WRITTEN QUESTION E-1762/99

by Luis Berenguer Fuster (PSE) and María Rodríguez Ramos (PSE) to the Commission

(11 October 1999)

Subject: Effects for consumers of the merger of the Carrefour and Promodes companies

The planned merger between the Carrefour and Promodes companies is giving rise to great concern among both suppliers and consumers who fear that it will create or strengthen a dominant position in certain key retail markets.

The merger will affect a large number of significant geographical markets, and the effects of competition will need to be analysed in all those market with homogeneous competition conditions. This means that consideration will have to be given both to regional markets and to districts in which the undertakings

concerned have a base, given that consumers do not generally shop outside their own area, and this will complicate the analysis of the effects on all those markets considerably.

If the Commission receives a notification for the purposes of Regulation 4064/89(1), will it deem itself competent in the matter, or does it take the view that it should refer the notified concentration to the competent authorities of the Member States?

(1) OJ L 395, 30.12.1989, p. 1.

Answer to written question by Mr Monti on behalf of the Commission

(23 November 1999)

Article 9 of Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings enables a Member State, within three weeks of the date of receipt of the notification, to request that the operation notified should be referred to it for examination. In the case referred to by the Honourable Members, the possibility that the Spanish and French competition authorities might request such a referral was recently raised, in particular by the press in these two Member States. If they did so, it would not be the first time that the Spanish competition authorities requested such referral. On 17 August 1999, the Commission referred case IV M-1555 Heineke v Cruzcampo to the Spanish authorities.

Two conditions governing referral are laid down in Article 9(2) of the Regulation: (a) the merger must threaten to create or strengthen a dominant position as a result of which effective competition would be significantly impeded on a market within that Member State, which presents all the characteristics of a distinct market; and (b) the merger affects competition on a market within that Member State which presents all the characteristics of a distinct market and which does not constitute a substantial part of the common market.

The Commission must take a decision to refer or not to refer within six weeks from the date of notification (instead of the usual period of one month), and decide whether it will itself deal with the case in order to maintain or restore effective competition on the relevant market or whether it will refer the entire case or part of it to the authorities of the Member States concerned. If the case is referred by the Commission, the Regulation requires the competition authorities in the Member States to publish a report or announce their conclusions within a period of no more than four months after the Commission referral.

Despite public reactions by certain Governments, so far no Member State has lodged a request for a referral regarding the proposed take-over of Promodes by Carrefour.