COMMISSION STAFF WORKING DOCUMENT Accompanying the document WHITE PAPER Towards more effective EU merger control
Date: 2014-07-09
Institutions: European Commission
Subjects: administrative formalities, industrial restructuring, merger, merger control, simplification of formalities













EUR-Lex - 52014SC0221 - EN











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52014SC0221

COMMISSION STAFF WORKING DOCUMENT Accompanying the document WHITE PAPER Towards more effective EU merger control /* SWD/2014/0221 final */









COMMISSION STAFF WORKING DOCUMENT
Accompanying the document
WHITE PAPER
Towards more effective EU merger
control

Table of content
1............ Introduction. 6
2............ Current state of EU
merger control and outlook. 6
2.1......... The 2004 reform.. 7
2.2......... Substantive assessment 8
2.2.1...... Application of the SIEC
test 8
2.2.2...... Role of quantitative and
qualitative evidence. 9
2.2.3...... Overview of the theories of
harm investigated by the Commission. 10
2.2.4...... Efficiencies and innovation. 11
2.3......... Merger control during
the financial and economic crisis. 12
2.4......... Remedies. 13
2.5......... Outlook: Fostering the
level playing field, cooperation and convergence. 14
3............ Acquisition of
non-controlling minority shareholdings. 17
3.1......... Why does the Commission
want to subject acquisitions of non-controlling minority shareholdings to
merger control rules?. 17
3.1.1...... Theories of harm.. 18
3.1.2...... Articles 101 and 102 may
not be suitable to deal effectively with anti-competitive minority
shareholdings  22
3.2......... Design options for
controlling the acquisition of minority shareholdings. 23
3.2.1...... Principles for a system for
the control of minority shareholdings at an EU level 23
3.2.2...... Possible alternatives. 24
3.2.3...... The preferred system:
Targeted transparency system.. 26
3.2.4...... Details and options within
the targeted transparency system.. 27
3.2.4.1... Jurisdiction. 28
3.2.4.2... Procedural aspects. 31
3.2.4.3... Substantive Assessment 33
3.3......... Conclusion on minority
shareholdings. 35
4............ Case referrals. 35
4.1......... Objectives and guiding
principles for case referrals. 35
4.2......... The proposed measures
and policy choices in the area of case referrals. 37
4.2.1...... Pre-notification referral
to the Commission: Article 4(5) of the Merger Regulation. 37
4.2.1.1... Introduction. 37
4.2.1.2... Proposed amendments. 38
4.2.1.3... Some further possible
improvement(s) 38
4.2.2...... Post-notification referral
to the Commission: Article 22 of the Merger Regulation. 39
4.2.2.1... Introduction. 39
4.2.2.2... Proposed amendments. 41
4.2.2.3... Proposed procedural measures
to improve cooperation amongst NCAs and with the Commission in cross-border or
multi-jurisdictional cases. 41
4.3......... Other referrals. 43
4.3.1...... Pre-notification referral
to one or more Member States (Article 4(4)): clarify the substantive threshold
for referrals. 43
4.3.2...... Post-notification referral
to one or more Member States (Article 9): modify the deadline to reject a
referral request 45
5............ Miscellaneous. 46
5.1......... Procedural
simplification. 46
5.1.1...... Introduction. 46
5.1.2...... Extra-EEA Joint Ventures. 47
5.1.3...... Exchange of confidential
information between Commission and Member States. 47
5.1.4...... Further simplification by
extending the transparency system to certain types of simplified merger cases  47
5.2......... Other issues. 47
5.2.1...... Notification of share
transactions outside the stock market (Article 4(1)) 47
5.2.2...... Clarification of
methodology for turnover calculation of joint ventures. 48
5.2.3...... Time limits. 48
5.2.4...... Unwinding of concentrations
with regard to minority shareholdings (Article 8(4)) 49
5.2.5...... Staggered transactions
under Article 5(2)(2) of the Merger Regulation. 49
5.2.6...... Qualification of
"parking transactions". 50
5.2.7...... Effective sanctions against
use of confidential information obtained during merger proceedings  50
5.2.8...... Commission's power to
revoke decisions in case of referral based on incorrect or misleading
information  51
6............ Conclusions and next
steps. 51
Annex I: Flowcharts of the Referral Procedures. 55
Annex II: Overview of transactions for which an Article
22 referral has been      accepted since 2004  57
                                                                                               
1.           Introduction
1.           The present Staff Working
Document accompanies the White Paper "Towards more effective EU merger
control" ("the White Paper"). It elaborates on the
considerations underlying the Commission's analysis of the current functioning
of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of
concentrations between undertakings[1]
(the "Merger Regulation") as well as the
proposals for possible amendments of that Regulation put forward in the White
Paper.
2.           The main areas for the
reform of the Merger Regulation have already been discussed in general terms in
the Staff Working Document "Towards more effective EU merger control"[2] ("the Consultation
Paper") which was published by the Commission on 25 June 2013. The
Consultation Paper sought comments from stakeholders primarily on two main
issues:
-  
  whether to apply merger control rules to deal
with the anti-competitive effects resulting from certain acquisitions of
non-controlling minority shareholdings; and
-  
  the effectiveness of the system of transferring
merger cases from Member States to the Commission both before and after
notification.
3.           The Commission received around
70 submissions in response to the Consultation Paper. In addition, DG
Competition staff has engaged in an intensive dialogue both with Member States – particularly national competition authorities ("NCAs") – and
private stakeholders regarding the questions raised in the Consultation Paper.
In this Staff Working Document, the Commission takes into account the feedback
received during the public consultation for developing these areas further. 
4.           The first purpose of this
Staff Working Document is to look more broadly at the development of the
substantive assessment the Commission applies to mergers, as well as how to
level the playing field and foster cooperation and convergence between the
Commission and NCAs in the field of merger control. Second, it aims to explain
how to undertake the main reforms in more detail than the White Paper.[3] 
2.           Current state of EU merger control and outlook
5.           With the Council’s
adoption of Regulation (EEC) No 4064/89[4]
(the original Merger Regulation), a comprehensive system of ex-ante
merger control was introduced into European Union competition law. Under this
system, mergers between companies meeting certain turnover thresholds must be
notified in advance to the Commission, which uses a competition-based test to
decide whether they are compatible with the internal market. Since its
adoption, merger control has developed into one of the main pillars of EU
competition law and its basic features are well proven.
6.           EU merger control makes an
important contribution to the functioning of the internal market, both by
providing a uniform set of rules for corporate restructuring and by ensuring
that competition and consumers are not harmed by excessive concentrations of
market power. As one might expect in an increasingly globalised economy, EU
merger control increasingly focusses on cross-border cases and those which have
an impact on the European economy. The following graph shows the significant
increase in the percentage of EU merger control cases involving non-EU firms in
recent years and the corresponding decrease in cases involving firms from the
same Member State, which overall only account for a minor percentage of cases.
While the latter cases may also have pan-European importance[5], this trend is
consistent with the Commission focussing on mergers that have an EEA-wide or
global impact, while the NCAs tend to focus more on mergers within national
dimension. 
2.1.        The
2004 reform 
7.           The current Merger
Regulation is the result of an overhaul of Council Regulation (EEC) No 4064/89
and was preceded by a Commission Green Paper published in 2001.[6] 
8.           The 2004 reform
introduced, among other things, the "significant impediment of effective
competition" ("SIEC") test as the relevant criterion for
assessing mergers (replacing the previous "creation or strengthening of a
dominant position" test).  
9.           The Merger Regulation
continued to apply only to concentrations, i.e. those transactions involving
acquisitions of control by undertakings over other undertakings or parts of
them. However, experience gained since 2004 shows that acquisitions of equity
stakes below the level of control, which are not captured by the Merger
Regulation, may in some instances lead to structural changes in the market.
Section 3 below discusses whether the Merger Regulation should be extended to
cover such transactions.
10.         The 2004 reform also made
it possible to refer cases from Member States to the Commission and vice versa
before notification, as well as for several Member States to jointly refer a
case to the Commission after notification. The positive impact of these
developments as well as some shortcomings is set out in Section 4. 
2.2.        Substantive
assessment
2.2.1.     Application of the SIEC test
11.         As set out above, the EU
merger control system saw its most substantial modification in 2004 when the
SIEC test was introduced.[7]
While the new test maintained that SIECs most prominently arise through the
creation or strengthening of a dominant position, thereby building upon the
precedents of the Commission and the case law of the Court, it closed a
possible enforcement "gap" by ensuring that mergers resulting in
"non-coordinated effects" in oligopolistic situations where the
merged entity would not have become dominant were captured by the Merger
Regulation.[8]
12.         Under the previous Merger
Regulation, there was legal uncertainty as to whether the dominance test would
capture mergers with potentially anti-competitive non-coordinated effects where
the merged entity does not become dominant. In an oligopoly with only a few
firms (none of which are individually dominant), and where collusion is
unlikely, economic theory suggests that merging firms might be incentivised to
increase their prices unilaterally, even if they do not become dominant. The
remaining market participants would benefit from the reduction in competitive
pressure resulting from the merger and might also increase their prices,
leading to an overall price increase in the market. This outcome is particularly
likely in differentiated product markets.
13.         The new test was designed
to address the so-called “gap” cases: mergers which allow firms to unilaterally
raise prices but do not create or reinforce a single or collective dominant
position. The Commission has examined numerous "gap" cases since
2004. T-Mobile Austria/tele.ring[9]
was the first and was followed by many others.[10]

14.         In order to increase the
transparency and predictability of the Commission's merger analysis under the
new test, the Commission published a set of Guidelines on the assessment of
horizontal mergers ("the Horizontal Merger Guidelines").[11] These Guidelines were
complemented by the adoption in 2008 of the Guidelines on the assessment of
non-horizontal mergers ("the Non-Horizontal Merger Guidelines").[12] The Non-Horizontal
Guidelines defined a structured approach based on the SIEC test relating to
concerns of input and customer foreclosure.[13]

15.         Guidance is also provided
by the EU Courts, as Commission decisions in merger cases are subject to
demanding judicial review.[14]
2.2.2.     Role
of quantitative and qualitative evidence 
16.         The introduction of the
SIEC test highlighted that, beyond the analysis of structural effects of the
merger, the Commission also assesses market characteristics (i.e. product
substitutability, capacity constraints, elimination of an important competitive
force, hindrance to competitors' expansion etc.) and whether competitive
constraints are eliminated by the merger. 
17.         On one hand, the Commission
has found in certain cases that competition concerns were absent despite the
high combined market shares of the parties, due to existing competitive
constraints which rendered these mergers unlikely to negatively impact on
competition and thus on consumers. In some other cases, however, the Commission
identified non-coordinated effects even though the merged company's market
share was similar to or even lower than that of its competitors.
18.         The Commission has
strengthened its economic analysis for complex mergers through a variety of
data and empirical techniques. The techniques used depend on data availability
and range from descriptive statistics to merger simulation with demand
estimation or direct evaluations of competitive constraints.[15] The Commission considers
quantitative evidence (namely economic and numerical) to be important in assessing
merger cases, but believes that it should always be integrated into the context
of the more qualitative evidence on file (such as minutes of interviews with
market participants, replies by customers and competitors to requests for
information and internal documents of the parties). These two types of evidence
are complementary to, rather than substitutes for, each other, as can be seen
in the example below:
In case COMP/M.6203 Western Digital/Hitachi,[16] the Commission looked
at a proposed acquisition in the market for hard disk drives
(""HDDs").[17] 
The transaction would have reduced the number of competitors active
in the HHD industry from 4 to 3 and from 3 to 2 in the market for 3.5-inch hard
disk drives. The Commission's assessment of the impact of this transaction
relied on two types of data: (i) customer submissions and other qualitative
evidence that showed that security of supply was important for HDD customers;
(ii) quantitative evidence in the form of commercial data on transactions between
the parties and their customers (as well as those of their main competitors),
and bidding data showing that most customers multi-source their HDD supplies.
By analysing the combined quantitative and qualitative evidence, the Commission
concluded that the presence of a third supplier mattered and that removing Hitachi from the market would harm consumers. 
2.2.3.     Overview of the theories of harm investigated by the
Commission 
19.         Over the last three years,
horizontal non-coordinated effects cases have accounted for about 90% of
intervention cases in the Commission’s work on merger cases.[18] Coordinated effects cases, on the other hand, have been very rare,
the last one being ABF/GBI[19] from 2008.
20.         There have also been
relatively few vertical and conglomerate cases, which account for just 7.5% and
2.5% of interventions over the last three years, respectively. Challenging cases
with vertical concerns include TomTom/Tele Atlas and Nokia/NAVTEQ[20]. Although conglomerate cases are much rarer, they may also raise
interesting competition issues, as in Intel/McAfee[21].
2.2.4.     Efficiencies
and innovation
21.         The Commission's Horizontal
Merger Guidelines explain that "it is possible that efficiencies brought
about by a merger counteract the effects on competition and in particular the
potential harm to consumers that it might otherwise have".[22]  Therefore, in
assessing a merger’s impact on competition, the Commission makes "an
overall competitive assessment" that includes any likely merger-specific efficiencies
to the extent that "they are likely to enhance the ability and incentive
of the merged entity to act pro-competitively for the benefit of
consumers."[23]
This approach is an integrated one in which possible anti-competitive concerns
are weighed against efficiencies. 
22.         In particular, the
Commission will examine the claimed efficiencies with respect to whether (i)
the efficiencies are verifiable, (ii) the efficiencies are merger-specific and
(iii) the benefits of the efficiencies are likely to be passed on to consumers.[24] The Guidelines specify that the notifying
parties must provide, in a timely manner, the information necessary to demonstrate
that the claimed efficiencies meet these criteria.
23.         Accordingly, assessing efficiencies
has been an integral part of merger analysis for the past ten years.  
Case COMP/M.6570 - UPS/TNT Express[25] is an example of a
case where the evaluation of efficiencies was instrumental in the competitive
assessment of the proposed merger.[26] The Commission partially recognised the
efficiencies claimed by the parties[27]
and it was able to quantify the recognised efficiencies and the expected price
rise. By including efficiencies in its overall analysis of the effects of the
merger, the Commission was able to exclude anticompetitive effects for a number
of countries. The recognised efficiencies were not sufficient to offset the
expected negative effects in all countries, however. Since the parties did not
offer sufficient remedies for the countries where competition concerns remained,
the transaction was prohibited.
24.         Innovation is widely
recognised as a main driver for competitiveness and growth in the economy. Merger
enforcement can foster innovation by protecting competition, which leads to
better market outcomes not only in terms of lower prices and increased output
but also in terms of better product quality, variety and innovation. In Intel/MacAfee,
for example, the remedies helped preserve innovation in security software and
ensure that competitors were not foreclosed.[28]
2.3.        Merger control during the financial and economic crisis
25.         The financial and economic
crises showed that the EU Merger Regulation provides all the necessary tools to
apply effective merger control even in times of economic downturn. While the
Commission has taken due account of the market changes resulting from the
crisis, it has resisted pressure for a more lenient approach to EU merger control.
By preserving competitive market structures during the economic downturn, the
Commission set the foundation for a sustainable subsequent upturn. 
26.         In the particularly
sensitive banking sector, for instance, competition concerns in credit card markets
were dispelled by a set of remedies on the BNP Paribas/Fortis merger.[29] The Commission made
its decision well before the deadline and granted a partial derogation from the
suspension obligation, thereby making sure that BNP Paribas could give timely and
necessary support to the acquired Fortis assets in order to keep them
operational. Similarly, in Fortis/ABN Amro,[30] the Commission ensured
full implementation of the remedies it accepted immediately before the
financial crisis in order to preserve competition in the banking market for
Small and Medium Enterprises ("SMEs") in the Netherlands after the
recovery.
27.         When justified, the
Commission uses the tools at its disposal to account for the deteriorating
situation of the parties during its assessment. In particular, the Commission
has done this by thoroughly analysing failing firm arguments[31] and by developing a
refined analysis of the framework for the competitive assessment.[32] In this analysis, the
Commission undertakes a thorough examination of whether the deterioration of
the competitive structure following the merger would have occurred despite the
merger.[33]
This can be illustrated by the case below: 
In case COMP/M.6360 - Nynas/Harburg[34], the Commission cleared the proposed acquisition by Sweden’s Nynas AB of certain Shell
Deutschland Oil GmbH refinery assets located in Hamburg/Harburg (Germany). The Commission’s analysis showed that, in the absence of the notified
transaction, the Harburg refinery assets would most likely exit the market,
which would have been much worse for the competitive structure of the relevant
markets than the reasonably foreseeable effects of the concentration. The case
is a good illustration of how the Commission compares the competitive
conditions that prevail without the concentration with the conditions that
would result from the concentration.
2.4.        Remedies
28.         If the Commission
identifies competition concerns when examining a notified merger, the parties
may offer commitments in order to remedy those concerns. If the Commission
finds that the commitments address the competition concerns and are sufficient
to ensure the merger’s compatibility with the internal market, it shall
authorise the transaction subject to those commitments. Such authorisation
renders the commitments binding on the parties.[35] 
29.         Commitments are crucial instruments
of merger control, since the large majority of cases that raise competition
concerns are cleared with commitments rather than prohibited. Indeed, only 24
transactions have been prohibited since 1990. The overall percentage of mergers
where the Commission intervened in order to maintain effective competition in
the single market[36]
has been stable at around 5% to 8% of all notified mergers over the last years.
While this ratio may fluctuate depending on the nature of the transactions
notified to the Commission, it stability also indicates the maturity of the
system. 
30.         The Commission further
revised its practice regarding remedies with its 2008 Remedies Notice.[37] The revised Remedies
Notice[38]
explains that a divestiture commitment is the best way to eliminate competition
concerns and is also the "benchmark" against which the suitability of
other proposed remedies should be assessed. The new Notice aims at a more
standardised approach towards remedies and focuses more closely on their
effectiveness. In particular, it clarifies and strengthens:
-  
  the requirements for the scope of the
divestiture, 
-  
  the requirements for suitable purchasers,
-  
  the hold-separate obligations of the parties
pending the divestiture, the conditions for so-called carve-out divestitures
(where the divestment business does not constitute an existing stand-alone
business), and the supervisory role of the monitoring trustee.
Case COMP/M.5658 - Unilever/Sara Lee[39]
illustrates the Commission's approach to structural/non-structural remedies. In
order to alleviate the Commission's concerns, the merging parties offered several
non-structural remedies that the Commission did not consider to be effective,
including re-branding in certain Member States. Finally, the commitment to
divest Sara Lee's Sanex brand and related business in Europe was accepted as this
offered a clear and workable remedy, sufficient to restore competition in all
markets where the Commission had concerns. 
31.         Complex remedies involve
risks that need to be anticipated in advance. Untimely remedies may render an
authorisation impossible, especially when the purchaser's identity is critical and
"fix-it-first" solutions are necessary.[40] However, recent cases
also show that the Commission is flexible in discussing complex remedies such
as up-front buyers or specific purchaser requirements if they are workable and
supported by sufficient safeguards.[41]

