Proposal for a Council Regulation on the control of concentrations between undertakings ("The EC Merger Regulation") COM(2002) 711 final — 2002/0296(CNS)  (Text with EEA relevance)
Date: 2003-01-28
Institutions: Council of the European Union
Subjects: competition, competition law, competition policy, economic concentration, merger control

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II

(Preparatory Acts)

COMMISSION

Proposal for a Council Regulation on the control of concentrations between undertakings

æ(‘The EC Merger Regulation’)æ

COM(2002) 711 final — 2002/0296(CNS)

(2003/C 20/06)

(Text with EEA relevance)

EXPLANATORY MEMORANDUM

I. INTRODUCTION

1. Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (‘the
Merger Regulation’) (1) was adopted on 21 December 1989 and entered into force on 21 September
1990. It was amended by the Act of Accession of Austria, Finland and Sweden (2)) and by Council
Regulation (EC) No 1310/97 of 30 June 1997 (‘the amending Regulation’) (3). The Merger Regulation
applies to all concentrations having a Community dimension, as defined on the basis of the annual
turnover of the companies concerned, and confers exclusive jurisdiction to the Commission for such
cases. The Merger Regulation thus provides a ‘one-stop shop’ within the European Union for the
examination and control of concentrations having a Community dimension.

2. The current proposal for review of the Merger Regulation was prompted by the legal obligation to
review the turnover thresholds under Article 1 and the case referral rules under Article 9 (4). In
addition, the Commission took the opportunity to examine the operation of the Regulation as a
whole, in order to identify other areas in which improvements could be made (mainly substantive
and procedural issues).

3. On 11 December 2001, the Commission adopted a Green Paper on the Review of Regulation (EEC)
No 4064/89 (‘the Green Paper’) (5). That Green Paper invited comments mainly on three areas: (i) the
operation of the turnover thresholds and case referral mechanisms (so-called jurisdictional issues), (ii)
the substantive test to be applied for the review of concentrations by the Commission (so-called
substantive issues), and (iii) procedural issues. Views were also sought on the effectiveness of the due
process guarantees built into the EU merger control regime and of judicial review in merger cases.

4. Following the adoption of the Green Paper, the Commission launched a consultation of Member
States, the business and legal community and other interested parties. The Council, the European
Parliament and the Economic and Social Committee were also invited to express their opinions.

5. The review showed that Community merger control is widely regarded as a success. Nevertheless, it
identified a number of weaknesses in the present system, not only in relation to turnover thresholds,
but also in relation to some other aspects of the Merger Regulation. The Commission considers that
it is now appropriate to propose amendments that will address these shortcomings and will thus
improve the operation of merger control in the European Community.

6. In the light of the objective set by the European Council to make Community legislation more
accessible and comprehensible (6), and given that the proposed amendments concern various Articles
of the Merger Regulation,
it is proposed to replace both the current Merger Regulation and the
amending Regulation by a new EC Merger Regulation, using the recasting technique (7).

(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13.
(2) Act concerning the conditions for accession of the Kingdom of Norway, the Republic of Austria, the Republic of

Finland and the Kingdom of Sweden; OJ C 241, 29.8.1994, p. 57.
(3) OJ L 180, 9.7.1997, p. 1; corrigendum in OJ L 40, 13.2.1998, p. 17.
(4) See Article 1(4) and (5) and Article 9(10) of the Merger Regulation.
(5) COM(2001) 745 final.
(6) European Council meeting in Edinburgh in December 1992.
(7) See the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for

legal acts, OJ C 77, 28.3.2002, p. 1.

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7. As compared with the text of the current Merger Regulation, the amendments contained in the

proposed new EC Merger Regulation can be categorised as follows:

— jurisdictional issues (see section II.A below),

— substantive issues (see section II.B below),

— procedural issues (see section II.C below),

— other proposed amendments (see section II.D below).

II. OVERVIEW OF THE MOST IMPORTANT AMENDMENTS

A. Jurisdictional issues

(1) Community dimension

8. One of

the aims of

Commission's Green Paper,
Commission and national competition authorities, in line with the principle of subsidiarity.

is an optimisation of

the proposed amendments to the Merger Regulation, as set out

in the
the allocation of merger cases between the

9. In this context, it is the Commission's stated objective to ensure that the Commission can deal with
cases having a significant cross-border impact, but which are not currently caught by the turnover
thresholds of Article 1(2) and 1(3) of the Merger Regulation, whilst ensuring that Member States deal
with cases whose impact is mainly national or local. This would also benefit the business community
by reducing legal uncertainty and costs, which have been reported to be significant in post-notifi-
cation referrals. As set out in further detail below, the proposal places the exclusive right of initiative
with the notifying parties at the pre-notification stage.

10. In line with the principle of subsidiarity, and in order to preserve administrative efficiency and the
‘one-stop shop’ concept — one of the main assets of the current system —, the Community legislator
should at the same time seek to reduce the significant number of multiple filings,
i.e. mergers
requiring notifications in several Member States.

11. The Commission's review of the functioning of the Merger Regulation has revealed that the threshold
levels in Article 1(2) as well as the two-thirds rule (8) continue to function effectively as proxies for
those cases that are most appropriately dealt with at the Community level.

12. Article 1(3) has fallen short of achieving its underlying objective,

to confer Commission
competence over cases that affect
the
Commission looked at various possibilities aimed at improving the functioning of Article 1(3) as
set out in the Green Paper.

three or more Member States (9). Given these findings,

i.e.

(a) The Green Paper proposal

13. The main suggestion set out in the Green Paper was for a so-called ‘mandatory 3+ system’, the
perceived advantage of which would have been to automatically confer Community dimension on
concentrations notifiable under clearly established national laws. Closer examination shows however
that the system does not provide the initially perceived advantage of being simple, clear and legally
certain.

(8) It follows from Article 1(2)(b) of the Merger Regulation that a concentration does not have a Community dimension
and does not therefore fall within the jurisdiction of the Commission if each of the undertakings concerned achieves
more than two-thirds of its aggregate Community-wide turnover within one and the same Member State (so-called
‘two-thirds rule’).

(9) As set out in the Green Paper, in 2000, only about one in five cases known to be subject to multiple notifications to
three or more Member States were caught by the provision. In addition, a trend was observed according to which
multiple notifications involving three or more Member States are steadily increasing, and the approaching
enlargement of the Community to 25 Member States as from 2004 is likely to further accentuate the negative
effects of multiple filings involving a significant number of Member States.

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14. The requirement to notify in three or more Member States is not a sufficient indication of the
existence of a Community interest. This may be due to the existence of low jurisdictional thresholds
in some Member States and applicant countries, or even due to the lack of sufficient nexus to a
specific national jurisdiction.

15. The mandatory 3+ system would also introduce unacceptable legal uncertainty. Different jurisdic-
tional tests or concepts of concentration in various Member and applicant States could lead to
diverging interpretations. It seems inappropriate to base Community jurisdiction on criteria about
which the merging parties, the relevant Member State and, possibly, the Commission could adopt
differing views. This is particularly true for Member State jurisdictions that base their notification
requirements on market share thresholds.

16. Based on the comments received, the Commission has also given serious consideration to proposals
for an ‘optional 3+ system’, possibly combined with a veto right for the Member States concerned.
Under such a system the 3+ rule would remain intact, that is the test would be whether a transaction
below the Article 1(2) and 1(3) thresholds was notifiable in 3 or more Member States. The parties
would first check whether the 3+ rule was met. If this were the case, the parties would have a choice:
either to notify to the national jurisdictions, or to make a request that the case ought to be deemed
to have a Community dimension and hence notified to the Commission. The Member States
concerned could be given a right to veto the merging companies' choice to notify to the Commission
instead of submitting three or more notifications to national competition authorities.

17. However, even such an improved optional 3+ system would retain many of the disadvantages of the
original 3+ proposal whilst also being more complex. First, an optional 3+ system would remain a
relatively crude test for ‘catching’ or ‘missing’ cross-border cases. The fact that a transaction would be
notifiable in three or more Member States would not necessarily mean that the transaction had
significant cross-border effects. At the same time, some cases notifiable in only one or two Member
States might have significant cross-border effects and would not be caught. Second, by giving the
parties the right to choose where to notify and hence the right to determine jurisdiction, there would
be a risk of ‘forum shopping’ (or at the very least a perception thereof). A right for the Member
States concerned to veto the submission of notifications to the Commission would not eliminate
such problems and could create uncertainty.

(b) The Commission's proposal — a system of streamlined referrals

18. In the light of the above and taking into account

the results of the public consultation the
Commission has concluded that
the most effective way of meeting the two main objectives
outlined above, that is optimal allocation of cases and reduction in the incidence of multiple
filings, could be achieved through a more streamlined system of referrals. Such a system would
be based on an enhanced recourse to the Merger Regulation's referral mechanisms under Articles 9
and 22 ECMR, including their improvement and use at a pre-notification stage, so as to provide for
an effective means of fine-tuning the allocation of cases brought about by the turnover thresholds of
Article 1(2) and 1(3) ECMR.

19. The main elements of the proposed system are the following:

— improvement of the criteria for referrals, including a closer ‘mirroring’ of the criteria for referral

in both directions,

— applicability of Articles 9 and 22 at the pre-notification stage. Given their superior knowledge of
the circumstances of the case, the notifying parties should be given an exclusive right of initiative
at this stage of the procedure. In relevant cases, this would enable them to make a reasoned
request for a pre-notification referral of the case in either direction. For the sake of efficiency, the
request would be deemed to be accepted if not expressly opposed within given deadlines. The
relevant authorities and the Commission would be organised in an informal ‘network’ so as to
enhance the efficiency and effectiveness of the process, an approach supported by the current
level of experience in the Member States regarding merger control. The proposed changes for the
pre-notification referrals have been incorporated into the proposed new Article 4(4) and 4(5),

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— conferring exclusive jurisdiction on the Commission if all the Member States concerned, or a
minimum number of three such Member States, agree to a case being referred under Article 22,

— possibility for the Commission to invite Member States to make referrals under Article 22, or to
request the Commission to refer cases to them under Article 9; currently the Commission has no
such formal ‘right of initiative’;

(i) Improvement of the substantive criteria in Articles 9 and 22

20. First of all, the substantive criteria for the application of both provisions are being simplified and
improved (10). As regards Article 9, the current wording of its paragraph 2(a) requires Member States
to assess whether or not the proposed concentration threatens to create or strengthen a dominant
position. The Commission proposes to delete this wording so as to allow referral requests on the
basis that competition would be significantly affected on a distinct market within a given Member
State. National authorities would thus not be obliged to present elaborate preliminary conclusions
with regard to the competitive assessment of the case. This would facilitate a speedier use of Article 9.

21. Conversely, Article 22 would be applied mainly in those cases which have a significant impact on
competition beyond a single Member State. One of the initial purposes of Article 22 was to provide
a possibility for Member States which do not have national merger control legislation to refer cases
with an impact on trade between Member States to the Commission; today, only Luxembourg falls
into this category. Nevertheless, the possibility for a single Member State to refer cases to the
Commission should not be completely excluded.

(ii) Application of Articles 9 and 22 at a pre-notification stage at the request of the parties

22. The consultation showed that the main weakness is that the current referral provisions can only be
used after a merger has been notified to either the Commission or the national competition autho-
rities, as the case may be. This inevitably brings about a significant loss of time and administrative
efficiency and imposes unnecessary costs and burdens on the merging companies. In Article 22
cases, experience has shown that the delay can easily amount to several months.

23. In order to address these drawbacks, it is therefore proposed in a new Article 4 paragraphs 4 and 5
to render Articles 9 and 22 applicable at a pre-notification stage, at the request of the merging
parties.

24. As regards cases fulfilling the turnover thresholds of Article 1(2) or 1(3), it could be determined at an
early stage whether a transaction would be better dealt with at the Member State level and referred in
advance of notification. Conversely, in early application of Article 22, Member States could refer to
the Commission cases remaining below the turnover thresholds of Article 1(2) and 1(3) ECMR but
which are likely to have a significant cross-border impact.

25. Such referrals would be made on the basis of a request and information provided by the merging
parties. As is generally the case with referrals under Articles 9 and 22 of the Merger Regulation, the
competition authorities involved would retain certain discretion as to whether or not to request,
grant or accept a referral.

(iii) Exclusive Community jurisdiction where all, or at least three, Member States concerned make a referral

request; streamlining of Article 22 procedure

26. In order to make Article 22 an efficient mechanism for the review of cases with significant cross-
border effects, and to reduce legal uncertainty,
it is proposed that, where all, or at least three,
Member States with jurisdiction under their national rules decide to refer a case to the Commission,
the Commission should acquire exclusive jurisdiction over the case throughout
the EEA (see
proposed Articles 22(3) and 4(5), fourth subparagraph of the proposed new Regulation).

(10) In part, this issue had already been set out in the Commission's Green Paper.

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27. It is also proposed to clarify and streamline the procedural rules relating to joint referrals under
Article 22, in light of the experience gained in the Promatech/Sulzer (11) and GEES/Unison (12) cases
(see Article 22(1), (2), and (4) of the proposed new Regulation). To that end, the new Regulation
introduces deadlines for Member States to make referral requests and for other Member States to join
such requests. For the sake of efficiency, Article 22 provides for a non-opposition procedure (13).

(iv) Referrals at the request of the Commission

28. For both Article 9 and Article 22 of the Merger Regulation, it is proposed to expressly provide the
possibility for the Commission to invite Member States to make a referral request, after the case has
been notified. At a pre-notification stage, however, the Commission would simply transmit the
request of the merging parties, in line with the underlying basic concept that the pre-notification
referrals mechanism should only be triggered by the merging parties themselves, as is laid down in
the proposed Article 4(4) and 4(5).

(v) Implications of a system of streamlined referrals

Advantages and disadvantages

29. The main advantage of this system would be its precision. Unlike relatively crude turnover or ‘3+’
type tests, this test would form a basis for focusing on cases that have a significant cross-border
impact at the Community level. The system would also have the advantage of striking a balance
between Community and national interests by providing a ‘two-way approach’: it would allow for
streamlined referrals both from and to the Commission. Last but not least, this system would also
deal with the issue of case allocation in a short timeframe if triggered by the parties at the
pre-notification stage. A transaction would be notified to the ‘right’ authority from the start,
reducing legal uncertainty and cost for the merging parties.

30. As regards the business and legal communities, it should be acknowledged that they have expressed
some scepticism about a more extensive use of the referral mechanism. Their criticism, however,
mainly relates to the fact that the prospect of referrals after notification of a case to a given authority
creates additional costs and legal uncertainties for the parties as their case will be dealt with by an
authority different from the one to which they have initially turned. The Commission considers that
the proposed amendments to the referral provisions, in particular their applicability at a pre-notifi-
cation stage and the right of initiative granted to the merging parties, address most of the concerns
voiced by the business and legal communities with regard to referrals.

Comparison with the modernisation of Regulation No 17

31. The EC Merger Regulation is based on the concept of exclusive jurisdiction, that is to say, a merger is
to be reviewed either at the Community level or at the national level. A parallelism of jurisdiction
does not exist (see Article 21(1), (2) and recital 29 of Regulation (EEC) No 4064/89).

32. Moreover, the Commission and national competition authorities do not apply the same substantive
and procedural rules. Whilst the Commission reviews mergers falling within its own jurisdiction on
the basis of the Merger Regulation, the national competition authorities apply their respective
national legislation to mergers falling within their jurisdiction; they do not apply the Merger Regu-
lation (see Article 21(1), (2) of the current Merger Regulation). The same basic rule also applies in a
referral scenario: Referrals under Article 9 of the Merger Regulation are made with a view to the
application of the national competition law of the Member State concerned, whilst cases referred to
the Commission under Article 22 are reviewed on the basis of the Merger Regulation.

33. Given that cases do not qualify, a priori, for review by both the Commission and national authorities,
and given that the Commission and national authorities do not apply the same substantive rules, it is
not necessary to provide for mechanisms ensuring the uniform application of competition law.

(11) COMP/M.2698 — Promatech/Sulzer Textil, Commission Decision of 24 July 2002.
(12) COMP/M.2738 — GEES/Unison, Commission Decision of 17 April 2002.
(13) The same applies for the proposed Article 4(5).

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(2) Definition of a concentration

34. Article 3 defines what is considered to be a concentration under the Merger Regulation.

(a) Change of control on a lasting basis

(i) Article 3 paragraph 1

35. The general definition in Article 3(1) has been amended so as to explicitly include the criteria
according to which a concentration requires a change in control and that this control has to take
place on a lasting basis. These criteria were in the past applied as unwritten criteria when deter-
mining whether an operation constituted a concentration in the sense of the Merger Regulation.

36. The criterion for a change in control is currently only detailed in the Commission notice on the
concept of a concentration (14). The way the proposed Article is formulated, the term is used in a
wide sense so as to cover mergers and acquisitions, which both continue to be explicitly referred to
in Article 3(1).

37. The criterion of a lasting change is currently only included in recital 23 of Regulation (EEC) No

4064/89, and is taken up in the Commission notice on the concept of a concentration.

38. It seems appropriate to complete the text of the Merger Regulation by incorporating all the major

criteria that define a concentration into the definition of Article 3(1).

