No C 225/60 Official Journal of the European Communities 10. 9. 90 
Opinion on the implementing provisions for a European regulation on the control of 
concentrations between undertakings 
(90/C 225/21) 
On 29 May 1990 the Bureau of the Economic and Social Committee, acting under the third 
paragraph of Article 20 of its Rules of Procedure, decided to draw up an opinion on the 
implementing provisions for a European Regulation on the control of concentrations between 
undertakings. 
The Section for Industry, Commerce, Craft and Services was instructed to prepare the Committee's 
work on the subject. Mr Petersen was appointed rapporteur general by the Committee's plenary 
session. 
At its 278th plenary session (meeting of 5 July 1990) the Economic and Social Committee adopted 
the following opinion with no votes against and one abstention. 
1. Introduction 
1.1. After long discussions at ministerial level and in the 
Member States, and after opinions from the European 
Parliament and the Economic and Social Committee, the 
European Merger Control Regulation was adopted by the 
EEC Council of Ministers on 21 December 1989 (1). 
The Committee has long been a supporter of a Community 
scheme for the control of concentrations, in order to keep 
the Community competition system operational. Establish­
ment of the internal market will necessarily entail 
considerable structural changes in the Community. 
Concentrations are one of the ways of strengthening 
market forces and enabling the Community economy to 
adapt. Steps should be taken to avoid developments 
towards market structures which distort competition, 
which are now also occurring in the field of business 
(strength of business demand). 
1.2. If one compares the final text of the basic regulation 
with that submitted by the Council to the ESC for an 
opinion on 5 May 1988 one finds considerable variations, 
which are clear evidence of a highly disputed compromise. 
On the positive side is certainly the fact that the regulation 
will help to remove legal uncertainties. This applies 
especially to the nature and extent of the Commission's 
merger control powers and the demarcation of European 
from national law. And finally it will help — at least 
initially — the alignment of merger control measures in the 
Community Member States. The ESC particularly wel­
comes the clarification in Article 18 of the Regulation that 
the 'legally recognized representatives of the employees' of 
the firms involved may apply to be heard and that the 
Commission has to allow this application. 
1.3. For the initial phase of merger control — i.e. from 
21 September 1990 — an extremely high threshold of ECU 
5 000 million has been laid down for the worldwide total 
(!) OJ No L 395, 30. 12. 1989, p. 1. turnover of the firms involved in a merger. So, the vast 
majority of mergers — even when they are on a 
Community-wide scale — will still initially be handled by 
national anti-cartel authorities. 
The distinct increase in the threshold figure from ECU 
1 000 million to ECU 5 000 million must be considered as a 
political compromise; on economic, and therefore also 
competition grounds it is hardly justifiable. Even in 
anticipation of the single European market the competition 
landscape in the European Community is undergoing 
lasting structural changes. Having thresholds in an initial 
phase which are too high will make it more difficult, if not 
impossible, to formulate a uniform competition policy for 
all Member States — at any rate in the key areas. 
The threshold is to be reviewed in 1994. But the protocol 
statement concerning Article 1 of the Regulation makes it 
clear that the result of such a review is not yet a foregone 
conclusion. There is no common declaration on the figure 
for the new thresholds after the review. It should not be 
ruled out that some Member States will want to make 
permanent a Regulation which was envisaged as a 
transitional step. The practical usefulness of the political 
compromise which has been reached is therefore faced with 
a stern test. 
1.4. Among the criteria laid down in the Regulation for 
examining a projected merger the main one is that of 
market domination. The Commission is given a list of 
yardsticks to be used when making its assessment. The 
Committee particularly welcomes the fact that the 
Commission is required, in the course of its investigation, 
to take account of the interests of intermediate and final 
consumers and technological and economic progress. It 
would have been pleasing to see other criteria such as 
degree of development and need for restructuring in certain 
areas of the Community — which are at present to be found 
only in the protocol statements — included in the basic 
Regulation, not least in order to preserve jobs threatened 
by structural change. In the form of a protocol statement 
10. 9. 90 Official Journal of the European Communities No C 225/61 
these criteria have no binding force. It remains to be hoped, 
however, that the Commission will apply these criteria too 
in individual cases. 
1.5. The issue which took longest to resolve in Council 
was the question of division of responsibility between the 
EC Commission and the competent authorities of the 
Member States. Even during the tenure of Commissioner 
Sutherland the Commission repeatedly stressed that the 
precedence of Community over national law should be 
clearly spelt out in the Regulation, In its opinion on the 
amended proposal for a Council Regulation (EEC) on the 
control of concentrations between undertakings the 
Committee expressed the view that 'all concentrations 
falling within the scope of the Regulation should be 
appraised solely with reference to Community law and 
should not be subject to any further scrutiny by the 
Member States' (1). 