2.5.        Outlook: Fostering the level playing field, cooperation
and convergence
32.         The
Merger Regulation has truly succeeded at levelling the playing field and providing
one-stop-shop scrutiny for mergers with an EU dimension. However, Member States
also play important roles in merger control enforcement in the European Union.
Between 2001 and 2007, the combined NCAs dealt with nearly 4,000 merger cases
per year on average. A truly functional system for scrutinizing mergers
throughout the EU requires efficient work-sharing, cooperation, and convergence
between the Commission and the 27 Member State exercising merger control.[42]
33.         Diverging merger rules and
practices create administrative burdens on businesses and may also impact the
internal market. In the consultation carried out in preparation for a 2009
report from the Commission to the Council on the operation of the Merger
Regulation ("the 2009 Report"),[43] and in subsequent debates, stakeholders expressed concerns
regarding the administrative burden and risk of diverging decisions of
competition authorities across Europe. Stakeholders stated that they would
welcome more convergence in this respect. The administrative burden is
particularly apparent in cases with cross-border effects, as these sometimes require
clearance from several NCAs. In such cases, diverging rules may lead to higher
cost for businesses and, in exceptional cases, inconsistent outcomes.
34.         Although NCAs ordinarily
apply Articles 101 and 102 of the Treaty on the Functioning of the European
Union (“TFEU”) in conjunction with their national laws, the EU Merger Regulation
has been a model for many national merger control regimes. For this reason, there
is basic legislative convergence across jurisdictions, particularly regarding
the substantive test for assessing transactions.[44] 
35.         In addition, some
convergence has been achieved on substantive and jurisdictional issues through
increased cooperation between NCAs and the Commission. In 2010, a working group
of the Commission and the NCAs ("Merger Working Group") was
established to foster cooperation and convergence among the NCAs of the 27
Member States (with merger control regimes) within the current institutional
and legal framework. In 2011, the group adopted a set of Best Practices for
merger cooperation between NCAs.[45] There is, in general, close practical cooperation between the
Commission and NCAs, as well as between the NCAs themselves. 
36.         Despite the convergence
achieved to date, the harmonisation is incomplete. Among the notable points of
divergence are national laws that allow a government to overrule an NCA's negative
competition-based merger decision (applying national merger control law) on the
basis of other public-interest considerations. Although such interventions are
generally rare, such regimes exist in France, Germany, Italy, Spain and the   United Kingdom, for example.
37.         While most NCAs now apply
the SIEC or a similar test in their substantive assessments, the ways in which
such tests are further developed in guidance documents (such as the
Commission's Horizontal and Non-Horizontal Guidelines) and the ways in which
they are applied and interpreted by competition authorities (and ultimately reviewing
courts) are equally important. Divergence in this respect may impact the substantive
assessment and cause inconsistent outcomes. The same is true with respect to
remedies, as Member States do not always follow the same approach.
38.         The Member States' rules
and practices regarding procedure, such as time frames for review and
stand-still rules, may also differ, leading to uncertainty and imposing
additional costs on companies. 
39.         Therefore, the White Paper
concludes that greater convergence between the Commission and NCAs, and among
the NCAs, is important to create a truly level playing field and avoid
inconsistent outcomes[46], even short of an initiative of legislative harmonisation, as
recently also called for by several NCAs. On one hand, the Commission and Member States should continue to align their respective practices by increasing cooperation
and sharing experience, using all available tools and forums such as the Merger
Working Group. On the other, NCAs should intensify their cooperation on
individual cases. 
40.         NCAs can avoid inconsistent
outcomes in any event by referring cases to the Commission. Stakeholders,
including NCAs, have therefore proposed that parties should be able to request
a referral if only two Member States have jurisdiction. In any event, if NCAs
believe that the Commission is best situated to avoid divergent outcomes, they
can refer cases to the Commission under Article 22. The reform proposals on
Article 22, set out in the White Paper and explained further in Section 4.2.2
below, suggest setting up a system based on an early information notice. Such a
system should facilitate practical cooperation amongst the NCAs in cross-border
and multi-jurisdictional cases, even if no referral ultimately takes place. By
the same token, the proposal set out in Section 5.1.3 would make practical
cooperation easier, which would improve the exchange of case-related
information between the Commission and NCAs.
41.         Beyond such voluntary
"soft convergence", Professor Monti's report "A New Strategy for
the Single Market" (2010)[47] referred to the possibility of extending the use of the substantive
EU merger control rules. He concluded that there is an interest in moving
towards a greater convergence for the substantive assessment of mergers and the
review process at national level. He also concluded that the objective of
ensuring a level playing field would require NCAs to apply the substantive EU
merger control rules at the national level too when mergers have cross-border
effects. More recently, a report by the French NCA raised similar proposals.[48]
42.         A move towards a system
similar to the current enforcement framework of Articles 101 and 102 TFEU could
be appropriate for transactions in the Single Market with cross-border effects,
which are increasing in number. It could further reduce the risk that NCAs
dealing with the same case will reach conflicting outcomes and could simplify
the administrative burden for parties in multi-jurisdictional filings. However,
such a move to a system where both the Commission and the NCAs apply the same
EU substantive law ("EU merger control area") would require a more
ambitious modification of the current merger control system within the European
Union. 
3.           Acquisition of non-controlling
minority shareholdings 
3.1.        Why does the Commission want to subject acquisitions of
non-controlling minority shareholdings to merger control rules? 
43.         Effective and efficient competition
policy requires appropriate and well-designed methods of tackling all sources
of harm to competition and thus to consumers. The following subsections address
the problems concerning non-controlling minority shareholdings.
44.         As is stands, the Merger Regulation
only applies to “concentrations”, which are defined as acquisitions of control
by one or more person(s) or undertaking(s) over one or more other undertakings
or parts of undertakings. For example, a firm acquiring a majority stake in
another firm and two firms creating a joint venture both qualify as
concentrations. If certain thresholds are complied with, such concentrations
must be notified to the Commission in advance and may only be implemented once
the Commission has cleared them.
45.         When the acquisition of a
minority shareholding is unrelated to acquisition of control, the Commission
cannot investigate or intervene against it. Only a merger party’s pre-existing
minority shareholdings in a competitor or a company active in an upstream or
downstream market can be taken into account by the Commission in the context of
a notified merger concerning a separate acquisition of control. If the minority
shareholding is acquired after the Commission examines the acquisition of
control, however, the Commission has no competence under the Merger Regulation
to address possible competition concerns, even though they may be the same. 
46.         The experiences of the
Commission, the Member States, and third countries, as well as economic
research[49]
all show that in some instances, the acquisition of a non-controlling minority
shareholding, such as one firm acquiring a 20% shareholding in a competitor,
can harm competition and thus consumers (see below for some examples). Such
minority shareholdings can lead to a SIEC which cannot be adequately addressed
under the Merger Regulation in its current form. 
47.         In
the European Union, Austria, Germany and the United Kingdom currently have
national merger control rules that give them the competence to review
acquisitions of non-controlling minority shareholdings.[50] In all three Member
States, the NCAs have intervened against acquisitions of minority shareholdings
that raised competition concerns. Likewise, many jurisdictions outside the EU,
such as Canada, the United States, and Japan, examine structural links under
merger control rules. In addition, in both the public consultation and recent media
reports, further recent acquisitions of minority shareholdings have emerged where
the shareholding was acquired in a competitor or a vertically related company.[51]
3.1.1.     Theories
of harm
48.         Several types of competition
concerns can arise when a minority shareholding is acquired. These concerns are
based on similar theories of harm to those relevant for acquisitions of control
and, in general, require that the transaction significantly increase market
power.[52]
49.         The
economic effects of minority shareholdings on competition in the market depend
on the size of the minority shareholding, the resulting financial interests,
and the corporate rights conferred by them. Whereas financial interests refer
to the acquiring firm's entitlement to a share of the target firm’s profits,
corporate rights refer to the ability to influence the acquired firm's commercial
decisions. 
50.         Acquiring a minority
shareholding in a competitor may lead to non-coordinated anti-competitive
effects because such a shareholding may increase the acquirer's incentive and
ability to unilaterally raise prices or restrict output. Intuitively, if firms
have financial stakes in their competitors' profits, they may decide to 'internalise'
the positive effects of their own output reductions or price increases on their
competitors' profits. This may occur when the minority shareholding is
"passive", meaning its holder has no influence on the target firm's
decisions. 
51.         These potential anti-competitive
effects may also materialize when a minority shareholding is "active",
meaning its holder may have influence over the target firm's decisions. This
can occur when the acquirer gains influence over the outcome of special
resolutions in shareholders' meetings, which are needed to approve certain
strategies related to significant investments, product lines, geographical
scope, raising capital, engaging in mergers and acquisitions, and advertising,
among others. In this respect, economic theory predicts that the acquiring firm
may influence the target firm to increase its prices because the acquiring firm
fully benefits from the positive externalities of the competitor’s price
increase but bears only part of the costs, depending on the level of its
financial ownership rights. If the target company is ultimately forced to stop
competing with the acquirer, the situation would be akin to a full merger but
without any of the cost-saving efficiencies that a merger can generate.
52.         The Commission and the Member States have found that competition concerns are more likely to be serious when a
minority shareholding grants some degree of influence over the target firm's
decisions, as in the case studies described below.
53.         Siemens/VA Tech
demonstrated both the "financial incentive" theory of harm and risk
created when an undertaking holds influence and voting rights in a competitor.
In that case, the Commission concluded that information and voting rights
granted to Siemens through the prior acquisition of a minority shareholding in
SMS Demag would lead to reduced competition in the metal plant-building market,
where VA Tech was active, because Siemens would have received privileged access
to information about SMS Demag's participation in plant building tenders.
Case M.3653 - Siemens/VA Tech[53] involved the
acquisition of Austrian engineering group VA Tech by Siemens. There was a horizontal
overlap between SMS Demag, a company in which Siemens held a 28%
(non-controlling) minority shareholding, and one of VA Tech's subsidiaries.
Certain information, consultation and voting rights were granted to Siemens by
SMS Demag's shareholders' agreement. The Commission found that the merger would
reduce competition in the metal plant-building market due to a combination of
financial incentives and information rights stemming from Siemens’ 28% share in
SMS Demag. 
In order to resolve the Commission’s concerns, Siemens proposed, and
the Commission accepted, a number of commitments that ensured Siemens would
dispose of the minority shareholding and not use its position in SMS Demag to
obtain any strategic information regarding the latter's business policy until
the sale was finalised.
54.         Competition concerns may
also arise when the financial interests of the acquiring company in the target
company are limited but the acquirer can use its minority shareholding position
to limit the competitive strategies available to the target firm, thereby
weakening it as a competitive force.  
55.         Competition concerns
regarding the ability of minority shareholders to influence the competitive
strategies of target companies were at the core of
several recent European and UK minority shareholding cases, of which the
Ryanair/Aer Lingus cases may be the best known example.
Ryanair had already acquired a significant minority shareholding in
the share capital of its competitor, Aer Lingus, when
it notified the Commission of its proposal to acquire control in 2006. The
Commission prohibited the acquisition due to serious concerns that it would
hurt competition by creating or strengthening Ryanair's dominant position on a
number of routes, but Ryanair maintained a minority shareholding
of 29.4% in Aer Lingus.[54]
A second attempt by Ryanair to acquire control over Aer Lingus was also blocked
by the Commission in February 2013.[55]
The Merger Regulation did not allow the Commission to order Ryanair
to divest the shareholding it already held in Aer Lingus, as the General Court
confirmed.[56]
However, Aer Lingus argued Ryanair's minority shareholding would have
significant negative effects on competition between the two carriers, as
Ryanair would use the minority shareholding to weaken Aer Lingus's ability to
compete. 
The United Kingdom's Competition Commission examined Ryanair's
minority shareholding in Aer Lingus on the basis of the UK merger control rules, which allow for a review of such minority interests. In its
findings issued on 28 August 2013,[57]
the UK Competition Commission stated that the shareholding gives Ryanair the
ability to influence the commercial policy and strategy of Aer Lingus, its main
competitor on flight routes between the United Kingdom and Ireland. In particular, it was likely to impede or prevent Aer Lingus from being acquired
by, or combining with, another airline. The UK Competition Commission was also
concerned that Ryanair’s minority shareholding was likely to affect Aer
Lingus’s commercial policy and strategy by allowing Ryanair to block special
resolutions, restricting Aer Lingus’s ability to issue shares and raise capital,
and to limit Aer Lingus’s ability to effectively manage its portfolio of
Heathrow slots. Ryanair was required to reduce its 29.8% stake in Aer Lingus
down to 5% and was obligated not to seek or accept board representation or
acquire further shares. 
56.         In the Ryanair/Aer
Lingus case, the UK Competition Authorities had no jurisdiction to assess cross-border
effects of the transaction resulting from overlaps between the parties for
flights between Dublin and European destinations other than those in the UK. The European Commission could have assessed those if the Merger Regulation had covered
acquisitions of non-controlling minority stakes. Since this is not the case,
those effects remained unscrutinised. This illustrates that there are cases
with dimensions beyond a single Member State for which the Commission would be
better situated to investigate the impacts on competition. 
57.         Competition concerns
stemming from a minority shareholder’s ability to influence the target
company’s competitive strategies were also the focus of
the Toshiba/Westinghouse case. That case also demonstrates that
competition concerns arising from a minority shareholding can be alleviated not
only by a full divestiture, but also by non-structural remedies regarding
voting rights and access to information.
Case M.4153 - Toshiba/Westinghouse[58] concerned the
acquisition of Westinghouse, active in the nuclear sector, by Toshiba. Toshiba
already held a pre-existing minority shareholding in Global Nuclear Fuels
("GNF"), a joint venture active in the market for nuclear fuel
assemblies. Accordingly, the notified transaction would have led to an overlap
between Westinghouse's activities and Toshiba's non-controlling shareholding in
the joint venture. 
Toshiba held 24.5% of the voting rights in GNF, which was one of the
two most important competitors to Westinghouse (alongside French company Areva)
in both the EEA and world-wide markets for the design and manufacture of
nuclear fuel assemblies. In addition, Toshiba had a number of veto rights that
it could use to prevent GNF from expansions into fields in which they would
compete with Toshiba/Westinghouse, as well as certain information rights and
representation in various boards of GNF and its subsidiaries. 
The Commission found that the transaction could lead to a possible
elimination of competition. In particular, the Commission found that Toshiba
could use its veto rights in GNF and its subsidiaries to prevent GNF from expanding
into fields in which they would compete with Toshiba/Westinghouse. Furthermore,
through its information rights and its representation on various Boards of GNF
and its subsidiaries, Toshiba would have the opportunity to obtain sensitive
confidential information which would help Toshiba make GNF’s expansion more
difficult. 
The concern was addressed through remedies in the joint venture. In
particular, Toshiba had to relinquish all board and management representation
in GNF, its veto rights under the joint venture agreement, and all rights to
obtain any confidential information. Toshiba was not prevented from receiving
strictly limited information, however.
58.         Horizontal minority shareholdings
may also lead to coordinated anti-competitive effects by increasing market
participants' ability and incentives to tacitly or explicitly collude in order
to achieve supra-competitive profits. The acquisition of a minority shareholding
in a competitor may facilitate such effects by offering the acquiring firm a
privileged into the competitor’s commercial activities. It may also make the
threat of future retaliation more credible and severe should a minority
shareholder deviate from the collusive behaviour, as the acquiring firm may use
its rights in an obstructive or hostile way to limit the competitive strategies
of the "target" company. Both effects will impact market
participants' ability and incentives to coordinate.[59] Concerns about potential coordinated effects
were at the heart of VEBA/VIAG.
Case M.1673 - VEBA/VIAG[60]
concerned the merger between German energy operators VEBA and VIAG, which was
examined by the Commission in parallel to the merger between RWE and VEW
(assessed by the German Bundeskartellamt). Both mergers together would have resulted
in a dominant duopoly on the German wholesale electricity market. In this
context, the Commission also examined the complex web of interconnected (controlling
and non-controlling) minority shareholdings that VEBA/VIAG and RWE/VEW held in
regional and local electricity suppliers.
These various controlling and non-controlling shareholdings between
the duopoly and virtually all other wholesale supply companies could, in
combination with high market shares, increase the duopoly's market power and
lead to coordinated behaviour. To remedy the situation, the parties committed
to divest several of their controlling and non-controlling minority
shareholdings, among other things.
59.         Finally, non-horizontal
transactions may raise competition concerns related to input foreclosure.
Minority shareholdings may make input foreclosure more likely because the
acquiring company only internalises a part, rather than all, of the target
firm’s profits. In some cases, the risk of foreclosure created by a minority
shareholding is actually higher the risk from a fully-integrated firm.
60.         Input foreclosure was a
concern in IPIC/MAN Ferrostaal.[61]