(ii) Article 3 paragraph 5

39. Article 3(5) remains unchanged. The provision describes certain narrowly defined situations when a
concentration shall not be deemed to exist. Experience has shown that the limitations in this
provision (in terms of non-voting rights and as regards the maximum period for holding on to
the securities) mean that it is rarely applicable. At the same time, restrictions of this type are
intended to discourage circumvention of the Merger Regulation, and thus to safeguard its effec-
tiveness as well as the level playing field for companies in the internal market. The Green Paper
therefore mooted the possibility of extending this provision so as to give it a larger field of
application.

40. In the light of the changes proposed to the wording of Article 3(1), which clarify that the change of
control has to take place on a lasting basis, it is not necessary to amend the specific cases laid down
in Article 3(6).

41. The new wording of Article 3(1) on the other hand makes it clear, that it is not excluded that other
operations, even if they do not meet the narrow criteria laid down in Article 3(6), can be considered
not to constitute a concentration if it is shown that the operation in question does not constitute a
change of control on a lasting basis.

(b) Multiple transactions

(i) Article 3 paragraph 4

42. The proposed new Article 3(4) now explicitly states that multiple transactions which are conditional
on one another or are so closely connected that their economic rationale justifies their treatment as a
single concentration shall be deemed to constitute a single concentration.

43. In the past, the Commission has had to decide on a number of occasions whether a number of
transactions, which are linked in a variety of respects, should be considered as constituting a single
concentration.

(14) Commission notice on the concept of a concentration under Regulation (EEC) No 4064/89 on the control of

concentrations between undertakings, OJ C 66, 2.3.1998, p. 5.

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44. The question is relevant in determining the jurisdiction of the Commission. A transaction that by
itself might not have a Community dimension because it does not meet the thresholds set out in the
Merger Regulation, might nevertheless fall within the scope of the Merger Regulation as part of a
concentration that is made up of more than one transaction.

45. Article 3 applies to the acquisition of ‘direct or indirect control of the whole or parts of one or more
other undertakings’. Apart from this general and wide definition, the only other provision directly
concerned with the situation of two or more transactions constituting a single concentration is
Article 5(2), second subparagraph. This provision was designed primarily to prevent circumvention
of the Merger Regulation by separating one concentration into numerous transactions. The Merger
Regulation has established a legal presumption that all transactions meeting the requirements of
Article 5(2), second subparagraph, are to be considered as one concentration.

46. In conformity with the ‘one-stop shop’ system, there is no reason in principle why other multiple
transactions, which are not covered by the present Merger Regulation, should not be assessed as a
whole if they involve an economic link revealing economic unity between the transactions in a
manner that is equivalent to a single concentration. In order to avoid artificial separation in the
treatment of multiple transactions, which, from the perspective of the parties and/or of the market,
are characterised by economic unity, it appears appropriate to further specify the circumstances in
which multiple transactions should be considered as constituting a whole for the purpose of the
Merger Regulation.

47. The Green Paper (15) had identified a number of specific categories for which the application of the
‘one-stop shop’ principle would better serve the overall aim of maintaining effective competition, as
it would ensure that the totality of effects of such concentrations are subject to one coherent
assessment.

48. The reactions to categorising the scenarios presented in the Green Paper as one concentration were
generally positive. These scenarios are summarised in the proposed recital 16. As a matter of legis-
lative technique, however, it is proposed to introduce a clause of general application. These criteria
not only cover the scenarios that have been discussed in the Green Paper but also other scenarios
which might arise in individual cases and merit an equivalent treatment.

49. The wording of this clause has been guided by the purpose of covering those cases that are so closely
connected that their treatment as a single concentration is justified. At the same time the wording
has to be stringent enough as not to compromise predictability in its application. Further guidance
on this principle could be provided during the revision of the Commission's notice on the concept of
a concentration (16).

(ii) Article 5 paragraph 2 second subparagraph

50. It is proposed to retain the one circumstance that had already been provided for in the Merger
Regulation since its inception, i.e. Article 5(2), second subparagraph. This provision was designed
primarily to prevent the circumvention of the Merger Regulation by separating one concentration
into numerous transactions.

51. The wording of this provision has been tightened, however, so that transactions that are linked
merely by the time criterion and the identity of the parties, but lack any economic connection, would
no longer be considered as one single concentration in the future. Therefore,
in future, concen-
trations meeting the criteria of Article 5(2), second subparagraph will not be considered to constitute
one concentration, if they concern unrelated economic sectors.

(15) Green Paper, paragraph 106 et seq.
(16) OJ C 66, 2.3.1998, p. 5.

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B. Substantive issues

52. On the substantive side, the Green Paper sought to launch a debate on two main policy questions.
First, it proposed to review the respective merits of the ‘dominance test’, which is used in the Merger
lessening of
Regulation as the substantive standard to review mergers, and the ‘substantial
competition test’ (‘SLC’), which is used in certain other jurisdictions such as the United States and,
since relatively recently, also the United Kingdom and Ireland. Second, it proposed to review and, if
necessary, clarify the role in merger investigations of efficiency claims made by the merging parties.

(1) The substantive test

53. The Green Paper invited views on the effectiveness of the substantive test contained in Article 2 of
the Merger Regulation, and in particular sought views on how its effectiveness compares with the
‘substantial lessening of competition’ (SLC) standard used in some other jurisdictions. Two principal
points of view have informed the debate on the substantive test. On the one hand, the consultation
revealed a certain concern as to whether the current dominance test could provide effective control
in some specific situations of oligopoly, in particular in cases where the merging firms would be in a
position to raise prices, and thus exercise market power, without resorting to co-ordination and
without necessarily holding the largest market share in the market. The economic community seems
to agree that such cases should indeed be covered. The main argument for changing to SLC would be
the clarity provided by the test in these cases.

54. On the other hand, many comments in response to the Green Paper have pointed out that what
matters is how the applicable legal test should be interpreted. The dominance test and SLC have
produced broadly convergent outcomes and the dominance test is proving to be an instrument
capable of being adapted to a wide variety of situations where market power exists. It should also
be noted that the Court of Justice has not explicitly ruled on, and therefore not explicitly excluded,
the possibility of addressing the effect of mergers in (non-collusive) oligopolies with no single firm
being significantly larger than the others under the current dominance test (17).

55. The Commission considers that the aim of improving legal certainty on the scope of the Merger
Regulation is best served by clarifying the Regulation itself. The Commission thus proposes to insert
a new Article 2(2) into the Merger Regulation, which aims to clarify the concept of dominance under
the Merger Regulation.

56. The proposed definition of

the dominance criterion closely follows the characterisation of a
dominant position given by the Court of Justice (18).
It thereby seeks to maintain the sizeable
body of case law and case practice which has been built up over the years. The proposed recital
21 has the purpose of making it clear that specific situations of oligopoly are also covered by
Article 2.

57. This approach has the additional advantage of not linking the definition of dominance under the
Merger Regulation to any future interpretations given by the ECJ to the concept of dominance under
Article 82 of the Treaty.

58. Alongside these proposals, a draft Notice on the appraisal of horizontal mergers under Regulation
(EEC) No 4064/89 will be published for public consultation. It is further proposed to amend Article
23 of the ECMR in order to establish that, for the purpose of merger control, guidance shall be given
regarding the notion of dominance by a Notice issued by the Commission (19).

(17) In the past, the Court has shown a willingness to adopt a teleological interpretation of the notion of dominance in
order not to deprive it of its effet utile. Such a teleological interpretation has been particularly applied in the context
of the ECMR where the Court has held that it applies ‘to all concentrations with a Community dimension insofar as
they are likely, because of their effect on the structure of competition within the Community, to prove incompatible
with the system of undistorted competition envisaged by the Treaty’. Case C-68/94, France et al./Commission — ‘Kali
& Salz’ [1998] ECR I-1375, paragraph 170.

(18) The clarification proposed is consistent with how the European Court of Justice has defined dominance in merger
cases, but is intended to more closely focus on the economic impact of concentrations. See Case T-102/96,
Gencor/Commission, T-102/96, [1999] ECR II-753, paragraph 200.

(19) At present, Article 23 of the ECMR confers on the Commission the power to adopt implementing provisions, but
only in respect of procedural matters (notifications, time limits, and hearings as well as, since the last merger review
of 1997, the procedure and time limits for the submission of commitments).

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(2) The consideration of efficiencies in merger control

59. The Green Paper also invited views as to the proper role and scope of efficiency considerations in
merger control. Many respondents to the consultation on the Green Paper were in favour of treating
efficiency claims made by parties explicitly in the merger review process.

60. The Commission is of the opinion that it is legally possible to deal explicitly with the issue of
efficiencies under the present substantive test and with the present and proposed wording of the
Merger Regulation. This view was also shared by many respondents to the Green Paper. Article
2(1)(b) of the Merger Regulation provides a legal basis in that respect by stating that the Commission
shall take account, inter alia, of ‘the development of technical and economic progress provided it is to
consumers' advantage and does not form an obstacle to competition’.

C. Procedural issues

(1) Obligation to notify a concentration before its implementation, Article 4(1)

61. The obligation to notify a concentration with a Community dimension to the Commission before it
is put into effect is an expression of the principle of ex-ante merger control. Practice over the last 12
years has shown that a strict enforcement of the one-week deadline for submitting notifications
(Article 4(1) of the current Merger Regulation) is neither realistic nor necessary. Given the suspensive
effect of Article 7(1), it is in the undertakings' own commercial interest to obtain regulatory clearance
from the Commission as soon as possible, so as to be able to complete their concentration.

62. Experience has also shown that on many occasions, the notifying parties would have preferred to
submit notifications earlier than the present wording of Article 4(1) permits; the ‘triggering event’
currently required by the Merger Regulation is, as a general rule, the conclusion of a binding
agreement between the merging parties.

63. The comments received in response to the Green Paper show broad support for a flexibilisation of
both the timing of notifications and the ‘triggering event’ for notifying a merger. Such a flexibili-
sation would also bring the Community's merger control law in line with what is current practice in
many other jurisdictions and recommended by the International Competition Network (20) with a
view, inter alia, to enhancing international cooperation.

64. Accordingly, Article 4(1), first sentence, of the proposed new Regulation abandons the one-week
deadline for submitting notifications but clearly spells out that the Community's system of merger
review is based on ex-ante control (‘Concentrations [. . .] shall be notified to the Commission prior to
their implementation [. . .].’). Article 4(1), second subparagraph, allows notifications where the under-
takings concerned demonstrate to the Commission a good faith intention to conclude a (binding)
agreement and thus flexibilises the ‘triggering event’.

(2) Suspension of concentrations

65. The obligation to suspend the implementation of a notified concentration, i.e. the prohibition to
implement it pending a clearance decision of the Commission, as provided for by Article 7 of the
Merger Regulation, is an expression of the system of ex-ante merger control.

(20) See,

in particular, Section III. of the International Competition Network's Recommended Practices for Merger

Notification Procedures, available at the following Internet website:
http://www.internationalcompetitionnetwork.org/practices.pdf
Section III.A of these recommended practices reads as follows:
mergers upon certification of a good faith intent to consummate the proposed transaction’.
Section III.B states: ‘Jurisdictions that prohibit closing while the competition agency reviews the transaction or for a
specified time period following notification should not impose deadlines for pre-merger notification’.

‘Parties should be permitted to notify proposed

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(i) Automatic derogation for acquisitions through the stock market

66. In line with what had been proposed in the Green Paper (21), it is proposed to enlarge the scope of
application of the automatic derogation in Article 7(2) (ex-Article 7(3)) beyond public bids, so as to
cover all acquisitions made from various sellers through the stock market, e.g. the so-called ‘creeping
take-overs’, and thereby remove any legal uncertainty caused by Article 7(1) in relation to such
acquisitions.

(ii) Automatic derogation for simplified procedure cases

67. As regards cases which, in general, do not lead to a combination of market positions giving rise to
competition concerns, the obligation to suspend the implementation of a concentration is not an
absolute requirement to ensure the effectiveness of ex-ante merger control. Certain types of concen-
trations, such as, for instance, venture capital investments, are often dependent on the parties' ability
to react quickly and close their transactions before the expiry of the one-month deadline for a Phase
I decision.

68. In Article 7(4) of the draft Regulation, it is therefore proposed to enable the Commission to disapply
the suspensive effect laid down in Article 7(1) for categories of cases which, in general, do not lead
to a combination of market positions giving rise to competition concerns. The intended categories
would mainly correspond to the ones set out in the Commission notice on a simplified procedure for
treatment of certain concentrations under Regulation (EEC) No 4064/89 (22).

(3) Calculation of deadlines

69. The calculation of the time limits laid down in the Merger Regulation and in the Implementing
Regulation should be simplified and rendered more transparent by expressing all deadlines in terms
of working days (‘WD’, with one week generally having five working days, except if it includes
official Commission holidays). This approach was also proposed by the Commission in its Green
Paper (23), and has received a generally positive feedback. Accordingly, the deadlines set by the
Merger Regulation have been expressed in working days throughout the proposed new Regulation.

(4) A more flexible time-frame

(i) The current problem: time constraints both in Phase I and in Phase II

70. One of the most frequently reported procedural difficulties encountered under the current system is
the ‘time squeeze’ which can occur in complex cases, and in particular (but not only) in cases
involving remedies.

71. As regards Phase I, the short deadline for submission of remedies (currently three weeks from the
date of notification (24)) does not always allow the Commission to identify the areas in which serious
doubts may arise, to receive input from the Member States, and to discuss with the parties and
market test any remedies that they may propose at that stage.

72. As regards Phase II, time constraints may already occur in the first half which is the investigation
period and for which not more than six weeks can normally be allowed. This average investigation
time can indeed be insufficient if a case raises a series of competition concerns or requires complex
economic analysis (such as an econometric study or the evaluation of alleged efficiency gains) or
where the parties want to take issue with so called ‘complaints’ by competitors before the Statement
of Objections is issued.

(21) See also Green Paper, paragraph 42.
(22) OJ C 217, 29.7.2000, p. 32.
(23) Green Paper, paragraphs 190-193.
(24) Article 18(1) of the Implementing Regulation (Regulation (EC) No 447/98 of 1 March 1998, OJ L 61, 2.3.1998,

p. 1).

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73. In addition, in almost every Phase II case, a ‘time squeeze’ is felt towards the second half of the
four-month period. In particular it should be noted that the preparation of the parties' reply to the
Commission's Statement of Objections (SO), the possibility for them to analyse the Commission's file
(after being granted access to the file), the discussion of possible remedies with the Commission, and
the preparation of the draft decision, often coincide. Moreover, Member States have repeatedly
commented that
the Commission does not provide the Advisory Committee with all relevant
documents in time for a full discussion to take place at the meeting.

(ii) The proposed solution: more flexibility while preserving the general benefits of deadlines

74. Whilst it should be recognised that the benefits of the time limits provided for in the Merger
Regulation should certainly be preserved (the speediness of the investigation and the predictability
of the timeframe are widely regarded as major assets of the current system), it seems necessary to
ease to a certain extent the time constraints in complex cases. That is why the Green Paper proposed
the introduction of a ‘stop the clock’ provision, i.e. a provision allowing for an extension of the legal
deadlines within which a final Commission decision must be adopted (25). The feedback received in
response to the Green Paper has shown almost unanimous support for such a ‘stop the clock’ idea.

(iii) The proposed changes: an overview

75. Given the above, it is proposed to introduce several elements of flexibility into the timeframe of
merger control procedure. The existing automatic extension of the deadline in Phase I remedy cases
has been enlarged — Phase I decisions in remedy cases must be adopted after 35 working days
(seven weeks) instead of the current six weeks (see Article 10(1), second subparagraph). Conversely,
an automatic extension of the deadline in Phase II (which does not yet exist) should be introduced,
accommodating the time constraints in typical Phase II remedy cases (see Article 10(3)
first
subparagraph). In order to encourage the submission of remedies at an early stage, however, this
extension of the Phase II deadline should only apply if Phase II remedies are submitted on or after the
55th working day, counting from the initiation of proceedings (Article 6(1)(c) decision).

76. In addition, there should be an optional possibility to extend the deadline in complex Phase II cases
(see Article 10(3), second subparagraph) by up to 20 working days. Indeed, the time constraints in
complex Phase II cases (complex market investigation, possibly involving econometric studies or the
analysis of alleged efficiency gains; thorough examination of the arguments put forward by the
parties) can be significant even if no remedies are offered. Additional time for the investigation of
complex Phase II cases is normally in the interest not only of the Commission but also of the
merging companies. The parties would have the option to use the additional time to convince the
Commission that all or part of the objections, which would most likely be raised in an upcoming
Statement of Objections, are not well founded and should be dropped. In order to allow for sufficient
planning of the various procedural steps in a Phase II investigation, it is proposed that the parties
should only be able to extend the Phase II time limit once, and that they should request this within
15 working days of the beginning of Phase II, i.e. three weeks into Phase II. This allows for sufficient
time for the Commission and the undertakings concerned to engage in informal discussions about
the possible timing of Phase II proceedings.

