Commission notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EEC) No 4064/89 (Text with EEA relevance)
Date: 2000-07-29
Institutions: European Commission
Subjects: EU programme, competition, competition policy, economic concentration, simplification of formalities

C 217/32

EN

Official Journal of the European Communities

29.7.2000

on a simplified procedure for treatment of certain concentrations under Council Regulation (EEC)
No 4064/89

COMMISSION NOTICE

(2000/C 217/11)

(Text with EEA relevance)

1. This notice sets out a simplified procedure under which
the Commission intends to treat certain concentrations that
do not raise competition concerns. The notice is based on
experience gained by the Commission in applying Council
Regulation (EEC) No 4064/89 of 21 December 1989 on
the control of concentrations between undertakings (1), as
last amended by Regulation (EC) No 1310/97 (2)
(the
(cid:145)Merger Regulation(cid:146))
shown that
certain categories of notified concentrations are normally
cleared without having raised any substantive doubts,
provided that there were no special circumstances.

to date, which has

2. By following the procedure outlined in the following
to make Community

sections,
the Commission aims
merger control more focused and effective.

I. OVERVIEW OF THE SIMPLIFIED PROCEDURE

3. This notice sets out

there

the conditions under which the
together with the
simplified procedure will be applied,
procedure
itself. Pre-notification contact between the
notifying parties and the Commission in such cases is
encouraged. When all necessary conditions are met, and
the
provided
Commission will adopt a short-form clearance decision
within one month from the date of notification, pursuant
the Merger Regulation. Where it
to Article 6(1)(b) of
the
considers
Commission may, naturally,
launch an investigation
and/or adopt a full decision within the time-limits laid
down in Article 10(1) of the Merger Regulation.

in any particular

it appropriate

circumstances,

special

case,

are

no

foreseen activities within the
negligible, actual or
territory of the European Economic Area (EEA). Such
cases occur where:

(i) the turnover (3) of

turnover of
than EUR 100 million in the EEA territory; and

the contributed activities (4)

the joint venture and/or the
less

is

(ii) the total value of assets (5) transferred to the joint
than EUR 100 million in the

less

venture is
territory (6);

(b) two or more undertakings merge, or one or more
undertakings acquire sole or joint control of another
undertaking, provided that none of the parties to the
concentration are engaged in business activities in the
same product and geographical market, or in a product
market which is upstream or downstream of a product
market in which any other party to the concentration is
engaged (7);

(3) The turnover of the joint venture should be determined according
to the most recent audited accounts of the parent companies, or the
joint venture itself, depending upon the availability of separate
accounts for the resources combined in the joint venture.

(4) The expression (cid:145)and/or(cid:146) refers to the variety of situations covered;

for example:
(cid:151) in the case of a joint acquisition of a target company, the
this

is the turnover of

turnover to be taken into account
target (the joint venture),

II. CATEGORIES OF CONCENTRATIONS

SUITABLE FOR

TREATMENT UNDER THE SIMPLIFIED PROCEDURE

Eligible concentrations

4. The simplified procedure will apply to the following

categories of concentrations:

(a) two or more undertakings acquire joint control of a
joint venture, provided that the joint venture has no, or

(1) OJ L 395, 30.12.1989, p. 1; Corrigendum: OJ L 257, 21.9.1990, p.

13.

(2) OJ L 180, 9.7.1997, p. 1; Corrigendum: OJ L 40, 13.2.1998, p. 17.

(cid:151) in the case of the creation of a joint venture to which the parent
companies contribute their activities, the turnover to be taken
into account is that of the contributed activities,

(cid:151) in the case of entry of a new controlling party into an existing
joint venture, the turnover of the joint venture and the turnover
of the activities contributed by the new parent company (if any)
must be taken into account.