The acquisition of MAN Ferrostaal (a subsidiary of MAN) by International
Petroleum Investment Company ("IPIC") was approved by the Commission
in 2009 subject to certain conditions.  The
Commission found that the transaction would give rise to a foreclosure risk
regarding the only existing non-proprietary technology for melamine production
in the world. In fact, IPIC's subsidiary AMI was, together with DSM, the major
producer of melamine, whereas MAN Ferrostaal had a 30% minority shareholding in
Eurotecnica, the supplier of the input technology. Although a minority shareholding,
this 30% participation gave MAN Ferrostaal material influence over
Eurotecnica's melamine licensing and engineering businesses, since the
shareholders' agreement foresaw a number of decisions to be taken by
super-majority. Furthermore, the shareholder agreement gave all shareholders extensive
information rights. The Commission found that these conditions were likely to
have a substantial deterrent effect on the licensing practice for current and
future customers of Eurotecnica, given that the voluminous information
exchanged between a prospective client and Eurotecnica might end up in the
hands of these clients’ competitors, namely AMI. 
In addition, a foreclosure strategy towards DSM or potential new
entrants for the production of melamine, a billion euro European market, could
be expected. The Commission also found that, due to the high concentration of
the melamine market (two main producers with symmetrical market shares – AMI
and DSM) and its transparent nature (published contract prices, well-known
costs), there was increased risk of coordination between the two market leaders,
AMI and DSM. 
To remedy the situation, MAN Ferrostaal committed to divest its
entire minority shareholding in Eurotecnica.
3.1.2.     Articles 101 and 102 may not be suitable to deal
effectively with anti-competitive minority shareholdings
61.         In the public consultation,
a number of stakeholders, such as businesses, business associations, and law
firms, questioned whether the limited number of problematic transactions justifies
broadly extending the Merger Regulation’s scope. Some stakeholders suggested
that the rules on restrictive agreements and abuse of a dominant position, set
out in Articles 101 and 102 TFEU, respectively, were adequate substitutes
because they could capture many of the problematic transactions. 
62.         However, the Commission's
ability to use Article 101 and Article 102 TFEU to intervene against
anti-competitive minority shareholdings may be limited. Regarding Article 101,
it is not clear whether acquiring a minority shareholding would constitute an
“agreement” having the object or effect of restricting competition within the meaning
of Article 101 TFEU in all cases. Particularly regarding acquisitions of a
series of shares via the stock exchange, the application of Article 101 TFEU
might present a number of conceptual difficulties such as whether there is an
agreement. If there is, the Commission would still have to determine whether
such an agreement would have the object or effect of restricting competition
and, if so, which purchase agreement specifically does so. The same is probably
true for the articles of association of a company, the purpose of which is
generally to determine the corporate governance of the company and the
relationship between it and its shareholders. Regarding Article 102 TFEU, this
provision requires that the undertaking acquiring a minority shareholding
already hold a dominant position and that the acquisition would constitute an
abuse of that dominant position. The circumstances under which the Commission
can intervene against competitive harm arising from acquisitions of minority
shareholdings are therefore quite narrow.[62]

63.         As explained above, the so-called
"theories of harm" relevant for a competition assessment of minority
shareholdings are similar to those arising from acquisitions of control (i.e. horizontal,
non-coordinated, and vertical effects) because they target structural changes
in the market. Therefore, the SIEC test laid down in the Merger Regulation
appears much more appropriate than the tests laid down in Article 101 or 102
TFEU. 
64.         Second, while some
respondents to the public consultation claim that Articles 101 and 102 TFEU
should be applied, they also emphasise the importance of legal certainty for
companies making investments. The procedures laid down in Council Regulation (EC)
No. 1/2003[63]
for enforcing Articles 101 and 102 TFEU essentially require companies to
self-assess whether they comply with the competition rules and give the
Commission and NCAs the power to intervene ex-post against any anti-competitive
conduct without any time limitation. Such a procedure appears to provide less legal
certainty for undertakings and therefore is less appropriate for examining the
effect of lasting acquisitions of minority shareholdings than the procedural
framework of the Merger Regulation. Under the latter, the Commission must make
a decision within a short, legally binding deadline.
65.         In sum, the Commission sees
the need to extend the Merger Regulation to the acquisition of non-controlling
minority shareholdings and that it is appropriate to apply the substantive test
of the Merger Regulation. While it is expected that only a limited number of
cases would be investigated, past cases have shown that this initiative would
be a relevant enforcement activity. 
3.2.        Design options for
controlling the acquisition of minority shareholdings
66.         When designing the system for
the control of minority shareholdings, it is useful to establish the parameters
for a system of controlling minority shareholdings at EU level. This will help
in answering two fundamental questions: (1) which cases should fall under the
Commission's competence and (2) which procedure is best suited to meet the
Commission’s aims.
3.2.1.     Principles for a system for
the control of minority shareholdings at an EU level
67.         A system for controlling minority shareholdings at the
EU level should strike the right balance between the following three principles.
68.         First and foremost,
considering the overall aim of preventing harm to consumers and the theories of
harm discussed above, the system should capture the potentially problematic cases.

69.         Secondly, it should avoid
unnecessary and disproportionate administrative burdens, primarily for
companies, but also for the Commission and NCAs. In the public consultation, stakeholders
were concerned that the Commission would propose a far-reaching system with a
high administrative burden on business even though few transactions would be
problematic. Stakeholders often pointed out that most minority shareholdings
are perfectly innocuous, such as those acquired for investment purposes or during
recapitalisation or restructuring of ailing companies by financial
institutions. Indiscriminately subjecting such shareholdings to mandatory
review under merger control rules might go beyond what is needed to prevent
anti-competitive transactions. 
70.         While these first two
principles are important for a system of controlling minority shareholdings in
any jurisdiction, a third principle is important for a system for the control
of minority shareholdings at the EU level. Namely, the system should fit with
the existing merger control systems at EU and national level. 
71.         The NCAs maintained that
any system for controlling minority shareholdings at the EU level should be
consistent with national systems. This is important given that the Member
States that currently control the acquisition of minority shareholdings would
lose the competence to review transactions above the turnover thresholds of the
Merger Regulation.[64]
Some NCAs were also concerned that a high level of protection of competition
would only be achieved if the Commission is at least informed about the fact
that a transaction is envisaged and takes a clear position on whether it will
investigate that transaction. This would allow Member States to request a
referral in case the Commission were to decide not to investigate a case. 
72.         A system for controlling
minority shareholdings should also fit smoothly into the existing legal and
procedural framework of the Merger Regulation in order to avoid unnecessarily
complicating EU merger control. It can accomplish this without necessarily
extending the notification system.
3.2.2.     Possible
alternatives
73.         Regarding the possible
design of the procedure, the Consultation Paper put forward three procedural
options for the control of minority shareholdings. These three options were (i)
a notification system; (ii) a self-assessment system; and (iii) a transparency
system (as a hybrid option) [65]: 
              Under the
notification system, the current system of ex-ante merger control would be
extended to acquisitions of non-controlling minority shareholdings under
certain conditions. All acquisitions of shareholdings above a given "safe
harbour" would have to be notified in advance and could only be
implemented after the Commission had issued a clearance decision. The same
procedural deadlines as for concentrations would also apply to minority
shareholdings. 
              Under the
self-assessment system, the parties would not be obliged to notify the
acquisition of a minority shareholding in advance and could proceed without
prior approval of the Commission. The Commission
would have to rely on its own market intelligence or complaints to become aware
of transactions that may raise competition issues and would then be free to
select the potentially problematic cases (except for acquisitions below a
"safe harbour") and investigate them. 
              Under the transparency
system, the parties would be required to submit an information notice informing
the Commission about certain types of transactions. Submitting an information
notice would allow the Commission to decide whether the transaction warrants an
investigation and allow Member States to consider whether to make a request for
a referral. 
74.         The cases that fall within
the Commission’s competence should be closely linked to the theories of harm
discussed above. Based on these theories, only transactions between competitors
or vertically related companies are potentially anti-competitive. Amongst
those, only transactions that result in the acquisition of some sort of
influence over the competitive behaviour of the "target" company or
which create an incentive for the acquiring company to adapt its competitive
behaviour (for example, in view of the knowledge gained about the target
company through the minority shareholding) should be captured. Further details
and criteria regarding the identification of potentially anti-competitive
transactions are discussed below.  
75.         The scope of the Commission's jurisdiction relates directly
to what procedure is appropriate and adequate. For example, if the
Commission has jurisdiction over all acquisitions of minority shareholdings
above a certain threshold, a pre-merger notification system would create a
heavy burden on businesses because unproblematic mergers would also be covered.
Giving the Commission jurisdiction over all acquisitions of minority shareholdings
above a certain threshold might therefore be more appropriate under a
self-assessment system, where the Commission is free to investigate
transactions on its own initiative. On the other hand, the administrative
burden imposed by a notification or transparency system would be much lower if
the Commission's jurisdiction were limited to only potentially problematic
transactions. The relationship between the design of the procedural system and
the scope of jurisdiction arose frequently in responses to the public consultation.

3.2.3.     The preferred system: Targeted transparency system 
76.         Taking into account the
three principles articulated above and the considerations regarding scope of
jurisdiction and procedure, the Commission proposes targeting the new system at
only certain types of minority shareholdings. From the outset, the Commission's
competence under the Merger Regulation would be limited certain potentially
anti-competitive transactions, which would limit the number of cases to be
assessed under the new system.  
77.         The Commission must
therefore define the group of potentially anti-competitive acquisitions of
minority shareholdings to be captured. In view of the theories of harm
discussed in section 3.1.1, only transactions between competitors or vertically
related companies seem to raise competition concerns. Furthermore, a certain
minimum level of shareholding and/or certain rights attaching to that
shareholding, which grant the acquirer some influence over the target or access
to information, should be required. 
78.         In view of the theories of harm
discussed above, the Commission proposes that only transactions with the
following criteria fall within the Commission's jurisdiction and require an
information notice. These transactions would presumptively create a
"competitively significant link":
-  
  The transaction concerns the acquisition of a
minority shareholding in a competitor or vertically related company ("competitively
significant link").
-  
  The minority shareholding creates a significant
link between the two companies. Such a link would be presumed if the post-transaction
minority shareholding is above a certain threshold (e.g. around 20%), as such
shareholdings generally confer certain corporate rights and change financial
incentives. Alternatively, if the minority shareholding is between 5% and 20%,
then certain rights would need to attach to the shareholding in order for the
link to be considered competitively significant. Such rights might include the
right to nominate a member of the board, exert influence, or obtain access to
the target’s competitively sensitive information. 
79.         Transactions involving
acquisitions of minority shareholdings below 5% would not be covered by the new
competence, but might still be captured by the Member States' merger control
regimes or, in case they are part of wider cooperation agreements, by Article
101 TFEU. For pre-existing minority shareholdings analysed in the context of a
concentration, full divesture may still be necessary to ensure a remedy’s effectiveness
if the Commission finds that the minority shareholding affects the incentives
to compete.
80.         Considering the three
principles set out in Section 3.2.1, the targeted transparency system is the
preferred option for the following reasons: 
81.         First, under the targeted
transparency system, potentially harmful transactions would likely come to the
attention of the Commission and Member States while innocuous transactions,
such as those entered into for investment purposes only, would not. The targeted
transparency system therefore limits cases to those that are strictly necessary
to prevent harm to consumers. 
82.         Second, the targeted
transparency system limits the administrative burden by weeding out the
unproblematic cases and limiting the amount of information to be submitted to
the Commission at the initial stage. Contrary to the targeted notification
system, the parties would not have to submit a notification in each and every
case. Only if the Commission were to decide to investigate a case would the
parties have to submit full notifications, and only then would the Commission
have to issue a decision following its investigation. The targeted transparency
system is therefore administratively lighter for both companies and the
Commission. 
83.         Finally, the targeted
transparency system would fit with the existing systems for controlling
minority shareholdings on a national level. The notice would inform the Member
States of relevant transactions and would allow them to request a referral. The
Commission would take into account the reduced level of information available
to Member States when assessing whether the criteria for a referral, pursuant
to Article 9, are met. Under the transparency system, a 15 working-day waiting
period should also be considered. Such a waiting period would align with the
deadline under Article 9 for a Member State referral request following a full
notification.  Such a system would ensure that the Member States with
notification systems and stand-still obligations do not face transactions that
have already been implemented before they start their investigations. Under a
self-assessment system, the Member States would not be informed of transactions
and, unless a transaction were voluntarily notified before implementation, the
member states could not possibly request a referral before the transaction is
implemented. 
84.         The Commission therefore
believes that an amendment to the Merger Regulation to cover acquisitions of
non-controlling minority shareholdings should be based on a "targeted
transparency system", as outlined in this section. The system should also
permit voluntary notifications, which many stakeholders advocated for during
the public consultation in order to obtain legal certainty. In such cases, the
Commission would investigate the case and issue a decision.
85.         The
Commission estimates that roughly 20-30 minority shareholding cases per year
will meet the above criteria of the targeted transparency system as well as the
turnover thresholds of the Merger Regulation. This number corresponds to
roughly 7-10% of the merger cases currently examined by the Commission each
year.[66]
3.2.4.     Details and options
within the targeted transparency system
86.         The following section sets
out details and possible policy choices within the targeted transparency system
regarding jurisdiction, procedure, and substantive assessment.
3.2.4.1.  Jurisdiction
              a)
Criteria for transactions creating a "competitively
significant link"
87.         Based on the theories of
harm discussed above, the Commission suggests the following criteria for
determining whether a transaction creates a "competitively significant
link" and therefore should fall under the Commission's jurisdiction: 
88.         First, the minority
shareholding must be acquired in a competitor or in a directly
vertically-related company. For the purpose of establishing the Commission's
competence, the concept of "competitor" would not require a detailed
antitrust analysis of the relevant markets. Rather, it would take into account whether
the companies are active in the same sector and the same geographic area and, based
on the self-assessment of the parties, whether the acquirer has a competitive
relationship to the target.[67]