The division of responsibilities can be inferred from Article 
9 of the basic Regulation. Thus, the Community system in 
principle has precedence, but under certain, strictly limited 
circumstances the Commission can refer a planned merger 
to the competent authority of the Member State concerned. 
In line with the practice already adopted by Commissioner 
Sir Leon Brittan this will only be done in exceptional 
circumstances. The only exception to the principle of 
precedence is provided for in Article 21 (3) of the 
Regulation which speaks of 'other legitimate interests' of 
the Member States. In such cases the Member States may 
adopt appropriate protective measures. This provision 
applies in particular to considerations of public safety and 
media choice, and the application of national supervisory 
rules in the banking and insurance sectors. 
2. Implementing provisions for European merger control 
2.1. In March 1990 the Commission submitted its first 
drafts of the implementing provisions for the basic 
Regulation. After exhaustive discussion by the Advisory 
Committee on control of company mergers, these drafts 
were resubmitted for discussion in June 1990 in an 
amended form. In the short time available to it the 
Economic and Social Committee attempted to formulate 
views on the amended drafts. 
The Committee feels that the package of implementing 
regulations and statements so far discussed by the 
Commission is at least as important as the basic Regulation 
itself. The package covers a wide field, too wide in view of 
the limited time available. The Committee is therefore 
pleased to note that the drafts' shortcomings have 
meanwhile been remedied and clear priority given to the 
regulation; these are, after all, essential if the basic 
regulation is to enter into force on 21 September this year. 
(!) OJ No C 208, 8. 8. 1988, p. 12. Despite clear improvements to the Regulation compared 
with earlier drafts the Committee still has a number of 
reservations, Appropriate account should be taken of these 
in drawing up the final version of the implementing 
provisions. 
2.2. Form Co on the notification of a concentration in 
accordance with Council Regulation (EEC) No 
4064/89 of 21 December 1989 on the control of 
concentrations between undertakings 
2.2.1. The draft Regulation contains a questionnaire 
which is to be filled in and sent to the Commission 
whenever a concentration occurs which falls within the 
scope of the Community's rules on merger control. This 
notification form is the actual basis of concentration 
controls and is also sent by the Commission to the 
individual Member States. 
2.2.2. The Committee feels that the Commission 
deserves recognition for the fact that the revised version of 
the questionnaire is considerably improved, particularly as 
regards the breadth of the information requested. It 
remains essentially unchanged, however, with respect to 
the degree of detail it requires companies to provide. This is 
true in particular of the information requested on 
respective markets (sections 5 and 6), which have in some 
cases even been expanded. Only the number of markets on 
which information is required has been reduced to 
reasonable proportions. 
2.2.3. On closer examination of the questionnaire the 
Committee is still of the view that the planned procedure 
will lead to the establishment of a super-bureaucracy which 
ultimately neither those involved nor the Commission will 
be able to control; this particularly applies in the case of 
smaller firms if the thresholds are later lowered. A deluge of 
information, lack of flexibility and backlogs in the 
processing of numerical data would be the inevitable 
consequence. The Committee therefore appeals to the 
Commission to design more manageable and appropriate 
procedures acceptable to all concerned. 
2.2.4. The Committee will pick out a number of 
examples to demonstrate the impracticability of the 
questionnaire in its present form: 
— In C (d) and (e) the Commission makes a general request 
— without giving any exact reasons for analyses, 
reports, studies and surveys which were produced or 
commissioned by the interested parties in preparation 
for the planned deal. It is thus asking for texts which 
were compiled for reasons other than to be examined 
later by the authorities. It would seem from the outset 
that these texts will provide competition law experts 
with little information. The disadvantages for the 
parties concerned are, however, clear, for there is no 
No C 225/62 Official Journal of the European Communities 10. 9. 90 
way that widely circulated sensitive data could be kept 
secret. Moreover, a careful drafting of the questionnaire 
should lead to the Commission having the facts it needs 
to examine a merger. 
— The term 'products groups' is used for the first time in 
section 5 of the revised version. According to the 
Commission's definition the term refers to individual 
groups of products within the same relevant market. 
Apparently further information is now being requested 
about the relevant markets and the individual market 
segments. Thus, the amount of market data to be 
supplied by the companies will not be reduced in 
principle, as the Commission itself intends it to be, but 
will be increased, and depending on the market 
structure may be increased considerably. 
