Commission Notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98 (Text with EEA relevance)
Date: 2001-03-02
Institutions: European Commission
Subjects: European Commission, administrative procedure, competition law, competition policy, economic concentration, merger control

2.3.2001

EN

Official Journal of the European Communities

C 68/3

on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission
Regulation (EC) No 447/98

COMMISSION NOTICE

(2001/C 68/03)

(Text with EEA relevance)

I. INTRODUCTION

that

(cid:145)the Commission may declare

1. Council Regulation (EEC) No 4064/89 of 21 December
1989 on the control of concentrations between under-
takings (1), as
last amended by Regulation (EC) No
1310/97 (2) (hereinafter referred to as (cid:145)the Merger Regu-
the Commission may
lation(cid:146)) expressly provides
decide to declare a concentration compatible with the
common market following modification by the parties (3).
Recital 8 of Council Regulation (EC) No 1310/97 states
concentration
that
compatible with the common market
in the second
phase (4) of
following commitments by
the procedure,
the parties that are proportional to and would entirely
eliminate the competition problem . . .(cid:146). Recital 8 also
provides for (cid:145)commitments in the first phase (5) of
the
procedure where the competition problem is readily ident-
ifiable and can easily be remedied . . . Transparency and
effective consultation of Member States and interested
third parties should be ensured in both phases of
the
procedure(cid:146).

a

2. The purpose of

this notice is to provide guidance on
in particular,
including,
modifications to concentrations,
commitments to modify a concentration. Such modifi-
cations are more commonly described as (cid:145)remedies(cid:146) since
their object is to reduce the merging parties’ market power
and to restore conditions for effective competition which
would be distorted as a result of the merger creating or
strengthening a dominant position. The guidance set out in
this notice reflects the Commission’s evolving experience
with the assessment, acceptance and implementation of
remedies under
the Merger Regulation since its entry
into force on 21 September 1990. The principles
contained here will be applied and further developed and
refined by the Commission in individual cases. The
guidance provided on commitments is without prejudice
to the interpretation which may be given by the Court of
Justice or by the Court of First Instance of the European
Communities.

commitments

that have been accepted by

3. This notice sets out the general principles applicable to
remedies acceptable to the Commission, the main types
of
the
Commission in cases under the Merger Regulation, the
specific requirements which proposals of commitments
in both phases of the procedure, and the
need to fulfil
main
of
commitments.

implementation

requirements

the

for

II. GENERAL PRINCIPLES

4. Under the Merger Regulation, the Commission assesses the
compatibility of a notified concentration with the common

market on the basis of
its effect on the structure of
competition in the Community (6). The test for compati-
bility under Article 2(2) and (3) of the Merger Regulation
is whether or not a concentration would create or
strengthen a dominant position as a result of which
effective competition would be significantly impeded in
it (7). A
the common market or a substantial part of
concentration that creates or
strengthens a dominant
position as described above is incompatible with the
common market and the Commission is
required to
prohibit it.

to resolve

5. Where a concentration raises competition concerns in that
strengthening of a
it could lead to the creation or
dominant position, the parties may seek to modify the
concentration in order
competition
concerns raised by the Commission and thereby gain
their merger. Such modifications may be
clearance of
offered and implemented in advance of a clearance
decision. However,
it is more common that the parties
submit commitments with a view to rendering the concen-
tration compatible with the common market within a
specific period following clearance.

the

to

are

liable

significantly

6. It is the responsibility of the Commission to show that a
concentration creates or strengthens market structures
which
effective
impede
competition in the common market. It is the responsibility
of the parties to show that the proposed remedies, once
implemented, eliminate the creation or strengthening of
such a dominant position identified by the Commission.
To this end, the parties are required to show clearly, to the
Commission’s satisfaction in accordance with its obli-
gations under the Merger Regulation,
the remedy
competition in the
restores
common market on a permanent basis.

conditions of

effective

that

7.

In assessing whether or not a remedy will restore effective
competition the Commission will consider all relevant
including inter alia
factors relating to the remedy itself,
the remedy proposed,
the type,
scale and scope of
full and
its successful,
together with the likelihood of
timely implementation by the parties. Moreover,
these
factors have to be judged by reference to the structure
and particular characteristics of the market in which the
the
competition concerns arise,
position of the parties and other players on the market.
It follows that it is incumbent on the parties from the
outset
these
to remove any uncertainties as to any of
factors which might cause the Commission to reject the
remedy proposed.

including of

course

C 68/4

EN

Official Journal of the European Communities

2.3.2001

8. More generally, the Commission will take into account the
fact that any remedy, so long as it remains a commitment
which is not yet fulfilled, carries with it certain uncer-
tainties as to its eventual outcome. This general
factor
must also be taken into consideration by the parties
when presenting a remedy to the Commission.