89.         Second, the link would be
considered significant if: (1) the acquired minority shareholding is above a
certain thresholds (e.g. around 20% of the total shares capital); or (2) the
minority shareholding is above 5%, but below the 20% threshold, provided that
additional rights are present. 
90.         The following
considerations apply to the threshold levels. First, national corporate law
often foresees that shareholding conferring certain levels of voting rights
enable the shareholders to block special resolutions. This right allows the
shareholder to influence the target company’s strategy.[68] The percentage level
of voting rights that enables the shareholder to block special resolutions
differs between Member States and depends on the corporate form, but is
frequently set at 25%.[69]
A shareholding at around this level very often results in blocking and other
corporate rights, so a 25% shareholding should be the upper limit for a
threshold. (The threshold could also be reached on the basis of a
"de-facto" blocking minority due to low attendance rates at the
annual shareholder meetings, as described below.) 
91.         Second, higher shareholdings
more strongly shift financial incentives, so the rights attached to such
shareholdings may be less important in assessing whether a minority
shareholding is potentially anti-competitive. In fact, according to economic
theory financial incentives that may affect the incentives for firms to compete
can be considered significant at a threshold significantly lower than 25%.[70] On this basis, the
Commission should consider approximately 20% as an appropriate starting point
for analysing financial incentives.[71]

92.         If the minority
shareholding is above 5% but below 20%, additional elements would have to be
present in order for a minority shareholding to qualify as a competitively
significant link. For example, a shareholding could qualify if it results in a
"de-facto" blocking minority[72]
due to the low attendance level at shareholder meetings or because the
shareholder agreement grants additional rights. Other elements would typically
include (i) a seat on the board (or the agreement or likelihood to be elected
to the board) and (ii) information rights giving access to commercially
sensitive information. When establishing the "additional elements", typically
rights stemming from the shareholding itself, corporate law, or the shareholder
agreement are important for determining whether the shareholdings create
competitively significant links. 
93.         Meanwhile, experience shows
that competitive harm is very unlikely for shareholdings of 5% or less. On the
other hand, shareholdings above 5% that are linked to special rights such as
board seats make competitive harm possible because the shareholding goes beyond
mere financial participation for investment purposes. Note, for instance, that
the U.S. exempts acquisitions of voting securities of 10% or less from the
filing obligation if the acquisition is made "solely for the purpose of
investment"[73].
The exemption does not apply if the acquirer is a competitor or can nominate a
candidate for the board of directors, for example. With this in mind, a safe
harbour of 5% seems appropriate, especially as further conditions would exist
up to the 20% threshold (e.g. additional rights, acquisition of a stake in a
competitor or vertically related company). 
94.         Other agreements, such as
cooperation agreements, R&D agreements, joint production agreements, joint
purchasing agreement, long-term exclusive supply agreements, off-take
agreements, sometimes coincide with the acquisition of a minority shareholding.
Where a minority shareholding is only acquired in support of broader
cooperation, the Commission suggests excluding these agreements from the
assessment if a transaction creates a competitively significant link and falls
within the Commission's jurisdiction. However, in line with current practice
for concentrations, these agreements could be assessed in the competitive
assessment of the transaction (see also below in the context of Article 101
TFEU, para. 115 et seq.). Distinguishing between the rights linked to the
shareholding itself and commercial agreements should increase legal certainty
in determining whether or not a minority shareholding results in a
competitively significant link.  
              b)
Legislative implementation
95.         With respect to the
practical implementation, there are several possible ways to transpose this
targeted approach into legislation. 
96.         The text of the Merger
Regulation could define the Commission’s competence to cover only acquisitions
of minority shareholdings which create a "competitively significant
link". The criteria of a "competitively significant link" (namely
that the competence covers only minority shareholdings in competitors and
vertically related companies and that the transaction results in a cumulative minority
shareholding of around 20% and above, or a minority shareholding between 5% and
20% if additional rights are present) would either be set forth in the articles
of the Merger Regulation, the recitals, and/or a guidance document. 
97.         Another option to implement
the Commission’s proposals is to state, in the regulation itself, that the
Commission is competent for acquisitions of minority shareholdings above 5% if
further criteria, to be specified by the Commission in an implementing
regulation, are fulfilled. Spelling the criteria out in an implementing
regulation would give the Commission the ability to fine-tune the criteria, in
consultation with the Member States, after gaining some experiences and without
requiring a full amendment of the Merger Regulation. 
              c)
Amendment of the banking clause, Article 3(5)(a) of the Merger Regulation
98.         Extending the scope of the
Merger Regulation to non-controlling minority shareholdings might also require
adapting the banking clause (Article 3(5)(a)). Article 3(5)(a) currently allows
financial institutions to acquire a controlling shareholding in other companies
under certain circumstances without having to notify the transaction.[74] 
99.         In the public consultation,
some stakeholders voiced concerns that the suggested reform should not endanger
restructuring transactions. For example, in case of debt-for-equity swaps,
business decisions might have to be made very quickly and any waiting period or
stand-still obligation would delay and harm such transactions.
100.       The Commission can avoid
this by adapting Article 3(5) of the Merger Regulation to specify that
restructuring transactions, carried out by financial institutions in the normal
course of business and for a limited period of time, would not create
competitively significant links. 
101.       Application of such an amended
banking clause would likely be limited, as the targeted approach only captures
transactions between competitors or vertically related companies in the first
place. However, the amendment would offer the concerned parties reassurance. 
3.2.4.2.  Procedural aspects
102.       The targeted transparency
notice could broadly look like the following: 
-  
  The parties self-assess whether, in their
view, the transaction creates a competitively significant link according to the
criteria described above. 
-  
  If it does, they submit an information notice
to the Commission. Alternatively, if the parties want legal certainty, they can
also voluntarily notify the transaction to the Commission under the normal
procedure. 
-  
  If the parties submit an information notice,
the Commission decides on the basis of the notice whether the case merits a
Phase I investigation. The Commission would publish a notice of the transaction
in order to allow complainants to come forward and would also inform the Member
States of the notice to allow them to consider a referral request.
-  
  If the Commission decides that the case merits
an investigation, it would request a full notification from the parties. This
would initiate the Phase I procedure as applicable for concentrations. If the
Commission does not request a notification, the parties can close the
transaction either immediately or after a short waiting period (discussed
further below) and the Commission will not issue a decision on the case. 
103.       Some aspects of the
procedure are discussed in more detail below. 
              a) Scope of the
information notice
104.       The information notice
should contain information about the parties, the turnover of the undertakings
concerned, a description of the transaction, the level of shareholding before
and after the transaction and any rights attached to the minority shareholding
if it is below 20%. In addition, the notice would have to contain some
essential market information about the parties and their main competitors or
internal documents that allow for an initial competitive assessment.[75] While the
Commission is aware that reviewing documents and delineating and identifying
antitrust markets can be cumbersome for companies, this information appears to
be necessary for the Commission to decide if a transaction warrants further
investigation. It is also necessary to allow the Member States to determine
whether to request a referral of the case. 
              b)
Waiting period 
105.       In order to make the
targeted transparency system fully compatible with the Member States' merger control
systems, the Commission should consider imposing a waiting period once an
information notice has been submitted during which the parties would not be
able to close the transaction. The Member States could request the referral of
a case within this period. Such a waiting period could last 15 working days,
for example. Given the current deadlines for Member States to request a referral,
the same period of 15 working days seems appropriate for the acquisition of
minority shareholdings. The Commission could request a notification from the
parties during this period if the case appears prima facie problematic,
in which case the normal procedure would start and the stand-still obligation
would apply in order to ensure the effectiveness of a later decision. If the
Commission did not request a notification within the 15 working days following
the receipt of the information notice and no referral request occurs, the
parties would be free to close the transaction. 
106.       As with concentrations, the
parties would be able to request a derogation from the waiting
period/stand-still obligation under Article 7(3) of the Merger Regulation. 
107.       Introduction of a waiting
period might also require adapting the wording of Article 7(2) of the Merger
Regulation for the acquisition of minority shareholdings. Namely, the wording
should be changed to allow acquisitions of shares via a stock exchange without
observing the three week waiting period. Such an acquisition would not
constitute an early implementation if, during the three week waiting period,
the voting rights are not exercised. Such an application of Article 7(2) of the
Merger Regulation would take into account a concern expressed by stakeholders
in the public consultation that reforms should not harm the liquidity of the
stock markets. 
              c) Prescription period 
108.       In order to allow the
business community to come forward with complaints, the Commission should also
be free to take up a case within a limited period of time after the transaction
has been implemented. Such a period would also reduce the risk of the
Commission starting precautionary investigations during the initial waiting
period so as not to be blocked from investigating a transaction in case
complainants come forward later on.
109.       The responses to the public consultation regarding an
appropriate prescription period ranged from periods of 10 working days to 5
years.[76]
Many respondents referred to the limitation period of 4 months under the UK system as an appropriate period, while several other respondents suggested 6 to 12 and
up to 24 months. In view of the responses, the Commission suggests a limitation
period of four or six months which runs upon submission of the information
notice. 
110.       If the Commission decides to
open an investigation during this period and the transaction is already
(partially) implemented, the Commission suggests validating all steps already
taken. However, the regular stand-still obligation would apply for any further
implementing measures and the Commission would have the power to issue interim
measures, such as a hold separate order[77],
to ensure the effectiveness of a decision under Articles 6 and 8 of the Merger
Regulation.  
              d)
"Staggered" acquisitions
111.       In "staggered"
transactions (i.e. transactions where an initial minority stake is acquired and
increased in subsequent, independent transactions) the question arises whether
an information notice would have to be submitted every time that a stake is
increased and/or the underlying rights change. One possibility is to require
submission of an information notice only the first time a competitively
significant link is established (when the acquirer acquirers a 20% minority
stake or a stake between 5% and 20% plus the additional rights specified
above). Subsequent increases would not trigger a new information notices unless
they result in acquisitions of control, which would trigger notifications under
the existing rules. 
112.       On the other hand, the
Commission can conceive of a system in which each increase in a minority stake and
change in the underlying rights triggers a new information notice.
Alternatively, in cases where the acquirer has previously informed the
Commission of a "5% + rights" acquisition, the Commission could
consider requiring subsequent information once the acquirer passes the 20%
threshold, as such an increase could change of the type or level of influence
held over the target. 
113.       The second and third options
present a "safer", more conservative framework, as each change would
be newly assessed, but they could also result in significant additional
administrative burden on companies. Given that the Commission would only be
competent if the minority shareholding represents a competitively significant
link anyway, it suggests the first option.
3.2.4.3.  Substantive Assessment 
              a)
Substantive test
114.       The Commission suggests also
applying the substantive test for assessing concentrations to acquisitions of
minority shareholdings. The test requires determining whether a transaction
would lead to a significant impediment of effective competition in the internal
market or a substantive part of it (the "SIEC" test). Under the SIEC
test, the theories of harms could be tailored to the specific circumstances of
each minority shareholding case. Examples of the possible theories of harm are
set out under Section 3.1.1. 
              b) Relationship between
Article 101 TFEU and the assessment under the Merger Regulation
115.       For
the substantive assessment of minority shareholding acquisitions, a clearance
decision under the Merger Regulation needs to clarify the extent to which it covers
any further agreements between the acquirer and the target at the same time the
minority stake is acquired, but which go beyond the acquisition of minority
shareholding. Such agreements might, for example, concern further cooperation
between the parties. 
116.       The Commission suggests
that, in line with the current practice, such agreements remain subject to
assessment under Articles 101 and 102 TFEU unless they constitute ancillary
restraints. Ancillary restraints are directly related to and necessary for the
implementation of the transaction.[78]
Any merger assessments would therefore be limited to competition issues
specific to the structural link created by the acquisition of the minority
stake. They would not prejudice any future antitrust investigations. All
additional agreements between the parties would remain subject to Articles 101
and 102 TFEU. This means that only agreements which are deemed to be "ancillary
restraints" are covered by the clearance decision. 
117.       In addition, in line with
the Commission's practice under the Merger Regulation, the Commission can take
those agreements into account when assessing the transaction under merger
control rules. The Commission has to assess the current market conditions and
their likely development in the future and, for example, any long-term
contracts form part of this market reality.[79]
118.       As with ancillary
restraints, it is for the parties to assess, with the help of the Commission's
relevant guidance notice[80],
whether any agreement fulfils the relevant criteria, unless they explicitly
request that the Commission do so because of novel or unresolved questions
giving rise to genuine uncertainty.[81]
              c)
Acquisition of non-controlling minority shareholdings and joint ventures
119.       As the Consultation Paper
already suggested, acquisitions of minority stakes in  joint ventures, which
perform on a lasting basis all the functions of an autonomous economic entity
(so-called "full function" joint venture, Article 3(4) of the Merger
Regulation), should be covered by the new competence. 
120.       Under the revised Merger
Regulation, joint ventures which are not jointly controlled but rather have
several shareholders with minority stakes who make decisions through changing
majorities would also fall under the new competence as long as the joint
venture is full-function in nature. 
121.       Procedurally, the
acquisitions of minority shareholdings by several companies in a joint venture
would constitute a single transaction if the share purchase agreements are
conditional upon each other or if they are concluded at the same time.[82] Where a joint venture
is newly established and two of the shareholders acquire joint control
(triggering a notification) while a third shareholder acquires a minority stake
without control (triggering only an information notice), the third shareholder
should also join the notification if the operation constitutes a single
transaction. This ensures that the transaction assessment is not artificially
divided.
              d)
Creeping transactions and relevant framework of analysis
122.       In cases where minority
shareholdings are slowly built up ("creeping transaction"), the
relevant framework for assessing the acquisition would use the status quo ante
(i.e. the status before the transaction triggering the notice) as the
benchmark. This is in line with the current stance of the Merger Regulation for
concentrations. 
3.3.        Conclusion on minority shareholdings
123.       A targeted transparency
system, as set out in this section, seems well suited to capture potentially
problematic transactions and thus prevent consumer harm, which can result from
acquisitions of minority shareholding and which the Commission is not
adequately equipped to address under the current Merger Regulation. In
addition, a system like the one suggested above would not disproportionately
burden business, as only a limited number of cases would require the filing of
an information notice to the Commission. The introduction of an information
notice instead of a full notification further reduces the burden on businesses
to collect the necessary information. 
124.       Although
the design of such a system for controlling minority shareholdings poses a
number of challenges regarding the proper procedure, jurisdictional scope, and
substantive assessment, none of these challenges seems insurmountable.
Implementing such a system needs some fine-tuning to ensure a smooth
integration into the existing procedures for merger control at the EU level,
but also at the Member State level. 
4.           Case referrals 
4.1.        Objectives
and guiding principles for case referrals
125.       More effective and efficient
EU merger control implies a reduction in the administrative burden for existing
procedures and simplification of existing procedures, particularly for case
referrals between Member States and the Commission.
126.       The Merger Regulation uses a
bright-line test based on certain turnover thresholds to distinguish
concentrations with an EU dimension from those subject to national merger
scrutiny. The turnover thresholds include the so-called "two-thirds
rule", leaving cases to Member States' jurisdiction where all the
undertakings concerned achieve two thirds of their turnover in a single Member
State. The jurisdictional thresholds are also complemented by a case referral
system that allows re-allocation of individual cases when the bright-line test
fails as a proxy for the European or cross-border dimension of a merger.
127.       The 2004 reform of the
Merger Regulation allowed Member States to refer cases to the Commission and
vice versa before notification. It also allowed several Member States to
jointly refer a case to the Commission after notification. The 2009 Report
highlighted that, although the rules on jurisdiction and referrals laid down in
the Merger Regulation worked well overall, there remained room for improvement.[83] It found that the
pre-notification and post-notification referral mechanisms had considerably
enhanced the efficiency and jurisdictional flexibility of merger control in the
EU by improving the allocation of cases between the Commission and Member States according to the principles of "one-stop-shop" and the "more
appropriate authority". 
128.       However, the Report also
found that a significant number of cross-border cases remain subject to reviews
in three or more Member States (in 2007, 100 cases resulted in more than 360
investigations by NCAs). In addition, available data suggested that around 6%
of the cases notified in at least three Member States gave rise to competition
concerns. The 2009 report identified the procedural burden associated with a
referral as a possible reason for the lack of referrals, as companies and their
advisors criticised the referral procedures as cumbersome and time-consuming.[84] In some cases,
companies may have opted against referring cases to the Commission in order to
avoid its jurisdiction, even if the Commission would have been the "more
appropriate authority". This practice is known as "forum
shopping". Against this background, the 2009 Report found room to expand
"one-stop-shop" review and suggested that additional concentrations
could be reviewed by the Commission under the principle of the "more
appropriate authority".
129.       In light of the stakeholder
comments and the Commission's and Member States' experiences, there appears to
be further room to streamline the case referral system in order to strengthen
the principles of one-stop-shop and the "more appropriate authority".
There is also room to simplify the referral procedures both before and after
notification, especially from Member States to the Commission (Articles 4(5)
and 22 of the Merger Regulation). 
130.       The following proposals do
not foresee any fundamental changes to the current referral system, but are
mostly aimed at relieving the procedural burden associated with referrals as
identified by the Commission, the Member States, and companies and their
advisors. The proposals should render the procedure less cumbersome and
time-consuming. 
131.       In line with the
Consultation Paper and the comments received in response to the public
consultation, the Commission proposes: 
-  
  simplifying the procedure for pre-notification
referral of cases from Member States to the Commission pursuant to Article 4(5)
of the Merger Regulation, particularly by abolishing the need for merging
parties to file a reasoned submission for referral before filing a notification.
This will generate savings both in terms of time and costs;
-  
  improving the effectiveness of the procedure
for post-notification referral of cases from Member States to the Commission,
pursuant to Article 22 of the Merger Regulation, and strengthening the
"one-stop-shop" principle by ensuring that the Commission is positioned
to examine the effects of the merger on competition for the whole territory of
the EEA following a referral.
4.2.        The proposed measures and policy choices in the area of case
referrals
4.2.1.     Pre-notification referral to the Commission: Article 4(5)
of the Merger Regulation
4.2.1.1.  Introduction
1.                      
Since the introduction of Article 4(5) in 2004,
a total of 269 requests for pre-notification referral to the Commission were
made; roughly 26 a year on average.[85] This represents around 8% of
all cases notified to the Commission and several of these were significant cases which posed competition problems or
allowed the Commission to look into nascent markets.[86] Out of these 269 cases, only 6 were vetoed by a Member State and therefore not referred to the Commission. 
2.                      
Article 4(5) of the Merger Regulation allows the
merging parties to request, before notifying a transaction to the competent NCAs,
the referral of a merger to the Commission if it does not meet the thresholds
of the Merger Regulation and has to be notified in at least three Member
States. Under the current system, parties must submit a "reasoned
submission" ("Form RS"). The competent Member States have 15
working days to oppose the referral (in which case the review remains with the
Member States). If no competent Member State opposes the request, the
Commission obtains jurisdiction for the entire EEA and the parties must submit
a notification to the Commission ("Form CO" or "Short Form
CO"). 
3.                      
While the system is, in general, popular with
stakeholders, the requirement for two separate submissions ("Form RS"
and "Form CO") and the 15 working day consultation period is burdensome
and time-consuming. Some undertakings may have therefore opted against using
the Article 4(5) referral procedure in some cases in the past. This view has
been confirmed almost unanimously by the replies of stakeholders to the Staff
Working Document. 
4.2.1.2.  Proposed
amendments 
135.       The proposal, as expressed
by the Commission in its Staff Working Document, has received strong support
from all public and private stakeholders in the public consultation.  
136.       The proposal suggests abolishing
the requirement that the parties file a Form RS to the Commission while
retaining the basic principles of the system. Given the low number of vetoes in
the past years, experience shows that there is no need for a Form RS, which
allows the Member States to exercise a veto before the notification to the
Commission.[87] 

