt with fairly according to a common 
set of rules and by one, rather than several, competition 
agencies throughout the Community. 
However there are clear hesitations among the competent 
authorities and competition agencies at national level on 
the need to proceed to an immediate reduction in thresholds 
without further experience of the application of the 
existing Regulation. 
This preliminary assessment on thresholds is expanded in the 
general conclusions to the paper under point IV. 
Use of other criteria to determine jurisdiction 
13. The application of fixed quantitative thresholds is inevi­
tably an approximate and somewhat crude method for alloca­
ting jurisdiction between the national and Community levels. 
Ideally, it would be possible to take into account both 
sectoral and qualitative criteria. The difficulty is that 
such criteria create genuine problems, especially within the 
Community framework for merger control which is based on an 
ex-ante control with rapid decision-making. 
Whilst other criteria, such as market share data, can be 
useful to help determine jurisdiction they are often unavai­
lable or imprecise. Usually, they can only be accurately 
established after extensive analysis and in critical cases 
are frequently a subject of contention. 
Similarly, another question that could be considered is the 
introduction of differentiated thresholds on a sectoral 
basis. This too would raise considerable problems. There 
would in the first place be the difficulty of establishing 
varying thresholds by sector in terms of obtaining an 
"equivalent" measure for merger control. The application of 
the current thresholds would also become much more complex, 
particularly in cases concerning firms active across a 
number of sectors. 
At the level of the individual undertakings, turnover data 
is nearly always fully available and objective. The present 
approach has the great advantage of providing legal 
certainty in relation to jurisdictional allocation. 
The theoretical advantages gained by the introduction of 
other criteria such as sectoral or qualitative data, would 
therefore be considerably outweighed by the practical diffi­
culties they would raise. 
B- ARTICLE 9(2) REFERRALS AND ARTICLE 22(3) APPLICATIONS 
14. The turnover of undertakings and the size of product markets 
vary considerably by economic sector. On average a petro­
chemicals company has much higher turnover than a textile 
company. A single threshold will necessarily have a varying 
impact on a sectoral basis. The only way to obtain the same 
advantages of single Community jurisdiction for those 
- 15 -
sectors with below average turnover is a reduction in thres­
holds. On the other hand, for sectors where average turnover 
is relatively high, one consequence of threshold reduction 
is the possibility that there may be an increase in 
notification of more nationally oriented mergers in these 
particular sectors. Referral of such cases by the commission 
to the Member States allows some fine-tuning in case allo­
cation. This raises the question as to whether there should 
be a more flexible approach to referral under Article 9 in 
the interests of a more balanced allocation of cases between 
the Commission and the Member States. 
There are a variety of technical changes that could be made 
to Article 9 to achieve this objective. The following 
changes could, for example, be envisaged: 
- where an operation concerns only markets representing a 
non-substantial part of the Community (i.e. local or 
regional) within a Member State the threat requirement 
could be removed. This would mean in practice that the 
Commission would always, upon request, refer a case back 
to the Member State concerned where a concentration has no 
impact on a substantial part of the community; 
- the threat requirement could be removed for all cases 
where a Member state demonstrates that an operation only 
concerns a distinct market within that Member State, be it 
a substantial part of the common market or not. 
However, since it is now the general position of the 
Commission to either refer a case to national authorities or 
open Phase II proceedings where a justified request for case 
referral has been lodged, it is generally considered that 
the current terms of Article 9 provide an adequate 
instrument if existing turnover thresholds were maintained. 
15. Lastly, certain concentrations falling below the thresholds 
may still have a significant impact on competition across 
national boundaries. It would therefore seem sensible to 
keep the possibility open for Member States to refer cases 
to the Commission under Article 22. 
conclusion on referrals 
From the experience gained and the evolution in the 
Commission's practice with regard to application of 
Article 9, there appears to be no case for amendment of the 
referrals procedures of the Regulation at this stage. 
However the matter could be looked at again in the proposed 
future review of the Regulation by some adjustments of the 
referrals procedures. 