— With regard to information about prices and price 
trends (section 5.8), the notifying parties are now being 
asked about price levels not only in the Community but 
also in the rest of the world. It is already apparent that 
such data will not only be hardly obtainable but also, 
for the purposes of interpretation, may even be quite 
inaccurate. 
— The information requested by the Commission in 
section 6 (General conditions in affected markets) is also 
considered by the Committee to be exaggerated. 
Meticulous attention is to be paid to points of detail, e.g. 
in connection with the market entry or potential market 
entry of other companies or in connection with research 
and development. The Committee concedes that these 
points may be important for the assessment of 
individual cases. Realistically speaking, however, it 
should be the duty of the companies to reveal these 
details by themselves so that the Commission can judge 
the deal in the proper light. 
2.2.5. For banks there is the problem of the geographical 
allocation of business and private customers, which is 
important when determining the threshold figure. Thus in 
many EEC Member States foreign customers who are EEC 
residents are not kept apart from other foreign customers. 
Difficulties also arise when allocating these multinational 
groups to a given geographical area. The Commission 
seems to want to impose over-strict disclosure obligations 
on banks seeking to merge across frontiers. The resulting 
administrative costs in themselves could be sufficient 
reason to obstruct such mergers, even though, from the 
material and legal point of view, Commission author­
ization would hardly seem to be in doubt. 
2.2.6. The Committee fully accepts the Commission's 
legitimate right to information in investigating a planned 
merger. But it wonders whether the Commission is doing 
itself a favour in making the entire questionnaire 
compulsory, instead of retaining the right to limit the number of questions or establish priorities, in order to 
permit a more rapid and effective assessment of individual 
cases. This objective could be borne in mind at an informed 
preliminary discussion which would provide the Commis­
sion at an early stage of the proceedings with valuable 
information on plans and the details of a projected merger. 
At the same time the questions relevant to a formal 
investigation could be reduced to the necessary minimum. 
The Committee therefore suggests that the Commission 
reserve the right in individual cases to draw up itself the 
questions to be answered in the return, even where this 
differs from the standard questionnaire, in order to filter 
out speedily and without undue formality the information 
actually needed for an assessment of the plan. 
2.2.7. The need to prevent the investigation procedure 
dragging on until it is no longer relevant is reason enough 
for limiting the number of questions. Industry needs quick 
decisions from the Brussels authorities if it is to plan ahead. 
In view of the considerable costs involved in planning a 
merger, and the consequent risks, companies need a high 
degree of legal certainty and calculability. The legal 
provisions should take account of this need. 
2.3. Draft Commission Regulation (EEC) on the 
notifications, time limits and hearings provided for 
in Council Regulation (EEC) No 4064/89 on the 
control of concentrations between undertakings 
2.3.1. This Regulation is supposed to create the 
administrative framework for examining mergers from 
notification to the final decision. It lays down not only the 
rights and duties of those involved in the merger but also 
those of third parties, including employees' representatives. 
2.3.2. The Committee welcomes the EC Commission's 
plan to treat undertakings the same as itself regard to the 
submission of documents and, in particular, with regard to 
the observance of time limits (J). 
However, the revised version of the Regulation still fails to 
achieve this objective. For example, Article 10 of this 
Regulation specifies that the Commission has met time 
limits laid down in the basic Regulation if it 'has taken the 
relevant decision before the end of the period'. The new 
version no longer requires that the operative part of the 
decision must have also been sent off; the Committee 
thinks that the original rule should be reverted to in order 
to restrict legal uncertainty wherever possible. 
(J) Commission memorandum of 1 June 1990 to the members of 
the Advisory Committee on Concentrations, point 2 (e). 
10. 9. 90 Official Journal of the European Communities No C 225/63 
2.4. Draft Commission notice on the difference between 
concentration and cooperation under Council 
Regulation (EEC) No 4064/89 
2.4.1. Article 3 (2) of the merger control Regulation lays 
down one of the conditions whereby a joint venture is to be 
considered as a merger within the terms of the Regulation. 
Such joint ventures must 'perform on a lasting basis all the 
functions of an autonomous economic entity and which do 
not give rise to coordination amongst themselves or 
between them and the joint venture'. The task of the draft 
notice is to explain this definition further so that the firms 
involved have the necessary measures of legal certainty 
when assessing this question. 