137.       The parties could therefore
notify directly to the Commission, at which point the Commission would
immediately forward the notification to the Member States so that Member States
competent to examine the transaction under national law[88] can oppose the
referral. As under the current system, Member States would have a period of 15
working days to oppose the referral. Unless a competent Member State opposes the referral, the Commission would obtain jurisdiction. If at least one competent
  Member State opposes the referral, the Commission would renounce jurisdiction
and Member States would retain their original competence. 
138.       In the event of such a veto,
the Commission would adopt a decision renouncing its competence. It would not
have any discretion in this regard. As before, the parties would then have to
determine which Member States they have to notify.
139.       A chart explaining the
proposed changes is attached as Annex 1 - Chart 1.
4.2.1.3.  Some further possible improvement(s)
140.       The public consultation and
the various discussions with the Member States have stressed the need for an
early information exchange between the Member States and the Commission. This
ensures that the Member States are informed about a case at an early stage.
They may not even need the full 15 working days to decide whether to oppose the
referral. If Member States were able to exercise their veto early on, this
could reduce the time and resources spent by the Commission on a case which
might ultimately be reviewed by a Member State. In case of a veto, the Member
States should be able to access and use the information gathered by the
Commission in its investigation, as it might have engaged in a significant
investigation by the time of the veto. 
141.       The aim of an early
information exchange is not to reintroduce the Form RS in pre-notification. However,
parties should be encouraged to contact the relevant NCAs as soon as they are
in contact with the Commission, even at a preliminary stage. To accomplish
this, some amendments of Article 19 of the Merger Regulation might be
necessary.[89]

4.2.2.     Post-notification
referral to the Commission: Article 22 of the Merger Regulation
4.2.2.1.  Introduction
142.       Article 22 of the Merger
Regulation allows one or more Member States to request referral of a case to
the Commission after it has been notified to the competent NCAs, provided the
concentration affects trade between Member States and threatens to
significantly affect competition within the territory of the Member State(s) making the request. 
4.                      
While 30 referral requests have been made since 1990,
23 of these 30 have taken place since 2004.[90] As can be seen from Annex II, most of the cases concerned either
EEA-wide markets or multiple affected national markets. On this basis, the Commission
was considered to be the "more appropriate authority" to handle these
investigations. 
5.                      
In line with the general principles for case
allocation among the Commission and Member States, Article 22 currently allows NCAs
to refer those cases to the Commission when the Commission is the "more
appropriate authority". Cases that raise serious competition concerns in supra-national
markets or with possible cross-border remedies are most appropriate for the
Commission’s jurisdiction.[91] Article 22 may also concern transactions which are reviewable in
only two Member States, like the case Aegean/Olympic II.[92] It seems to be the right tool for dealing with such cases, as NCAs
should be able to assess on the basis of a notification whether to refer a case
to the Commission.[93] 
6.                      
However, under the current system, if the
Commission accepts referrals under Article 22, it will only obtain jurisdiction
for the territory of the Member State(s) that have requested the referral or
explicitly joined another Member State’s request. This means that, even though
such cases have cross-border effects, the Commission cannot examine the effects
of the merger for the entire EEA. The current system is therefore not based on
the “one-stop-shop” principle that generally governs case allocation under the
Merger Regulation. This shortcoming can lead to a patchwork of competences,
where the Commission investigates the effects of a transaction for some Member
States while some NCAs investigate the effects of a transaction in their respective
territories. The system also undermines the principle of legal certainty.
7.                      
NCAs and the majority of replies to the Staff
Working Document support the view that the current Article 22 referral system
is suboptimal because it does not give the Commission competence for the entire
EEA and may lead to parallel investigations contrary to the
"one-stop-shop" principle. Some stakeholders also mentioned that
Article 22 referrals are especially unpredictable, and thus burdensome, for
notifying parties because a Member State that lacks competence to review a
transaction under its national law may join a referral request. 
147.       The
following examples demonstrate that the referral system needs to move towards
“one-stop-shop” scrutiny and ensure that the "more appropriate
authority" receives the case. 
In case COMP/M.5675 - Syngenta/Monsanto,[94] Spain referred the case to the Commission and was joined by Hungary. The Commission examined the European-wide upstream market for sunflower hybrid
licences and the closely related national markets for hybrid distribution in Spain and Hungary. However, since France had not joined the referral request, the Commission could
not look into the French distribution market, which might have raised equally
serious competition concerns.
COMP/M.5828 - Procter & Gamble/Sara Lee[95] was similar. Although the transaction was notifiable in ten Member
States (Bulgaria, Italy, Austria, Poland, Portugal, the Slovak Republic, Spain,
Hungary, Cyprus and Germany), Proctor & Gamble decided against
pre-notification referral pursuant to Article 4(5) of the Merger Regulation and
had notified the concentration to the Bundeskartellamt, as well as to other
NCAs. Following Germany’s Article 22(1) referral request, which seven other
Member States[96] later joined, the Commission accepted the requests of Belgium, Germany, Portugal, Spain and the United Kingdom.[97]
4.2.2.2.  Proposed
amendments
148.       In line with the proposal
set out in the Consultation Paper, which has received very positive feedback in
the public consultation, the Commission proposes amending the post-notification
referral procedure under Article 22 as follows:
-  
  One or more Member State(s), competent under
their national law to review a merger, would be able to request a referral to
the Commission within 15 working days. 
-  
  Unlike the current system, only Member States
that are originally competent could request referrals.
-  
  If a referral is requested, any other
competent Member State can oppose the referral. The Member State would not have to justify its veto, in view of the fact that it has jurisdiction to
examine the merger. 
-  
  If no competent Member State vetoes the
referral, the Commission has discretion to accept or decline the referral. One reason
for the Commission to decline the referral would be that the merger has no
European scope (i.e. it affects purely national markets and has no cross-border
effects), in line with the Notice on Case Referral.
-  
  The Commission's decision to accept a referral
would give it jurisdiction for the entire EEA and it would therefore become
unnecessary for Member States to join the request.
-  
  If any competent Member State opposes the
referral, all Member States would retain their jurisdiction. 
149.       A chart explaining the
proposed mechanism is attached as Annex 1 - Chart 2. 
4.2.2.3.  Proposed procedural measures to improve cooperation
amongst NCAs and with the Commission in cross-border or multi-jurisdictional
cases 
150.       The above proposal presents
two challenges. The first concerns a timing issue which could arise if the
referral request is made after another Member State has already cleared the
transaction in its territory. In that case the Commission would no longer be
able to take EEA-wide jurisdiction. 
151.       The second challenge
concerns the information deficit of the other Member States. First, they might
not have enough information to ascertain whether they are competent and
therefore have the right to oppose the referral. Second, if they are competent,
they still might not have sufficient information to make an informed choice
about whether or not to veto the referral. This is because they may not yet
have received a notification (the second information problem is not new and
exists similarly under Article 22 as it stands currently). 
152.       Although it might not be
possible to remedy both issues completely, the Commission proposes the
procedural solutions below to avoid the problem of prior clearance decisions by
other Member States, and at least mitigate the information problem. 
153.       The Commission suggests
installing a mandatory early information system for multi-jurisdictional or
cross-border cases or cases which concern markets which are prima facie wider
than national. This system would replace the current ECA notice used by NCAs to
inform each other and the Commission of transactions notified to NCAs.[98] The Member State would send the notice to the Commission as soon as possible after receiving the notification
or otherwise learning of the transaction. The Commission would then forward the
notice to the other Member States. For Member States which have pre-notification
contacts with the parties, the notice could be circulated at an earlier stage.
154.       The notice would be
circulated when a NCA has to assess a transaction that is multi-jurisdictional
and/or potentially concerns markets which are prima facie wider than national.
In this notice, the NCA would indicate whether it is considering making a
referral request because, on a preliminary basis, the Commission seems to be the
"more appropriate authority". In that case, the notice would trigger the
suspension of the national deadlines of all Member States which are also
investigating the case so that the suspension would occur earlier than under
current rules. Alternatively, if the Commission itself believes that it might
be the "more appropriate authority", it would invite the Member State to request a referral under Article 22(5). Such an invitation would suspend
all national deadlines. 
155.       The suspension would start
on the day the Member States receive the notice. It would end at the latest 15
working days after the Member State which sent the notice receives a formal
notification. At that point, the Member State has to decide whether or not to
request a referral (as it is already currently foreseen in Article 22). If the Member State decides not to request a referral, the suspension triggered by the notice or
an invitation would end and the NCAs would remain competent to decide on the
case. Alternatively, if it or any other competent Member States decides to
request a referral, the normal suspension of Article 22(2)(2) of the Merger
Regulation would apply. 
156.       Such a procedural solution
should reduce the risk of an NCA making a referral request to the Commission
after another NCA issues a decision clearing the transaction. However, in the
unlikely event that a Member State adopts a clearance decision before a
referral request occurs, the clearance decision would remain in force and the
case would be referred by the remaining Member States only. This would be an
exception to the Commission’s competence to review transactions for the entire
EEA following an Article 22 referral. 
157.       The circulation of such a
notice would also ensure that the Member States and the Commission are informed
of all multi-jurisdictional transactions, as well as cases with potential
trans-border effects. This would facilitate cooperation and coordination
between all the agencies involved in the review process and would foster
convergence among them.
158.       The content of the notice
should address the information problem. The notices should include information about
the likely scope of the geographic markets concerned, particularly if they are supranational,
and list other competent Member States. In order to do this, the NCAs could request
information from the parties about the other Member States in which the
transaction is notifiable. To the fullest extent possible, the notice would
contain information on markets that cover the territory of other competent
Member States. Alternatively, if one Member State cannot request information on
behalf of others, the Commission remains competent to request market
information like market share estimates from the notifying parties to share
with competent Member States. This power allows those Member States to assess
possible referral requests. In practice, the parties will have to prepare
notifications for the other competent Member States, so such a request would
not create an undue burden.  
159.       Even if a referral to the
Commission does not take place, the notice would facilitate cooperation between
Member States in cross-border and multi-jurisdictional cases, since they would
be informed about such cases early on.  
4.3.        Other
referrals 
160.       Further streamlining referrals
from the Commission to the Member States may require amending the Article 4(4)
pre-notification referral procedures and the Article 9 post-notification
referral procedures set forth in the Merger Regulations.
4.3.1.     Pre-notification referral to one or more Member States (Article
4(4)): clarify the substantive threshold for referrals
161.       In total, 94 requests for pre-notification
referrals to NCAs were made since the introduction of Article 4(4) in 2004. The
number of requests has risen for the past two years so that, as a percentage of
total notifications, Article 4(4) requests are around 4%, up from 1-2% in 2007-2008.[99] 
162.       Under Article 4(4) of the
Merger Regulation, the merging parties may request referral of all or part of
the case to a competent NCA before notifying a transaction falling under the
Merger Regulation to the Commission. Parties have to submit a "reasoned
submission" ("Form RS"), which requires the information necessary
for the Commission and Member States to assess whether or not to accept the
referral. If the Member State to which the case is referred does not oppose the
referral within 15 working days and the Commission finds that "the
concentration may significantly affect competition" in a distinct market
within that Member State, the Commission may refer all or part of the case to
the Member State in question. It has 25 working days from receipt of the
reasoned submission to make its referral decision.
163.       Similar to its proposal regarding
Article 4(5), the Commission seeks to determine whether it can streamline the
Article 4(4) referral procedure by abolishing the "Form RS" filing to
the Commission and allowing direct notification to the concerned Member State.
164.       Unlike under Article 4(5),
however, where the Commission becomes competent to assess the merger for the
entire EEA on the basis of the notification, under Article 4(4), a case is
ultimately only dealt with by one Member State (except in partial referral
cases) once it is being referred. The "Form RS" is the only basis for
the Commission and the other Member States to assess whether potential
competition issues exist in other Member States which should be addressed at
the EU level. Consequently, it does not appear possible to reform Article 4(4)
referrals like their Article 4(5) counterparts or to abolish the Form RS.
Neither the Commission nor the other Member States would receive sufficient
information about transactions that may affect the EEA and their own territories,
respectively.
165.       According to Article 4(4) of
the Merger Regulation, prior to the notification of a concentration, the
parties may request that the transaction be reviewed at the Member State level
when concentration "may significantly affect competition in a market
within a Member State which presents all the characteristics of a distinct
market and should therefore be examined, in whole or in part, by that Member
State." Some stakeholders expressed concern during the public
consultations for the 2009 Report and the Consultation Paper that, in order to
justify the Article 4(4) referral request, the parties would have to make
self-incriminatory statements regarding the appearance of competition concerns.[100]
166.       Unlike Article 4(5) of the Merger
Regulation, Article 4(4) imposes a substantive test for transactions to qualify
for a referral. Although Recital 16 clarifies that, in order to request a
referral, parties need not demonstrate a likely adverse effect on competition,
the current language of Article 4(4) may indeed give such an impression. The
language may have deterred some notifying parties from requesting referrals to
a Member State in appropriate cases.
167.       Therefore, the Commission
should consider amending the substantive test in Article 4(4) so parties do not
have to claim that the transaction may lead to a "significant effect in
a market" in order for a case to qualify for a referral. Showing that
the concentration is likely to primarily impact a distinct market in the Member State in question would suffice. Article 4(4) might be used more frequently by
parties in the future if it no longer involves a perceived "element of
self-incrimination". 
168.       In any event, the Commission
would maintain discretion about referring a case to Member State.
4.3.2.     Post-notification referral to one or more Member States
(Article 9): modify the deadline to reject a referral request 
169.       Member States have made more
than 100 requests under Article 9 of the Merger Regulation since 1990 and more
than 40 since 2004.[101]
As the 2009 Report stated, Article 9 remains a useful tool for ensuring that
cases are assessed by the "more appropriate authority".[102] 
170.       Upon the request of a Member State, Article 9 of the Merger Regulation allows the Commission to refer a concentration
with a Union dimension to a Member State to investigate under applicable
national competition rules.
171.       The referral mechanism under
Article 9 is generally believed to function effectively and is a useful tool
underpinned by the principle of the "more appropriate authority".[103] 
172.       Still, there may be room for
further flexibility regarding the Commission's deadline for rejecting referral
requests in the case of Phase II proceedings. 
173.       Currently, the Commission
has 65 working days from the date of notification to make a referral or adopt a
statement of objections (which constitutes "the preparatory steps in
order to adopt the necessary measures under Article 8(2), (3) or (4) to
maintain or restore effective competition on the market concerned" as
required by Article 9(5)). If, despite receiving "a reminder from the Member State concerned", the Commission does not take any of those steps, the case is
deemed to have been referred to that Member State. The 65 working days deadline
can be problematic for the Commission as normally the Commission will still be
in the course of investigating at that time and it may typically still have to
decide on whether to take the case forward and to adopt a statement of
objections. 
174.       Therefore, the Commission is
considering amending the Merger Regulation to ensure a proper functioning of
the deadlines. It suggests tolling the 65 working days deadline from the start
of the Phase II proceedings[104]
to ensure that its investigation is well advanced at the time when it has to
decide upon a referral. Also, this amendment would bring that deadline in line
with the deadline for remedies in Phase II.[105]