C. OTHER IMPROVEMENTS REQUIRING A CHANGE IN THE REGULATION 
16. In the context of the review of the Merger Regulation, the 
Commission has also examined a number of other possible 
improvements to the Regulation which were mainly related to 
procedural issues. In this respect, a distinction has to be 
made between those procedural changes which need an amend­
ment of the Regulation and those which can be implemented by 
the Commission on its own authority. 
- 16 -
(i) Commitments in the first phase 
17. As has already been described above, during the first years 
of merger control the Commission has felt it justified to 
accept commitments from companies in Phase 1 examination. It 
has done so in cases where the competition concern was 
clear-cut, could easily be remedied and where compliance was 
easily monitored. Examples were Fiat/Ford New Holland, 
Elf/Minol, Courtaulds/Snia and British Airways/TAT. This 
provided the notifying parties with an option to modify 
their concentration plan so as to remove serious doubts 
presented by the original plan without needlessly suffering 
the loss of time incurred in entering Phase 2 proceedings. 
Such an approach provides a regulatory response propor­
tionate to the size of the competition problem and the 
remedy already at hand. Secondly, Recital 8 of the Imple­
menting Regulation^ provides for the Commission services to 
discuss difficulties encountered with the companies 
concerned at any stage in the procedure. 
It nevertheless raises questions with regard to procedure 
and especially transparency and to the ability of the 
Commission to enforce commitments which can only be ful­
filled after the clearance decision has been adopted. Under 
other competition jurisdictions, proposed undertakings must 
be made public before they can be accepted in a final 
decision. Publication of the proposed undertakings before 
the final Commission decision would give competitors and 
interested third parties the opportunity to comment. 
The following amendments to Article 6(l)b could therefore be 
considered: 
- it could be explicitly stipulated that the Commission may 
attach to its decision conditions and obligations ; 
- subject to confidentiality provisions the commitments 
proposed by the parties could be made known to third 
parties, and if appropriate, published in the Official 
Journal of the European Communities; 
- in addition, if it had received settlement proposals at a 
late stage the Commission could be empowered to prolong 
the usual time limit of one month for Phase 1, by a 
maximum of one additional month; 
- as a corollary it would be necessary to foresee the same 
penalties as for Article 8(2) decisions in the event of 
any failure to fulfil undertakings. 
This new procedure would not only allow the Commission to 
obtain a better knowledge of the practical implications of 
the envisaged conditions, but it would also allow Member 
States to be fully informed of any undertakings envisaged 
and, if necessary, to make their views known in due time. 
Commission Regulation (EEC) No. 2367/90 of 25 July 1990 
- 17 -
(ii) Improving transparency of commitments in the second phase 
18. For the same reasons as outlined under point 17 above, the 
Commission could, subject to business secrecy, make proposed 
settlements known to third parties and, where appropriate, 
publish commitments proposed in Phase 2 cases in the EC 
Official Journal. This would render the Commission procedure 
more transparent and give third parties a fuller opportunity 
to comment. 
Experience shows, however, that the parties concerned 
frequently propose commitments only at a relatively late 
stage of the second phase. Where a commitment is proposed 
immediately before or after the meeting of the Advisory 
Committee it would normally not be possible, given the 
procedural constraints of Phase 2 proceedings, to publish 
the proposed commitments, grant third parties adequate time 
to comment and consult Member States before any final deci­
sion is adopted within the original deadline. Taking into 
account the requirements of transparency and the rights of 
third parties on the one hand and the procedural constraints 
on the other hand, it appears that an appropriate and 
balanced solution would be that: 
- the Commission would be empowered to prolong the usual 
time limit of four months for Phase 2 by a maximum of one 
additional month, where commitments were not proposed 
sufficiently in advance of the meeting of the Advisory 
Committee under Article 18(1); 
- the Commission may communicate the proposed commitments to 
interested third parties and, where appropriate, publish 
them in the Official Journal before the adoption of a 
clearance decision. 