(5) The total value of assets of the joint venture should be determined
according to the last regularly prepared and approved balance sheet
of each parent company. The term (cid:145)assets(cid:146) includes: (1) all tangible
and intangible assets that will be transferred to the joint venture
(examples of tangible assets include production plants, wholesale or
retail outlets, and inventory of goods; examples of intangible assets
include intellectual property, goodwill, etc.), and (2) any amount of
credit or any obligations of the joint venture which any parent
company of the joint venture has agreed to extend or guarantee.
(6) Where the assets transferred generate turnover, then neither the
value of the assets nor that of the turnover may exceed EUR 100
million.

(7) See Commission notice on the definition of relevant market for the
purposes of Community competition law (OJ C 372, 9.12.1997, p.
5).

29.7.2000

EN

Official Journal of the European Communities

C 217/33

(c) two or more undertakings merge, or one or more
undertakings acquire sole or joint control of another
undertaking:

market, there may nonetheless be certain situations, which
exceptionally require a closer
full
investigation and/or
decision.
the Commission may refrain
from applying the simplified procedure.

In such cases,

(i) and two or more of the parties to the concentration
are engaged in business activities in the same
product
(horizontal
relationships); or

geographical market

and

(ii) one or more of the parties to the concentration are
engaged in business activities in a product market
which is upstream or downstream of a product
market in which any other party to the concen-
tration is engaged (vertical relationships) (8),

provided that their combined market share is not 15 %
or more for horizontal and 25 % or more for vertical
relationships (9).

5. The Commission’s experience in applying the Merger
Regulation to date has shown that, except in exceptional
above
circumstances,
categories do not combine market positions in a way
that would give rise to competition concerns.

falling into the

concentrations

Safeguards and exclusions

are

circumstances

in this assessment,

6. In assessing whether a concentration falls into one of the
the Commission will ensure that all
above categories,
established with sufficient
relevant
clarity. Given that market definitions may be a key
element
the parties are invited to
provide information on possible alternative market defi-
nitions during the pre-notification phase (see point 10).
Notifying parties are responsible for describing all alter-
native relevant product and geographic markets on which
the notified concentration could have an impact and for
providing data and information relating to the definition of
such markets (10). The Commission retains the discretion to
take the ultimate decision on market definition, basing its
decision on an analysis of the facts of the case. Where it is
difficult to define the relevant markets or to determine the
parties’ market shares, the Commission will not apply the
simplified procedure.

7. While it can normally be assumed that concentrations
falling into the above categories will not raise serious
common
doubts as

compatibility with the

to their

(8) See footnote 7.
(9) This means that only concentrations, which do not lead to affected
markets, as defined in Section 6 III of Form CO, fall
into this
category. The thresholds for horizontal and vertical relationships
apply to market shares both at national and at EEA levels and to
any alternative product market definition that may have to be
considered in a given case.
It is important that the underlying
market definitions set out in the notification are precise enough
to justify the assessment that these thresholds are not met, and that
all possible alternative market definitions are mentioned (including
geographic markets narrower than national).

(10) As with all other notifications, the Commission may revoke the
short-form decision if
it is based on incorrect information for
which one of the undertakings concerned is responsible (Article
6(3)(a) of the Merger Regulation).

8. The following are indicative examples of types of cases
which may be excluded from the simplified procedure.
Certain types of concentrations may increase the parties’
market power, for instance by combining technological,
financial or other resources, even if
the parties to the
concentration do not operate in the same market. Concen-
involving conglomerate aspects may also be
trations
unsuitable for
in particular,
the simplified procedure,
where one or more of the parties to the concentration
holds individually a market share of 25 % or more in
any product market in which there is no horizontal or
vertical relationship between the parties. In other cases, it
may not be possible to determine the parties’ precise
market shares. This is often the case when the parties
operate in new or little developed markets. Concentrations
in markets with high entry barriers, with a high degree of
concentration or other known competition problems may
also be unsuitable. Finally, the Commission may not apply
the simplified procedure where an issue of coordination as
referred to in Article 2(4) of the Merger Regulation arises.