5.           Miscellaneous
175.       Reforming the Merger
Regulation would also address some smaller, more technical points where
experience has shown that improvement is possible ("housekeeping").
In particular, reforms can be used to simplify procedures. The following
section addresses these housekeeping issues. 
5.1.        Procedural simplification
5.1.1.     Introduction
176.       The Commission has always sought
to minimise the administrative burden on notifying parties and third parties
resulting from merger control proceedings. In December 2013, it adopted a
package of measures aimed at simplifying procedures to the fullest extent
possible without amending the Merger Regulation itself. This package targeted
simple mergers which do not raise competition concerns from the outset and are
treated under the so-called "simplified procedure", as well as more
complex ones. The Simplification Package[106] substantially re-drafted and streamlined the forms required for
notifying mergers or making pre-notification referral requests (Form CO, Short Form CO and Form RS). It reduced information requirements for both
simplified and non-simplified cases wherever possible. 
177.       With the new Notice on a
simplified procedure and the revised Short Form CO, the thresholds for applying
the simplified procedure for non-problematic cases were raised to 20% for
mergers with horizontal overlaps (i.e. involving companies active in the same
market) and 30% for mergers with vertical relationships (i.e. where one merging
company is active in a market upstream or downstream from a market where the
other merging company is active). 
178.       In addition, the Commission
allowed for simplified treatment of cases with horizontal overlap and combined
market shares between 20% and 50% if the increase in market share is very
small.[107] The Simplification Package was also a concrete step towards the
goals of the Commission's Regulatory Fitness and Performance ("REFIT")
programme, which sought to make rules and procedures less burdensome for
business. At the same time, it enabled the Commission to focus its resources on
those mergers that are most likely to raise competition concerns.
179.       Further streamlining and
simplification of EU merger procedures, beyond the achievements of the 2013
Simplification Package, require amending the Merger Regulation itself. These
amendments are outlined below.
5.1.2.     Extra-EEA
Joint Ventures
180.       The Commission suggests
amending Article 1 of the Merger Regulation so that a full-function
joint-venture, located and operating
outside the EEA and without any effects on EEA markets, falls outside the
Commission's competence, even if the turnover thresholds are met. 
5.1.3.     Exchange of confidential
information between Commission and Member States
181.       Articles
19(1) and (2) of the Merger Regulation provide for exchange of certain
case-related information between NCAs and the Commission. The Commission should
consider refining this provision to ensure that when Member States refer cases
to the Commission and vice versa, under Article 22 and Article 9 respectively,
the authority that continues the investigation can use the information already
obtained by the authority that referred the case. In addition, it should also
clarify that the Commission’s ability to exchange case-related information with
NCAs includes information obtained by the Commission during the
pre-notification stage.
5.1.4.     Further simplification by extending the transparency system
to certain types of simplified merger cases
182.       To further simplify the
Merger Regulation’s procedures, the Commission should consider exempting
certain categories of mergers from the prior notification requirement. The
exemption would include certain categories of cases currently falling under the
simplified procedure, such as cases leading to no "reportable
markets" due to the absence of any horizontal or vertical relationship
between the parties. The Merger Regulation could confer this power upon the
Commission, and the Commission could define the exemption’s scope in the
Implementing Regulation.  
183.       If the Commission did issue
such an exemption, a possible replacement procedure would include extending the
targeted transparency system, explained above in the minority shareholdings
section, to cover the exempt transactions. Thus, the Commission would be
informed by an information notice and would be free to investigate a case. If
it decided not to, the transaction could be implemented after three weeks
without the need for a clearance decision. 
5.2.        Other
issues
5.2.1.     Notification
of share transactions outside the stock market (Article 4(1))
184.       Article 4(1) of the Merger
Regulation specifies the timeframe within which a merger notification may be
submitted. The 2004 re-cast introduced some flexibility insofar as merging
parties may now also notify a transaction before a binding sale and purchase
agreement is concluded or a public takeover bid is launched, provided they
demonstrate a "good faith intention" to do so.
185.       The Commission should also
consider modifying Article 4(1) of the Merger Regulation in order to provide
more flexibility for notifying mergers that are executed through share
acquisitions on a stock exchange without a public takeover bid. On one hand,
the current rules do not allow for notification of such transactions before the
acquisition of control on the basis of good faith intention. On the other, they
do not allow for an exercise of the voting rights once control has been
acquired. For such cases, it may be useful to adapt the criterion of "good
faith intention" in order to allow the parties to notify before the level
of shareholding required to exercise (de facto) control is acquired. The
acquiring party can demonstrate a clear commitment to carry out the acquisition
by preparing everything necessary (internally and externally) to proceed
immediately. 
5.2.2.     Clarification of methodology for turnover calculation of joint ventures
186.       Article
5(4) of the Merger Regulation should be amended to explicitly articulate the
methodology for the calculating a joint venture's relevant turnover. The
methodology is currently laid out in the Commission Consolidated Jurisdictional
Notice.[108]
This amendment would not entail any substantive change. It would merely clarify
how the law is currently applied.
5.2.3.     Time limits 
187.       Merger review by the
Commission is subject to strict, legally binding time limits.[109] While these time-limits attempt to balance the parties’ interest in
a quick decision with the general interest in a thorough investigation, the
time-limits in Phase II can sometimes be challenging. They are especially
challenging in cases involving complex economic data analysis or large numbers
of internal documents. 
188.       The additional flexibility
introduced by the 2004 review has therefore proven to be indispensable,
particularly where the Commission has carried out a complex quantitative
analysis.[110] The Commission has granted deadline extensions under Article 10(3)
of the Merger Regulation in over 50% of Phase II cases over the past ten years.
These extensions can either come by request of the notifying parties or by
agreement between the Commission and the notifying parties. In some cases, the
available time is barely enough for a thorough quantitative analysis, even with
an extended deadline, largely due to the time needed to collect data from the
parties and possibly third parties. The Commission should therefore consider
introducing greater flexibility by increasing the maximum number of working
days by which the Phase II deadline may be extended under Article 10(3)(2) from
20 to 30, for example.
189.       At the same time, the
Commission should clarify that Article 10(3)(1)’s automatic 15 working day
extension for Phase II deadlines be triggered in all cases where commitments
are offered following a statement of objections. It should also clarify that
the exception to the automatic extension for commitments that are offered
before 55 working days only applies if commitments offered are sufficient to
remove the concerns identified without the need for a statement of objections.
5.2.4.     Unwinding
of concentrations with regard to minority shareholdings (Article 8(4))
190.       The
Commission should consider modifying Article 8(4) of the Merger Regulation to
align the scope of the Commission’s power to require dissolution of partially
implemented transactions incompatible with the internal market with the scope
of the suspension obligation (Article 7(4) of the Merger Regulation). 
191.       In
case COMP/M.4439 Ryanair/Aer Lingus I in 2007[111], Ryanair's
acquisition of a non-controlling minority shareholding in Aer Lingus and
Ryanair's subsequent proposal to acquire control of Aer Lingus by acquiring
additional shares were treated as a single concentration for purposes of EU merger control.[112] Despite declaring the
proposed concentration incompatible with the internal market, however, the
Commission could not order divestiture of Ryanair's prior non-controlling
minority shareholding in Aer Lingus pursuant to Article 8(4) of the Merger
Regulation. The modified Article 8(4) would address such a scenario by
clarifying that when a partially implemented concentration is prohibited, the
Commission may order full divestiture of the acquired stake, even if it would
not confer control. 
192.       Such
an amendment would logically extend the current version of Article 8(4) to
cases in which transactions have been partially implemented. However, it would
also align with the proposed reform extending merger control to certain acquisitions
of non-controlling minority shareholdings.[113]
If, following the complete dissolution of a prohibited concentration under
Article 8(4), the acquirer were acquired a minority stake in the target
company, the acquisition would need to be assessed under the new proposed
regime for non-controlling minority shareholdings. 
193.       In
this context, the question arises whether the divestment of a minority
shareholding which forms part a single concentration should be limited to what
is permissible under the rules of minority shareholdings. In other words, given
that the acquirer would be free to acquire a minority stake after having to
dispose of its shareholding, should the divestment then be limited to the
shareholding above this threshold? 
194.       In
order to follow the same logic inherent in the current Article 8(4) and to
avoid a potentially complex assessment, it would seem preferable to
re-establish the status quo ante and allow the Commission to enforce the full
divestiture of the minority shareholding insofar as it forms part of the single
transaction assessed. 
5.2.5.     Staggered
transactions under Article 5(2)(2) of the Merger Regulation 
195.       Article 5(2)(2) of the
Merger Regulation establishes that, for the purpose of the turnover calculation
of the undertakings concerned, one or more transactions which take place within
a two-year period between the same persons or undertakings are treated as a
single concentration. 
196.       The purpose of this
provision is to prevent staggered transactions that circumvent EU merger
control by artificially dividing the transactions. For such cases Article
5(2)(2) foresees treating  and assessing the transactions as a single
concentration. While the Commission generally assesses the transaction as a
whole, this practice raises questions in cases where the first transaction was
notified and cleared by a NCA. 
197.       The Commission should
therefore consider how to tailor the scope of Article 5(2)(2) to only capture
cases of "real" circumvention. 
5.2.6.     Qualification of
"parking transactions"
198.       According to Article 3(1) of
the Merger Regulation, a concentration is defined as an operation bringing
about a lasting change in the control of the undertakings concerned. In certain
instances, however, an undertaking is "parked" with an interim buyer
(such as a bank) on the basis of an agreement that the target will at a later
stage be sold on to an ultimate acquirer. The interim acquirer thus acquires
the shares or assets on behalf of the ultimate acquirer, who may also bear the
financial risk, in order to facilitate the ultimate acquisition by the latter.
The Commission has stated in the Consolidated Jurisdictional Notice that it
considers such "parking transactions" the first step of a single
concentration leading to the ultimate buyer’s lasting acquisition of control.[114] In the Merger Regulation, the Commission should clarify that
"parking transactions" should be assessed as part of the acquisition
of control by the ultimate acquirer.[115]
5.2.7.     Effective
sanctions against use of confidential information obtained during merger
proceedings 
199.       Article 17(1) of the Merger
Regulation provides that information acquired in merger proceedings may only be
used for the purposes of the relevant investigation. However, when private
parties and their legal and economic advisors obtain commercially relevant
information about other private parties from the Commission (such as when the
notifying parties access the file or third parties take part in oral hearings
in order to be informed of the proceeding’s subject matter), the Commission
currently lacks an effective mechanism for enforcing the limited use
obligation. Therefore, the Commission should consider amending the Merger
Regulation to allow appropriate sanctions against parties and third parties that
receive access to non-public commercial information about other undertakings
for the exclusive purpose of the proceeding but disclose it or use it for other
purposes.
5.2.8.     Commission's power to revoke decisions in case of
referral based on incorrect or misleading information
200.       According to Articles
6(3)(a) and 8(6)(a) of the Merger Regulation, the Commission may revoke a
decision clearing a merger if that decision was obtained by deceit or is based
on incorrect information for which one of the parties is responsible. However,
the Merger Regulation does not explicitly confer an analogous revocation power
for falsely-obtained Article 4(4) referrals to Member States. The Commission
should amend the Merger Regulation to clarify that referral decisions based on
deceit or false information, for which one of the parties is responsible, can
also be revoked.
6.           Conclusions
and next steps
201.       The review carried out in
this Staff Working Document shows that EU merger control has worked very well
over the ten years since the 2004 Merger Regulation reform. Overall, the
re-cast Merger Regulation provides a good framework for effectively protecting
competition, and thus consumers, from anti-competitive effects of mergers and
acquisitions in the internal market while allowing the vast majority of
transactions that do not raise competition concerns to proceed after a short
review process. EU merger review procedures are transparent, respect the
procedural rights of the parties involved, and are subject to effective judicial
review by the EU Courts. 
202.       The 2004 reforms helped
preserve the Merger Regulation as an effective and modern instrument of
competition policy. In particular, the introduction of the SIEC test has
allowed the Commission to refine and improve its substantive assessment of
mergers. The assessment addresses all possible sources of competitive harm,
including likely non-coordinated effects of transactions where the merged
entity would not acquire a dominant position. The improvements to the case referral
system have also ensured that most cases reach the "more appropriate
authority".
203.       However, the Staff Working
Document's review also reveals certain areas for further improving EU merger
control:
-  
  First, there appears to be an enforcement gap
in EU competition law regarding potential anti-competitive effects from
acquisitions of non-controlling minority shareholdings. The gap would be best
addressed under the Merger Regulation.
-  
  Second, the case referral system could be
further streamlined to simplify administrative procedures and advance the
principles of "one-stop-shop" review and the "more appropriate
authority". 
-  
  Third, a number of more technical changes
appear to be useful in light of the experience gained since the 2004 reform.
These mostly relate to further procedural simplification.
204.       In light of the comments
received to the White Paper, the Commission will decide which further
legislative action to take in order to address these issues.
It is standard practice for DG Competition to publish submissions
received in response to a public consultation. However, it is possible to
request that submissions, or parts thereof, remain confidential. Should this be
the case, please indicate clearly on the front page of your submission that it
should not be made public and also send a non-confidential version of your
submission to DG Competition for publication.
The Commission invites comments on the White Paper and the Staff
Working Document. The Commission would in particular invite comments on the
following questions:
1.       Minority shareholdings:
a)       Regarding the concerns that a competence
to control the acquisition of minority shareholdings should not inhibit
restructuring transactions and the liquidity of equity markets, do you consider
that the suggestions put forward in the White Paper are sufficient to alleviate
this concern? Please take into account that the transactions would either not
be covered by the Commission's competence or not be subject to the 15 days
waiting period.  
b)       Are there any other mechanisms that
could be built into the system to exclude transactions for investment purposes
from the competence? 
c)       Regarding the scope of the information
notice under the transparency system, would you have a preference for
assimilating the information requirements to the German system, i.e. with a
requirement to give market share information or to the US system which relies on internal documents to form a view on the market structure and
market dynamics? 
d)      Please estimate the time and cost associated
with preparing a notice, taking into account also the different scopes
suggested, such as a notice with market share information, or a notice with
relevant internal documents. 
e)       Do you consider a waiting period
necessary or appropriate in order to ensure that the Commission or Member States can decide which acquisitions of minority shareholdings to investigate?
2.       Referrals - Article 22:
a)       Please comment on the suggestions
regarding the information system amongst the Member States and the Commission.
In particular, would such a system give sufficient information to the Member
States to decide about a referral request? 
b)       Would such a system reduce the risk of
diverging decisions by the Member States? 
3.       Please comment on the suggestions listed
in Section 5 "Miscellaneous" including the more detailed and
technical suggestions in the accompanying Staff Working Document. 
Comments may be sent by Friday 3 October 2014, either by e-mail to:
comp-merger-registry@ec.europa.eu