(iii) changes with respect to banking and credit institutions 
19. For the purposes of the application of the turnover rules to 
banks (i.e. credit and other financial institutions), assets 
and loans and advances are used as a tool to generate 
notional turnover. This is prescribed in the existing 
Article 5(3)a of the Regulation. However, the Commission's 
experience in banking cases to date has shown weaknesses in 
the ability of this approach to provide solutions to 
problems such as: 
- the allocation of turnover by geographical area; and 
- the calculation of turnover for institutions whose activi­
ties either do not include lending or advancing money, or 
are widely diversified. 
Council and Commission partially anticipated this problem. 
In their joint declaration, they considered that "the 
criterion defined as a proportion of assets should be 
replaced by a concept of banking income as referred to in 
Directive 86/635." This Directive is now implemented in 
every Member State. 
The use of the banking income criterion which includes 
mainly interest income, income from securities, commissions 
- 18 -
receivable and net profit on financial operations has 
several advantages. It enables credit and financial 
institutions to be afforded equal treatment; it allows non-
lending income to be taken into account and it provides a 
better reflection of the economic reality behind the 
activities of these financial institutions. The use of the 
banking income criterion thus appears more coherent and 
consistent. 
(iv) Appraisal criteria 
20, In its resolution of 10th October 1991 (OJ No. C 280/140 of 
28.10.91), the European Parliament called on the Commission 
for a proposal to the council to amend the Merger Regulation 
with a view to including in the appraisal of mergers crite­
ria reflecting social, local, regional and environmental 
policy considerations. 
It should be underlined here that the Merger Regulation 
contributes to the fundamental objective, laid down in 
Article 3A and 130 of the Maastricht Treaty of ensuring 
undistorted competition within an open market economy. In 
the Commission's view it is vital to maintain these efforts 
through the Merger Regulation, given the fundamental 
importance of effective competition for the proper 
functioning of the internal market. However the regulation 
also requires the Commission to carry out its appraisal of 
mergers within the general framework of the achievement of 
the fundamental objectives referred to in the Treaty (see 
Recital No. 13 and Article 2 para. 1 of the Merger 
Regulation). Within the existing Treaty, these objectives 
cover the social, regional and environmental fields. The 
treaty of Maastricht adds to these objectives the explicit 
aim of strengthening industrial competitiveness. 
Subject to the objective of ensuring effective competition, 
the commission can therefore assess competitive conditions 
and in particular apply the test of dominance in a flexible 
way which takes account, as far as possible, of other 
Community objectives. 
However the Commission believes that it would be wrong to 
allow dominant positions to be created on the Community 
market, such a policy could initially harm consumers and 
would ultimately act to the detriment of European firms 
themselves. Sapped by a lack of competitive pressure they 
would become less cost efficient and less innovative than 
their foreign competitors. Nevertheless, the Commission will 
of course have to take account of the strength of foreign 
firms both in the Community and on the world market when 
assessing the impact of a merger inside the Community. At 
the same time, the strengthening of Community firms to 
enable them to be better competitors on the Community market 
and on the world market can and must be taken into account, 
provided of course this does not result in their obtaining a 
dominant position which would impede effective competition. 
In these circumstances, the Commission considers that there 
are insufficient grounds for any proposal to the Council to 
amend the assessment criteria set down in Article 2 of the 
Regulation. It is nevertheless fully aware of the need for 
- 19 -
its merger decisions to be firstly soundly reasoned in 
relation to the objectives and criteria laid down in the 
Regulation and secondly to be explained with the maximum of 
transparency subject to the protection of valid business 
secrets. 
D. JOINT VENTURES 
Distinction between concentrative and cooperative JVs 
21. The distinction between concentrative and cooperative JVs 
has proved to be, in practice, one of the most difficult 
problems in applying the Merger Regulation. Structural, full 
function JVs fall under the Regulation provided that they do 
not give rise to the coordination of competitive behaviour 
between the parent companies or between them and the JV 
(Article 3(2), subpara. 2). If such coordination is found to 
exist, the JV is rendered cooperative and is examined under 
Regulation No. 17 and Article Rr» of the Treaty. 
