Source: EURLEX
Language: en
Format: md

|  |  |  |  |
| --- | --- | --- | --- |
| 5.3.2005 | EN | Official Journal of the European Union | C 56/2 |

---

Commission Notice on Case Referral in respect of concentrations

(2005/C 56/02)

(Text with EEA relevance)

|  |  |
| --- | --- |
| 1. | The purpose of this Notice is to describe in a general way the rationale underlying the case referral system in Article 4(4) and (5), Article 9 and Article 22 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation)[(1)](#ntr1-C_2005056EN.01000201-E0001) (hereinafter ‘the Merger Regulation’), including the recent changes made to the system, to catalogue the legal criteria that must be fulfilled in order for referrals to be possible, and to set out the factors which may be taken into consideration when referrals are decided upon. The Notice also provides practical guidance regarding the mechanics of the referral system, in particular regarding the pre-notification referral mechanism provided for in Article 4(4) and (5) of the Merger Regulation. The guidance provided in this notice applies, mutatis mutandis, to the referral rules contained in the EEA Agreement[(2)](#ntr2-C_2005056EN.01000201-E0002). |

I.   INTRODUCTION

|  |  |
| --- | --- |
| 2. | Community jurisdiction in the field of merger control is defined by the application of the turnover-related criteria contained in Articles 1(2) and 1(3) of the Merger Regulation. When dealing with concentrations, the Commission and Member States do not have concurrent jurisdiction. Rather, the Merger Regulation establishes a clear division of competence. Concentrations with a ‘Community dimension’, i.e. those above the turnover thresholds in Article 1 of the Merger Regulation, fall within the exclusive jurisdiction of the Commission; Member States are precluded from applying national competition law to such concentrations by virtue of Article 21 of the Merger Regulation. Concentrations falling below the thresholds remain within the competence of the Member States; the Commission has no jurisdiction to deal with them under the Merger Regulation. |

|  |  |
| --- | --- |
| 3. | Determining jurisdiction exclusively by reference to fixed turnover-related criteria provides legal certainty for merging companies. While the financial criteria generally serve as effective proxies for the category of transactions for which the Commission is the more appropriate authority, Regulation (EEC) No 4064/89 complemented this ‘bright-line’ jurisdictional scheme with a possibility for cases to be re-attributed by the Commission to Member States and vice versa, upon request and provided certain criteria were fulfilled. |

|  |  |
| --- | --- |
| 4. | When Regulation (EEC) No 4064/89 was first introduced, it was envisaged by the Council and Commission that case referrals would only be resorted to in ‘exceptional circumstances’ and where ‘the interests in respect of competition of the Member State concerned could not be adequately protected in any other way’[(3)](#ntr3-C_2005056EN.01000201-E0003). There have, however, been a number of developments since the adoption of Regulation (EEC) No 4064/89. First, merger control laws have been introduced in almost all Member States. Second, the Commission has exercised its discretion to refer a number of cases to Member States pursuant to Article 9 in circumstances where it was felt that the Member State in question was in a better position to carry out the investigation than the Commission[(4)](#ntr4-C_2005056EN.01000201-E0004). Likewise, in a number of cases[(5)](#ntr5-C_2005056EN.01000201-E0005), several Member States decided to make a joint referral of a case pursuant to Article 22 in circumstances where it was felt that the Commission was the authority in a better position to carry out the investigation[(6)](#ntr6-C_2005056EN.01000201-E0006). Third, there has been an increase in the number of transactions not meeting the thresholds in Article 1 of the Merger Regulation which must be filed in multiple Member State jurisdictions, a trend which is likely to continue in line with the Community's growing membership. Many of these transactions affect competition beyond the territories of individual Member States[(7)](#ntr7-C_2005056EN.01000201-E0007). |

|  |  |
| --- | --- |
| 5. | The revisions made to the referral system in the Merger Regulation are designed to facilitate the re-attribution of cases between the Commission and Member States, consistent with the principle of subsidiarity, so that the more appropriate authority or authorities for carrying out a particular merger investigation should in principle deal with the case. At the same time, the revisions are intended to preserve the basic features of the Community merger control system introduced in 1989, in particular the provision of a ‘one-stop-shop’ for the competition scrutiny of mergers with a cross-border impact and an alternative to multiple merger control notifications within the Community[(8)](#ntr8-C_2005056EN.01000201-E0008). Such multiple filings often entail considerable cost for competition authorities and businesses alike. |

|  |  |
| --- | --- |
| 6. | The case re-attribution system now provides that a referral may also be triggered before a formal filing has been made in any Member State jurisdiction, thereby affording merging companies the possibility of ascertaining, at as early as possible a stage, where jurisdiction for scrutiny of their transaction will ultimately lie. Such pre-notification referrals have the advantage of alleviating the additional cost, notably in terms of time delay, associated with post-filing referral. |

|  |  |
| --- | --- |
| 7. | The revisions made to the referral system in Regulation (EC) No. 139/2004 were motivated by a desire that it should operate as a jurisdictional mechanism which is flexible[(9)](#ntr9-C_2005056EN.01000201-E0009) but which at the same time ensures effective protection of competition and limits the scope for ‘forum shopping’ to the greatest extent possible. However, having regard in particular to the importance of legal certainty, it should be stressed that referrals remain a derogation from the general rules which determine jurisdiction based upon objectively determinable turnover thresholds. Moreover, the Commission and Member States retain a considerable margin of discretion in deciding whether to refer cases falling within their ‘original jurisdiction’, or whether to accept to deal with cases not falling within their ‘original jurisdiction’, pursuant to Article 4(4) and (5), Article 9(2)(a) and Article 22[(10)](#ntr10-C_2005056EN.01000201-E0010). To that extent, the current Notice is intended to provide no more than general guidance regarding the appropriateness of particular cases or categories of cases for referral. |