or by post to:
European Commission
Directorate-General for Competition, Unit A-2
White Paper "Towards more effective EU merger control"
B-1049 Brussel/Bruxelles.
              Annex I: Flowcharts of the Referral Procedures
              Chart 1: Pre-notification
referral requests by parties (Article 4(5))
              Chart 2: Referral request
by a Member State to the Commission (Article 22)
              Annex II: Overview of
transactions for which an Article 22 referral has been      accepted since 2004
 Case || Country || Decision date and type of decision  || Geographic scope of affected market || Competition concerns 
 M.4980 - ABF / GBI BUSINESS || Spain, joined by France, Portugal and NL (NL later withdrew its referral request) || 13/12/2007 Full referral || National markets for compressed yeast; EEA-wide (if not worldwide) market for dry yeast || Competition concerns for national markets for compressed yeast in Spain and Portugal 
 M.5020 - LESAFFRE / GBI UK || UK || 04/02/2008 Full referral || National market for fresh yeast (liquid and compressed) in UK; EEA-wide/worldwide market for dry yeast || National market for liquid and compressed yeast in the UK 
 M.5109 -DANISCO / ABITEC || Germany, joined by UK || 17/04/2008 Full referral || At least EEA-wide market for synthetic emulsifiers   || No competition concerns 
 M.5153 -ARSENAL / DSP || Spain, joined by Germany || 16/05/2008 Full referral || Various EEA-wide chemical markets || Competition concerns for EEA-wide markets for various chemicals 
 M.5675 - SYNGENTA / MONSANTO'S SUNFLOWER SEED BUSINESS || Spain, joined by Hungary || 12/11/2009 Full referral || EEA-wide upstream markets for seed treatment, downstream national markets for commercialization of sunflower seed || Competition concerns for national and EEA-wide markets 
 M.5828 - PROCTER & GAMBLE / SARA LEE || Germany, joined by Belgium, Spain, Portugal, UK, Slovakia and Poland (Slovakia and Poland later withdrew their request) || 31/03/2010 Full referral || National markets for air fresheners in Belgium, Spain, Germany, Portugal, UK || No competition concerns 
   || Hungary joined, but referral refused || 31/03/2010 Refusal of referral request by Hungary   || National market || Not applicable 
 M.5969 - SCJ / SARA LEE || Spain, joined by Belgium, France, Czech Republic, Greece and Italy || 07/09/2010 Full referral || Not assessed since notifying parties withdrew notification 
   || Hungarian request to join after expiry of deadline || No decision, as Hungary withdrew its request   || Not assessed since notifying parties withdrew notification 
 M.6106- CATERPILLAR/ MWM || Germany, joined by Slovakia and Austria || 26/01/2011 Full referral || Left open whether EEA-wide or worldwide market for generator sets   || No competition concerns     
 M.6191 - BIRLA / COLUMBIAN CHEMICALS || Germany, joined by Spain, France, UK   || 02/03/2011 Full referral || At least EEA-wide carbon black market || No competition concerns 
 M.6773 - CANON / IRIS || Belgium, joined by Austria, France, Ireland, Italy, Portugal, Sweden || 26/11/2012 Full referral || Markets for portable document scanners  and office automation equipment: left open whether national or EEA-wide; EEA-wide market for capture software || No competition concerns 
 M.6502 - LONDON STOCK EXCHANGE GROUP / LCH CLEARNET GROUP || Portugal, joined by France and Spain || 04/07/2012 Refusal of referral, as the UK as the centre of the transaction had not requested a referral || The merger concerns the trading market, compensation of equity, fixed interest securities and derivative instruments and must be notified in three countries: Spain, Portugal and UK. || Not applicable 
 M.6796 - AEGEAN / OLYMPIC II || Greece, Cyprus || 13/12/2012 Full referral || National market for passenger air transport services in Greece || No competition concerns 
 M.7054 - CEMEX / HOLCIM || Spain || 18/10/2013 || Case ongoing || Case ongoing 
[1]               OJ L 24, 29.1.2004, p. 1.
[2]               Commission Staff Working Document SWD (2013) 239
final, see http://ec.europa.eu/competition/consultations/2013_merger_control.
[3]               The scope chosen for the White Paper is without
prejudice to additional evaluations of other important aspects of the EU Merger
control by the Commission. 
[4]               Council Regulation (EEC) No 4064/89 of 21 December
1989 on the control of concentrations between undertakings (OJ L 395,
30.12.1989, p. 1).
[5]               Even if the origin of the parties is in the same Member State, the parties will need to have broader activities in Europe to fulfil the turnover
thresholds of the Merger Regulation. Otherwise, the two thirds rule would
apply. 
[6]               Green Paper on the Review of Council Regulation (EEC)
No 4064/89, COM (2001) 745 final.
[7]               Article 2(3) of the Merger Regulation provides that
the Commission must assess whether a concentration "would significantly
impede effective competition, in the common market or in a substantial part of
it, in particular as a result of the creation or strengthening of a dominant
position". This test replaced the previous substantive test of
"creation or strengthening of a dominant position" enshrined in
Article 2 of Council Regulation (EEC) No 4064/89, the so-called dominance test.
[8]               See Recital 25 Merger Regulation. 
[9]               COMP/M.3916 – T-Mobile/Tele.ring, decision of
26 April 2006
[10]             For instance COMP/M.4141 – Linde/BOC, decision
of 6 June 2006; COMP/M.4187 – Metso/Aker Kvaerner, decision of 12
December 2006, COMP/M.4844 – Fortis/ABN Amro, decision of 3 October
2007; COMP/M.5224 – EDF/British Energy, decision of 22 December 2008; COMP/M.6203
– Western Digital/ Hitachi, decision of 23 November 2011; COMP/M.6497 – Hutchinson/
Orange, decision of 12 December 2012 and COMP/M.6570 – UPS/TNT Express decision
of 30 January 2013.  
[11]             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).
[12]             Guidelines on the assessment of non-horizontal mergers
under the Council Regulation on the control of concentrations between
undertakings (OJ C 265, 18.10.2008, p. 6).
[13]             Both the Horizontal and the Non-Horizontal Guidelines
are frequently referred to by the EU Courts as a benchmark for assessing the
legality of the Commission's substantial analysis of mergers. The EU Courts
have confirmed that the Commission is bound by the guidance documents it has
issued, although they remain subject to scrutiny by the Courts for their
compliance with the Treaty and the Merger Regulation, see for instance Case
T-282/06 Sun Chemical e.a. v Commission [2007] ECR II-2149, paragraph
55.
[14]             The Court may scrutinise both the completeness and accuracy
of the evidence relied upon by the Commission and whether that evidence is capable
of substantiating the conclusions drawn from it (See in particular Case T-12/03
P Commission v TetraLaval [2005] ECR I-987, paragraphs 39 et seq.; Case
C-413/06 P Bertelsmann and Sony v Independent Music Publishers and Labels
Association (Impala) [2008] ECR I-4951, paragraphs 47 et seq.; Case
T-342/07 Ryanair v Commission [2010] ECR II-3457, paragraphs 29 et seq.).
Nonetheless, nearly all Commission decisions in merger cases taken since 2004
that were appealed have been upheld by the EU Courts and no Commission decision
approving or prohibiting a merger was definitively annulled. The only
Commission decision in a merger procedure taken after 2004 that was annulled by
a final Court judgment did not concern the compatibility of the merger with the
internal market but the approval of a proposed purchaser of a business that had
to be divested according to a conditional clearance decision (COMP/M.2978 – Lagardère/Natexis/VUP,
decision of 30 July 2004, annulled in last resort by judgment of the Court of
Justice of 6 November 2012 in Joint Cases C-553/10 P and C-554/10 P Commission
and Lagardère v Editions Odile Jacob [not yet reported in the ECR]). The
judgment of the General Court in Case T-464/04 Independent Music Publishers
and Labels Association (Impala) v Commission [2006] ECR II-2289, which
annulled the Commission's unconditional clearance of COMP/M.3333 – Sony/BMG,
decision of 19 July 2004, was overturned on appeal by the Court of Justice in
Case C-413/06 P Bertelsmann and Sony v Impala [2008] ECR I-4951, thus
the Commission's decision was ultimately upheld.
[15]             There are several recent examples of cases where a
range of sophisticated economic analysis was used to assess the existence of
SIEC like in: COMP/M.6570 – UPS/TNT Express, decision of 30 January 2013;
COMP/M.6458 – Universal Music Group/EMI Music, decision of 21 September
2012; COMP/M.6471 – Outokumpu/Inoxum, decision of 7 November
2012; or COMP/M.6663 – Ryanair/Aer Lingus, decision of 27
February 2013. 
[16]             Commission decision of 23 November 2011.
[17]             In this case, the Commission
approved the proposed acquisition of Hitachi Global Storage Technology (HGST),
a subsidiary of Hitachi of Singapore recently renamed Viviti Technologies, by
rival Western Digital of the US. The approval was conditional upon the
divestment of essential production assets for 3.5" hard disk drives (HDD),
including a production plant, and accompanying measures.
[18]             These are cases where the Commission intervened either
by accepting remedies in Phase I or Phase II, or by prohibiting the merger (or
where the parties abandoned the merger in Phase II). 
[19]             COMP/M.4980 – ABF/GBI Business, decision of 23
September 2008.
[20]             COMP/M.4942 – Nokia/NAVTEQ, decision of 2 July
2008; COMP/M.4854 - Tom Tom/Tele Atlas, decision of 14 May 2008.
[21]             COMP/M.5984 – Intel/McAfee, decision of 26
January 2011.
[22]             Horizontal Merger Guidelines, paragraph 76.
[23]             Horizontal Merger Guidelines, paragraph 77.
[24]             Horizontal Merger Guidelines, paragraph 78.
[25]             Commission decision of 30 January 2013.
[26]             The case was also considered a
"gap" case because it would have likely led to price increases
without the creation or strengthening of a dominant position. DHL would have
remained a market leader in some countries, but the proposed concentration
would have led to the removal of an important competitive player in
concentrated markets across Europe.
[27]             In particular, air network synergies resulting mainly
from the fact that the merged entity would need fewer, larger planes for the
combined small parcels volume than the individual parties pre-merger.
[28]             COMP/M.5984 – Intel/McAfee, decision of 26
January 2011.
[29]             COMP/M.5384 - BNP Paribas/Fortis, decision of 3
December 2008. 
[30]             COMP/M.4844 – Fortis/ABN Amro Assets, decision
of 3 October 2007.
[31]             COMP/M.6796 - Aegean/Olympic II, decision of 9
October 2013; COMP/M.6360 - Nynas/Harburg, decision of 2 September 2013.