On the basis of around 70 decisions on JVs to date under the 
Merger Regulation, it has been possible to establish a 
certain case law and to draw a clearer and more realistic 
borderline between concentrative and cooperative JVs. This 
development is in line with the Commission's Notice on 
concentrative and cooperative joint ventures which provides 
that the principles set out in this text will be followed 
and further developed by the Commission's practice in 
individual cases. 
The case law developed in the practice to date has esta­
blished in particular the following principles: 
- where only one parent company stays in the JVs market 
while the other parent company is either inactive or 
withdraws on a lasting basis from that market the JV is 
normally considered to be concentrative. 
- the cooperative elements of a JV do not prevent the 
assumption of a concentration where they are only of minor 
economic importance ('de minimis' rule), 
- where the coordination of competitive behaviour between 
the parent companies takes place on geographic markets 
outside the EC and has no appreciable effect on compe­
tition within the EC, the JV is considered to be concen­
trative despite this coordination. 
For the purpose of legal certainty, the Commission's Notice 
on concentrative and cooperative operations should, there­
fore, be modified in the light of the case law developed in 
the practice to date. 
Treatment of cooperative JVs 
22. It has been recognised that, compared with concentrative 
JVs, the treatment of cooperative full function JVs under 
Regulation No. 17 has been less favourable in terms of rapid 
proceedings and legal certainty. Since some of these JVs 
entail important changes in the structure of the 
- 20 -
participating undertakings, the Commission decided in 
December 1992 on a series of measures aimed at facilitating 
the creation of cooperative JVs. These measures include: 
- broadening of existing group exemptions, 
- publishing a notice on the assessment of cooperative JVs, 
- speeding up proceedings under Regulation No. 17 in cases 
of cooperative full function JVs. 
These new measures strengthen the parallelism in the 
Commission's handling of joint ventures under the Merger 
Regulation on the one hand and under Regulation No. 17 on 
the other. Some experience needs to be gained in their 
implementation before the need for further improvements is 
assessed. 
De minimis JVs 
23. A number of JVs have been notified which either, were of 
insignificant economic importance or, engaged in activities 
outside the Community having no or minimal impact within the 
Community. 
The difficulty is that some cases, notwithstanding the 
minimal JV turnover, can be important. This can be because 
of the specific product market concerned, e.g. in the case 
Péchiney/Viag the JV achieved a turnover of only 20 mECU but 
already had a 33% Community market share. In other cases 
this can be because of the importance of their parents. 
Therefore, it does not seem advisable to remove them comple­
tely from the scope of the Regulation - only to find an 
efficient way to deal with them. 
This could be achieved by accepting reduced notification 
requirements for JVs having annual turnover below some 
threshold. Based on experience a figure between 20 and 
50 million ECU seems suitable. Similarly, it could also be 
envisaged to introduce a threshold based on the market 
shares of the JV. The parties concerned would need complete 
only Sections 1 and 2 of Form CO plus provide some basic 
market information so that the economic significance of the 
JV could be properly assessed. 
Furthermore, joint ventures which are only engaged in 
activities outside the Community need to be examined under 
simplified arrangements. According to the "effects 
doctrine", a principle of international law, an antitrust 
authority has jurisdiction on those operations completed 
outside its territory which have direct or indirect and 
reasonably foreseeable effects on its territory. In the 
light of this doctrine, it has been argued that where a 
joint venture obviously has no impact on the markets within 
the Community, there should be no notification even if the 
turnover criteria of Article 1 are fulfilled by its parent 
companies. 
However, even so it is necessary to carry out a cursory 
assessment of the direct or indirect effects of an 
operation on Community markets. Moreover, if there is no 
- 21 -
notification, then doubt remains as to whether the operation 
concerned might fall within the competence of the Member 
States. Under these conditions, a pragmatic approach is the 
most preferable, featuring in particular reduced 
notification requirements and, where appropriate, a rapid 
decision-making procedure under Article 6(l)b. 
Calculation of the turnover of joint ventures 
24. In their joint declaration, the Council and the Commission 
both considered that the method of allocating the turnover 
of a JV between its parents should be reviewed. Under the 
current provisions of Article 5(5), turnover of a jointly 
controlled JV is shared equally between its parents, irres­
pective of the size of the financial or voting interests. 