9. If a Member State expresses substantiated concerns about
the notified concentration within three weeks of receipt of
the copy of the notification, or if a third party expresses
substantiated concerns within the time-limit laid down for
such comments, the Commission will adopt a full decision.
The time-limits set out
the Merger
Regulation apply. The simplified procedure will not be
applied if a Member State requests the referral of a
notified concentration pursuant
the
Merger Regulation.

in Article 10(1) of

to Article 9 of

III. PROCEDURAL PROVISONS

Pre-notification contacts

10. Experience has shown that the business community has
found pre-notification contacts between notifying parties
and the Commission beneficial (11).
In particular, such
contacts allow the Commission and the notifying parties
to determine the precise amount of
information to be
provided in a notification. Notifying parties are therefore
advised to engage in pre-notification contacts, particularly
the Commission to waive full-form
where they request
notification in accordance with Article 3(2) of Commission
Regulation (EC) No 447/98 (12) on the grounds that the
operation to be notified will not
competition
concerns.

raise

(11) See the ECLF Committee’s best practice guidelines, reproduced on
http://europa.eu.int/comm/

the
competition/mergers/others/best_practice_gl.html

Commission’s

website

at:

(12) OJ L 61, 2.3.1998, p. 1.

C 217/34

EN

Official Journal of the European Communities

29.7.2000

Publication of the fact of notification

11. The information to be published in the Official Journal of
the European Communities upon receipt of a notification (13)
will include: the names of the parties to the concentration,
the nature of the concentration and the economic sectors
involved, as well as an indication that, on the basis of the
information provided by the notifying party, the concen-
tration may qualify for a simplified procedure. Interested
parties will then have the opportunity to submit obser-
vations,
in particular on circumstances which might
require an investigation.

as it does for full clearance decisions. The public version of
the decision will be made available on the Internet for a
limited period. The short-form decision will contain the
information about the notified concentration published in
the Official Journal at the time of notification (names of
the parties, nature of
the concentration and economic
sectors concerned) and a statement in the decision that
the
concentration is declared compatible with the
common market because it falls within one or more of
the categories described in the notice on simplified
procedure, with the applicable category(ies) being explicitly
identified.

Short-form decision

12. If

satisfied that

the Commission is

the concentration
qualifies for the simplified procedure,
it will normally
issue a short-form decision. The concentration will thus
be declared compatible with the common market, within
one month from the date of notification, pursuant
to
Article 10(1) and (6) of the Merger Regulation. However,
in the period leading up to the one-month deadline, the
first phase merger
option of
and/or
launching
procedure
adopting a full decision remains open to the Commission,
should it judge such action appropriate in the case in
question.

reverting to a normal
and thus

investigations

Publication of the short-form decision

13. The Commission will publish a notice of the fact of the
decision in the Official Journal of the European Communities

IV. RESTRICTIONS DIRECTLY RELATED TO AND NECESSARY
FOR THE IMPLEMENTATION OF THE CONCENTRATION

14. Unless otherwise decided by

pursuant

also apply

the Commission,

to restrictions directly

the
simplified procedure for the approval of concentrations
will
related and
necessary to the implementation of
the concentration.
The approval of a concentration by a short-form decision
second
will
cover,
subparagraph, of
restrictions
which are specified by the notifying parties and which
are directly related and necessary to the implementation
It should be noted in this regard
of the concentration.
relation and necessity are
that
restrictions are not ancillary
objective
simply because the parties regard them as such.

to Article
the Merger Regulation,

the criteria of direct
in nature (14);

6(1)(b),

(13) Article 4, paragraph 3, of the Merger Regulation.

(14) See Commission notice on restrictions directly related and
necessary to concentrations (OJ C 203, 14.8.1990, p. 5). This
notice sets out those categories of restrictions that, on the basis
of the Commission’s experience of applying the Merger Regulation
to date, can be considered directly related and necessary to the
implementation of a concentration.