9. In the Gencor case (8), the Court of First Instance estab-
lished the principle that the basic aim of commitments is
to ensure competitive market
structures. Accordingly,
commitments that would amount merely to a promise to
behave in a certain way, for example a commitment not to
abuse a dominant position created or strengthened by the
proposed concentration, are as
such not considered
suitable to render the concentration compatible with the
common market. According to the Court (9), commitments
which are structural in nature, such as the commitment to
sell a subsidiary, are, as a rule, preferable from the point of
view of the Regulation’s objective,
inasmuch as such a
commitment prevents the creation or strengthening of a
dominant
the
previously
Commission and does not, moreover, require medium or
long-term monitoring measures. Nevertheless, the possi-
bility cannot automatically be ruled out that other types
of commitments may themselves also be capable of
a
preventing
dominant position. However, whether such commitments
can be accepted has to be determined on a case-by-case
basis.

strengthening

emergence

identified

position

the

by

or

of

is

the

that

the market

a business

enforceability

12. Whilst commitments have to be offered by the parties, the
of
Commission may
ensure
commitments by making its authorisation subject
to
compliance with them (13). A distinction must be made
between conditions and obligations. The requirement for
achievement of each measure that gives
rise to the
is a condition (cid:151) for
structural change of
example,
to be divested. The
implementing steps which are necessary to achieve this
result are generally obligations on the parties, e.g. such
as the appointment of a trustee with an irrevocable
the business. Where the undertakings
mandate to sell
concerned commit
the
a breach of
Commission may revoke clearance decisions issued either
under Article 6(2) or Article 8(2) of the Merger Regulation,
acting pursuant
to Article 6(3) or Article 8(5)(b),
respectively. The parties may also be subject to fines and
periodic penalty payments as provided in Article 14(2)(a)
and 15(2)(a) respectively of the Merger Regulation. Where,
concentration
however,
compatible with
not
materialise (14), that is, where the condition is not fulfilled,
the compatibility decision no longer
In such
circumstances, the Commission may, pursuant to Article
the Merger Regulation, order any appropriate
8(4) of
to restore
action necessary
effective
competition (15).
the parties may also be
In addition,
subject to fines as provided in Article 14(2)(c).

situation rendering

common market

an obligation,

conditions of

stands.

does

the

the

the

some

interim safeguards,

10. Once the concentration has been implemented, despite the
possibility of
the desired
conditions of competition on the market cannot actually
be restored until
the commitments have been fulfilled.
Therefore, commitments must be capable of being imple-
mented
period.
and within
Commitments should not require additional monitoring
once they have been implemented (10).

effectively

short

a

III. TYPES OF REMEDY ACCEPTABLE TO THE COMMISSION (16)

1. Divestiture

13. Where

threatens

a proposed merger

to create or
strengthen a dominant position which would impede
effective competition, the most effective way to restore
effective competition, apart from prohibition, is to create
the conditions for the emergence of a new competitive
entity or for the strengthening of existing competitors
via divestiture.

to clearly rule out

investigation is only carried out

11. The Commission may accept commitments in either phase
of the procedure. However, given the fact that an in-depth
market
in phase II,
commitments submitted to the Commission in phase I
must be sufficient
(cid:145)serious doubts(cid:146)
within the meaning of Article 6(1)(c) of the Merger Regu-
lation (11). Pursuant to Article 10(2) of the Merger Regu-
lation, the Commission has to take a clearance decision as
soon as the serious doubts established in the decision
pursuant to Article 6(1)(c) of the Merger Regulation are
removed as a result of commitments submitted by the
parties. This rule applies in particular to commitments
proposed at an early stage of phase II-proceedings (12).
After an in-depth investigation and where the Commission
in a Statement of Objections has reached the preliminary
view that the merger leads to the creation or strengthening
of a dominant position within the meaning of Article 2(3)
the commitments have to
of
eliminate
such a
strengthening of
dominant position.

the Merger Regulation,
creation or

the

Viable business

14. The divested activities must consist of a viable business
that,
if operated by a suitable purchaser, can compete
effectively with the merged entity on a lasting basis.
Normally a viable business is an existing one that can
operate on a stand-alone-basis, which means
inde-
pendently of the merging parties as regards the supply
of input materials or other forms of cooperation other
than during a transitory period.

15.

In proposing a viable business for divestiture, the parties
must take into account the uncertainties and risks related
to the transfer of a business to a new owner. These risks
may limit the competitive impact of the divested business,
and, therefore, may lead to a market situation where the
competition concerns of the Commission will not neces-
sarily be eliminated.

2.3.2001

EN

Official Journal of the European Communities

C 68/5

Object of the divestiture

Alternative divestiture commitments

the most

appropriate business has

16. Where the competition problem results from horizontal
overlap,
to be
divested (17). This might be the business of the acquiring
company in cases of a hostile bid where the notifying
party’s knowledge of the business to be acquired is more
limited. A commitment to divest activities of the target
company might, in such circumstances, increase the risk
that this business might not result in a viable competitor
which could effectively compete in the market on a lasting
basis.

17.

is an important consideration (18).

In determining which overlapping business should be
divested, the ability of the business to be operated on a
In
stand-alone-basis
order to assure a viable business,
it might be necessary
to include in a divestiture those activities which are
related to markets where the Commission did not raise
competition concerns because this would be the only
possible way to create an effective competitor in the
affected markets (19).

18. Although it has been accepted in certain specific circum-
stances (20), a divestiture consisting of a combination of
certain assets from both the purchaser and the target
may create additional risks as to the viability and efficiency
of the resulting business. It will, therefore, be assessed with
great care.
In exceptional cases, a divestiture package
including only brands and supporting production assets
may be sufficient to create the conditions for effective
competition (21). In such circumstances, the Commission
would have to be convinced that
the buyer could
integrate these assets effectively and immediately.