To date this rule was relevant in only a few cases. These 
have not posed difficulties and the rule still remains a 
valid one from the perspective of shared control. The rule 
should therefore remain unchanged. 
IV. GENERAL CONCLUSION ON THE REVIEW 
A. THRESHOLDS 
1. As the Commission has endeavoured to explain in this 
memorandum there are strong economic arguments for thres­
hold reduction. Mergers which may have a significant cross-
border effect within the single market are of concern to the 
Community and it is logical that with progressive 
integration of Community markets the Community itself should 
monitor and control them according to a common set of rules 
applied across the Member States. The "one-stop" shop 
principle is both administratively sensible and good for 
business. The Commission nevertheless believes there is a 
need for caution. The Regulation, as decided in 1989, has 
proved to be a considerable success, despite some initial 
scepticism. Indeed there is now widespread acceptance of and 
satisfaction with the existing arrangements for merger 
control by the Commission among not only the business 
community and legal firms but also with national 
authorities. 
There is also a strong level of commitment both at national 
level and at Community level to ensuring the Regulation is 
applied effectively. 
Any proposal for change must therefore be seen to bring 
tangible additional benefits and not call into question the 
progress made up to now. In this respect, the case for 
threshold reduction rests principally on the judgement as to 
whether mergers not covered by the existing thresholds will 
be important enough in terms of their effect on cross-border 
trade to justify an extension of Community jurisdiction. If 
their cross-border effect is important, then it is essential 
to lower the thresholds. Otherwise, business will suffer 
from the lack of a single jurisdiction across the Member 
States, and the Community as a whole and in particular its 
consumers, will suffer from the absence of effective control 
of mergers of genuine Community dimension. 
- 22 -
Ii, however, their cross-border effect turns out to be less 
significant, a lowering of thresholds could lead to requests 
for referrals to Member State authorities, less legal 
certainty for firms, and as a result a general deterioration 
in the constructive relationships which the Commission has 
built up with national authorities and with the business 
community. The balance of risks must be judged carefully. In 
the Commission's view, the results of its survey among 
undertakings tend to suggest there is more to lose by not 
lowering the thresholds than by leaving them at their 
present level. 
At the same time it is clear to the Commission, from the 
extensive consultations9 it has had, that a majority of 
national administrations and competition agencies feel there 
is still insufficient evidence of significant benefits from 
threshold reduction to make a proposal for reduction. They 
stress in addition that a proposal to modify the Regulation 
at this stage could call into question the consensus and 
commitment which has been generated around the application 
of the existing Regulation. They point in particular to the 
lack of cases below the thresholds where the Commission 
would have taken a different decision on a merger to the one 
taken by national control authorities; as well as to the 
strengthening since 1989 of merger control policies in a 
number of Member states. 
They also draw attention to the impact of inflation on the 
real value of the existing thresholds (less 15-20%) and the 
fact that, if the Community is enlarged, there will be an 
automatic increase in their Community turnover. Inflation 
and enlargment are not in the Commission's view of parti­
cular significance in jurisdiction terms. However they 
cannot be ignored. The Commission is also conscious of the 
fact that while the business community is almost unanimous 
in its support for a reduction in the world turnover 
threshold of ECU 5bn, only a small minority of business 
associations are so far in favour of reducing the Community 
turnover threshold of ECU 2 5 0m at this stage. 
In these circumstances, the Commission believes that it 
would be prudent to gain further experience of the operation 
of the existing Regulation and of the impact of national 
merger control policies before making any proposal for 
revision. 
Community-wide merger control is nevertheless a vital 
element in the functioning of the internal market and this 
market is integrating rapidly. The Commission therefore 
believes it would be wrong to delay reexamination of the 
threshold indefinitely. It would consequently intend to 
reexamine the possibility of making a proposal to Council to 
reduce thresholds at the latest by the end of 1996. 
in particular multilateral meetings on 21st June and 14th 
July 1993 
- 23 -
B. REFERRALS 
2. With respect to the referrals procedures under Article 9, 
the Commission believes in the light of this review that 
there is no case at this stage for any specific change to 
Article 9 although this question could be reexamined at the 
same time as any review of thresholds. 