77. All extensions of the timeframe should normally be triggered by the merging parties (either by means
of a specific request for an optional extension or by submitting remedies and thus triggering the
automatic prolongation), without the Commission having discretion to grant or refuse them. The
proposal nevertheless foresees that the Commission, with the consent of the parties, could trigger the
extension referred to in the preceding paragraph. The maximum extension should however not
exceed 20 working days (see Article 10(3), second subparagraph).

78. The proposed key elements of a more flexible timeframe (expressed in working days) can be

summarised as follows.

— automatic extension of the Phase I deadline by 10 WD to 35 WD if remedies are proposed,

(25) Green Paper, paragraphs 203-221.

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— optional extension of the Phase II deadline by up to 20 WD in complex Phase II cases (at the
request, or with the agreement, of the parties, to be made at the latest 15 WD after the initiation
of Phase II proceedings),

— automatic extension of the Phase II deadline by 15 WD in remedy cases (unless remedies have
been submitted sufficiently in advance of the deadline for commitment offers — before the 55th
working day) in order to allow for better consultation of Member States.

(5) Procedure following annulment by the European Courts

79. Article 10(5) of the Regulation is proposed to be clarified to reflect current practice as to the
procedure to be followed where the Court gives a judgment which annuls the whole or part of a
Commission decision. Under the proposal, such an annulment will, if it relates to a decision that was
subject to a time limit under Article 10, lead to the re-examination by the Commission with a view
to adopting a new decision pursuant to Article 6(1). The new examination will be made in the light
of current market conditions. In such cases, the parties will have to submit a new notification or
supplement the original notification, where the original notification has become incomplete by
reason of intervening changes in market conditions or in the information provided. Where there
are no such changes, a certification of this fact will suffice.

(6) Enforcement provisions

80. The investigative powers of

the Commission in merger cases and the penalties provided for
non-respect of certain rules set by the Regulation (so-called enforcement provisions) are laid down
in Articles 11 to 15 of the Merger Regulation.

(i) General principle: keeping the enforcement provisions in line with antitrust

81. The initial text of these enforcement provisions, as introduced by Regulation (EEC) No 4064/89, was
largely identical to that of the corresponding provisions in the antitrust area (Articles 11 to 16 of
Council Regulation No 17). It is appropriate to bring the enforcement provisions of the new Merger
Regulation in line with the corresponding provisions of the new Regulation implementing Articles
81 and 82 of the Treaty (Articles 18 to 20 and 22 to 23 thereof) with a view to rendering them
more effective.

(ii) Increase of the ceilings for fines and periodic penalty payments related to ‘fact-finding’

82. In particular,

it is appropriate to raise the possible amounts of the fines and periodic penalty
payments which are aimed at protecting the Commission's fact-finding through notifications and
market investigations (Articles 14(1), 15(1)(a) and 15(1)(b) of the proposed new Merger Regulation).
The establishment of the facts of a case forms the basis for a successful analysis of a concentration's
possible impacts on competition, and it may not be falsified by misleading or incorrect information.

— The current ceiling for fines under Article 14(1), which is set at EUR 50 000, has not been
changed for the last 12 years and no longer has a deterrent effect. It is proposed to raise this
ceiling to 1 % of the turnover of the undertaking or association of undertakings concerned, in
line with what had already been the case under the ECSC Treaty (see Article 47(3) thereof) and
will now apply in the antitrust area (see Article 22 of the new Regulation implementing Articles
81 and 82 of the Treaty).

— As

the maximum daily amount

regards periodic penalty payments,

is currently set at
EUR 25 000 under Article 15(1). This amount has not been changed for the last 12 years
and no longer has a sufficiently coercive effect.
the
aggregate average daily turnover of the undertaking or association of undertakings concerned,
in line with what had already been the case under the ECSC Treaty (see Article 47(3) thereof) and
will now apply for the antitrust area (see Article 23 of the new Regulation implementing Articles
81 and 82 of the Treaty).

is proposed to raise it

to 5 % of

It

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(iii) Increase of the ceilings for periodic penalty payments related to the enforcement of certain types of

Commission decisions

83. The same principles as set out for fact-finding should apply to the periodic penalty payments
enforcing remedy decisions (Article 15(1)(c)) or decisions ordering a de-merger (Article 15(1)(d)).
They are aimed at ensuring the continued effectiveness of the Community's system of ex-ante merger
control and the amounts chosen should have a sufficiently coercive effect. It is therefore proposed to
treat these provisions the same way as the ones relating to market investigations (Articles 15(1)(a)
and 15(1)(b)) and to allow for periodic penalty payments of up to 5 % of the average daily aggregate
turnover of the undertaking or association of undertakings concerned.

(iv) Power to take statements

84. Given the need for speed which characterises the general scheme of the Merger Regulation (26), it is
furthermore expedient to provide a possibility for the Commission to conduct interviews with
natural persons. The proposed provision (Article 11(7)) fills a gap in the Commission's current
powers in merger investigations by allowing for oral submissions to be recorded and used as
evidence in proceedings where the interviewee consents. It also foresees the possibility to impose
fines for incorrect or misleading information given in interviews (Article 14(1)(b)).

(v) No power to conduct sector inquiries or search private homes

85. Unlike the new Regulation implementing Articles 81 and 82 of the Treaty (see in particular Articles
17 and 20a thereof), however, the proposed new Merger Regulation does not provide for sector
inquiries or home searches. These far-reaching powers are specific to the area of antitrust policy
where the detection and prosecution of infringements pursuant to Articles 81 and 82 of the Treaty is
central.

D. Other proposed amendments

(1) Article 1 paragraph 4

86. Under Article 1(4), the Commission is obliged to report to the Council on the operation of the
thresholds and criteria set out in paragraphs 2 and 3 of Article 1. The purpose is to enable the
Council to decide on a possible review of the thresholds according to Article 1(5).

87. The current deadline has been renewed in the proposal in order to oblige the Commission to report

again to the Council on the thresholds by 1 July 2007.

88. In order to better enable the Commission to comply with its reporting obligation, the member States
will in future be held explicitly by the Regulation to provide the Commission with the necessary
statistical data.

(2) Article 4 paragraph 6

89. In order to enable the Council to decide with a qualified majority about possible amendments to
Article 4, in particular with a view to the proposed new referral procedures before a concentration is
notified, a review clause similar to Article 1(5) is being proposed in Article 4(6). Its deadline is linked
to that in Article 1(4) and 1(5).

(26) See, for instance, the judgments of the Court of First Instance of 27 November 1997 in Case T-290/94 —
Kaysersberg/Commission [1997] ECR II-2137 (at paragraphs 113-115), of 28 April 1999 in Case T-221/95 —
Endemol/Commission [1999] ECR II-1299 (at paragraph 68), and of 25 October 2002 in Case T-5/02 — Tetra
Laval/Commission, not yet reported in the ECR (at paragraph 91).

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(3) The Commission's powers under Article 8 paragraph 4

90. Article 8(4) of the current Merger Regulation deals with situations in which mergers that have
already been implemented are subsequently prohibited by the Commission. That Article allows the
Commission to require the separation of assets brought together, the cessation of joint control or any
other action that may be appropriate to restore conditions of effective competition.

91. It has been suggested that Article 8(1), by stating that all proceedings initiated pursuant to Article
6(1)(c) shall be closed by means of a decision as provided in Article 8(2) to (5), would limit the
applicability of these provisions to cases where the concentration has been notified and a second
phase proceeding has been initiated. Whilst the Commission does not share this interpretation (27), it
is expedient to clarify the powers conferred to it by the Regulation with regard to mergers that have
already been implemented. The proposed amendments to Article 8, in particular the deletion of its
current paragraph 1 (which is added to Article 6(1)(c)), remove any possible doubts as to the scope
of application of Article 8(4). The new wording of Article 8(4) clarifies that the scope of application
does not exclude mergers implemented without prior notification to the Commission.

92. As regards the powers conferred to the Commission, the wording of the present Article 8(4) is
proposed to be modified in order to emphasise the overriding principle underlying this provision:
The situation prevailing prior to the implementation of the concentration (status quo ante) should be
restored. The Court of First Instance has supported this interpretation in its recent judgment in case
Tetra Laval v Commission (28)). Where such restoration is not fully possible through dissolution of the
concentration, the second sentence of the proposed Article 8(4) provides the necessary powers for
the Commission to restore the status quo ante as far as possible.

93. In addition to the overriding principle of restoration of the status quo ante, the proposed new wording
is intended to express that the Commission may order any appropriate measure to ensure that
conditions of effective competition are not distorted in the interim, i.e. for the transitional period
until the status quo ante is restored. Such measures could include, inter alia, a requirement to hold
separate the undertakings or assets brought together until they are legally separated, the cessation of
the exercise of joint control or similar interim measures.

(4) The Commission's power to enforce conditions attached to previous decisions, new Article 8 paragraph 5

94. As regards Article 8(5) of the proposed Regulation, a specific provision is introduced which enables
the Commission to take any appropriate measure to restore or maintain conditions of effective
competition where a concentration has been implemented in contravention of Article 7 or of a
condition attached to a Commission decision under Articles 6(1)(b) or 8(2). With the exception of
interim measures, the provision will require that the criterion laid down in Article 2(4) is fulfilled. In
the cases referred to in Article 2(5), the provision will require that the criteria laid down in Article
81(3) of the Treaty are not fulfilled.

95. This provision is aimed at enabling the Commission to enforce conditions attached to its decisions,
in particular conditions intended to ensure that the parties comply with the commitments (‘remedies’)
they have entered into with a view to obtaining a conditional clearance decision (see Article 8(2),
second subparagraph, and Article 6(1)(b) in connection with 6(2)).

(27) Such an interpretation would run counter to the very purpose and wording of Article 8, in particular of Article 8(4),
which refers to ‘a concentration’, without limiting the powers of the Commission to cases of ‘notified’ concen-
trations (language used elsewhere in the Merger Regulation; see for instance Articles 6, 8(2), 9(1), etc.).

(28) Judgment of the Court of First Instance of 25 October 2002 in Case T-80/02 — Tetra Laval v Commission, not yet
reported in the ECR. The CFI held (at paragraph 36) ‘first of all, that the scheme of the Regulation, and particularly
the 16th recital, show that the objective of Article 8(4) is to allow the Commission to adopt all the decisions
necessary for the restoration of conditions of effective competition. When, as in the present case, the concentration
has been implemented pursuant to Article 7(3) of the Regulation, the separation of the undertakings involved in the
concentration is the logical consequence of the decision declaring the concentration incompatible with the common
market’. (NB: The text of recital 16 of Regulation (EEC) No 4064/89 is now incorporated in recital 27 of the
proposed Regulation.)

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96. The legal consequence of the non-compliance with a condition is that the decision no longer stands.
This may not in all cases suffice to ensure compliance. Furthermore, the current enforcement powers
of the Commission, i.e. fines pursuant to Article 14(3)(c) or (d), may not be sufficient in all cases to
achieve the objective of restoring or maintaining conditions of effective competition.

97. With a related amendment, it is proposed to extend Article 18(2) to the provisional measures which

are newly foreseen in the proposed Article 8(5).

(5) Clearance decisions in Phase II merger cases — Article 8 paragraphs 1 and 2

98. It is proposed to provide for a specific legal basis for unconditional clearance decisions in Phase II
cases in the amended Article 8(1) of the Merger Regulation. Article 8(2) would thus be limited to the
specific situation of a Phase II clearance based on remedies (commitments) submitted by the under-
takings concerned.

(6) Decisions to end Phase I — Article 6

99. Article 6(1)(b), in conjunction with Article 6(2), provides for the possibility to clear a concentration
on the basis of commitments submitted by the parties with a view to rendering the concentration
compatible with the common market. The textual amendment aims to clarify the text with regard to
this criterion.

100. The present text of Article 8(1) has been moved to the end of Article 6(1)(c) for the reasons set out
in paragraph set out above. In this context, this wording also specifies that after the adoption of an
Article 6(1)(c) decision the Commission is obliged to adopt a decision under Article 8(1) to (4),
unless the concentration has been definitely abandoned. Therefore a notification may not be
withdrawn by the notifying parties in Phase II, as long as the parties intend to put the deal into
effect. Conversely, in Phase I the withdrawal of the notification remains possible as long as an Article
6(1)(c) has not been adopted, because Article 4(1) no longer specifies at what point in time before
implementation a notification has to be submitted to the Commission.

(7) ‘Ancillary restraints’

101. As regards the treatment of restrictions directly related and necessary to the implementation of
concentrations (ancillary restraints), the present text of Articles 6(1)(b), second subparagraph, and
8(2), second subparagraph, last sentence, does not appear to provide for sufficient legal clarity.

102. In its recent notice on the treatment of ancillary restraints (29), the Commission took the view that
the assessment of such clauses in merger decisions is of a purely declaratory nature. Moreover, the
Commission announced the abandonment of its previous practice of individually assessing and
formally addressing ancillary restraints in each of
its merger decisions. This new policy was
intended to simplify the Commission's practice in the field of mergers and to bring it in line with
the modernisation of the Community's antitrust rules (rules implementing Articles 81 and 82 of the
EC Treaty).

103. It should, however, be noted that it does not clearly result from the present text of the Merger
Regulation that there is no obligation for the Commission to assess and address, in its decisions,
ancillary restraints if the notifying party so requests (30).

104. It is therefore proposed to modify the text of the Merger Regulation in such a way as to clearly state
that the Commission's clearance decision in a merger case shall be deemed to cover restrictions directly
related and necessary to the implementation of the concentration (see Articles 6(1)(b), 8(1) and 8(2)
of the proposal, as well as recital 17).

(29) Commission notice on restrictions directly related and necessary to concentrations, OJ C 188, 4.7.2001, p. 5 (see, in

particular, paragraph 2 of that notice).

(30) Judgment of the Court of First Instance of 20 November 2002 in Case T-251/00 — Lagardère et al./Commission, not

yet reported in the ECR (see in particular paragraphs 90 and 108 of that judgment).

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Proposal for a

COUNCIL REGULATION (EEC) (cid:2)(EC)(cid:2) No 4064/89

of 21 December 1989

on the control of concentrations between undertakings

æ(‘The EC Merger Regulation’)æ

2002/0296(CNS)

æ(Text with EEA relevance)æ

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Economic Community, and in particular Articles
(cid:2)83(cid:2) and (cid:2)308(cid:2) thereof,

Having regard to the proposal from the Commission (31),

Having regard to the opinion of the European Parliament (32),

Having regard to the opinion of the Economic and Social Committee (33),

WHEREAS:

(1) Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between
undertakings (34) has been substantially amended. Since further amendments are to be made, it should be
recast in the interest of clarity.

ænew

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 recital 4
(cid:1)2 1310/97, recital 10
æ new

(cid:2)(2)(cid:2)(1) Whereas For the achievement of the aims of the Treaty establishing the European Economic
Community, (cid:2)Article 3(1)(g)(cid:2) gives the Community the objective of instituting ‘a system ensuring that
competition in the common (cid:2)internal(cid:2) market is not distorted’. æArticle 4(1) of the Treaty provides
that the activities of the Member States and the Community shall be conducted in accordance with the
principle of an open market economy with free competition.æ (2) æThese principles are essential for the
further development of the internal market.æ

(31) OJ . . .
(32) OJ . . .
(33) OJ . . .
(34) OJ L 395, 30.12.1989, p. 1; corrected version in OJ L 257, 21.9.1990, p. 13; Regulation as last amended by

Regulation (EC) No 1310/97, OJ L 180, 9.7.1997, p. 1, corrigendum in OJ L 40, 13.2.1998, p. 17.

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(3) Whereas The æcompletion of the internal market and of the economic and monetary union, the
enlargement of the European Union, and the lowering of international barriers to trade and investmentæ
will continue to result in major corporate reorganisations in the Community, particularly in the form of
concentrations.

(4) Whereas Such a development (cid:2)reorganisations(cid:2) must be welcomed æto the extent that they areæ
in line with the requirements of dynamic competition and capable of increasing the competitiveness of
European industry,
living in the
Community.

improving the conditions of growth and raising the standard of

(5) Whereas, However, it must be ensured that the process of reorganisation does not result in lasting
damage to competition; whereas Community law must therefore include provisions governing those
concentrations which may significantly impede effective competition in the common market or in a
substantial part of it.

(6)(7) Whereas A æspecific legal instrument is therefore necessaryæ to permit effective control of all
concentrations from the point of view of their effect on the structure of competition in the Community
and to be the only instrument applicable to such concentrations. æRegulation (EEC) No 4064/89 has
allowed a Community policy to develop in this field. In the light of experience, however, that Regulation
should now be recast into legislation designed to meet the challenges of a more integrated market and the
future enlargement of the European Union. In accordance with the principles of subsidiarity and propor-
tionality set out in Article 5 of the Treaty, this Regulation confines itself to the minimum required in order
to achieve the objective of ensuring that competition in the common market
in
accordance with the principle of an open market economy with free competition, and does not go
beyond what is necessary for that purpose.æ

is not distorted,

(7)(6) Whereas Articles (cid:2)81(cid:2) and (cid:2)82(cid:2), while applicable, according to the case-law of the Court of
Justice, to certain concentrations, are not, however, sufficient to control all operations which may prove to
be incompatible with the system of undistorted competition envisaged in the Treaty. (8) whereas This
Regulation should therefore be based not only on Article (cid:2)83(cid:2) but, principally, on Article (cid:2)308(cid:2)
of the Treaty, under which the Community may give itself the additional powers of action necessary for
the attainment of its objectives, including (cid:2)and also(cid:2) with regard to concentrations on the markets for
agricultural products listed in (cid:2)Annex I(cid:2) to the Treaty.