Suitable purchaser

19. The condition for a clearance decision by the Commission
is that the viable business will have been transferred to a
suitable purchaser (22) within a specific deadline. The two
elements of the viable business and the suitable purchaser
are thus inter-linked. The potential of a business to attract
a suitable purchaser is, therefore, an important element of
the Commission’s assessment of the appropriateness of the
proposed commitment (23).

20. There are cases where the viability of

the divestiture
package depends, in view of the assets being part of the
business, to a large extent on the identity of the purchaser.
In such circumstances, the Commission will not clear the
merger unless the parties undertake not to complete the
notified operation before having entered into a binding
agreement with a purchaser for the divested business
(known as
the
(cid:145)upfront buyer(cid:146)),
the
Commission (24).

approved by

21. Once a divestiture of a business is made a condition of the
clearance decision, it is a matter for the parties to find a
suitable purchaser
this business. The parties may
therefore add, on their own initiative, other assets to
make the package more attractive to buyers (25).

for

22. In certain cases,

the implementation of

the parties’
preferred divestiture option (of a viable business solving
the competition concerns) might be uncertain or difficult
in view of, for instance, third parties’ pre-emption rights or
uncertainty as to the transferability of key contracts, intel-
lectual property rights or employees, as the case may be.
Nevertheless, the parties may consider that they would be
able to divest this business within the appropriate short
time period.

23. In such circumstances, the Commission cannot take the
in the end, effective competition will not be
risk that,
restored. Accordingly, it is up to the parties to set out in
the commitment an alternative proposal, which has to be
at
if not better suited to restore effective
competition, as well as a clear timetable as to how and
when the other alternative will be implemented (26).

least equal

Removal of structural links

24. Divestiture commitments may not be limited to over-
coming competition problems
created by horizontal
overlaps. The divestiture of an existing shareholding in a
joint venture may be necessary in order
to sever a
structural link with a major competitor (27).

25. In other cases, a possible remedy could be the divestiture
inter-
of minority shareholdings or the elimination of
locking directorates in order to increase the incentives
for competing on the market (28).

2. Other remedies

26. Whilst being the preferred remedy, divestiture is not the
only remedy acceptable to the Commission. First, there
may be situations where a divestiture of a business is
impossible (29). Secondly, competition problems can also
from specific features, such as the existence of
result
exclusive
combination of networks
((cid:145)network effects(cid:146)) or the combination of key patents. In
the Commission has to determine
such circumstances,
remedy may have a
whether or not other
sufficient
effective
competition.

types of
effect on the market

agreements,

to restore

the

to be inimical

27. The change in the market structure resulting from a
proposed concentration can cause existing contractual
arrangements
to effective competition.
This is in particular true for exclusive long-term supply
and distribution agreements if such agreements limit the
market potential available for competitors. Where the
merged entity will have a considerable market share, the
resulting from existing exclusive
foreclosure
effects
a
agreements may contribute
dominant position (30). In such circumstances, the termi-
agreements (31) may be
nation of
considered appropriate
competitive
concerns if there is clearly no evidence that de facto exclu-
sivity is being maintained.

existing exclusive

to eliminate

creation of

to the

the

C 68/6

EN

Official Journal of the European Communities

2.3.2001

28. The change in the market structure resulting from a
proposed concentration can lead to major barriers or
impediments to entry into the relevant market. Such
barriers may arise from control over infrastructure,
in
particular networks, or key technology including patents,
know-how or other intellectual property rights. In such
circumstances, remedies may aim at
facilitating market
entry by ensuring that competitors will have access to
the necessary infrastructure (32) or key technology.

29. Where the competition problem is created by control over
key technology, a divestiture of such technology (33) is the
preferable remedy as it eliminates a lasting relationship
between the merged entity and its competitors. However,
the Commission may accept licensing arrangements (pref-
erably
field-of-use
licences without
restrictions on the licensee) as an alternative to divestiture
where,
for instance, a divestiture would have impeded
has
efficient,
pursued this approach in mergers involving, for example,
the pharmaceutical industry (34).

The Commission

on-going

exclusive

research.

any

30. Owing to the specifics of the competition problems raised
by a given concentration in several markets, the parties
may have to offer remedy packages which comprise a
combination of divestiture remedies and other remedies
that facilitate market entry by granting network access or
access to specific content (35). Such packages may be
appropriate
foreclosure problems
arising, for instance, in concentrations in the telecommuni-
cation and media sectors. In addition, there may be trans-
actions affecting mainly one product market where,
however, only a package including a variety of other
commitments will be able to remedy the competitive
concerns
raised by the specific concentration on an
overall basis (36).

to remedy specific

IV. SITUATIONS WHERE REMEDIES ARE DIFFICULT, IF NOT
IMPOSSIBLE

problems

31. The Commission is willing to explore solutions to the
competition
concentration,
raised
provided that these solutions are convincing and effective.
There
remedies
adequate to eliminate competition concerns within the
common market cannot be found (37).
In such circum-
stances, the only possibility is prohibition.

concentrations where

are, however,

by

a

32. Where the parties submit proposed remedies that are so
is not possible for the
extensive and complex that
Commission to determine with the required degree of
certainty that effective competition will be restored in
the market,
be
granted (38).

authorisation

decision

cannot

an

it

V. SPECIFIC REQUIREMENTS FOR SUBMISSION OF
COMMITMENTS

1. Phase I

33. Pursuant

the Merger Regulation the
Commission may declare a concentration compatible

to Article 6(2) of

is confident

that
with the common market, where it
following modification a notified concentration no longer
raises serious doubts within the meaning of paragraph
1(c). Parties can submit proposals for commitments to
the Commission on an informal basis, even before notifi-
cation. Where
for
commitments together with the notification or within
three weeks from the date of receipt of the notification (39),
the deadline for the Commission’s decision pursuant to
Article 6(1) of the Merger Regulation is extended from
one month to six weeks.

proposals

submit

parties

the

34. In order to form the basis of a decision pursuant to Article
6(2), proposals for commitments must meet the following
requirements:

(a) they shall be submitted in due time, at the latest on the

last day of the three-week period;

(b) they shall specify the commitments entered into by the
parties in a sufficient degree of detail to enable a full
assessment to be carried out;

(c) they shall explain how the commitments offered solve
the
concerns

competition

identified

by

the
Commission.