Since pursuant to Article 22(6) the review of Article 22(3) 
to (5) is linked to a review of the thresholds, it is 
furthermore proposed to keep the rules on referrals under 
Article 22 until the thresholds have been reviewed. 
C. OTHER IMPROVEMENTS REQUIRING A CHANGE IN THE REGULATION 
3. Given that no change is proposed at this stage with regard 
to the principal substantive issues of the review (i.e. 
thresholds and referrals procedures), the Commission 
suggests that possible improvements of the current proce­
dure, including introduction of the concept of banking 
income for threshold calculation, which would require an 
amendment of the Merger Regulation should also be reexamined 
in the context of any proposal for amendment that the 
Commission may make, in particular in relation to thres­
holds, between now and end 1996. 
D. IMPROVEMENTS NOT REQUIRING A CHANGE IN THE REGULATION 
4. In the meantime, the Commission is envisaging improvements 
to the current procedure under the Merger Regulation by 
measures which it can implement on its own authority. In 
this respect, one basic aim is to increase the transparency 
of the application of the Regulation. 
Improving transparency appears in particular important with 
regard to commitments accepted by the Commission in the 
first Phase. It could be envisaged to accept commitments in 
Phase 1 only where they are offered by the parties at such a 
stage of the procedure that it would be still possible for 
concerned third parties to make their views on the proposed 
remedies known in due time. Where the parties offer a 
commitment at a stage which is too late in this respect, the 
parties could either withdraw their original notification 
and re-notify a modified concentration plan or the 
Commission could initiate proceedings under Phase 2. 
On the basis of these proposals the number of cases in Phase 
2 could, however, increase. It would therefore be appro­
priate, for the Commission, together with the Advisory 
Committee on Concentrations, to consider the possibility of 
an accelerated procedure in the second phase in clear-cut 
cases where an adequate remedy has been proposed by the 
parties. One possible solution would be to distribute the 
statement pursuant to Article 18, which contains the commit­
ments, in a limited number of languages and for the Advisory 
Committee to agree to adopt some opinions in an accelerated 
and written procedure. Under the very best hypothesis, a 
final decision under Article 8 could then be adopted in 
cases which are not disputed within two months after Phase 2 
proceedings were initiated. 
- 24 -
As to commitments offered by the parties at a late stage of 
Phase 2, the Commission could pursue a policy of refusing 
those commitments which are offered at a time when a consul­
tation of interested third parties is no longer possible. 
The Commission could bring about further improvements in 
transparency and legal certainty by issuing guidance state­
ments on the application of the Merger Regulation. This 
particularly applies to technical and legal issues relating 
to jurisdiction, calculation of turnover and the notion of 
concentration. In this context, the Commission's Notice on 
concentrative and cooperative operations should be modified 
in the light of the case law developed in the practice to 
date. 
With regard to joint ventures which are only of minor 
economic importance a more efficient solution could be 
achieved by accepting reduced notification requirements for 
joint ventures having annual turnover or a market share 
below some threshold to be defined by the Commission. 
Finally, the decision-making procedure could be made more 
transparent if the opinion of the Advisory Committee on 
draft decisions under Article 8 were to be published at the 
same time as the Commission's final decision is first 
announced. Similarly, the Commission intends to explain in 
its decision why it has departed, where applicable, from the 
opinion delivered by the Advisory Committee. 
PROPOSED ACTION 
In conclusion, the Commission invites the Council to under­
take the revision foreseen in Article 1 paragraph 3 and 
Article 9 of Regulation 4064/89 at the latest by the end of 
1996. 
It is also submitting this review for information to the 
European Parliament and the Economic and social Committee. 
2.S 
ANALYSIS OF TOTAL NUMBER OF MERGERS ANNEX 1 
1) The pictograpbs stow the development of the number of national or community or international operations expressed as index with a base year of 1986 87 (=100). 