(8)(9) Whereas The provisions to be adopted in this Regulation should apply to significant structural
changes the impact of which on the market goes beyond the national borders of any one Member
State (cid:2).(cid:2); whereas æSuch concentrations should, as a general rule, be reviewed exclusively at the
Community level,
in application of a ‘one-stop-shop’ system and in compliance with the principle of
subsidiarity.æ (29) Whereas Concentrations not covered by this Regulation come, in principle, within
the jurisdiction of the Member States.

(9)(10) Whereas The scope of application of this Regulation should therefore be defined according to the
geographical area of activity of the undertakings concerned and be limited by quantitative thresholds in
order to cover those concentrations which have a Community dimension. (cid:1)1 whereas, æThe Commission
should report to the Council on the implementation of the applicable thresholds and criteria so that the
Council, acting in accordance with Article 145 (cid:2)202(cid:2) of the Treaty, is in a position regularly to review
them, as well as the rules regarding pre-notification referral, in the light of the experience gained;æ(cid:1)
æthis requires statistical data to be provided by the Member States to the Commission to enable it to
prepare such reports and possible proposals for amendments.æ

(10)(11) Whereas A concentration with a Community dimension æshould be deemed to exist where the
aggregate turnover of the undertakings concerned exceeds given thresholds; that is the case irrespective of
whether or not the undertakings effecting the concentration have their seat or their principal fields of
activity in the Community, provided they have substantial operations there.æ

(11) Whereas The rules governing the referral of concentrations æfrom the Commission to Member States
and from Member States to the Commission should operate as an effective corrective mechanism in the
light of the principle of subsidiarityæ; (cid:1)2 whereas these rules protect the competition interests of the
Member States in an adequate manner and take due account of legal certainty and the ‘one-stop-shop’
principle(cid:1).

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ænew

(12) The Commission should be able to refer to a Member State concentrations which significantly affect
competition on a market within that Member State presenting all the characteristics of a distinct market.
Where the concentration affects such a market, which does not constitute a substantial part of the
common market, the Commission should be obliged, upon request, to refer the whole or part of the
case to the Member State concerned.

(cid:1) 1310/97, recital 1 (adapted)
æ new

(13) Whereas Concentrations with a æsignificant cross-border effect, a concept which is distinct from that
of effects on trade between Member States contained in Articles 81 and 82 of the Treaty,æ may qualify for
examination under a number of national merger control systems æif they fall below the turnover
thresholds referred to in this Regulation.æ whereas Multiple notification of
the same transaction
increases legal uncertainty, effort and cost for undertakings and may lead to conflicting assessments.
æThe system whereby concentrations may be referred to the Commission by the Member States
concerned should therefore be further developed. Such concentrations should be deemed to have a
Community dimension if at least three Member States concerned request the Commission to review
them.æ

(14) The undertakings concerned should be granted the possibility to request referrals to or from the
Commission before a concentration is notified so as to improve further the efficiency of the system for the
control of concentrations within the Community.

ænew

(cid:1) 1310/97, recital 5 (adapted)

æ new

(15) Whereas It is appropriate (cid:2)expedient(cid:2) to define the concept of concentration in such a manner as
to cover operations bringing about a lasting change æin the control of the undertakings concerned and
thereforeæ in the structure of
is
(cid:2)therefore(cid:2) appropriate (cid:2)also(cid:2) to include within the scope and procedure of Regulation (EEC)
No 4064/89 (cid:2)this Regulation(cid:2) all full-function joint ventures (cid:2)performing on a lasting basis all the
functions of an autonomous economic entity.(cid:2)

the market. Whereas in the specific case of

joint ventures It

ænew

(16) It is appropriate to treat as one and the same concentration two or more transactions which are
conditional on one another or are so closely connected that their economic rationale justifies their
for transactions involving the
treatment as a single transaction. This can be the case,
acquisition of joint control of one part and sole control of another part of an undertaking; transactions
where two or more undertakings exchange assets, regardless of whether these constitute legal entities or
not; or transactions by which control is acquired either through a public bid or from various sellers
through a series of transactions in securities including those convertible into other securities admitted to
trading on a market such as a stock exchange.

in particular,

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

(cid:2)(17)(cid:2)(25) Whereas This Regulation should still apply where the undertakings concerned accept
restrictions directly related and necessary to the implementation of the concentration. æThe Commission
should not be obliged to assess such restrictions in individual cases when applying this Regulation. The
extent to which restrictions are directly related and necessary to the implementation of the concentration
should be determined by the competent judicial or other authority after the concentration has been
declared compatible with the common market.æ

(cid:2)(18)(cid:2)(12) Whereas The arrangements to be introduced for the control of concentrations should,
without prejudice to Article (cid:2)86(cid:2)(2) of
the principle of non-discrimination
between the public and the private sectors. whereas, In the public sector, calculation of the turnover of
an undertaking concerned in a concentration needs, therefore, to take account of undertakings making up
an economic unit with an independent power of decision, irrespective of the way in which their capital is
held or of the rules of administrative supervision applicable to them.

the Treaty, respect

(cid:2)(19)(cid:2)(13) Whereas It is necessary to establish whether concentrations with a Community dimension
are compatible or not with the common market from the point of view of the need to maintain and
develop effective competition in the common market. whereas, In so doing, the Commission must place its
appraisal within the general framework of the achievement of the fundamental objectives referred to in
Article 2 of the Treaty (cid:2)establishing the European Community(cid:2) æand Article 2 of the Treaty on
European Union.æ

(cid:2)(20)(cid:2)(14) Whereas æIn order to ensure a system of undistorted competition in the common market
operating in accordance with the principle of an open market economy with free competition, this
Regulation must permit effective control of all concentrations from the point of view of their effect on
the structure of competition in the Community.æ this Regulation (cid:2)It(cid:2) should (cid:2)therefore(cid:2) establish
the principle that a concentration with a Community dimension which creates or strengthens a
(cid:2)dominant(cid:2) position as (cid:2)a(cid:2) result of which effective competition in the common market or in
a substantial part of it is significantly impeded is to be declared incompatible with the common market.
æIrrespective of the structure of the relevant markets affected by a concentration or of the manner in
which economic power is manifested or exercised, dominance should be defined in such a way as to reflect
a considerable level of economic power held by one or more undertakings.æ

ænew

the elimination of

(21) In view of the consequences that concentrations in oligopolistic market structures may have, it is all
the more necessary to maintain effective competition in such markets. Many oligopolistic markets exhibit a
healthy degree of competition. However, under certain circumstances,
important
competitive constraints that the merging parties exerted on each other, as well as the reduction of
competitive pressure on the remaining competitors, may, particularly in these markets, be detrimental
to competition unless these effects would be constrained by the reaction of competitors, customers or
consumers. For that purpose, the notion of dominance within the meaning of this Regulation should,
therefore, encompass situations in which, because of the oligopolistic structure of the relevant market and
the resulting interdependence of the various undertakings active on that market, one or more undertakings
would hold the economic power to influence appreciably and sustainably the parameters of competition,
in particular, prices, production, quality of output, distribution or innovation, even without coordination
by the members of the oligopoly. In making this appraisal, account should be taken of the specific features
of the markets under examination, such as the level of capacity constraints, the degree of product
differentiation, or the functioning of the bidding process. Consideration should also be given to,
inter
alia, the likely reactions of actual and potential competitors, as well as of customers, and any efficiencies
brought about by the merger.

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

(cid:1)1 1310/97, recital 5

(cid:2)(22)(cid:2) (cid:1)1 whereas In addition, to the dominance test set out in Article 2 of that Regulation, it should
be provided that the Commission apply the criteria of Article (cid:2)81(cid:2) (1) and (3) of the Treaty (cid:2)should
be applied(cid:2) to such joint ventures (cid:2)performing on a lasting basis all the functions of autonomous
economic entities(cid:2), to the extent that their creation has as its consequence an appreciable restriction of
competition between undertakings that remain independent.(cid:1)

ænew

(23) In order to clarify and explain the Commission's appraisal of concentrations under this Regulation, it
is appropriate to publish guidance which should provide a sound economic framework for the assessment
of concentrations with a view to determining whether or not they may be declared compatible with the
common market.

ænew

(24) In order to determine the impact of a concentration on competition in the common market, it is
appropriate to take account of any substantiated likely efficiencies put forward by the undertakings
concerned. It is possible that the efficiencies brought about by the concentration counteract the effects
on competition, and in particular the potential harm to consumers, that it might otherwise have and that,
as a consequence, the concentration does not create or strengthen a dominant position as a result of which
effective competition would be significantly impeded in the common market or in a substantial part of it.
The Commission should publish guidance on the conditions under which it may take efficiencies into
account in the assessment of a concentration.

(cid:1) 1310/97, recital 8 (adapted)

æ new

(cid:2)(25)(cid:2)(24) æWhere the undertakings concerned modify a notified concentration in particular by
offering commitments with a view to rendering the concentration compatible with the common
market, the Commission should be able to declare the concentration, as modified, compatible with the
common market.æ (cid:2)Such commitments should be proportionate to the competition problem and
entirely eliminate it. It is also appropriate to accept commitments before the initiation of proceedings
where the competition problem is readily identifiable and can easily be remedied(cid:2). æIt should be
expressly provided that the Commission may attach to its decision conditions and obligations in order
to ensure that the undertakings concerned comply with their commitments in a timely and effective
manner so as to render the concentration compatible with the common market. The Commission
should have at its disposal appropriate instruments to ensure the enforcement of these commitments
and to deal with situations where they are not fulfilled.æ whereas Transparency and effective consultation
of Member States and (cid:2)as well as of(cid:2) interested third parties should be ensured in both phases of
(cid:2)throughout(cid:2) the procedure.

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

(cid:1)1 1310/97, recital 9

æ new

(cid:2)(26)(cid:2)(15) Whereas Concentrations which, by reason of the limited market share of the undertakings
concerned, are not liable to impede effective competition may be presumed to be compatible with the
common market. whereas, Without prejudice to Articles (cid:2)81(cid:2) and (cid:2)82(cid:2) of the Treaty, an indi-
cation to this effect exists, in particular, where the market share of the undertakings concerned does not
exceed 25 % either in the common market or in a substantial part of it.

(cid:2)(27)(cid:2)(16) Whereas The Commission should have the task of taking all the decisions necessary to
establish whether or not concentrations with a Community dimension are compatible with the common
market, as well as decisions designed to restore æthe situation prevailing prior to the implementation of a
concentration which has been declared incompatible with the common market.æ

(cid:2)(28)(cid:2)(17) Whereas to (cid:2)To(cid:2) ensure effective control, undertakings should be obliged to give prior
notification of concentrations with a Community dimension æfollowing the conclusion of the agreement,
the announcement of the public bid, or the acquisition of a controlling interest. Notification should also be
possible where the undertakings concerned demonstrate to the Commission a good faith intention to
conclude an agreement, for instance on the basis of an agreement in principle or a letter of intent, or, in
the case of a public bid, where they have publicly announced an intention to make such a bid, provided
that the intended agreement or bid would result in a concentration with a Community dimension.æ (cid:1)1
(cid:2)The implementation of concentrations(cid:2) should be suspended until a final decision (cid:2)of
the
Commission(cid:2) has been taken.(cid:1) whereas, æHowever,æ it should be possible to æderogate from this
suspension at the request of the undertakings concerned,æ where appropriate. whereas,
In deciding
to grant a (cid:2)derogation,(cid:2) the Commission should take account of all pertinent
whether or not
factors, such as the nature and gravity of damage to the undertakings concerned by a concentration or
to third parties, and the threat to competition posed by the concentration. provision should be made for
the suspension of concentrations for a limited period, and for the possibility of extending or waiving a
suspension where necessary; whereas In the interests of legal certainty, the validity of transactions must
nevertheless be protected as much as necessary. æThe Commission should have the power to adopt
regulations granting a full derogation by operation of
law for certain categories of concentrations
which, in general, do not lead to a combination of market positions giving rise to competition concerns.æ

(cid:2)(29)(cid:2)(18) Whereas A period within which the Commission must initiate proceedings in respect of a
notified concentration and periods (cid:2)a period(cid:2) within which it must give (cid:2)take(cid:2) a final decision on
the compatibility or incompatibility with the common market of a notified (cid:2)that(cid:2) concentration
should be laid down. æThese periods should be extended whenever the undertakings concerned offer
commitments with a view to rendering the concentration compatible with the common market, in order
to allow for sufficient time for the analysis and market testing of such commitment offers and for the
consultation of Member States as well as interested third parties. A limited extension of the period within
which the Commission must take a final decision should also be possible in order to allow sufficient time
for the investigation of the case and the verification of the facts and arguments submitted to the
Commission.æ

(cid:2)(30)(cid:2)(20) Whereas The Commission should act in close and constant liaison with the competent
authorities of the Member States from which it obtains comments and information.

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ænew

(31) The Commission and the competent authorities of the Member States should form together a
network of public authorities, applying their respective competencies in close cooperation with a view
to ensuring that a case is dealt with by the most appropriate authority, in the light of the principle of
subsidiarity and with a view to ensuring that multiple notifications of a given concentration are avoided to
is necessary to set up efficient arrangements for
the greatest extent possible. For that purpose it
information and consultation. Further modalities for cooperation within the network should be laid
down and revised by the Commission, in close cooperation with the Member States.

(32) The Community respects the fundamental rights and observes the principles recognised in particular
by the Charter of Fundamental Rights of the European Union (35). Accordingly, this Regulation should be
interpreted and applied with respect to those rights and principles.

ænew

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

(cid:2)(33)(cid:2)(19) Whereas The undertakings concerned must be afforded the right to be heard by the
Commission when proceedings have been initiated; whereas the members of the management and super-
visory bodies and the recognised representatives of the employees of the undertakings concerned, and
(cid:2)interested(cid:2) third parties, must also be given the opportunity to be heard.

(cid:2)(34)(cid:2)(21) Whereas, æIn order to properly appraise concentrations, the Commission should have the
the
to request all necessary information and to conduct all necessary inspections throughout
right
Community. To that end, and with a view to protecting competition effectively,
the Commission's
powers of investigation need to be expanded. The Commission should in particular have the right to
interview any persons who may be in possession of useful information and to record the statements made.
In the course of an inspection, officials authorised by the Commission should have the right to affix seals
for the period of time necessary for the inspection, normally not for more than 72 hours, and to ask for
any information relevant to the subject matter and purpose of the inspection. Without prejudice to the
case-law of the Court of Justice, it is also useful to set out the scope of the control that the national judicial
authority may exercise when it authorises, as provided by national law and as a precautionary measure,
assistance from law enforcement authorities in order to overcome possible opposition on the part of the
undertaking against an inspection ordered by Commission decision; it results from the case-law that the
national judicial authority may in particular ask of the Commission further information which it needs to
carry out its control and in the absence of which it could refuse the authorisation; the case-law also
confirms the competence of the national courts to control the application of national rules governing the
implementation of coercive measures. The competent authorities of the Member States should cooperate
actively in the exercise of the Commission's investigative powers.æ

ænew

(35) When complying with decisions of the Commission, the undertakings and persons concerned cannot
be forced to admit that they have committed infringements, but they are in any event obliged to answer
factual questions and to provide documents, even if this information may be used to establish against
themselves or against others the existence of such infringements.

(35) OJ C 364, 18.12.2000, p. 1.

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ænew

(36) For the sake of transparency, all decisions of the Commission which are not of a merely procedural
nature should be widely publicised. While ensuring preservation of the rights of defence of the under-
takings concerned,
it is essential that business secrets be
protected. The confidentiality of information exchanged in the network and with the competent authorities
of third countries should likewise be safeguarded.

in particular the right of access to the file,

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

æ new

(cid:2)(37)(cid:2)(22) Whereas Compliance with this Regulation æshould be enforceable, as appropriate,æ by
means of fines and periodic penalty payments.whereas The Court of Justice should be given unlimited
jurisdiction in that regard pursuant to Article (cid:2)229(cid:2) of the Treaty.

(cid:2)(38)(cid:2)(26) Whereas The Commission should be given exclusive competence to apply this Regulation,
subject to review by the Court of Justice.

(cid:2)(39)(cid:2)(27) Whereas The Member States may (cid:2)should(cid:2) not (cid:2)be permitted to(cid:2) apply their
national legislation on competition to concentrations with a Community dimension, unless this Regulation
makes provision therefor. whereas The relevant powers of national authorities should be limited to cases
where, failing intervention by the Commission, effective competition is likely to be significantly impeded
within the territory of a Member State and where the competition interests of that Member State cannot be
sufficiently protected otherwise by this Regulation. whereas The Member States concerned must act
promptly in such cases; whereas this Regulation cannot, because of the diversity of national law, fix a
single deadline (cid:2)time limit(cid:2) for the adoption of remedies (cid:2)final decisions under national law(cid:2).