At the same time as submitting the commitments, the
parties need to supply a non-confidential version of the
commitments, for purposes of market testing (40).

the authorities of

35. Proposals submitted by the parties in accordance with
these requirements will be assessed by the Commission.
The Commission will consult
the
Member States on the proposed commitments and, when
considered appropriate, also third parties in the form of a
market test. In addition, in cases involving a geographic
market that is wider than the European Economic Area
((cid:145)EEA(cid:146)) or where, for reasons related to the viability of the
business, the scope of the business to be divested is wider
than the EEA territory, the proposed remedies may also be
discussed with non-EEA competition authorities in the
cooperation
framework of
agreements with these countries.

the Community’s bilateral

36. Where

the

assessment

the proposed
commitments remove the grounds for serious doubts,
the Commission clears the merger in phase I.

confirms

that

37. Where the assessment

that

shows

sufficient
raised by the merger,

the commitments
to remove the competitive
offered are not
concerns
the parties will be
informed accordingly. Given that phase I remedies are
designed to provide a straightforward answer to a readily
identifiable competition concern (41), only limited modifi-
cations can be accepted to the proposed commitments.
Such modifications, presented as an immediate response
to the result of the consultations,
include clarifications,
refinements and/or other
improvements which ensure
that the commitments are workable and effective.

2.3.2001

EN

Official Journal of the European Communities

C 68/7

38. If the parties have not removed the serious doubts, the
Commission will issue an Article 6(1)(c) decision and open
proceedings.

2. Phase II

39. Pursuant

to Article 8(2) of

the Merger Regulation,

the
Commission must declare a concentration compatible
with the common market, where following modification
a notified concentration no longer creates or strengthens a
dominant position within the meaning of Article 2(3) of
the Merger Regulation. Commitments proposed to the
Commission pursuant to Article 8(2) must be submitted
to the Commission within not more than three months
from the day on which proceedings were initiated. An
extension of
taken into
this period shall only be
consideration on request by the parties setting forth the
exceptional circumstances which, according to them,
for extension must be received
justify it. The request
within the three-month-period. An extension is only
possible in case of exceptional circumstances and where
in the particular case there is sufficient time to make a
proper assessment of the proposal by the Commission and
to allow adequate consultation with Member States and
third parties (42).

40. The Commission

is
to
available
to the end of

discuss
suitable
the three-month
commitments prior
period. The parties are encouraged to submit draft
proposals dealing with both substantive and procedural
aspects which
the
necessary
commitments are fully workable.

ensure

that

are

to

41. Proposals for commitments submitted in order to form the
basis for a decision pursuant to Article 8(2) must meet the
following requirements:

(a) they shall be submitted in due time, at the latest on the

last day of the three-month period;

(b) they shall address all competition problems raised in
the Statement of Objections and not subsequently
abandoned.
they must specify the
substantive and implementing terms entered into by
to enable a full
the parties
assessment to be carried out;

in sufficient detail

In this respect,

(c) they shall explain how the commitments offered solve

the competition concerns.

At the same time as submitting the commitments, the
parties shall supply a non-confidential version of
the
commitments, for purposes of market testing.

42. Proposals submitted by the parties in accordance with
these requirements will be assessed by the Commission.
If the assessment confirms that the proposed commitments
remove the competition concerns, following consultation
with the authorities of the Member States, discussions with
non-Member States authorities (43) and, when considered
appropriate, with third parties in the form of a market
test, a clearance decision will be submitted for Commission
approval.

subsequently modify
the Commission may only accept

43. Conversely, where the assessment leads to the conclusion
that the proposed commitments appear not to be sufficient
to resolve the competition concerns raised by the concen-
tration, the parties will be informed accordingly. Where
proposed
parties
the
these
commitments,
modified
clearly
determine (cid:151) on the basis of its assessment of information
already received in the course of
the investigation,
including the results of prior market testing, and without
the need for any other market
such
commitments, once implemented, resolve the competition
problems identified and allow sufficient time for proper
consultation of Member States.

commitments (44) where

test (cid:151) that

can

the

it

VI. REQUIREMENTS FOR IMPLEMENTATION OF
COMMITMENTS

44. Commitments are offered as a means of

securing a
clearance, with the implementation normally taking place
after the decision. These commitments require safeguards
to ensure their successful and timely implementation.
the
These implementing provisions will
form part of
commitments entered into by the parties vis-(cid:224)-vis
the
Commission. They have to be considered on a case-by-case
basis. This is in particular true for the fixed time periods
laid down for the implementation, which should in general
be as short as is feasible. Consequently, it is not possible to
standardise these requirements totally.

45. The following guidance is intended to assist the parties in
framing commitment proposals. The principles are based
on the framework of a divestiture commitment, which, as
was seen above, is the most typical commitment. However,
the principles discussed below are equally
many of
applicable to other types of commitments.

1. Essential features of divestment commitments

46. In a typical divestment commitment, the business to be
divested normally consists of a combination of tangible
and intangible assets, which could take the form of a
pre-existing company or group of companies, or of a
business activity which was not previously incorporated
in its own right. Thus the parties (45), when submitting a
divestiture commitment, have to give a precise and
exhaustive definition of the intended subject of divestment
(hereafter referred to as (cid:145)the description of the business(cid:146) or
(cid:145)the description(cid:146)). The description has to contain all the
elements of
the
business to act as a viable competitor in the market:
tangible (such as R & D, production, distribution, sales
and marketing activities) and intangible (such as intel-
lectual property
assets, personnel,
supply and sales agreements (with appropriate guarantees
these), customer lists,
about
third
the transferability of
technical assistance (scope,
party service agreements,
duration, cost, quality) and so forth.
In order to avoid
any misunderstanding about the business to be divested,
assets that are used within the business but that should
not, according to the parties, be divested, have to be
identified separately.

that are necessary for

the business

goodwill)

rights,

C 68/8

EN

Official Journal of the European Communities

2.3.2001

the business can retain and select

47. The description has to provide for a mechanism whereby
the acquirer of
the
appropriate personnel. Such a mechanism is required
both for the personnel that are currently working in the
business unit as it is operated and for the personnel that
provide essential functions for the business such as, for
instance, group R & D and information technology staff
even where such personnel are currently employed by
another business unit of the parties. This mechanism is
the Council
without prejudice to the application of
Directives on collective redundancies (46); on safeguarding
transfers of under-
employees rights
takings (47);
consulting
and
employees (48) as well as national provisions implementing
those Directives.

in the event of
informing

and

on

48. The divestment has to be completed within a fixed time
period agreed between the parties and the Commission,
which takes account of all relevant circumstances. The
package will specify what kind of agreement (cid:151) binding
letter of intent, final agreement, transfer of legal title (cid:151) is
required by what date. The deadline for the divestment
should start on the day of the adoption of the Commission
decision.

is subject

In addition,

the acquisition of

49. In order to ensure the effectiveness of the commitment,
to prior
the sale to a proposed purchaser
approval by the Commission. The purchaser is normally
required to be a viable existing or potential competitor,
independent of and unconnected to the parties, possessing
the financial resources (49), proven expertise and having
the incentive to maintain and develop the divested
business as an active competitive force in competition
with the parties.
the
business by a particular proposed purchaser must neither
be likely to create new competition problems nor give rise
to a risk that the implementation of the commitment will
be delayed. These conditions are hereinafter referred to as
(cid:145)the purchaser
to maintain the
structural effect of a remedy, the merged entity cannot,
in the
absence of an explicit
even in the
the
commitments, subsequently acquire influence over
whole or parts of
the
the divested business unless
Commission has previously found that the structure of
the market has changed to such an extent
the
influence over the divested business is no
absence of
longer necessary to render the concentration compatible
with the common market.

standards(cid:146).

In order

clause

that

business. The parties will be required to ensure that all
relevant tangible and intangible assets of the divestiture
package are maintained, pursuant
to good business
practice and in the ordinary course of business. This
relates in particular to the maintenance of fixed assets,
information of a confidential
know-how or commercial
or proprietary nature,
and the
the
technical and commercial competence of the employees.
Furthermore,
same
the divestiture
conditions of competition as
package as those applied before the merger, so as to
continue the business as it is currently conducted. This
includes
and
relevant
management
functions, sufficient capital, and a line of
credit, and it may include other conditions specific to
maintaining competition in an industry.

the parties must maintain the

customer base

administrative

providing

regards

52. As the Commission cannot, on a daily basis, be directly
involved in overseeing compliance with these interim pres-
ervation measures, it therefore approves the appointment
of a trustee to oversee the parties’ compliance with such
preservation measures (a so-called (cid:145)hold-separate trustee(cid:146)).
The hold-separate trustee will act in the best interests of
the business to be divested. The commitment will set out
the specific details of the trustee’s mandate. The trustee’s
mandate, to be approved by the Commission, together
with the trustee appointment, will
include for example,
responsibilities for supervision, which include the right
to propose,
all
measures which the trustee considers necessary to ensure
compliance with any of the commitments, and periodic
compliance reports.

if deemed necessary,

impose,

and,

3. Implementation of the commitments (cid:151) the divestiture

trustee

53. The commitment will also set out the specific details and
procedures relating to the Commission’s oversight of the
for example, criteria
the divestiture:
implementation of
reporting
the purchaser, periodic
approval of
for
requirements, and approval of the prospectus or adver-
tising material. Here, too, it is noted that the Commission
cannot, on a daily basis, be directly involved in managing
the
the
it appropriate to approve the
Commission considers
appointment a trustee with responsibilities for overseeing
the implementation of the commitments (the (cid:145)divestiture
trustee(cid:146)).

divestment. Consequently,

in most

cases,

2. Interim preservation of the business to be divested (cid:151)

the hold-separate trustee

50. It is the parties’ responsibility to reduce to the minimum
any possible risk of loss of competitive potential of the
business to be divested resulting from the uncertainties
inherent to the transfer of a business. Pending divestment,
the Commission will
to offer
require
commitments to maintain the independence, economic
viability, marketability and competitiveness of the business.