2) This analysis it based on the data provided in the Anual Competition Reports for the sanK period 
3) The operations examined are the acquisition of majority aad minority hoUmga, mergen 
4) The National riawttkrtionidate* to operatic 
TV (Vwnmnqity d—wfi^finn relates to npaalUw with cnmpaniea from different Member States. 
TV IfltTP^tHtll TtttTfiffirtt*!4^1! H**** *" <y««M« ***t fmrnpiw^a frn«n Mwnhw Sttf «nrf thitri ««t«ri« with *fferf« in tfv> (Vimmmfty tn^fr^ 
fcCMR RfcVItU 
BODY GENERAL 
POSITION EXECUTIVE SUHHARY OF RESPONSES RECEIVED TO DATE IN CONSULTATIVE PROCESS ANMlUL-al 
5bn THRESHOLDS 
250m ARTICLE 9 
2/3 OTHER / GENERAL 
Deleted on grounds of confidentiality 
N 
1^ 
ANNEX 3 
Qualitative assessment of prenotifications and otherwise known cases 
not falling under the existing thresholds 
The present annex lists a series of concentrations below the present 
worldwide and Community-wide turnover thresholds which have been 
discussed in prenotification meetings between the parties concerned and 
the Merger Task Force or have otherwise been brought to the attention 
of the Merger Task Force during the first two and a half years of the 
initial stage of implementation of Council Regulation 4064/89. 
This list is not, and indeed cannot be considered as being, exhaustive. 
It intends only to illustrate cases of concentrations with a clear 
cross-border effect having an impact on markets in several Member 
states. 
It should be seen as a supplement to the results of the survey and a 
number of the cases identified below are in fact included in the survey 
results. 
Deleted on grounds of confidentiality 
Geographical market definition 
(as set out in the decisions) 
100 
D 
"D 
ft. 
v 
XT tub non not 
national community olattlfled rsi 
00 
Le. a 
v 
E 
ANNEX A 
Cross-border cases 
{all countries) 
D 
x 
JT 
ft Cross-border (120) Non cross-border (46) 
3>o 
NOTIFICATION 
THRESHOLDS IN 
THE COMMUNITY THRESHOLDS 
EC CONCENTRATIONS 5000 MECU 
> 250 MECU 
2/3 RULE 
FRANCE AGGREGATED TURNOVER =~ 1000 MECU (7000 MIO FF) 
DE MINIMIS = 2 BILLION FF 
(25% MARKET SHARE) 
GERMANY AGGREGATED TURNOVER =~ 250 MECU (500 MIO DM) 
DE MINIMIS = 50 MIO DM 
(4 MIO DM, IF BUYER > 1000 MIO DM) 
UNITED KINGDOM ASSETS ACQUIRED =~ 40 MIO ECU (30 MIO UKL) 
(25% MARKET SHARE) 
ITALY AGGREGATED TURNOVER =~ 250 MIO ECU (500 BILLION 
LIT) 
OR TARGET COMPANY =~ 25 MIO ECU (50 BILLION LIT) 
PORTUGAL AGGREGATED TURNOVER ~~ 25 MIO ECU (5000 MIO 
ESCUDOS) 
IRELAND 2 COMPANIES EACH OF THEM AT LEAST *~ 4 MIO ECU (5 
MIO IRL) ASSETS 
OR TURNOVER 10 MIO IRL 
BELGIUM AGGREGATED TURNOVER =~ 25 MIO ECU ( 1000 MIO FB) 
AND 20% MARKET SHARE 
GREECE AGGREGATED TURNOVER =~ 75 MIO ECU 
SPAIN AGGREGATED TURNOVER=-150 MIO ECU (20000 MIO PTA) 
OR 25% MARKET SHARE 
USA 1 PARTY/TURNOVER OR ASSETS=~75MIO ECU (100 MIO $) 
2 PARTY: 10 MIO $ 
Ca^ i 

3 0 
ISSN 0254-1475 
COM(93) 385 final 
DOCUMENTS 
EN 08 
Catalogue number : CB-CO-93-439-EN-C 
ISBN 92-77-58803-9 
Office for Official Publications of the European Communities 
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