[32]             For example COMP/M.6447 - IAG/bmi, decision of
30 March 2012. 
[33]             Horizontal Merger Guidelines, paragraph 89. For a
further explanation on the criteria to be fulfilled for the, see Horizontal
Merger Guidelines, paragraph 90.
[34]             Commission decision of 2 September 2013.
[35]             See Article 6(2) and Article 8(2) of the Merger
Regulation.
[36]             These cases include mergers cleared in Phase I or in
Phase II with commitments, prohibitions as well as mergers abandoned after the
opening of an in-depth investigation.
[37]             Commission Notice on remedies acceptable under Council
Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004
(OJ C 267, 22.10.2008, p. 1).
[38]             See Commission Notice on remedies acceptable under Council
Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98 (OJ
C 68, 2.3.2001, p. 3), which updated and refined an earlier Notice from 2001.
[39]             Commission decision of 17 November 2010.
[40]             See e.g. case COMP/M.6570 - UPS/TNT, Commission
decision of 30 January 2013: the parties proposed the divestiture of local
subsidiaries in 15 origin countries, including the temporary access to UPS' air
network. The viability of such a remedy critically depended on the identity of
the buyer as it would need to connect the divested assets to a functioning
existing network which the parties were not able to propose within the
timeframe of the Commission's proceedings.  
[41]             Recent examples of cases with complex carve-out
remedies include COMP/M.6576 – Munksjsö/Ahlstrom, decision of 24 May
2013; COMP/M.6690 – Syniverse/Mach, decision of 29 May 2013; COMP/M.6857
– Crane/MEI, decision of 19 July 2013.
[42]             All Member States with the exception of Luxembourg.
[43]             Communication from the Commission to the Council,
Report on the functioning of Regulation No 139/2004, 18 June 2009, COM
(2009) 281 final, accompanied by Staff Working Paper SEC (2009) 808 final/2
("2009 Staff Working Paper").
[44]             For instance, in 2013 Germany replaced the previous
dominance test with the SIEC test thereby following the example of the re-cast
Merger Regulation adopted in 2004, see Achtes Gesetz zur Änderung des Gesetzes
gegen Wettbewerbsbeschränkungen vom 29.6.2013 (BGBl. I, 1738).
[45]             EU Merger Working Group, Best Practices on Cooperation
between EU National Competition Authorities in Merger Review, 8 November 2011.
[46]             See Recital 14 of the EUMR that emphasizes cooperation
and deals with referral and competence.
[47]             Mario Monti, A New Strategy for the Single Market at
the Service of Europe's Economy and Society, Report to the President of the
European Commission José Manuel Barroso, 9 May 2010.
[48]
            Autorité de la concurrence, Rapport au Ministre de l'Économie et
des Finances. Pour un contrôle plus simple, cohérent et stratégique en Europe,
16 December 2013.
[49]             See Annex I of the Consultation Paper for an overview
of the economic literature,
[50]             See Annex II of the Consultation Paper.
[51]             See for example the minority stakes recently acquired
by Telefónica in Telecom Italia, by Air France in Alitalia, by Intel in ASML, a manufacturer of lithography systems for the
semiconductor industry, by Marine Harvest in Grieg Seafood or by VW in Suzuki. Regarding minority
shareholdings in vertical relationships examples include the 10% minority
shareholdings of Nestlé in Givaudan (which was recently sold) or the 15%
shareholding of BMW in SGL Carbon (in addition to the 29% shareholding of the Quandt/Klatten
family which controls car manufacturer BMW).
[52]             See para. 8 of the Horizontal Merger Guidelines and
para. 10 of the Non-horizontal Merger Guidelines.
[53]             Commission decision of 13 July 2005.
[54]             COMP/M.4439 – Ryanair/Aer Lingus I, decision of
27 June 2007.
[55]             COMP/M.6663 – Ryanair/Aer Lingus III, decision
of 27 February 2013.
[56]             Case T-411/07 Aer Lingus v Commission [2010] ECR
II-3691.
[57]             http://www.competition-commission.org.uk/assets/competitioncommission/docs/2012/ryanair-aer-lingus/130828_ryanair_final_report.pdf
- Ryanair appealed the decision but the Competition Appeal Tribunal rejected
the appeal on 7 March 2014.
[58]             Commission decision of 19 September 2006.
[59]             Annex I of the Consultation Paper.
[60]             COMP/M.1673 - VEBA/VIAG, decision of 13 June
2000.
[61]             COMP/M.5406 - IPIC/MAN Ferrostaal AG, decision
of 13 March 2009.
[62]             Case T-411/07 Aer Lingus v Commission [2010] ECR
II-3691, in particular paragraph 104, and Case 6/72 Continental Can v
Commission [1973] ECR 216.
[63]             Council Regulation (EC) No 1/2003 of 16 December 2002
on the implementation of the rules on competition laid down in Articles 81 and
82 of the treaty (OJ L 1, 4.1.2003, p. 1) as amended.
[64]             Regarding the delineation of competences between the
Member States and the Commission, it would be envisaged that the turnover
thresholds of the Merger Regulation would also apply to the acquisitions of
minority shareholdings and that likewise the referral system would apply for
minority shareholdings in order to allow for a "fine tuning" of case
allocation to the "more appropriate authority" where this is not
achieved via the turnover thresholds.
[65]             The Consultation Paper did not define what would
constitute a relevant "minority shareholding" (the Consultation Paper
used the term "structural link"), but rather put it to the
stakeholders to state which minority shareholdings should be controlled. Many
replies pointed in the direction of a targeted system which would cover only
transactions between competitors or vertically related companies.
[66]             These figures were based on an
extrapolation from the Zephyr database (a database containing information on
the total number, the value and the corresponding participation percentages of
ownership transactions in listed companies registered in 27 EU Member States)
and an estimation of the yearly number of minority shareholding transactions
with EU dimension which were investigated by the Member States (i.e. those which
have a system for the control of minority shareholdings. However, the estimate
presuppose that acquisitions of non-controlling minority shareholding are
similarly frequent across different Member States. See Impact Assessment Report for more detail.
[67]             This approach would also capture an acquisition of a
minority shareholding by one company which itself does not compete with the target,
but which already holds a minority stake (or more) in one or more other firm(s)
competing with the target. The main possible theory of harm applicable in such
a case would be one of coordination, where, for instance, the holding company
sits on the board of several competitors and has access to confidential
information which it can share with the other competitors. Although the
likelihood that such a case would result in competition concerns may be less
than in the case of a direct link between acquirer and target, such
transactions would still fall under the Commission's competence. One would also
need to consider the turnover calculation and the definition of undertakings
concerned for such cases. 
[68]             The two Member States which rely so far on a similar
test, namely "material influence" in the UK, "wettbewerblich
erheblicher Einfluss" (competitively significant influence) in Germany, both
take into account whether the shareholding gives rise to equivalent rights to
those granted to a minority shareholder of 25% in determining the
"significance" of the shareholding.
[69]             See for instance in Belgium, Germany and the United
Kingdom a 25% threshold applies to publicly listed companies, while in other
Member States, such as France and Italy, it is 33.33%. 
[70]             See responses to the Consultation Paper from economic
consultancies and academics.
[71]             Alternatively, a 15% threshold could be envisaged. For
instance, the United Kingdom has set a threshold of 15% above which it may
examine any case (see OFT, "Mergers - Jurisdiction and procedural
guidance", para. 3.20). This might also serve as a clear-cut threshold
above which a shareholding would be considered a "competitively
significant link".
[72]             The UK case BSkyB/ITV (2007) provides a good example of
a de-facto blocking minority shareholding as a stake of 17.9% was found sufficient
for a material link on the basis that it allowed BskyB to influence strategic
decision making of ITV. The case was cleared subject to a divestiture of the
shareholding down to 7.5%. 
[73]             See Section
(c)(9) of the Hart-Scott-Rodino Act (15 U.S.C. § 18a). An acquisition is made "solely for the purpose of investment"
if the person holding or acquiring such voting securities has no intention of
participating in the formulation, determination, or direction of the basic
business decisions of the issuer. See 16 CFR 801.1(i)(1) and 16 CFR 802.9
available at: http://www.ftc.gov/enforcement/premerger-notification-program/statute-rules-and-formal-interpretations.
[74]             Broadly speaking, a concentration is not deemed to
arise if the acquiring financial institution does not exercise the voting
rights with a view of determining the competitive behaviour of the target firm
and if the securities are disposed within one year following the acquisition.  
[75]             One possibility would be to require market share
information only for the markets where the combined market shares are 20% or
above, similar to what is required under the German Act against Restraints of
Competition, see §39 (3) Nr. 2 GWG. Another possibility would be to require the
submission of internal documents similar to the HSR 4(c) documents in the U.S.,
covering any studies, analyses, etc. which were prepared "for the
purpose of evaluating or analysing the acquisition with respect to market
shares, competition, competitors, markets, potential for sales growth or
expansion into product or geographic markets". 
[76]             Responses to Question 9 of the Consultation Paper. 
[77]             The "hold separate" obligation would require
a ring-fencing of the assets, the obligation to nominate a hold separate manager,
etc., similar to what is standard practice for divestiture commitments during
the divestiture periods or the conditions and obligations under Article 7(3) of
the Merger Regulation. 
[78]             Article 6 (1) (b) subparagraph 2 and Article 8 (2)
subparagraph 3 of the Merger Regulation and Commission Notice on restrictions
directly related and necessary to concentrations (OJ C 56, 5.2.2005, p.24). 
[79]             See for instance COMP/M.6541 - Glencore/Xstrata,
decision of 22 November 2012, para. 26.
[80]             Commission Notice on restrictions directly related and
necessary to concentrations (OJ C 56, 5.3.2005, p. 24).
[81]             See Recital 21 of the Merger Regulation.
[82]             However, this would not necessarily mean that the
turnover would be calculated in the same way as it is currently calculated for
joint ventures. For jurisdictional purposes, it might be more appropriate to
calculate the turnover for each acquirer separately. 
[83]             Regarding the two-thirds rule, the 2009 Report noted
that the 126 cases notified at the national level in application of this rule
during the period of 2001 to 2009 was relatively low compared to the overall
case load of more than 26,000 at Member State level and that it had mostly been
applied in relation to large Member States. The Report found that the two-thirds
rule had in most cases appropriately distinguished between mergers that in
terms of cross-border effects had a Union relevance and those that did not.
However, the Report found that there were nevertheless a small number of cases
with potential cross-border effects that fell under NCA competence due to the
two-thirds rule. On the other hand, the figures analysed in the 2009 Staff
Working Paper also show that as firms become geographically more diversified,
the relevance of the two-thirds rule is decreasing. It is likely that that
trend has continued since 2009. 
[84]             For instance, paragraph 19 of the 2009 Report.
[85]             Figures include cases until May 2014. Source: http://ec.europa.eu/competition/mergers/statistics.pdf
[86]             For instance COMP/M.4854 - Tom Tom/Tele Atlas,
decision of 15 May 2008; COMP/M.4731 - Google/Double Click, decision of
11 March 2008; COMP/M.5669 - Cisco/Tandberg, decision of 29 March
2010; COMP/M.6690 - Syniverse/Mach, decision of 29 May 2013; COMP/M.6576
– Munksjö/Ahlstrom, decision of 24 May 2013 or COMP/M.6857
– Crane/MEI, decision of 19 July 2013.
[87]             Some stakeholders, including NCAs, have questioned
whether parties should be able to request a referral if only two Member States
have jurisdiction. The advantage of such a proposal is that parties could
ensure a uniform decision is taken for such cases with cross-border effects. On
the other hand, the one-stop-shop principle is less important if only two
competent Member States are involved. In any event, Member States can request
an Article 22 referral for such cases with cross-border effects.  
[88]             It should be made clear that, in the context of case
referrals, a competent Member State includes those Member States where the
parties may notify, but there is no obligation to do so given the voluntary
nature of the regime (e.g. the United Kingdom). 
[89]             See paragraph 0.
[90]             Figures include cases until May 2014. Source: http://ec.europa.eu/competition/mergers/statistics.pdf.
[91]             See Commission Notice on case referral in respect of
concentrations (OJ C 56, 5.3.2005, p. 2) ("Notice on Case Referral"),
paragraph 45. According to the Notice, a case displays such cross-border
effects in particular if it gives rise to serious competition concerns in
markets which are wider than national in geographic scope or in a series of
national or narrower than national markets in a number of Member States in
circumstances where coherent treatment of the case (regarding possible
remedies, but also, in appropriate cases, the investigative efforts as such) is
considered desirable. 
[92]             Case COMP/M.6796 – Aegean/Olympic II, decision
of 9 October 2013.
[93]             Such category of cases also involves few cases in which
the NCAs involved reached diverging conclusions, for instance the transactions Eurotunnel/SeaFrance,
Akzo Nobel/Metlac or Flughafen Wien/Bratislava Airport.
[94]             Commission decision of 17
November 2010.
[95]             Commission decision of 17 June
2010.
[96]              The
 United Kingdom, Belgium, Portugal, Spain, Slovakia, Hungary and Poland.
[97]             The Commission dismissed the request of Hungary as it did not meet the requirements laid down in Article 22(3). Slovakia and Poland withdrew their request. 
[98]             http://ec.europa.eu/competition/ecn/eca_information_exchange_procedures_en.pdf. 
[99]             Figures include cases until May 2014. Source: http://ec.europa.eu/competition/mergers/statistics.pdf.
[100]            2009 Staff Working Paper, paragraph 96.
[101]            Figures include cases until May 2014. Source: http://ec.europa.eu/competition/mergers/statistics.pdf.
[102]            2009 Report, paragraph 21, and 2009 Staff Working Paper,
paragraph 154.
[103]            Section 4.2 of the 2009 Report.
[104]            Article 6(1)(c) of the Merger Regulation.
[105]            In Phase II investigation, commitments must be submitted
no later than 65 working days from the day on which the Phase II investigation
was opened (Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing
Council Regulation (EC) No 139/2004 (OJ L 133 30.04.2004, p. 1) amended by
Commission Regulation EC No 1033/2008 of 20 October 2008 (OJ L 279, 22.10.2008,
p. 3) and by Commission Regulation (EU) No 1269/2013 of 5 December 2013 (OJ L 336,
14.12.2013, p. 1)
[106]            Commission Implementing Regulation (EU) No 1269/2013 of
5 December 2013 amending Regulation (EC) No 802/2004 implementing Council
Regulation (EC) No 139/2004 on the control of concentrations between
undertakings (OJ L 336, 14.12.2013, p. 1) and Commission Notice on a simplified
procedure for treatment of certain concentrations under Council Regulation (EC)
No 139/2004 (OJ C 366, 14.12.2013, p. 5, corrigendum: OJ C 11, 15.01.2014, p.6).
[107]            As indicated by an increase ("delta") of the
so-called Herfindahl-Hirschman Index ("HHI") of less than 150.
[108]            Commission Consolidated Jurisdictional Notice under
Council Regulation (EC) No 139/2004 on the control of concentrations between
undertakings (OJ C 95, 16.4.2008, p. 1), section 5.2.
[109]            In principle, the Commission has 25 working days during
the initial Phase I investigation to decide whether the transaction may be
cleared because it does not raise any serious doubts as to its compatibility
with the internal market, or whether an in-depth Phase II investigation should
be initiated. In Phase II proceedings, it must normally take a final decision
within 90 working days (Article 10(1) of the Merger Regulation. If the parties
offer commitments, the deadlines are extended to 35 working days (in Phase I)
or 105 working days (in Phase II, unless the commitments are offered before 55
working days and not substantially modified thereafter). Furthermore, the Phase
II deadline may be extended either on request of the notifying parties or in
agreement between the Commission and the notifying parties by up to a maximum
of 20 additional working days (Article 10(3) of the Merger Regulation). 
[110]            Section 0.
[111]            COMP/M.4439 – Ryanair/Aer Lingus, decision of 20
February 2007.
[112]            Case T-411/07 Aer Lingus v Commission [2010] ECR
II-3691.
[113]            See section 0.
[114]            Consolidated Jurisdictional Notice, see footnote 103, paragraph
35. 
[115]            The Court of Justice has explicitly stated in Case
C-551/10 P Editions Odile Jacob v Commission, judgment of 6 November 2012 (not
yet reported in the ECR), that the question of qualification of the
"parking transaction" was not relevant for deciding the case at hand.