(cid:2)(40)(cid:2)(28) Whereas, Furthermore, the exclusive application of this Regulation to concentrations with a
Community dimension is without prejudice to Article (cid:2)296(cid:2) of the Treaty, and does not prevent the
Member States from taking appropriate measures to protect legitimate interests other than those pursued
by this Regulation, provided that such measures are compatible with the general principles and other
provisions of Community law.

(cid:2)(41)(cid:2)(30) Whereas The conditions in which concentrations involving Community (cid:2)undertakings
having their seat or their principal fields of activity in the Community(cid:2) are carried out in non-member
(cid:2)third(cid:2) countries should be observed, and provision should be made for the possibility of the Council
giving the Commission an appropriate mandate for negotiation with a view to obtaining non-discrimi-
natory treatment for Community (cid:2)such(cid:2) undertakings.

(cid:2)(42)(cid:2)(31) Whereas This Regulation in no way detracts from the collective rights of employees, as
recognised in the undertakings concerned.æ, notably with regard to any obligation to inform or consult
their recognised representatives under Community and national law.æ

(43) Whereas The Commission should be given the power to adopt implementing provisions where
necessary,

(cid:1) 1310/97, recital 14 (adapted)

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

HAS ADOPTED THIS REGULATION:

Article 1

Scope

1. Without prejudice to Article (cid:2)Articles 4(5) and(cid:2) 22, this Regulation shall apply to all concen-
trations with a Community dimension as defined (cid:2)in paragraphs 2 and 3 of this Article(cid:2) paragraphs 2
and 3.

(cid:1) 1310/97 Article 1, point 1(a) (adapted)

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

2.

For the purposes of this Regulation, a (cid:2)A(cid:2) concentration has a Community dimension where:

(a) the combined aggregate worldwide turnover of all the undertakings concerned is more than ECU

(cid:2)EUR(cid:2) 5 000 million; and

(b) the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more

than ECU (cid:2)EUR(cid:2) 250 million,

unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide
turnover within one and the same Member State.

(cid:1) 1310/97 Article 1, point 1(b) (adapted)

For the purposes of this Regulation, a (cid:2)A(cid:2) concentration that does not meet the thresholds laid

3.
down in paragraph 2 has a Community dimension where:

(a) the combined aggregate worldwide turnover of all the undertakings concerned is more than ECU

(cid:2)EUR(cid:2) 2 500 million;

(b) in each of at least three Member States, the combined aggregate turnover of all the undertakings

concerned is more than ECU (cid:2)EUR(cid:2) 100 million;

(c)

in each of at least three Member States included for the purpose of point (b), the aggregate turnover of
each of at least two of the undertakings concerned is more than ECU (cid:2)EUR(cid:2) 25 million; and

(d) the aggregate Community-wide turnover of each of at least two of the undertakings concerned is more

than ECU (cid:2)EUR(cid:2) 100 million;

unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide
turnover within one and the same Member State.

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(cid:1) 1310/97 Article 1, point 1(c)
æ new

Before 1 July æ2007æ the Commission shall report to the Council on the operation of the
4.
thresholds and criteria set out in paragraphs 2 and 3. æMember States shall regularly provide the
Commission with the statistical data necessary to prepare this report and possible proposals pursuant
to paragraph 5.æ

5.
Following the report referred to in paragraph 4 and on a proposal from the Commission, the
Council, acting by a qualified majority, may revise the thresholds and criteria mentioned in paragraph 3.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

Article 2

Appraisal of concentrations

1.
Concentrations within the scope of this Regulation shall be appraised in accordance with the
following provisions with a view to establishing whether or not they are compatible with the common
market.

In making this appraisal, the Commission shall take into account:

(a) the need to maintain and develop effective competition within the common market in view of, among
other things, the structure of all the markets concerned and the actual or potential competition from
undertakings located either within or outwith the Community;

(b) the market position of the undertakings concerned and their economic and financial power, the
alternatives available to suppliers and users, their access to supplies or markets, any legal or other
barriers to entry, supply and demand trends for the relevant goods and services, the interests of the
intermediate and ultimate consumers, and the development of technical and economic progress
provided that it is to consumers' advantage and does not form an obstacle to competition.

ænew

2.
For the purpose of this Regulation, one or more undertakings shall be deemed to be in a dominant
position if, with or without coordinating, they hold the economic power to influence appreciably and
sustainably the parameters of competition, in particular, prices, production, quality of output, distribution
or innovation, or appreciably to foreclose competition.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

(cid:2)3.(cid:2)2.
A concentration which does not create or strengthen a dominant position as a result of
which effective competition would be significantly impeded in the common market or in a substantial part
of it shall be declared compatible with the common market.

(cid:2)4.(cid:2)3.
A concentration which creates or strengthens a dominant position as a result of which
effective competition would be significantly impeded in the common market or in a substantial part of
it shall be declared incompatible with the common market.

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(cid:1) 1310/97 Article 1, point 2 (adapted)

(cid:2)5.(cid:2)4.
To the extent that the creation of a joint venture constituting a concentration pursuant to
Article 3 has as its object or effect the coordination of the competitive behaviour of undertakings that
remain independent, such coordination shall be appraised in accordance with the criteria of Article 85
(cid:2)81(cid:2)(1) and (3) of the Treaty, with a view to establishing whether or not the operation is compatible
with the common market.

In making this appraisal, the Commission shall take into account in particular:

— whether two or more parent companies retain to a significant extent activities in the same market as
the joint venture or in a market which is downstream or upstream from that of the joint venture or in
a neighbouring market closely related to this market,

— whether the coordination which is the direct consequence of the creation of the joint venture affords
the undertakings concerned the possibility of eliminating competition in respect of a substantial part of
the products or services in question.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 3

Definition of concentration

A concentration shall be deemed to arise where æa change of control on a lasting basis results

1.
fromæ

(a) (cid:2)the merger of(cid:2) two or more previously independent undertakings æor parts of undertakingsæ

merge, or

(b) (cid:2)the acquisition,(cid:2) by one or more persons already controlling at least one undertaking, or (cid:2)by(cid:2)
one or more undertakings acquire, whether by purchase of securities or assets, by contract or by any
other means, (cid:2)of(cid:2) direct or indirect control of the whole or parts of one or more other under-
takings.

The creation of a joint venture performing on a lasting basis all the functions of an autonomous

2.
economic entity shall constitute a concentration within the meaning of paragraph 1(b).

For the purposes of this Regulation, control (cid:2)Control(cid:2) shall be constituted by rights, contracts or
3.
any other means which, either separately or in combination and having regard to the considerations of fact
or law involved, confer the possibility of exercising decisive influence on an undertaking, in particular by:

(a) ownership or the right to use all or part of the assets of an undertaking;

(b) rights or contracts which confer decisive influence on the composition, voting or decisions of the

organs of an undertaking.

(cid:2)3.(cid:2)4.

Control is acquired by persons or undertakings which:

(a) are holders of the rights or entitled to rights under the contracts concerned; or

(b) while not being holders of such rights or entitled to rights under such contracts, have the power to

exercise the rights deriving therefrom.

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ænew

Two or more transactions which are conditional on one another or are so closely connected that
4.
their economic rationale justifies their treatment as a single transaction shall be deemed to constitute one
and the same concentration arising on the date of the last transaction, provided that the transactions taken
as a whole satisfy the requirements of paragraph 1.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

(cid:2)5.
economic entity shall constitute a concentration within the meaning of paragraph 1(b).(cid:2)

The creation of a joint venture performing on a lasting basis all the functions of an autonomous

(cid:2)6.(cid:2)5.

A concentration shall not be deemed to arise where:

(a) credit institutions or other financial institutions or insurance companies, the normal activities of which
include transactions and dealing in securities for their own account or for the account of others, hold
on a temporary basis securities which they have acquired in an undertaking with a view to reselling
them, provided that they do not exercise voting rights in respect of those securities with a view to
determining the competitive behaviour of that undertaking or provided that they exercise such voting
rights only with a view to preparing the disposal of all or part of that undertaking or of its assets or
the disposal of those securities and that any such disposal takes place within one year of the date of
acquisition; that period may be extended by the Commission on request where such institutions or
companies can show that the disposal was not reasonably possible within the period set;

(b) control is acquired by an office-holder according to the law of a Member State relating to liquidation,

winding up, insolvency, cessation of payments, compositions or analogous proceedings;

(c) the operations referred to in paragraph 1(b) are carried out by the financial holding companies referred
to in Article 5(3) of the Fourth Council Directive 78/660/EEC (36) of 25 July 1978 on the annual
accounts of certain types of companies, as last amended by Directive 84/569/EEC (37), provided
however that the voting rights in respect of the holding are exercised,
in particular in relation to
the appointment of members of the management and supervisory bodies of the undertakings in which
they have holdings, only to maintain the full value of those investments and not to determine directly
or indirectly the competitive conduct of those undertakings.

Article 4

Prior notification of concentrations æand pre-notification referral at the request of the notifying
partiesæ

Concentrations with a Community dimension defined in this Regulation shall be notified to the
the

1.
Commission æprior to their implementation and following the conclusion of
announcement of the public bid, or the acquisition of a controlling interest.

the agreement,

Notification may also be made where the undertakings concerned demonstrate to the Commission a good
faith intention to conclude an agreement or,
in the case of a public bid, where they have publicly
announced an intention to make such a bid, provided that the intended agreement or bid would result
in a concentration with a Community dimension.

(36) OJ L 222, 14.8.1978, p. 11(cid:2), as last amended by Directive 2001/65/EC of the European Parliament and of the

Council of 27 September 2001, OJ L 283, 27.10.2001, p. 28(cid:2).

(37) OJ L 314, 4.12.1984, p. 28.

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For the purposes of this Regulation, the term ‘notified concentration’ shall also cover intended concen-
trations notified pursuant to the second subparagraph. For the purposes of paragraphs 4 and 5 of this
Article, the term ‘concentration’
includes intended concentrations within the meaning of the second
subparagraph.æ

2.
A concentration which consists of a merger within the meaning of Article 3(1)(a) or in the
acquisition of joint control within the meaning of Article 3(1)(b) shall be notified jointly by the parties
to the merger or by those acquiring joint control as the case may be. In all other cases, the notification
shall be effected by the person or undertaking acquiring control of the whole or parts of one or more
undertakings.

3. Where the Commission finds that a notified concentration falls within the scope of this Regulation, it
shall publish the fact of the notification, at the same time indicating the names of the parties (cid:2)under-
takings concerned(cid:2), ætheir country of origin,æ the nature of the concentration and the economic
sectors involved. The Commission shall take account of the legitimate interest of undertakings in the
protection of their business secrets.

ænew

4.
Prior to the notification of a concentration within the meaning of paragraph 1, the undertakings or
persons referred to in paragraph 2 may inform the Commission, by means of a reasoned submission, that
the concentration affects competition in a market within a Member State which presents all the charac-
teristics of a distinct market and should therefore be examined, in whole or in part, by that Member State.

The Commission shall transmit this submission to all Member States without delay. The Member State
receiving the submission, express its agreement or
concerned shall, within 10 working days of
disagreement as regards the request to refer the concentration. Where the Member State concerned
takes no such decision within that period, it shall be deemed to have agreed.

Unless the Member State concerned disagrees, the Commission, where it considers that such a distinct
market exists, and will be affected by the concentration, may decide to refer the whole or part of the case
to the competent authorities of that Member State with a view to the application of that State's national
legislation on competition.

The decision whether or not to refer the case shall be taken within 20 working days starting from the
receipt of the reasoned submission by the Commission. The Commission shall inform the other Member
States and the undertakings concerned of its decision. If the Commission does not take a decision within
it shall be deemed to have adopted a decision to refer the case in accordance with the
this period,
submission made by the persons or undertakings concerned.

If the Commission decides to refer the whole of the case to the competent authorities of the Member State
concerned, no notification shall be made pursuant to paragraph 1.

Article 9(6) to (10) shall apply mutatis mutandis.

5. With regard to a concentration which would not have a Community dimension within the meaning
of Article 1, the persons or undertakings concerned may, prior to its notification to the competent
authorities of one or more Member States, inform the Commission by means of a reasoned submission
that the concentration has significant cross-border effects and should therefore be examined by the
Commission.

The Commission shall transmit this submission to all Member States without delay.

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The Member State or States concerned shall decide, within 10 working days of receiving the submission,
whether or not to request the Commission to examine the concentration. Where a Member State takes no
such decision within the aforementioned period of 10 working days, it shall be deemed to have adopted a
decision to make such a request to the Commission. No notification of the concentration shall be
submitted to the Member State or States concerned before the decision whether or not to request has
been adopted.

Where all the Member States concerned, or at least three such Member States, have requested the
Commission to examine the concentration, the concentration shall be deemed to have a Community
dimension and shall be notified to the Commission in accordance with paragraphs 1 and 2 of this Article.

In all other cases, the Commission may, at the latest 10 working days after the expiry of the period set in
in accordance with a request received pursuant to this
the third subparagraph, decide to examine,
paragraph, any concentration which it regards as having significant cross-border effects. The Commission
shall inform the Member States and the undertakings concerned of its decision. If the Commission does
not take a decision within this period, it shall be deemed to have adopted a decision to examine the
concentration.

Where the Commission decides to examine the concentration, it may request the submission of a notifi-
cation pursuant to paragraphs 1 and 2. The Member States or States having made the request to the
Commission shall not apply their national legislation on competition to the concentration.

Article 22(5) shall apply mutatis mutandis.

Following the report referred to in Article 1(4) and on a proposal from the Commission, the Council,

6.
acting by a qualified majority, may revise this Article.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 5

Calculation of turnover

Aggregate turnover within the meaning of Article 1(2) (cid:2)this Regulation(cid:2) shall comprise the
1.
amounts derived by the undertakings concerned in the preceding financial year from the sale of
products and the provision of services falling within the undertakings' ordinary activities after deduction
of sales rebates and of value added tax and other taxes directly related to turnover. The aggregate turnover
of an undertaking concerned shall not include the sale of products or the provision of services between
any of the undertakings referred to in paragraph 4.

Turnover, in the Community or in a Member State, shall comprise products sold and services provided to
undertakings or consumers, in the Community or in that Member State as the case may be.

2.
By way of derogation from paragraph 1, where the concentration consists in the acquisition of parts,
whether or not constituted as legal entities, of one or more undertakings, only the turnover relating to the
parts which are the subject of the transaction (cid:2)concentration(cid:2) shall be taken into account with regard
to the seller or sellers.

However, two or more transactions within the meaning of the first subparagraph which take place within
a two-year period between the same persons or undertakings shall, æunless they concern unrelated
economic sectors,æ be treated as one and the same concentration arising on the date of the last trans-
action.

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(cid:1) 1310/97 Article 1, point 4,
(adapted)

first

indent

3.

In place of turnover the following shall be used:

(a)

for credit institutions and other financial institutions, as regards Article 1 (2) and (3), the sum of the
following income items as defined in Council Directive 86/635/EEC (38) of 8 December 1986 on the
annual accounts and consolidated accounts of banks and other financial institutions, after deduction of
value added tax and other taxes directly related to those items, where appropriate:

(i) interest income and similar income;

(ii) income from securities:

— income from shares and other variable yield securities,

— income from participating interests,

— income from shares in affiliated undertakings;

(iii) commissions receivable;

(iv) net profit on financial operations;

(v) other operating income.

The turnover of a credit or financial institution in the Community or in a Member State shall
comprise the income items, as defined above, which are received by the branch or division of that
institution established in the Community or in the Member State in question, as the case may be;

(b) for insurance undertakings, the value of gross premiums written which shall comprise all amounts
received and receivable in respect of insurance contracts issued by or on behalf of the insurance
undertakings, including also outgoing reinsurance premiums, and after deduction of taxes and para-
fiscal contributions or levies charged by reference to the amounts of individual premiums or the total
volume of premiums; as regards Article 1(2)(b) and (3)(b), (c) and (d) and the final part of Article 1(2)
and (3), gross premiums received from Community residents and from residents of one Member State
respectively shall be taken into account.

(cid:1) 1310/97 Article 1, point 4, second indent
(adapted)

4. Without prejudice to paragraph 2, the aggregate turnover of an undertaking concerned within the
meaning of Article 1(2) and (3) (cid:2)this Regulation(cid:2) shall be calculated by adding together the respective
turnovers of the following:

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

(a) the undertaking concerned;

(b) those undertakings in which the undertaking concerned, directly or indirectly:

(i) owns more than half the capital or business assets, or

(38) OJ L 372, 31.12.1986, p. 1.

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(ii) has the power to exercise more than half the voting rights, or

(iii) has the power to appoint more than half the members of the supervisory board, the administrative

board or bodies legally representing the undertakings, or

(iv) has the right to manage the undertakings' affairs;

(c) those undertakings which have in the undertaking concerned the rights or powers listed in (b);

(d) those undertakings in which an undertaking as referred to in (c) has the rights or powers listed in (b);

(e) those undertakings in which two or more undertakings as referred to in (a) to (d) jointly have the

rights or powers listed in (b).