the parties

51. These commitments will be designed to keep the business
separate from the business retained by the parties, and to
is managed as a distinct and saleable
ensure that

it

54. The divestiture trustee’s role will vary on a case-by-case
basis, but will generally include supervision which includes
the right to propose, and if deemed necessary, impose, all
measures which the trustee requires to ensure compliance
with any of the commitments, and reporting at regular
intervals. Where appropriate, the trustee’s role will span
two phases: in the first phase, he or she will be responsible
for overseeing the parties’ efforts to find a potential
the parties do not succeed in finding an
purchaser.
acceptable purchaser within the time frame set out
in
their commitments, then in the second phase, the trustee
will be given an irrevocable mandate to dispose of the
business within a specific deadline at any price, subject
to the prior approval of the Commission.

If

2.3.2001

EN

Official Journal of the European Communities

C 68/9

4. Approval of the trustee and the trustee mandate

5. Approval of the purchaser and the purchase agreement

accounting

consulting or

trustee will normally be

55. Depending on the types of commitments involved and the
facts of the case, the divestiture trustee may or may not be
the same person or institution as the hold-separate trustee.
an investment bank,
The
management
company or
similar institution. The parties shall suggest the trustee
(or a number of
to the Commission. The
trustee shall be independent of the parties, possess the
necessary qualifications to carry out
the job and shall
not be, or become, exposed to a conflict of interests. It
is the parties’ responsibility to supply the Commission
with adequate information for
the
trustee fulfils these requirements. The Commission will
review and approve the terms of the trustee’s appointment,
which should be irrevocable unless (cid:145)good cause(cid:146) is shown
to the Commission for the appointment of a new trustee.

to verify that

trustees)

it

56. The parties are responsible for

remuneration of each
trustee for all services rendered in the execution of their
responsibilities, and the remuneration structure must be
impede the trustee’s independence and
such as to not
effectiveness in fulfilling his mandate. The trustee will
assume specified duties designed to ensure compliance in
good faith with the commitments on behalf of
the
Commission, and these duties will be defined in the
trustee’s mandate. The mandate must include all provisions
necessary to enable the trustee to fulfil its duties under the
commitments accepted by the Commission. It is subject to
Commission’s approval.

57. When the specific commitments with which the trustee
has been entrusted have been implemented (cid:151) that is to
say, when legal
title for the divestiture package to be
divested has passed or at the end of some specific obli-
gations which continue post-divestiture (cid:151) the mandate
will provide for the trustee to request the Commission
for a discharge from further responsibilities. Even after
the discharge has been given, the Commission has the
discretion to require the reappointment of the trustee, if
subsequently it appears
the
relevant commitments might not have been fully and
properly implemented.

to the Commission that

58. The parties or the trustee can only proceed with the sale if
the Commission approves a proposed purchaser and the
purchase agreement on the basis of the arrangements set
out in the commitment. The parties or the trustee will be
required to demonstrate satisfactorily to the Commission
that the proposed buyer meets the requirements of the
commitments, which means the purchaser’s standards,
the business is sold in a manner consistent
and that
with the commitment. The Commission will
formally
communicate its view to the parties. Before doing so,
the Commission officials may have discussed with the
proposed purchaser its incentives for competing with the
merged entity on the basis of its business plans. Where
different purchasers are being proposed for different parts
of the package, the Commission will assess whether each
individual proposed purchaser is acceptable and that the
total package solves the competition problem.

59. Where the Commission determines that the acquisition of
the divestiture package by the proposed purchaser, in the
light of
the information available to the Commission,
threatens to create prima facie competition problems (50)
timely
or other difficulties, which may delay
implementation of the commitment or indicate the lack
of appropriate incentives for the purchaser to compete
with the merged entity, the proposed purchaser will not
be considered acceptable. In this case, the Commission will
formally communicate its view that the buyer does not
satisfy the purchaser’s standards (51).

the

60. Where the purchase results in a concentration that has a
Community dimension, this new operation will have to be
notified under the Merger Regulation and cleared under
normal procedures (52). Where this is not the case, the
is without
Commission’s
prejudice
control of
national authorities.

a purchaser
jurisdiction of merger

approval of

to the

C 68/10

EN

Official Journal of the European Communities

2.3.2001

(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13.
(2) OJ L 180, 9.7.1997, p. 1.
(3) The references to (cid:145)parties(cid:146) and (cid:145)merging parties(cid:146) also cover situations with one notifying party.
(4) Referred to hereinafter as (cid:145)phase II(cid:146).
(5) Referred to hereinafter as (cid:145)phase I(cid:146).
(6) Recital 7 of the Merger Regulation.
(7) In the case of the creation of a joint venture, the Commission will also examine the concentration under Article 2(4) of the Merger Regulation. In
this respect, the Commission examines whether or not the creation of the joint venture has as its object or effect the coordination of the
competitive behaviour of undertakings that remain independent. Such coordination will be appraised in accordance with the criteria of Article
81(1) and (3) of the Treaty, with a view to establishing whether or not the operation is compatible with the common market. The principles set
out in this notice would normally also apply to cases dealt with under Article 2(4).