2.4.2. The joint venture would appear to be one of the 
most important types of organization for harmonizing and 
aligning economic structures and living standards within 
the European Community. The Regulation of 25 July 1985 
on a European Economic Interest Grouping (EEIG) first 
created company law preconditions for cross-border 
cooperation. Pending the adoption of further laws for 
different forms of Community-wide companies such as the 
European company, the joint venture organized under 
national company law is an established vehicle for cross-
frontier cooperation in areas ranging from Community 
R&D to marketing. Accordingly, frequent and intensive 
use is made of the joint venture as closer ties are established 
between the Community's economies. 
However, this form of cooperation is legally unsatisfac­
tory, since it is not covered by the group exemption 
Regulations that have already been adopted. Also, the 
merger control Regulation covers joint ventures only to a 
small extent. This is one of the weaknesses of the basic 
regulation, which will be remedied only in part by a 
Commission notice. It is therefore all the more important, 
the Committee thinks, to lay down at least procedural rules 
for all joint ventures which will provide the companies in 
question with a minimum degree of legal certainty so that 
they can calculate the consequences of their conduct. This 
includes first and foremost, the introduction of exami­
nation deadlines which could be based on the deadlines for 
the Community control of concentrations. Companies 
would thus be informed within a reasonable period of how 
their plans were affected by competition law. Because the 
Commission's examination practices are quite adequate in 
terms of the results obtained, this formal consideration 
would seem to have priority and should be the cornerstone 
of any notification procedure for joint ventures. This 
applies in particular to cooperative joint ventures, which 
are by far the most important in practice. 2.5. Draft Commission notice on guidelines relative to 
ancillary restrictions to concentrations 
2.5.1. According to the basic Regulation, ancillary 
restrictions must always be assessed in relation to the 
concentration, whatever their treatment might be under 
Articles 85 and 86 of the EEC Treaty if they were to be 
considered in isolation or in a different economic context. 
The notice tries to indicate to those concerned what line the 
Commission will take in practice when examining a 
merger. 
The Committee is pleased that the Commission will 
endeavour 'within the limits set by the Regulation, to take 
the greatest account of business practice and the conditions 
necessary to the implementation of concentrations' (J). 
2.5.2. The Committee's comments on this draft are as 
follows: 
— According to the Commission's draft notice 'the 
geographic scope of the non-competion clause must be 
limited to the area where the vendor had established the 
products or services before the transfer' (2). Such a strict 
attitude seems to the Committee at the very least unfair 
if the merger occurs at an early stage in the market's 
development or the vendor for other reasons has not yet 
had the possibility of opening up and developing the 
relevant markets completely. As well as the time factor, 
lack of financing or the difficulties in calculating the 
risks involved in marketing a completely new product or 
service may be reasons for taking a step-by-step 
approach. Such circumstances should be borne in mind 
if at any time legal consequences like those provided for 
are involved. 
— The Committee is pleased that under certain conditions, 
according to the new version of the notice, restrictions 
on passive competition are also to be permitted as part 
of a competition agreement. As markets are sometimes 
very transparent, the flexibility now being shown by the 
Commission is appropriate and consistent. 
— The Committee cannot see what reasons may have 
prompted the Commission to limit territorial exclu­
sivity in a trademark licence to a period of two years (3). 
This clearly contradicts the parallel rule concerning a 
prohibition on competition, according to which — 
rightly, in the Committee's view, a distinction is drawn 
between cases where only goodwill is to be transferred 
(for which a period of two years is deemed to be 
sufficient) and cases where both goodwill and know-
how are to be transferred (for which a period of five 
0) Draft notice, 1.2. 
(2) Draft notice, IH.A.3. 
(3) Draft notice, III.B.4., second paragraph. 
No C 225/64 Official Journal of the European Communities 10. 9. 90 
years is considered appropriate) (1). As the Commission 
itself refers to the general non-competition clause it has 
laid down, a similar procedure seems indicated here. 
3. Conclusions 
In view of the importance to economic and competition 
policy of the present drafts and the multitude of points 
remaining for sparking off suggestions and discussions, the 
Committee regrets that the implementing provisions for a 
European merger control regulation have had to be dealt 
with under considerable time pressure. The Committee 
(!) Draft notice, III.A.2. would have liked the preparatory work on the relevant 
regulations and notices to have been done in parallel with 
the Council's discussions on the merger control Regu­
lation. This would have created the necessary pre­
conditions for an even more thorough discussion, espe­
cially of the wording of the questionnaire, which has such a 
decisive bearing on actual practice. 
Done at Brussels, 5 July 1990. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE