Commission Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC) No 139/2004Text with EEA relevance
Date: 2005-03-05
Institutions: European Commission
Subjects: European Commission, administration of the Institutions, administrative procedure, merger control

C 56/32

EN

Official Journal of the European Union

5.3.2005

Commission Notice on a simplified procedure for treatment of certain concentrations under
Council Regulation (EC) No 139/2004

(2005/C 56/04)

(Text with EEA relevance)

I. INTRODUCTION

II. CATEGORIES OF CONCENTRATIONS SUITABLE FOR

TREATMENT UNDER THE SIMPLIFIED PROCEDURE

1. This Notice sets out a simplified procedure under which
the Commission intends to treat certain concentrations
pursuant
to Council Regulation (EC) No 139/2004 of
20 January 2004, on the control of concentrations
between undertakings (the EC Merger Regulation) (1) on
the basis that they do not raise competition concerns.
This Notice replaces the Notice on a simplified procedure
for treatment of certain concentrations under Council
Regulation (EEC) No 4064/89 (2). The Commission's
experience gained in applying Council Regulation (EEC)
No 4064/89 of 21 December 1989 on the control of
concentrations between undertakings (3) has shown that
certain categories of notified concentrations are normally
cleared without having raised any substantive doubts,
provided that there were no special circumstances.

2. The purpose of this Notice is to set out the conditions
under which the Commission usually adopts a short-form
decision declaring a concentration compatible with the
common market pursuant to the simplified procedure and
to provide guidance in respect of the procedure itself.
When all necessary conditions set forth at point 5 of this
Notice are met and provided there are no special circum-
stances, the Commission adopts a short-form clearance
decision within 25 working days from the date of notifi-
cation, pursuant to Article 6(1)(b) of the EC Merger Regu-
lation (4).

Eligible concentrations

5. The Commission will apply the simplified procedure to

the following categories of concentrations:

(a) two or more undertakings acquire joint control of a
joint venture, provided that the joint venture has no,
or negligible, actual or foreseen activities within the
territory of the European Economic Area (EEA). Such
cases occur where:

(i) the turnover (5) of the joint venture and/or the
is less

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

the contributed activities (6)

(ii) the total value of assets (7) transferred to the joint
venture is less than EUR 100 million in the EEA
territory (8);

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

3. However,

if

the safeguards or exclusions set

forth at
points 6 to 11 of this Notice are applicable, the Commis-
sion may launch an investigation and/or adopt a full deci-
sion under the EC Merger Regulation.

(6) The expression ‘and/or’ refers to the variety of situations covered;

for example:
— in the case of a joint acquisition of a target company, the turn-
over to be taken into account is the turnover of this target (the
joint venture),

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

4. By following the procedure outlined in the following
the Commission aims to make Community

sections,
merger control more focused and effective.

(1) OJ L 24, 29.1.2004, p. 1.
(2) OJ C 217, 29.7.2000, p. 32.
(3) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990,

p. 13.

(4) The notification requirements are set out in Annexes I and II to
Commission Regulation (EC) No 802/2004 implementing Council
Regulation (EC) No 139/2004 on the control of concentrations
between undertakings.

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

includes:

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

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(b) two or more undertakings merge, or one or more
undertakings acquire sole or joint control of another
undertaking, provided that none of the parties to the
concentration are engaged in business activities in the
same product and geographical market, or
in a
product market which is upstream or downstream of
a product market in which any other party to the
concentration is engaged (9);

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

(i) two or more of the parties to the concentration
are engaged in business activities in the same
product and geographical market (horizontal rela-
tionships) provided that their combined market
share is less than 15 %; or

(ii) one or more of the parties to the concentration
are engaged in business activities in a product
market which is upstream or downstream of a
product market in which any other party to the
relation-
engaged
concentration
ships) (10), provided that none of their individual
or combined market shares is at either level 25 %
or more (11);

(vertical

is

is difficult

definition of such markets (12). The Commission retains
the discretion to take the ultimate decision on market
definition, basing its decision on an analysis of the facts of
to define the relevant
the case. Where it
markets or to determine the parties' market shares, the
Commission will not apply the simplified procedure. In
addition, to the extent that concentrations involve novel
legal issues of a general interest, the Commission would
normally abstain from adopting short-form decisions, and
would normally revert to a normal first phase merger
procedure.