5. Where undertakings concerned by the concentration jointly have the rights or powers listed in
paragraph 4(b), in calculating the aggregate turnover of the undertakings concerned for the purposes of
Article 1(2) and (3) (cid:2)this Regulation(cid:2):

(cid:1) 1310/97 Article 1, point 4 (adapted)

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

(a) no account shall be taken of the turnover resulting from the sale of products or the provision of
services between the joint undertaking and each of the undertakings concerned or any other under-
taking connected with any one of them, as set out in paragraph 4(b) to (e);

(b) account shall be taken of the turnover resulting from the sale of products and the provision of services
between the joint undertaking and any third undertakings. This turnover shall be apportioned equally
amongst the undertakings concerned.

Article 6

Examination of the notification and initiation of proceedings

1.

The Commission shall examine the notification as soon as it is received.

(a) Where it concludes that the concentration notified does not fall within the scope of this Regulation, it

shall record that finding by means of a decision.

(b) Where it finds that the concentration notified, although falling within the scope of this Regulation,
does not raise serious doubts as to its compatibility with the common market, it shall decide not to
oppose it and shall declare that it is compatible with the common market.

(cid:1) 1310/97 Article 1, point 5(a), first indent
(adapted)
æ new

The (cid:2)A(cid:2) decision declaring the (cid:2)a(cid:2) concentration compatible shall æbe deemed toæ also cover
restrictions directly related and necessary to the implementation of the concentration.

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(cid:1) 1310/97 Article 1, point 5(a),
indent (adapted)
(cid:1)1 Corrigendum, OJ L 40, 13.2.1998, p. 17
æ new

second

(c) (cid:1)1 Without prejudice to paragraph 2(cid:1), where the Commission finds that the concentration notified
falls within the scope of this Regulation and raises serious doubts as to its compatibility with the
it shall decide to initiate proceedings. (cid:2)Without prejudice to Article 9, such
common market,
to (4),(cid:2)
proceedings shall be closed by means of a decision as provided for in Article 8(1)
æunless the undertakings concerned have abandoned the concentration.æ

(cid:1) 1310/97 Article 1, point 5(b) (adapted)
(cid:1)1 Corrigendum, OJ L 40, 13.2.1998, p. 17

(cid:1)12. Where the Commission finds(cid:1) that, following modification by the undertakings concerned, a
notified concentration no longer raises serious doubts within the meaning of paragraph 1(c), it may decide
to (cid:2)shall(cid:2) declare the concentration compatible with the common market pursuant to paragraph 1(b).

The Commission may attach to its decision under paragraph 1(b) conditions and obligations intended to
ensure that the undertakings concerned comply with the commitments they have entered into vis-à-vis the
Commission with a view to rendering the concentration compatible with the common market.

(cid:1)13.

The Commission may revoke(cid:1) the decision it has taken pursuant to paragraph 1(a) or (b) where:

(a) the decision is based on incorrect information for which one of the undertakings is responsible or

where it has been obtained by deceit;

or

(b) the undertakings concerned commit a breach of an obligation attached to the decision.

(cid:1)14.
1, without being bound by the deadlines (cid:2)time limits(cid:2) referred to in Article 10(1).

In the cases referred to in paragraph 3, the Commission(cid:1) may take a decision under paragraph

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(cid:1)1 1310/97, Article 1, point 5(c)
(cid:1)2 Corrigendum, OJ L 40, 13.2.1998, p. 17

(cid:1)1(cid:1)25.(cid:1)(cid:1) The Commission shall notify its decision to the undertakings concerned and the
competent authorities of the Member States without delay.

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Article 7

Suspension of concentrations

(cid:1) 1310/97 Article 1, point 6(a) (adapted)
æ new

A concentration (cid:2)with a Community dimension(cid:2) as defined in Article 1, æor which is to be
1.
examined by the Commission pursuant to Article 4(5),æ shall not be put into effect (cid:2)implemented(cid:2)
either before its notification or until it has been declared compatible with the common market pursuant to
a decision under Article (cid:2)Articles(cid:2) 6(1)(b), (cid:2)8(1)(cid:2) or Article 8(2)(cid:2),(cid:2) or on the basis of a
presumption according to Article 10(6).

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 Article 1, point 6(c)
æ new

(cid:2)2.(cid:2)3. (cid:1)1 Paragraph 1(cid:1) shall not prevent the implementation of a public bid æor of a series of
transactions in securities including those convertible into other securities admitted to trading on a market
such as a stock exchange, by which control within the meaning of Article 3 is acquired from various
sellers,æ which has been notified to the Commission in accordance with Article 4(1) provided that

æ(a)

the concentration is notified to the Commission pursuant to Article 4 without delay; andæ

(cid:2)(b)(cid:2) the acquirer does not exercise the voting rights attached to the securities in question or does so
only to maintain the full value of its investments based on a derogation granted by the
Commission under paragraph 4 (cid:2)3(cid:2).

(cid:1) 1310/97 Article 1, point 6(d) (adapted)

(cid:2)3.(cid:2)4.
The Commission may, on request, grant a derogation from the obligations imposed in
paragraphs 1 or 3 (cid:2)2(cid:2). The request to grant a derogation must be reasoned. In deciding on the
request, the Commission shall take into account inter alia the effects of the suspension on one or more
undertakings concerned by a (cid:2)the(cid:2) concentration or on a third party and the threat to competition
posed by the concentration. That (cid:2)Such a(cid:2) derogation may be made subject to conditions and
obligations in order to ensure conditions of effective competition. A derogation may be applied for and
granted at any time, even (cid:2)be it(cid:2) before notification or after the transaction.

ænew

4.
The Commission may, by regulation, define categories of concentrations for which a derogation
within the meaning of paragraph 3 from the obligations imposed in paragraphs 1 and 2 shall be deemed
to have been granted subject to the concentration being notified and to any other requirements defined in
such a regulation. Such categories may only cover concentrations which, in general, do not lead to a
combination of market positions giving rise to competition concerns.

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(cid:1) 1310/97 Article 1, point 6(e) (adapted)
æ new

5.
The validity of any transaction carried out in contravention of paragraph 1 shall be dependent on a
decision pursuant to Article 6(1)(b) or Article 8(cid:2)(1),(cid:2) (2) or (3) or on a presumption pursuant to
Article 10(6).

This Article shall, however, have no effect on the validity of transactions in securities including those
convertible into other securities admitted to trading on a market æsuch as a stock exchangeæ, unless the
buyer and seller knew or ought to have known that the transaction was carried out in contravention of
paragraph 1.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 8

Powers of decision of the Commission

1. (cid:2)Where the Commission finds that a notified concentration fulfils the criterion laid down in Article
2(3) and, in the cases referred to in Article 2(5), the criteria laid down in Article 81(3) of the Treaty, it
issue a decision declaring the concentration compatible with the common market.(cid:2) Without
shall
prejudice to Article 9, all proceedings initiated pursuant to Article 6(1)(c) shall be closed by means of a
decision as provided for in paragraphs 2 to 5.

The (cid:2)A(cid:2) decision declaring the (cid:2)a(cid:2) concentration compatible shall æbe deemed toæ also cover
restrictions directly related and necessary to the implementation of the concentration.

(cid:1) 1310/97 Article 1, point 7(a) (adapted)
æ new

2. Where the Commission finds that,
necessary, a notified concentration fulfils the criterion laid down in Article 2(cid:2)(3)(cid:2)(2) and,
cases referred to in Article 2(4) (cid:2)(5)(cid:2),
Treaty, it shall issue a decision declaring the concentration compatible with the common market.

following modification by the undertakings concerned if
in the
the criteria laid down in Article 85 (cid:2)81(cid:2)(3) of the

It (cid:2)The Commission(cid:2) may attach to its decision conditions and obligations intended to ensure that the
undertakings concerned comply with the commitments they have entered into vis-à-vis the Commission
with a view to rendering the concentration compatible with the common market.

The (cid:2)A(cid:2) decision declaring the (cid:2)a(cid:2) concentration compatible shall æbe deemed toæ also cover
restrictions directly related and necessary to the implementation of the concentration.

(cid:1) 1310/97 Article 1, point 7(b) (adapted)

3. Where the Commission finds that a concentration fulfils the criterion defined in Article 2(cid:2)(4)(cid:2)(3)
or, in the cases referred to in Article 2(4) (cid:2)(5)(cid:2), does not fulfil the criteria laid down in Article 85
(cid:2)81(cid:2)(3) of the Treaty, it shall issue a decision declaring that the concentration is incompatible with the
common market.

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
æ new

4. Where a concentration has already been implemented æand is declared incompatible with the
common market,æ the Commission may,
to paragraph 3 or by separate
decision, require æthe undertakings concerned to dissolve the concentration, in particular through the
dissolution of the merger or the disposal of all the shares or assets acquired, so as to restore the situation
prevailing prior to the implementation of the concentration. In circumstances where restoration of the
situation prevailing prior to the implementation of the concentration is not possible through dissolution of
the concentration, the Commission may take any other measure appropriate to achieve such restoration as
far as possible.æ

in a decision pursuant

The Commission may order any appropriate measure to ensure that the undertakings concerned dissolve
the concentration or take other restorative measures as required in its decision.

ænew

The Commission may adopt interim measures to ensure that conditions of effective competition are not
distorted.

ænew

5. Where a concentration has been implemented in contravention of Article 7, or of a condition
attached to a decision under Articles 6(1)(b) or 8(2), the Commission may take any measure appropriate
to restore or maintain conditions of effective competition, including interim measures. A decision requiring
the undertakings concerned to dissolve the concentration or imposing any other measures, with the
exception of interim measures, may only be taken where the criterion laid down in Article 2(4) is fulfilled,
and in the cases referred to in Article 2(5), where the criteria laid down in Article 81(3) of the Treaty are
not fulfilled.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

5.(cid:2)6.(cid:2) The Commission may revoke the decision it has taken pursuant to paragraph (cid:2)paragraphs
1 or(cid:2) 2 where:

(a) the declaration of compatibility is based on incorrect information for which one of the undertakings is

responsible or where it has been obtained by deceit; or

(b) the undertakings concerned commit a breach of an obligation attached to the decision.

6.(cid:2)7.(cid:2) In the cases referred to in paragraph 5 (cid:2)6(cid:2), the Commission may take a decision
pursuant to æparagraphs 1 to 4.æ 3, without being. (cid:2)It shall not be(cid:2) bound by the deadline
(cid:2)time limits(cid:2) referred to in Article 10(3).

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The Commission shall notify its decision to the undertakings concerned and the competent auth-

8.
orities of the Member States without delay.

ænew

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

Article 9

Referral to the competent authorities of the Member States

1.
The Commission may, by means of a decision notified without delay to the undertakings concerned
and the competent authorities of the other Member States, refer a notified concentration to the competent
authorities of the Member State concerned in the following circumstances.

(cid:1) 1310/97 Article 1, point 8(a)
æ new

2. Within æ10 working daysæ of the date of receipt of the copy of the notification a Member State,
æon its own initiative or upon the invitation of the Commission,æ may inform the Commission, which
shall inform the undertakings concerned, that:

(cid:1) 1310/97 Article 1, point 8(a)
æ new

(a) a concentration significantly æaffects competitionæ on a market within that Member State, which

presents all the characteristics of a distinct market; or

(b) a concentration 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.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

If the Commission considers that, having regard to the market for the products or services in
3.
question and the geographical reference market within the meaning of paragraph 7, there is such a
distinct market and that such a threat exists, either:

(a) it shall itself deal with the case (cid:2)in accordance with this Regulation(cid:2) in order to maintain or restore

effective competition on the market concerned; or

(b) it shall refer the whole or part of the case to the competent authorities of the Member State concerned
that State's national competition law (cid:2)legislation on

with a view to the application of
competition(cid:2).

(cid:1) 1310/97 Article 1, point 8(b) (adapted)

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

If, however, the Commission considers that such a distinct market or threat does not exist it shall adopt a
decision to that effect which it shall address to the Member State concerned, (cid:2)and shall itself deal with
the case in accordance with this Regulation(cid:2).

(cid:1) 1310/97 Article 1, point 8(b) (adapted)

In cases where a Member State informs the Commission (cid:2)pursuant to paragraph 2(b)(cid:2) that a concen-
tration affects competition in a distinct market within its territory that does not form a substantial part of
the common market, the Commission shall refer the whole or part of the case relating to the distinct
market concerned, if it considers that such a distinct market is affected.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 Corrigendum, OJ L 3, 7.1.1998, p. 16
æ new

4.

A decision to refer or not to refer pursuant to paragraph 3 shall be taken:

(a) as a general rule within the six-week period provided for in Article 10(1), second subparagraph, where

the Commission, pursuant to Article 6(1)(b), has not initiated proceedings; or

(b) within æ65 working daysæ at most of the notification of the concentration concerned where the
Commission has initiated proceedings under Article 6(1)(c), without taking the preparatory steps in
order to adopt the necessary measures under Article 8(2), second subparagraph, (3) or (4) to maintain
or restore effective competition on the market concerned.

If within the æ65 working daysæ referred to in paragraph 4(b) the Commission, despite a reminder
5.
from the Member State concerned, has not taken a decision on referral in accordance with paragraph 3
nor has taken the preparatory steps referred to in paragraph 4(b), it shall be deemed to have taken a
decision to refer the case to the Member State concerned in accordance with paragraph 3(b).

6.
The publication of any report or the announcement of the findings of the examination of the
concentration by the competent authority of the Member State concerned shall be effected not more
than æ90 working daysæ after the Commission's referral.

7.
The geographical reference market shall consist of the area in which the undertakings concerned are
involved in the supply and demand of products or services, in which the conditions of competition are
sufficiently homogeneous and which can be distinguished from neighbouring areas because, in particular,
conditions of competition are appreciably different in those areas. This assessment should take account in
particular of the nature and characteristics of the products or services concerned, of (cid:1)1 the existence of
entry barriers or of consumer preferences(cid:1), of appreciable differences of the undertakings' market shares
between the area concerned and neighbouring areas or of substantial price differences.

In applying the provisions of this Article, the Member State concerned may take only the measures

8.
strictly necessary to safeguard or restore effective competition on the market concerned.

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In accordance with the relevant provisions of the Treaty, any Member State may appeal to the Court
9.
of Justice, and in particular request the application of Article 186 (cid:2)243 of the Treaty(cid:2), for the purpose
of applying its national competition law (cid:2)legislation on competition(cid:2).

(cid:1) 1310/97 Article 1, point 8(c)

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 Article 1, point 9(a)
(cid:1)2 Corrigendum, OJ L 40, 13.2.1998, p. 17
æ new

Article 10

Time limits for initiating proceedings and for decisions

æWithout prejudice to Article 6(4),æ The (cid:2)the(cid:2) decisions referred to in Article 6(1) must be
1.
taken within æ25 working daysæ at most. That period shall begin on the (cid:2)working(cid:2) day following
that of the receipt of a notification or, if the information to be supplied with the notification is incomplete,
on the (cid:2)working(cid:2) day following that of the receipt of the complete information.

That period shall be increased to æ35 working daysæ (cid:2)where(cid:2) if the Commission receives a request
from a Member State in accordance with Article 9(2)(cid:1)1 or where, (cid:1)2 the undertakings concerned(cid:1)(cid:1)
æoffer commitments pursuant to Article 6(2) with a view to rendering the concentration compatible with
the common market.æ

Decisions taken pursuant to Article 8(cid:2)(1) or(cid:2) (2) concerning notified concentrations must be
2.
taken as soon as it appears that the serious doubts referred to in Article 6(1)(c) have been removed,
particularly as a result of modifications made by the undertakings concerned, and at the latest by the
deadline (cid:2)time limit(cid:2) laid down in paragraph 3.

3. Without prejudice to Article 8(6) (cid:2)(7),(cid:2) decisions taken pursuant to Article 8(cid:2)(1) to(cid:2) (3)
concerning notified concentrations must be taken within not more than æ90 working daysæ of the date
on which the proceedings are initiated. æThat period shall be increased to 105 working days where the
undertakings concerned offer commitments pursuant to Article 8(2), second subparagraph, with a view to
rendering the concentration compatible with the common market, unless these commitments have been
offered less than 55 working days after the initiation of proceedings.æ

ænew

At any time following the initiation of proceedings, the periods set by the first subparagraph may be
extended by the Commission with the consent of the notifying parties. The periods set by the first
subparagraph shall likewise be extended if the notifying parties make a request to that effect not later
than 15 working days after the initiation of proceedings pursuant to Article 6(1)(c). The notifying parties
may make only one such request. The total duration of any extension or extensions effected pursuant to
this subparagraph shall not exceed 20 working days.

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 Article 1, point 9(b)
æ new

4. (cid:1)1 The periods set by paragraphs 1 and 3(cid:1) shall exceptionally be suspended where, owing to
circumstances for which one of
the
Commission has had to request information by decision pursuant to Article 11 or to order an investigation
(cid:2)inspection(cid:2) by decision pursuant to Article 13.

the undertakings involved in the concentration is responsible,

5. Where the Court of Justice gives a Judgement (cid:2)judgment(cid:2) which annuls the whole or part of a
Commission decision taken under this Regulation which is subject to a time limit set by this Article, æthe
concentration shall be re-examined by the Commission in the light of current market conditions with a
view to adopting a decision pursuant to Article 6(1).æ

ænew

The notifying parties shall submit a new notification or supplement the original notification, without delay,
where the original notification has become incomplete by reason of intervening changes in market
conditions or in the information provided. Where there are no such changes, the parties shall certify
this fact without delay.