(8) Judgment of the Court of First Instance of 25 March 1999 in Case T-102/96 Gencor v Commission [1999] ECR II-753, at paragraph 316.
(9) Op. cit., at paragraph 319.
(10) Only in exceptional circumstances will

the Commission consider commitments which require further monitoring: Commission Decision

97/816/EC (IV/M.877 (cid:151) Boeing/McDonnell Douglas; OJ L 336, 8.12.1997, p. 16).

(11) Commitments in phase I can only be accepted in certain types of situation. The competition problem needs to be so straightforward and the

remedies so clear-cut that it is not necessary to enter into an in-depth investigation.

(12) Commission Decision of 30 March 1999 (IV/JV.15 (cid:151) BT/AT & T); Commission Decision 2000/45/EC (IV/M.1532 (cid:151) BP Amoco/Arco; OJ L 18,

19.1.2001, p. 1).

(13) If the Commission’s final assessment of a case shows that there are no competition concerns or that the resolution of the concerns does not
depend on a particular element of the submitted commitments, the parties, being informed, may withdraw them. If the parties do not withdraw
them, the Commission may either take note of their proposals in the decision or ignore them. Where the Commission takes note of them, it will
explain in its decision that they do not constitute a condition for clearance.

(14) The same principle applies where the situation that originally rendered the concentration compatible is subsequently reversed; see the last sentence

of paragraph 49.

(15) These measures may also lead to periodic penalty payments as provided in Article 15(2)(b).
(16) The following overview is non-exhaustive.
(17) Where the competition problem arises in vertical integration cases, divestiture may also resolve the competition concern.
(18) Commission Decision of 29 September 1999 (IV/M.1383 (cid:151) Exxon/Mobil, at paragraph 860); Commission Decision of 9 February 2000

(COMP/M.1641 Linde/AGA, at paragraph 94).

(19) Commission Decision 1999/229/EC (IV/M.913 (cid:151) Siemens/Elektrowatt; OJ L 88, 31.3.1999, p. 1, at paragraph 134); Commission Decision
2000/718/EC (COMP/M.1578 (cid:151) Sanitec/Sphinx; OJ L 294, 22.11.2000, p. 1, at paragraph 255); Commission Decision of 8 March 2000
(COMP/M.1802 (cid:151) Unilever/Amora Maille); Commission Decision of 28 September 2000 (COMP/M.1990 (cid:151) Unilever/Bestfoods; OJ C 311,
31.10.2000, p. 6).

(20) Commission Decision 96/222/EC (IV/M.603 (cid:151) Crown Cork & Seal/CarnaudMetalbox; OJ L 75, 23.3.1996, p. 38).
(21) Commission Decision 96/435/EC (IV/M.623 (cid:151) Kimberly-Clark/Scott Paper; OJ L 183, 23.7.1996, p. 1).
(22) See paragraph 49 for the purchaser standards.
(23) IV/M.913 (cid:151) Siemens/Elektrowatt: cited above.
(24) Commission Decision of 13 December 2000 (COMP/M.2060 (cid:151) Bosch/Rexroth).
(25) IV/M.1532 (cid:151) BP Amoco/Arco (cited above) where the commitment was to divest the interests in certain gas pipelines and processing facilities in

the North Sea, also the interests in the related gas fields were divested.

(26) Commission Decision of 8 April 1999 (COMP/M.1453 (cid:151) AXA/GRE; OJ C 30, 2.2.2000, p. 6).
(27) Commission Decision 98/455/EC (IV/M.942 (cid:151) VEBA/Degussa; OJ L 201, 17.7.1998, p. 102).
(28) Commission Decision of 9 February 2000 (COMP/M.1628 (cid:151) TotalFina/Elf); Commission Decision of 13 June 2000 (COMP/M.1673 (cid:151) VEBA/

VIAG); Commission Decision of 1 September 2000 (COMP/M.1980 (cid:151) Volvo/Renault; OJ C 301, 21.10.2000, p. 23).

(29) IV/M.877 (cid:151) Boeing/McDonnell Douglas (cited above). The Commission’s investigations revealed that no existing aircraft manufacturer was
interested in acquiring Douglas Aircraft Company (DAC, the commercial aircraft division of McDonell Douglas) from Boeing, nor was it
possible to find a potential entrant to the commercial jet aircraft market who might achieve entry through the acquisition of DAC.

(30) Commission Decision 98/475/EC (IV/M. 986 (cid:151) AGFA Gevaert/DuPont; OJ L 211, 29.7.1998, p. 22).
(31) Commission Decision of 28 October 1999 (IV/M.1571 (cid:151) New Holland/Case: OJ C 130, 11.5.2000, p. 11); Commission Decision of 19 April 1999

(IV/M.1467 (cid:151) Rohm and Haas/Morton; OJ C 157, 4.6.1999, p. 7).

(32) Commission Decision of 5 October 1992 (IV/M.157 (cid:151) Air France/Sabena; OJ C 272, 21.10.1992, p. 1; Commission Decision of 27 November 1992
(IV/M.259 (cid:151) British Airways/TAT; OJ C 326, 11.12.1992, p. 1); Commission Decision of 20 July 1995 (IV/M.616 (cid:151) Swissair/Sabena; OJ C 200,
4.8.1995, p. 10); Commission Decision of 13 October 1999 (IV/M.1439 (cid:151) Telia/Telenor); Commission Decision of 12 April 2000 (COMP/M.1795
(cid:151) Vodafone/Mannesmann).