7. While it can normally be assumed that concentrations
falling into the categories referred to in point 5 will not
raise serious doubts as to their compatibility with the
common market, there may nonetheless be certain situa-
tions, which exceptionally require a closer investigation
and/or a full decision. In such cases, the Commission may
revert to a normal first phase merger procedure.

(d) a party is to acquire sole control of an undertaking

over which it already has joint control.

Safeguards and exclusions

6. In assessing whether a concentration falls into one of the
categories referred to in point 5, the Commission will
ensure that all relevant circumstances are established with
sufficient clarity. Given that market definitions are likely
to be a key element in this assessment, the parties should
provide information on all plausible alternative market
definitions during the pre-notification phase (see point
15). Notifying parties are responsible for describing all
alternative relevant product and geographic markets on
which the notified concentration could have an impact
and for providing data and information relating to the

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

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

8. The following are indicative examples of types of cases
which may be excluded from the simplified procedure.
Certain types of concentrations may increase the parties'
market power, for instance by combining technological,
financial or other resources, even if the parties to the
concentration do not operate in the same market.
Concentrations where at least two parties to the concen-
tration are present
in closely related neighbouring
markets (13) may also be unsuitable for the simplified
procedure, in particular, where one or more of the parties
to the concentration holds individually a market share of
25 % or more in any product market in which there is no
horizontal or vertical relationship between the parties but
to a market where
which is a neighbouring market
another party is active.
it may not be
possible to determine the parties' precise market shares.
This is often the case when the parties operate in new or
little developed markets. Concentrations in markets with
high entry barriers, with a high degree of concentra-
tion (14) or other known competition problems may also
be unsuitable.

In other cases,

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

(13) Product markets are closely related neighbouring markets when the
products are complementary to each other or when they belong to
a range of products that is generally purchased by the same set of
customers for the same end use.

(14) See Guidelines on the assessment of horizontal mergers under the
Council Regulation on the control of concentrations between
undertakings OJ C 31, 5.2.2004, p. 5, points 14-21.

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9. The Commission's experience to date has shown that a
change from joint
to sole control may exceptionally
require closer investigation and/or a full decision. A par-
ticular competition concern could arise in circumstances
where the former joint venture is integrated into the
group or network of
its remaining single controlling
shareholder, whereby the disciplining constraints exercised
by the potentially diverging incentives of the different
controlling shareholders are removed and its strategic
market position could be strengthened. For example, in a
scenario in which undertaking A and undertaking B
jointly control a joint venture C, a concentration pursuant
to which A acquires sole control of C may give rise to
competition concerns in circumstances in which C is a
direct competitor of A and where C and A will hold a
substantial combined market position and where this
removes a degree of
independence previously held by
C (15).
In cases where such scenarios require a closer
analysis, the Commission may revert to a normal first
phase merger procedure (16).

10. The Commission may also revert to a normal first phase
merger procedure where neither the Commission nor the
competent authorities of Member States have reviewed
the prior acquisition of joint control of the joint venture
in question.

11. Furthermore, the Commission may revert to a normal first
phase merger procedure where an issue of coordination as
referred to in Article 2(4) of the EC Merger Regulation
arises.

12. If a Member State expresses substantiated concerns about
the notified concentration within 15 working days of
receipt of the copy of the notification, or if a third party
expresses substantiated concerns within the time-limit laid
down for such comments, the Commission will adopt a
full decision. The time-limits set out in Article 10(1) of
the EC Merger Regulation apply.

Referral requests

13. The simplified procedure will not be applied if a Member
State requests the referral of a notified concentration

pursuant to Article 9 of the EC Merger Regulation or if
the Commission accepts a request
from one or more
Member States for referral of a notified concentration
pursuant to Article 22 of the EC Merger Regulation.

Pre-notification referrals at the request of the notifying parties

14. Subject to the safeguards and exclusions set out in this
Notice, the Commission may apply the simplified proce-
dure to concentrations where:

(i) following a reasoned submission pursuant to Article
4(4) of the EC Merger Regulation, the Commission
decides not to refer the case to a Member State; or

(ii) following a reasoned submission pursuant to Article
4(5) of the EC Merger Regulation the case is referred
to the Commission.

III. PROCEDURAL PROVISIONS

Pre-notification contacts

15. The Commission has

found pre-notification contacts
between notifying parties and the Commission beneficial
even in seemingly unproblematic cases (17). The Commis-
sion's experience of the simplified procedure has shown
that candidate cases for the simplified procedure may
raise complex issues for instance, of market definition (see
point 6) which should preferably be resolved prior to
notification. Such contacts allow the Commission and the
notifying parties to determine the precise amount of infor-
mation to be provided in a notification. Pre-notification
contacts should be initiated at least two weeks prior to
the expected date of notification. Notifying parties are
therefore advised to engage in pre-notification contacts,
particularly where they request the Commission to waive
full-form notification in accordance with Article 3(1) of
Commission Regulation (EC) No 802/2004 of 7 April
2004 implementing Council Regulation (EC) No 139/
2004 on the control of concentrations between undertak-
ings (18) on the grounds that the operation to be notified
will not raise competition concerns.

(15) Case No. IV/M.1328 KLM/Martinair, XXIXth Report on Competi-

tion Policy 1999 – SEC(2000) 720 final, points 165-166.

(16) Case No COMP/M.2908 Deutsche Post/DHL (II), Decision of

18.9.2002.

(17) See DG Competition Best Practices on the conduct of EC merger

control proceedings available at:
http://europa.eu.int/comm/competition/mergers/legislation/regu-
lation/best_practices.pdf
(18) OJ L 133, 30.4.2004, p. 1.

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Publication of the fact of notification

16. The information to be published in the Official Journal of
the European Union upon receipt of a notification (19) will
include the names of the parties to the concentration,
their country of origin, the nature of the concentration
and the economic sectors involved, as well as an indica-
tion that, on the basis of the information provided by the
the concentration may qualify for a
notifying party,
simplified procedure. Interested parties will then have the
opportunity to submit observations,
in particular on
circumstances which might require an investigation.

Short-form decision

17. If the Commission is satisfied that the concentration fulfils
the criteria for the simplified procedure (see point 5), it
will normally issue a short-form decision. This includes
appropriate cases not giving rise to any competition
concerns where it receives a full form notification. The
concentration will thus be declared compatible with the
common market, within 25 working days from the date
of notification, pursuant to Article 10(1) and (6) of the EC
Merger Regulation. The Commission will endeavour to
issue a short-form decision as
soon as practicable
following expiry of the 15 working day period during
which Member States may request referral of a notified
concentration pursuant to Article 9 of the EC Merger
Regulation. However, in the period leading up to the 25
working day deadline, the option of reverting to a normal

first phase merger procedure and thus launching investi-
gations and/or adopting a full decision remains open to
the Commission, should it judge such action appropriate
in the case in question.

Publication of the short-form decision

18. The Commission will publish a notice of the fact of the
decision in the Official Journal of the European Union as it
does for full clearance decisions. The public version of the
decision will be made available on DG Competition's
Internet website for a limited period. The short-form deci-
sion will contain the information about
the notified
concentration published in the Official Journal at the time
of notification (names of the parties,
their country of
origin, nature of the concentration and economic sectors
the concentration is
concerned) and a statement
declared compatible with the common market because it
falls within one or more of the categories described in this
Notice, with the applicable category(ies) being explicitly
identified.

that

IV. ANCILLARY RESTRICTIONS

19. The simplified procedure is not suited to cases in which
the undertakings concerned request an express assessment
of restrictions which are directly related to, and necessary
for, the implementation of the concentration.

(19) Article 4(3) of the EC Merger Regulation.