The periods laid down in paragraph 1 shall start on the working day following that of the receipt of
complete information in a new notification, a supplemented notification, or a certification within the
meaning of the second subparagraph.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

6. Where the Commission has not taken a decision in accordance with Article (cid:2)Articles(cid:2) 6(1)(b), or
(cid:2)6(1)(cid:2)(c) (cid:2),(cid:2) or Article (cid:2)8(1),(cid:2) 8(2) or (cid:2)8(cid:2)(3) within the deadlines (cid:2)time limits(cid:2) set in
paragraphs 1 and 3 respectively, the concentration shall be deemed to have been declared compatible with
the common market, without prejudice to Article 9.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 11

Requests for information

In carrying (cid:2)order to carry(cid:2) out the duties assigned to it by this Regulation, the Commission
1.
may, æby simple request or by decision,æ obtain all necessary information from the Governments and
competent authorities of the Member States, from (cid:2)require(cid:2) the persons referred to in Article 3(1)(b),
and from (cid:2)as well as(cid:2) undertakings and associations of undertakings, (cid:2)to provide all necessary
information(cid:2).

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2. When sending a æsimpleæ request for information to a person, an undertaking or an association of
undertakings, the Commission shall state the legal basis and the purpose of the request, æspecify what
information is required and fix the time limit within which the information is to be provided, as well asæ
the penalties provided for in Article 14(1)(c) for supplying incorrect æor misleadingæ information.

ænew

3. Where the Commission requires a person, an undertaking or an association of undertakings to
supply information by decision,
it shall state the legal basis and the purpose of the request, specify
what information is required and fix the time limit within which it is to be provided. It shall also
indicate the penalties provided for in Article 14 and indicate or impose the penalties provided for in
Article 15. It shall further indicate the right to have the decision reviewed by the Court of Justice.

4.
The owners of the undertakings or their representatives and, in the case of legal persons, companies
or firms, or associations having no legal personality, the persons authorised to represent them by law or by
their constitution, shall supply the information requested on behalf of the undertaking concerned. Lawyers
duly authorised to act may supply the information on behalf of their clients. The latter shall remain fully
responsible if the information supplied is incomplete, incorrect or misleading.

5.
The Commission shall without delay forward a copy of any decision taken pursuant to paragraph 3
to the competent authority of the Member State in whose territory the residence of the person or the seat
of the undertaking or association of undertakings is situated, and to the competent authority of the
Member State whose territory is affected.

6.
At the request of the Commission, the governments and competent authorities of the Member States
shall provide the Commission with all necessary information to carry out the duties assigned to it by this
Regulation.

7.
In order to carry out the duties assigned to it by this Regulation, the Commission may interview any
natural or legal person who consents to be interviewed for the purpose of collecting information relating
to the subject matter of an investigation. At the beginning of the interview, which may be conducted by
telephone or other electronic means, the Commission shall state the legal basis and the purpose of the
interview and indicate the penalties provided for in Article 14 for supplying incorrect or misleading
information.

Where an interview is conducted in the premises of an undertaking, the Commission shall inform the
competent authority of the Member State in whose territory the interview takes place. If so requested by
the competent authority of that Member State,
its officials may assist the officials and other persons
authorised by the Commission to conduct the interview.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 12

Investigations (cid:2)Inspections(cid:2) by the authorities of the Member States

At the request of the Commission, the competent authorities of the Member States shall undertake
1.
the investigations (cid:2)inspections(cid:2) which the Commission considers to be necessary under Article 13(1),
or which it has ordered by decision pursuant to Article 13(3) (cid:2)(4)(cid:2). The officials of the competent
authorities of the Member States (cid:2)who are(cid:2) responsible for conducting those investigations (cid:2)these
inspections(cid:2) æas well as those authorised or appointed by themæ shall exercise their powers æin
accordance with their national lawæ.

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If so requested by the Commission or by the competent authority of the Member State within the
2.
(cid:2)whose(cid:2) territory of which the investigation (cid:2)the inspection(cid:2) is to be carried out (cid:2)conducted,(cid:2)
officials of æand other accompanying persons authorised byæ the Commission may assist the officials of
that (cid:2)the(cid:2) authority in carrying out their duties (cid:2)concerned(cid:2).

Article 13

Investigative powers of the Commission (cid:2)The Commission's powers of inspection(cid:2)

In carrying (cid:2)order to carry(cid:2) out the duties assigned to it by this Regulation, the Commission may
1.
undertake all necessary investigations into (cid:2)conduct all necessary inspections of(cid:2) undertakings and
associations of undertakings.

(cid:2)2.(cid:2) To that end the (cid:2)The(cid:2) officials æand other accompanying personsæ authorised by the
Commission shall be empowered (cid:2)to conduct an inspection shall have the power(cid:2):

(d)(cid:2)(a)(cid:2) to enter any premises, land and means of transport of undertakings (cid:2)and associations of

undertakings(cid:2);

(a)(cid:2)(b)(cid:2) to examine the books and other business records (cid:2)related to the business(cid:2), æirrespective

of the medium on which they are storedæ;

(b)(cid:2)(c)(cid:2) to take or æobtain in any formæ copies of or extracts from the (cid:2)such(cid:2) books or records;

æ(d)

to seal any business premises and books or records for the period and to the extent necessary
for the inspection;æ

(c)(cid:2)(e)(cid:2) to ask æany representative or member of staff of the undertaking or association of under-
takingsæ for explanations on æfacts or documents relating to the subject matter and purpose
of the inspection and to record the answersæ.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

The officials of the Commission æand other accompanying persons authorised by the
(cid:2)3.(cid:2)2.
Commissionæ authorised to carry out the investigations (cid:2)to conduct an inspection(cid:2) shall exercise
their powers on (cid:2)upon(cid:2) production of an (cid:2)a written(cid:2) authorisation in writing specifying the
subject matter and purpose of the investigation (cid:2)inspection(cid:2) and the penalties provided for in
in cases where (cid:2)case the(cid:2) production of the required books or other business
Article 14(1)(d)
records (cid:2)related to the business(cid:2) is incomplete æor where answers to questions asked under
this Article are incorrect or misleading.æ In good time before the investigation
paragraph 2 of
(cid:2)inspection(cid:2), the Commission shall
in writing (cid:2)give notice of the inspection to(cid:2) the
competent authority of the Member State within the (cid:2)in whose(cid:2) territory of which the inspection
is to be carried out (cid:2)conducted(cid:2) and of the identities of the authorised officials.

inform,

(cid:2)4.(cid:2)3.
Undertakings and associations of undertakings shall (cid:2)are required to(cid:2) submit to inves-
tigations (cid:2)inspections(cid:2) ordered by decision of the Commission. The decision shall specify the subject
matter and purpose of the investigation (cid:2)inspection(cid:2), appoint the date on which it shall (cid:2)is to(cid:2)
begin and state (cid:2)indicate(cid:2) the penalties provided for in Articles 14(1)(d) and 15(1)(b) and the right to
have the decision reviewed by the Court of Justice. (cid:2)The Commission shall take such decisions after
consulting the competent authority of the Member State in whose territory the inspection is to be
conducted(cid:2).

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The Commission shall in good time and in writing inform the competent authority of the Member
4.
State within the territory of which the investigation is to be carried out of its intention of taking a decision
pursuant to paragraph 3. It shall hear the competent authority before taking its decision.

Officials of æas well as those authorised or appointed byæ the competent authority of the Member
5.
State within the (cid:2)in whose(cid:2) territory of which the investigation (cid:2)inspection(cid:2) is to be carried out
(cid:2)conducted(cid:2) æshallæ, at the request of that authority or of the Commission, æactivelyæ assist the
officials of æand other accompanying persons authorised byæ the Commission in carrying out their
duties. æTo this end, they shall enjoy the powers specified in paragraph 2.æ

ænew

6. Where the officials and other accompanying persons authorised by the Commission find that an
undertaking opposes an inspection ordered pursuant to this Article, the Member State concerned shall
afford them the necessary assistance, requesting where appropriate the assistance of the police or of an
equivalent enforcement authority, so as to enable them to conduct their inspection.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

ænew

If

7.
the assistance provided for in paragraph 6 requires authorisation from a judicial authority
according to national rules, such authorisation shall be applied for. Such authorisation may also be
applied for as a precautionary measure.

8. Where authorisation as referred to in paragraph 7 is applied for, the national judicial authority shall
control that the Commission decision is authentic and that the coercive measures envisaged are neither
arbitrary nor excessive having regard to the subject matter of the inspection. In its control of propor-
tionality of the coercive measures, the national judicial authority may ask the Commission, directly or
through the competent authority of that Member State, for detailed explanations. However, the national
judicial authority may not call
into question the necessity for the inspection nor demand that it be
provided with the information in the Commission's file. The lawfulness of the Commission's decision
shall be subject to review only by the Court of Justice.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

Article 14

Fines

The Commission may by decision impose on the persons referred to in Article 3(1)(b), undertakings
1.
or associations of undertakings fines ænot exceeding 1 % of the aggregate turnover of the undertaking or
association of undertakings concerned within the meaning of Article 5æ where,
intentionally or
negligently:

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(a)

they fail to notify a concentration in accordance with Article 4;

(cid:2)(a)(cid:2)(b)

they supply incorrect or misleading information in a æsubmission, certification,æ notification
æor supplement theretoæ, pursuant to Article (cid:2)Articles(cid:2) 4, or æ10(5), 22(3) or 22(4)æ;

(cid:2)(b)(cid:2)(c)

they supply incorrect æor misleadingæ information in response to a request made pursuant
to Article 11(cid:2)(2)(cid:2) or æin an interview pursuant to Article 11(7);æ

æ(c)æ

(d)

in response to a request made by decision adopted pursuant to Article 11(3), they supply
incorrect,
incomplete or misleading information or do not supply information within the
required time limit;æ

they produce the required books or other business records (cid:2)related to the business(cid:2) in
incomplete form during investigations (cid:2)inspections(cid:2) under Article 12 or 13, or refuse to
submit to an investigation (cid:2)inspection(cid:2) ordered by decision taken pursuant to Article 13
(cid:2)(4)(cid:2).

ænew

(e)

in response to a question asked in accordance with Article 13(2)(e),

— they give an incorrect or misleading answer,

— they fail to rectify within a time limit set by the Commission an incorrect, incomplete or

misleading answer given by a member of staff, or

— they fail or refuse to provide a complete answer on facts relating to the subject matter and
purpose of an inspection ordered by a decision adopted pursuant to Article 13(4);

(f)

seals affixed by officials or other accompanying persons authorised by the Commission in
accordance with Article 13(2)(d) have been broken.

Under the conditions set out in paragraph 1, the Commission may by decision impose fines of from

2.
EUR 1 000 to 50 000 on the persons referred to in Article 3(1)(b).

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 Corrigendum, OJ L 3, 7.1.1998, p. 16
æ new

(cid:2)3.(cid:2)2.
The Commission may by decision impose fines not exceeding 10 % of the aggregate turnover
of the undertakings concerned within the meaning of Article 5 on the persons or undertakings concerned
where, either intentionally or negligently, they:

(a)

(a)

fail to comply with an obligation imposed by decision pursuant to Article 7(4) or 8(2), second
subparagraph;

fail to notify a concentration in accordance with Article (cid:2)Articles(cid:2) 4, æ22(3) or 22(4)
prior to its implementation, unless they are expressly authorised to do so by Article 7(2) or by
a decision taken pursuant to Article 7(3);æ

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(b)

(c)

put into effect (cid:2)implement(cid:2) a concentration in breach of Article 7; (1) or disregard a
decision taken pursuant to Article 7(2);

put into effect (cid:2)implement(cid:2) a concentration declared incompatible with the common
market by decision pursuant to Article 8(3) or do not take the (cid:2)comply with any(cid:2)
measures ordered by decision pursuant to æArticle 8(4) or (5)æ;

(cid:2)(d)(cid:2)(a)

fail to comply with æa condition oræ an obligation imposed by decision pursuant to Article
(cid:2)Articles(cid:2) æ6(1)(b),æ 7(4) (cid:2)(3)(cid:2) or 8(2), second subparagraph.

(cid:2)4.(cid:2)3.
(cid:2),(cid:2) and gravity æand durationæ of the infringement.

In setting (cid:2)fixing(cid:2) the amount of a (cid:2)the(cid:2) fine, regard shall be had to the nature

(cid:2)5.(cid:2)4.
nature.

Decisions taken pursuant to paragraphs 1, and 2 (cid:2)and 3(cid:2) shall not be of a criminal law

Article 15

Periodic penalty payments

The Commission may by decision impose on the persons referred to in Article 3(1)(b), undertakings
1.
or associations of undertakings concerned periodic penalty payments ænot exceeding 5 % of the average
daily aggregate turnover of the undertaking or association of undertakings concerned within the meaning
of Article 5æ for each (cid:2)working(cid:2) day of delay, calculated from the date set in the decision, in order to
compel them:

(a)

(b)

to supply complete and correct information which it has requested by decision (cid:2)taken(cid:2)
pursuant to Article 11(cid:2)(3)(cid:2);

to submit to an investigation (cid:2)inspection(cid:2) which it has ordered by decision (cid:2)taken(cid:2)
pursuant to Article 13(cid:2)(4)(cid:2).

(cid:2)(c)(cid:2)(a) (cid:2)to comply with an obligation imposed by decision pursuant to Article(cid:2) æ6(1)(b),æ 7(4)

(cid:2)7(3) or 8(2), second subparagraph, or(cid:2)

(cid:2)(d)(cid:2)(b) to apply the (cid:2)to comply with any measures ordered by decision pursuant to Article 8(4)(cid:2)

æor (5)æ.

2. æFor the purposes laid down in paragraph 1,æ (cid:1)1 The (cid:2)the(cid:2) Commission may by decision
impose(cid:1) on the persons referred to in Article 3(1)(b) periodic penalty payments of up to ECU
(cid:2)EUR(cid:2) 100 000 for each (cid:2)working(cid:2) day of delay calculated from the date set in the decision.
in order to compel them:

(a) to comply with an obligation imposed by decision pursuant

to Article 7(4) or 8(2), second

subparagraph, or

(b) to apply the measures ordered by decision pursuant to Article 8(4).

3. Where the persons referred to in Article 3(1)(b), undertakings or associations of undertakings have
satisfied the obligation which it was the purpose of the periodic penalty payment (cid:2)was intended(cid:2) to
enforce, the Commission may set (cid:2)fix(cid:2) the total (cid:2)definitive(cid:2) amount of the periodic penalty
payments at a lower figure (cid:2)lower(cid:2) than that which would arise under the original decision.

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Article 16

Review by the Court of Justice

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 Article 1, point 10(a)
æ new

The Court of Justice shall have unlimited jurisdiction within the meaning of Article 172 (cid:2)229(cid:2) of the
Treaty to review decisions whereby the Commission has fixed a fine or periodic penalty payments; it may
cancel, reduce or increase the fine or periodic penalty payment imposed.

Article 17

Professional secrecy

Information acquired as a result of the application of æthis Regulationæ shall be used only for the

1.
purposes of the relevant request, investigation or hearing.

2. Without prejudice to Articles 4(3), 18 and 20, the Commission and the competent authorities of the
Member States, their officials and other servants shall not disclose information they have acquired through
the application of this Regulation of the kind covered by the obligation of professional secrecy.

Paragraphs 1 and 2 shall not prevent publication of general information or of surveys which do not

3.
contain information relating to particular undertakings or associations of undertakings.

Article 18

Hearing of the parties and of third persons

Before taking any decision provided for in æArticle 6(3),æ (cid:1)1 Article 7(4) (cid:2)(3)(cid:2)(cid:1), æArticle
1.
to (6),æ and Articles 14 and 15,
8(2)
the Commission shall give the persons, undertakings and
associations of undertakings concerned the opportunity, at every stage of the procedure up to the consul-
tation of the Advisory Committee, of making known their views on the objections against them.

(cid:1) 1310/97 Article 1, point 10(b) (adapted)
æ new

By way of derogation from paragraph 1, a decision to grant a derogation from suspension as referred
2.
to in (cid:2)pursuant(cid:2) to Article (cid:2)Articles(cid:2) 7(4) (cid:2)(3)(cid:2) æand 8(4) or
(5)æ may be taken
provisionally, without the persons, undertakings or associations of undertakings concerned being given
the opportunity to make known their views beforehand, provided that the Commission gives them that
opportunity as soon as possible after having taken its decision.

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(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)11310/97 Article 1, point 11
æ new

3.
The Commission shall base its decision only on objections on which the parties have been able to
submit their observations. The rights of the defence shall be fully respected in the proceedings. Access to
the file shall be open at least to the parties directly involved, subject to the legitimate interest of under-
takings in the protection of their business secrets.

In so far as the Commission or the competent authorities of the Member States deem it necessary,
4.
they may also hear other natural or legal persons. Natural or legal persons showing a sufficient interest and
especially members of the administrative or management bodies of the undertakings concerned or the
recognised representatives of their employees shall be entitled, upon application, to be heard.