(33) Commission Decision of 9 August 1999 (IV/M.1378 (cid:151) Hoechst/Rh(cid:244)ne-Poulenc; OJ C 254, 7.9.1999, p. 5); Commission Decision of 1 December

1999 (COMP/M.1601 (cid:151) Allied Signal/Honeywell); Commission Decision of 3 May 2000 (COMP/M.1671 (cid:151) Dow/UCC).

(34) Commission Decision of 28 February 1995 (IV/M.555 (cid:151) Glaxo/Wellcome; OJ C 65, 16.3.1995, p. 3).
(35) COMP/M.1439 (cid:151) Telia/Telenor; COMP/M.1795 (cid:151) Vodafone Airtouch/Mannesmann (cited above); Commission Decision of 13 October 2000

(COMP/M.2050 (cid:151) Vivendi/Canal+/Seagram; OJ C 311, 31.10.2000, p. 3).

(36) Commission Decision 97/816/EC (IV/M.877 (cid:151) Boeing/McDonnell Douglas; OJ L 336, 8.12.1997, p. 16); COMP/M.1673 (cid:151) VEBA/VIAG.

2.3.2001

EN

Official Journal of the European Communities

C 68/11

(37) Commission Decision 94/922/EC (MSG Media Service, OJ L 364, 31.12.1994, p. 1); Commission Decision 96/177/EC (Nordic Satellite Distribution,
OJ L 53, 2.3.1996, p. 20); Commission Decision 96/342/EC (RTL/Veronica/Endemol, OJ L 134, 5.6.1996, p. 32); Commission Decision
1999/153/EC (Bertelsmann/Kirch/Premiere; OJ L 53, 27.2.1999, p. 1; Commission Decision 1999/154/EC (Deutsche Telekom BetaResearch; OJ L 53,
27.2.1999, p. 31); Commission Decision 97/610/EC (St Gobain/Wacker Chemie/NOM; OJ L 247, 10.9.1997, p. 1); Commission Decision 91/619/EEC
(Aerospatiale/Alenia/De Havilland, OJ L 334, 5.12.1991, p. 42); Commission Decision 97/26/EC Gencor/Lonrho, OJ L 11, 14.1.1997, p. 30);
Commission Decision 2000/276/EC (M.1524 (cid:151) Airtours/First Choice; OJ L 93, 13.4.2000, p. 1).

(38) Commission Decision of 15 March 2000 (COMP/M.1672 (cid:151) Volvo/Scania); Commission Decision of 28 June 2000 (COMP/M.1741 (cid:151) WorldCom/

Sprint).

(39) Article 18(1) of Commission Regulation (EC) No 447/98 (Implementing Regulation), OJ L 61, 2.3.1998, p. 1.
(40) By way of a market test, customers, competitors, suppliers and other companies which might be affected or have specific expertise are requested

to indicate to the Commission their reasoned opinion as to the effectiveness of the commitment.

(41) See recital 8 of Council Regulation (EC) No 1310/97 referred to in paragraph 1.
(42) M.1439 (cid:151) Telia/Telenor; and in Commission Decision 98/335/EC (M.754 (cid:151) Anglo American/Lonrho; OJ L 149, 20.5.1998, p. 21).
(43) See paragraph 35.
(44) COMP/M.1628 (cid:151) TotalFina/Elf, LPG, cited above, at paragraph 345.
(45) Commitments must be signed by a person duly authorised to do so.
(46) Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ L 225,

12.8.1998, p. 16).

(47) Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of
employees rights in the event of transfers of undertakings, businesses or parts of a business (OJ L 61, 5.3.1977, p. 26) as amended by Council
Directive 98/50/EC (OJ L 201, 17.7.1998, p. 88).

(48) Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale
undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ L 254, 30.9.1994, p. 64),
as amended by Directive 97/74/EC (OJ L 10, 16.1.1998, p. 22).

(49) The Commission does not accept seller-financed divestitures because of the impact this has on the divested company’s independence.
(50) This is most likely to arise where the market structure is already highly concentrated and where the remedy would transfer the market share to

another market player.

(51) COMP/M.1628 (cid:151) TotalFina/Elf (cid:151) motorway service stations.
(52) Commission Decision of 29 September 1999 (Case M.1383 (cid:151) Exxon/Mobil) and the Commission Decisions of 2 February 2000 in the follow-up

Cases M.1820 (cid:151) BP/JV Dissolution (not published) and M.1822 (cid:151) Mobil/JV Dissolution (OJ C 112, 19.4.2000, p. 6).

Non-opposition to a notified concentration

(Case COMP/M.2199 (cid:151) Quantum/Maxtor)

(2001/C 68/04)

(Text with EEA relevance)

On 8 December 2000 the Commission decided not to oppose the above notified concentration and to
declare it compatible with the common market. This decision is based on Article 6(1)(b) of Council
Regulation (EEC) No 4064/89. The full text of the decision is only available in English and will be
made public after it is cleared of any business secrets it may contain. It will be available:

(cid:151) as a paper version through the sales offices of the Office for Official Publications of the European

Communities (see list on the last page),

(cid:151) in electronic form in the (cid:145)CEN(cid:146) version of the CELEX database, under document No 300M2199. CELEX

is the computerised documentation system of European Community law.

For more information concerning subscriptions please contact:

EUR-OP,
Information, Marketing and Public Relations (OP/A/4-B),
2, rue Mercier,
L-2985 Luxembourg.
Tel. (352) 29 29 424 55, fax (352) 29 29 427 63.