Article 19

Liaison with the authorities of the Member States

1.
The Commission shall transmit to the competent authorities of the Member States copies of notifi-
cations within three (cid:2)3(cid:2) working days and, as soon as possible, copies of the most important
documents lodged with or issued by the Commission pursuant to this Regulation.(cid:1)1 Such documents
shall include commitments which are intended by the parties to form the basis for a decision (cid:2)offered by
the undertakings concerned vis-à-vis the Commission with a view to rendering the concentration
compatible with the common market(cid:2) pursuant to Articles 6(1)(b) (cid:2)(2)(cid:2) or 8(2), (cid:2)second subpara-
graph(cid:2)(cid:1).

2.
The Commission shall carry out the procedures set out in this Regulation in close and constant
liaison with the competent authorities of the Member States, which may express their views upon those
procedures. For the purposes of Article 9 it shall obtain information from the competent authority of the
Member State as referred to in paragraph 2 of that Article and give it the opportunity to make known its
views at every stage of the procedure up to the adoption of a decision pursuant to paragraph 3 of that
Article; to that end it shall give it access to the file.

An Advisory Committee on concentrations shall be consulted before any decision is taken pursuant

3.
to Articles 8 æ(1) to (6)æ, 14 or 15, or any provisions are adopted pursuant to Article 23.

The Advisory Committee shall consist of representatives of the (cid:2)competent(cid:2) authorities of the
4.
Member States. Each Member State shall appoint one or two representatives; if unable to attend, they may
be replaced by other representatives. At least one of the representatives of a Member State shall be
competent in matters of restrictive practices and dominant positions.

5.
Consultation shall take place at a joint meeting convened at the invitation of and chaired by the
Commission. A summary of the case, together with an indication of the most important documents and a
preliminary draft of the decision to be taken for each case considered, shall be sent with the invitation. The
meeting shall take place not less than 14 days (cid:2)10 working days(cid:2) after the invitation has been sent.
The Commission may in exceptional cases shorten that period as appropriate in order to avoid serious
harm to one or more of the undertakings concerned by a concentration.

6.
The Advisory Committee shall deliver an opinion on the Commission's draft decision, if necessary by
taking a vote. The Advisory Committee may deliver an opinion even if some members are absent and
unrepresented. The opinion shall be delivered in writing and appended to the draft decision. The
Commission shall take the utmost account of the opinion delivered by the Committee. It shall inform
the Committee of the manner in which its opinion has been taken into account.

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7. æThe Commission shall publish the opinion of the Advisory Committee in the Official Journal of the
European Communities, having regard toæ the legitimate interest of undertakings in the protection of their
business secrets.

Article 20

Publication of decisions

The Commission shall publish the decisions which it takes pursuant to Article 8æ(1) to (6), 14 and

1.
15æ in the Official Journal of the European Communities.

The publication shall state the names of the parties and the main content of the decision; it shall

2.
have regard to the legitimate interest of undertakings in the protection of their business secrets.

Article 21

(cid:2)Application of the Regulation and(cid:2) Jurisdiction

(cid:1) 1310/97 Article 1, point 12(a) (adapted)

(cid:2)1.
This Regulation alone shall apply to concentrations as defined in Article 3, and Regulations No
17 (39), (EEC) No 1017/68 (40), (EEC) No 4056/86 (41) and (EEC) No 3975/87 (42) shall not apply, except in
relation to joint ventures that do not have a Community dimension and which have as their object or
effect the coordination of the competitive behaviour of undertakings that remain independent.(cid:2)

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

(cid:2)2.(cid:2)1.
the decisions provided for in this Regulation.

Subject to review by the Court of Justice, the Commission shall have sole jurisdiction to take

(cid:2)3.(cid:2)2.
that has a Community dimension.

No Member State shall apply its national legislation on competition to any concentration

The first subparagraph shall be without prejudice to any Member State's power to carry out any enquiries
necessary for the application of æArticles 4(4),æ 9(2) or after referral, pursuant to Article 9(3), first
subparagraph, indent (b), or (5), to take the measures strictly necessary for the application of Article 9(8).

(cid:2)4.(cid:2)3.
Notwithstanding paragraphs 1 and 2 (cid:2)2 and 3,(cid:2) Member States may take appropriate
measures to protect legitimate interests other than those taken into consideration by this Regulation and
compatible with the general principles and other provisions of Community law.

Public security, plurality of the media and prudential rules shall be regarded as legitimate interests within
the meaning of the first subparagraph.

(39) OJ 13, 21.2.1962, p. 204/62.
(40) OJ L 175, 23.7.1968, p. 1.
(41) OJ L 378, 31.12.1986, p. 4.
(42) OJ L 374. 31.12.1987, p. 1.

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Any other public interest must be communicated to the Commission by the Member State concerned and
shall be recognised by the Commission after an assessment of its compatibility with the general principles
and other provisions of Community law before the measures referred to above may be taken. The
Commission shall inform the Member State concerned of its decision within æ25 working daysæ of
that communication.

Article 22

Application of the Regulation (cid:2)Referral to the Commission(cid:2)

(cid:1) 1310/97 Article 1, point 12(a) (adapted)

1.
This Regulation alone shall apply to concentrations as defined in Article 3, and Regulations No
17 (43), (EEC) No 1017/68 (44), (EEC) No 4056/86 (45) and (EEC) No 3975/87 (46) shall not apply, except in
relation to joint ventures that do not have a Community dimension and which have their object or effect
the coordination of the competitive behaviour of undertakings that remain independent.

ænew

One or more Member States may request the Commission to examine any concentration as defined
1.
in Article 3 that does not have a Community dimension within the meaning of Article 1 but affects
competition within the territory of the Member State or States making the request and trade between
Member States.

Such a request shall be made at most within 20 working days of the date on which the concentration was
notified, or if no notification is required, otherwise made known to the Member State concerned.

The Commission shall inform the competent authorities of the Member States and the undertakings

2.
concerned of any request received pursuant to paragraph 1 without delay.

Any other Member State shall have the right to join the initial request within a period of 20 working days
from the date of its receipt by the Commission, during which time all national procedures relating to the
concentration shall be suspended.

Where a Member State concerned takes no decision as to whether or not to join the request within the
aforementioned period of 20 working days, it shall be deemed to have adopted a decision to join the
request.

3. Where all the Member States which would be competent to review the concentration under their
national legislation on competition, or at least three such Member States, have requested the Commission
to examine a concentration, the concentration shall be deemed to have a Community dimension and shall
be notified to the Commission in accordance with Article 4.

In all other cases, the Commission may, at the latest 10 working days after the expiry of the period
4.
set in paragraph 2, decide to examine, in accordance with a request received pursuant to paragraphs 1 or
2, any concentration which it regards as having significant cross-border effects. If the Commission does
not take a decision within this period, it shall be deemed to have adopted a decision to examine the
concentration.

(43) OJ 13, 21.2.1962, p. 204/62.
(44) OJ L 175, 23.7.1968, p. 1.
(45) OJ L 378, 31.12.1986, p. 4.
(46) OJ L 374, 31.12.1987, p. 1.

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The Commission shall inform the Member States and the undertakings concerned of its decision. It may
request the submission of a notification pursuant to Article 4.

The Member State or States having made the request shall not continue to apply their national legislation
on competition to the concentration.

(cid:1) 1310/97 Article 1, point 12(b) (adapted)

(cid:1) 1310/97 Article 1, point 12(c) (adapted)
æ new

Articles 2 æ, 4(2) to (3)æ, 5, 6, æand 8 to 21æ shall apply æwhere the Commission
(cid:2)5.(cid:2)4.
examines a concentration pursuant to paragraphs 3 or 4.æ Article 7 shall apply to the extent that the
concentration has not been put into effect (cid:2)implemented(cid:2) on the date on which the Commission
informs the parties (cid:2)undertakings concerned(cid:2) that a request has been made.

ænew

Where a notification pursuant to Article 4 is not required, the period set in Article 10(1) within which
proceedings may be initiated shall begin on the working day following that on which the Commission
informs the undertakings concerned that
to
paragraph 4.

it has decided to examine the concentration pursuant

(cid:1) 1310/97 Article 1, point 12(c)

ænew

6.
The Commission may inform one or several Member States that it considers a concentration within
the meaning of paragraph 1 to have significant cross-border effects. In that case, the Commission may
invite that Member State or those Member States to make a request pursuant to paragraph 1.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
(cid:1)1 1310/97 Article 1, point 13(a)
æ new

Article 23

Implementing provisions

(cid:2)1.(cid:2) The Commission shall have the power to adopt (cid:2)lay down(cid:2):

(cid:2)(a)(cid:2) implementing provisions concerning the form, content and other details of notifications æand

submissionsæ pursuant to Article 4, (cid:1)1,

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(cid:2)(b)

implementing provisions concerning(cid:2) Articles æ4(4), 4(5)æ 7, 9, 10 and 22(cid:1), and hearings
pursuant to Article 18,

(cid:1) 1310/97 Article 1, point 13(b) (adapted)
(cid:1)1 Corrigendum, OJ L 40, 13.2.1998, p. 17
æ new

(cid:2)(c)(cid:2) The Commission shall have the power to lay down the procedure (cid:1)1 and time limits for the

submission æand implementationæ of commitments pursuant to Articles 6(2) and 8(2),(cid:1)

(cid:2)(d)

implementing provisions concerning hearings pursuant to Article 18,(cid:2)

(e)

administrative fees for submission of notifications pursuant to Article 4(1).

ænew

The Commission shall publish guidance on the principles governing the assessment of concentrations

2.
pursuant to Article 2.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)

Article 24

Relations with non-member (cid:2)third(cid:2) countries

The Member States shall inform the Commission of any general difficulties encountered by their

1.
undertakings with concentrations as defined in Article 3 in a non-member (cid:2)third(cid:2) country.

2.
Initially not more than one year after the entry into force of this Regulation and thereafter period-
ically the Commission shall draw up a report examining the treatment accorded to Community under-
takings (cid:2)having their seat or their principal fields of activity in the Community,(cid:2) in the terms referred
to in paragraphs 3 and 4, as regards concentrations in non-member (cid:2)third(cid:2) countries. The
Commission shall submit those reports to the Council, together with any recommendations.

3. Whenever it appears to the Commission, either on the basis of the reports referred to in paragraph 2
or on the basis of other information, that a non-member (cid:2)third(cid:2) country does not grant Community
undertakings (cid:2)having their seat or their principal fields of activity in the Community,(cid:2) treatment
comparable to that granted by the Community to undertakings from that non-member country, the
Commission may submit proposals to the Council for an appropriate mandate for negotiation with a
for Community undertakings (cid:2)having their seat or their
view to obtaining comparable treatment
principal fields of activity in the Community(cid:2).

4. Measures taken under this Article shall comply with the obligations of the Community or of the
Member States, without prejudice to Article 234 (cid:2)307(cid:2) of the Treaty, under international agreements,
whether bilateral or multilateral.

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Article 25

ænew

Repeal

1. Without prejudice to Article 26(3), Council Regulations (EEC) No 4064/89 and (EC) No 1310/97 are
repealed with effect from 1 May 2004.

References to the repealed Regulations shall be construed as references to this Regulation and shall be

2.
read in accordance with the correlation table in the Annex.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13
(adapted)
æ new

(cid:2)Article 26(cid:2)

Entry into force (cid:2)and transitional provisions(cid:2)

This Regulation shall enter into force on æthe twentieth day following that of the publication of this

1.
Regulation in the Official Journal of the European Communitiesæ.

2.

This Regulation shall be applicable from 1 May 2004.

ænew

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

ænew

3.
Regulation (EEC) No 4064/89 shall continue to apply to any concentration which was the subject of
an agreement or announcement or where control was acquired within the meaning of Article 4(1) of that
Regulation before the date of application of this Regulation, subject,
in particular, to the provisions
governing applicability set out in Article 25(2) and (3) of Regulation (EEC) No 4064/89 and Article 2
of Regulation (EEC) No 1310/97.

(cid:1) Act of Accession of A, S and FIN Article 29
(adapted)

(cid:2)4.(cid:2)3.
As regards concentrations to which this Regulation applies by virtue of accession, the date of
accession shall be substituted for the date of entry into force (cid:2)application(cid:2) of this Regulation. The
provision of paragraph 2, second alternative, applies in the same way to proceedings initiated by a
competition authority of the new Member States or by the EFTA Surveillance Authority.

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This Regulation shall be binding in its entirety and directly applicable in all Member States.

(cid:1) Corrigendum, OJ L 257, 21.9.1990, p. 13

Done at Brussels, [. . .]

For the Council

The President

. . .

æ

ANNEX

Correlation table

Regulation (EEC) No 4064/89

This Regulation

Article 1(1), (2) and (3)

Article 1(4)

—

Article 1(5)

Article 2(1)

—

Article 2(2)

Article 2(3)

Article 2(4)

Article 3(1)

Article 3(2)

Article 3(3)

Article 3(4)

—

Article 3(5)

Article 4(1), first sentence

Article 4(1), second sentence

—

Article 4(2) and (3)

—

Article 5

Article 6(1)(a) and (b)

Article 6(1)(c)

Article 6(2) to (5)

Article 1(1), (2) and (3)

Article 1(4), first sentence

Article 1(4), second sentence

Article 1(5)

Article 2(1)

Article 2(2)

Article 2(3)

Article 2(4)

Article 2(5)

Article 3(1)

Article 3(5)

Article 3(2)

Article 3(3)

Article 3(4)

Article 3(6)

Article 4(1), first subparagraph

—

Article 4(1), second and third subparagraphs

Article 4(2) and (3)

Article 4(4) to (6)

Article 5

Article 6(1)(a) and (b)

Article 6(1)(c), first sentence

Article 6(2) to (5)

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Regulation (EEC) No 4064/89

This Regulation

Article 7(1)

Article 7(3)

Article 7(4)

—

Article 7(5)

Article 8(1)

—

Article 8(2), (3) and (4)

—

Article 8(5)

Article 8(6)

—

Article 9(1) to (9)

Article 9(10)

Article 10(1) and (2)

Article 10(3)

—

—

Article 7(1)

Article 7(2)

Article 7(3)

Article 7(4)

Article 7(5)

Article 6(1)(c), second sentence

Article 8(1)

Article 8(2), (3) and (4)

Article 8(5)

Article 8(6)

Article 8(7)

Article 8(8)

Article 9(1) to (9)

—

Article 10(1) and (2)

Article 10(3), first subparagraph, first sentence

Article 10(3), first subparagraph, second sentence

Article 10(3), second subparagraph

Article 10(4), (5) and (6)

Article 10(4), (5) and (6)

Article 11(1)

Article 11(2)

Article 11(3)

Article 11(4)

—

Article 11(5), first sentence

Article 11(5), second sentence

Article 11(6)

—

Article 12

Article 13(1), first subparagraph

Article 11(1)

—

Article 11(2)

Article 11(4), first sentence

Article 11(4), second and third sentences

—

Article 11(3)

Article 11(5)

Article 11(6) and (7)

Article 12

Article 13(1)

Article 13(1), second subparagraph, introductory words

Article 13(2), introductory words

Article 13(1), second subparagraph, point (a)

Article 13(1), second subparagraph, point (b)

Article 13(1), second subparagraph, point (c)

Article 13(1), second subparagraph, point (d)

—

Article 13(2)

Article 13(3)

Article 13(4)

Article 13(5)

Article 13(6), first sentence

Article 13(6), second sentence

—

Article 13(2)(b)

Article 13(2)(c)

Article 13(2)(e)

Article 13(2)(a)

Article 13(2)(d)

Article 13(3)

Article 13(4), first and second sentences

Article 13(4) third sentence

Article 13(5)

Article 13(6)

—

Article 13(7) and (8)

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Regulation (EEC) No 4064/89

This Regulation

Article 14(1) introductory words

Article 14(2)

—

Article 14(1)(a)

Article 14(1)(b)

Article 14(1)(c)

Article 14(1)(d)

—

Article 14(1) introductory words

—

Article 14(1)(a)

Article 14(1)(b) and (c)

Article 14(1)(d)

Article 14(1)(e) and (f)

Article 14(2), introductory words

Article 14(3), introductory words

Article 14(2)(a)

—

Article 14(3)(d)

Article 14(3)(a)

Article 14(2)(b) and (c)

Article 14(3)(b) and (c)

Article 14(3)

Article 14(4)

Article 14(4)

Article 14(5)

Article 15(1), introductory words

Article 15(1), introductory words

Article 15(1)(a) and (b)

Article 15(2), introductory words

Article 15(2)(a)

Article 15(2)(b)

Article 15(3)

Articles 16 to 20

Article 21(1)

Article 21(2)

Article 21(3)

Article 22(1)

Article 22(3)

—

Article 22(4)

Article 22(5)

—

Article 23

—

Article 24

—

Article 25(1)

—

Article 25(2)

Article 25(3)

—

Article 15(1)(a) and (b)

Article 15(2)

Article 15(1)(c)

Article 15(1)(d)

Article 15(3)

Articles 16 to 20

Article 21(2)

Article 21(3)

Article 21(4)

Article 21(1)

—

Article 22(1) to (4)

Article 22(5)

—

Article 22(6)

Article 23(1)

Article 23(2)

Article 24

Article 25

Article 26(1)

Article 26(2)

Article 26(3)

Article 26(4)

Annex