II.   REFERRAL OF CASES

Guiding principles

|  |  |
| --- | --- |
| 8. | The system of merger control established by the Merger Regulation, including the mechanism for re-attributing cases between the Commission and Member States contained therein, is consistent with the principle of subsidiarity enshrined in the EC Treaty[(11)](#ntr11-C_2005056EN.01000201-E0011). Decisions taken with regard to the referral of cases should accordingly take due account of all aspects of the application of the principle of subsidiarity in this context, in particular which is the authority more appropriate for carrying out the investigation, the benefits inherent in a ‘one-stop-shop’ system, and the importance of legal certainty with regard to jurisdiction[(12)](#ntr12-C_2005056EN.01000201-E0012). These factors are inter-linked and the respective weight placed upon each of them will depend upon the specificities of a particular case. Above all, in considering whether or not to exercise their discretion to make or accede to a referral, the Commission and Member States should bear in mind the need to ensure effective protection of competition in all markets affected by the transaction[(13)](#ntr13-C_2005056EN.01000201-E0013). |

More appropriate authority

|  |  |
| --- | --- |
| 9. | In principle, jurisdiction should only be re-attributed to another competition authority in circumstances where the latter is the more appropriate for dealing with a merger, having regard to the specific characteristics of the case as well as the tools and expertise available to the authority. Particular regard should be had to the likely locus of any impact on competition resulting from the merger. Regard may also be had to the implications, in terms of administrative effort, of any contemplated referral[(14)](#ntr14-C_2005056EN.01000201-E0014). |

|  |  |
| --- | --- |
| 10. | The case for re-attributing jurisdiction is likely to be more compelling where it appears that a particular transaction may have a significant impact on competition and thus may deserve careful scrutiny. |

One-stop-shop

|  |  |
| --- | --- |
| 11. | Decisions on the referral of cases should also have regard to the benefits inherent in a ‘one-stop-shop’, which is at the core of the Merger Regulation[(15)](#ntr15-C_2005056EN.01000201-E0015). The provision of a one-stop-shop is beneficial to competition authorities and businesses alike. The handling of a merger by a single competition authority normally increases administrative efficiency, avoiding duplication and fragmentation of enforcement effort as well as potentially incoherent treatment (regarding investigation, assessment and possible remedies) by multiple authorities. It normally also brings advantages to businesses, in particular to merging firms, by reducing the costs and burdens arising from multiple filing obligations and by eliminating the risk of conflicting decisions resulting from the concurrent assessment of the same transaction by a number of competition authorities under diverse legal regimes. |

|  |  |
| --- | --- |
| 12. | Fragmentation of cases through referral should therefore be avoided where possible[(16)](#ntr16-C_2005056EN.01000201-E0016), unless it appears that multiple authorities would be in a better position to ensure that competition in all markets affected by the transaction is effectively protected. Accordingly, while partial referrals are possible under Article 4(4) and Article 9, it would normally be appropriate for the whole of a case (or at least all connected parts thereof) to be dealt with by a single authority[(17)](#ntr17-C_2005056EN.01000201-E0017). |

Legal certainty

|  |  |
| --- | --- |
| 13. | Due account should also be taken of the importance of legal certainty regarding jurisdiction over a particular concentration, from the perspective of all concerned[(18)](#ntr18-C_2005056EN.01000201-E0018). Accordingly, referral should normally only be made when there is a compelling reason for departing from ‘original jurisdiction’ over the case in question, particularly at the post-notification stage. Similarly, if a referral has been made prior to notification, a post-notification referral in the same case should be avoided to the greatest extent possible[(19)](#ntr19-C_2005056EN.01000201-E0019). |

|  |  |
| --- | --- |
| 14. | The importance of legal certainty should also be borne in mind with regard to the legal criteria for referral, and particularly — given the tight deadlines — at the pre-notification stage. Accordingly, pre-filing referrals should in principle be confined to those cases where it is relatively straightforward to establish, from the outset, the scope of the geographic market and/or the existence of a possible competitive impact, so as to be able to promptly decide upon such requests |

Case referrals: legal requirements and other factors to be considered

Pre-notification referrals

|  |  |
| --- | --- |
| 15. | The system of pre-notification referrals is triggered by a reasoned submission lodged by the parties to the concentration. When contemplating such a request, the parties to the concentration are required, first, to verify whether the relevant legal requirements set out in the Merger Regulation are fulfilled, and second, whether a pre-notification referral would be consistent with the guiding principles outlined above. |

Referral of cases by the Commission to Member States under Article 4(4)

Legal requirements

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 16. | In order for a referral to be made by the Commission to one or more Member States pursuant to Articles 4(4), two legal requirements must be fulfilled:   |  |  | | --- | --- | | (i) | there must be indications that the concentration may significantly affect competition in a market or markets; |  |  |  | | --- | --- | | (ii) | the market(s) in question must be within a Member State and present all the characteristics of a distinct market. | |

|  |  |
| --- | --- |
| 17. | As regards the first criterion, the requesting parties are in essence required to demonstrate that the transaction is liable to have a potential impact on competition on a distinct market in a Member State, which may prove to be significant, thus deserving close scrutiny. Such indications may be no more than preliminary in nature, and would be without prejudice to the outcome of the investigation. While the parties are not required to demonstrate that the effect on competition is likely to be an adverse one[(20)](#ntr20-C_2005056EN.01000201-E0020), they should point to indicators which are generally suggestive of the existence of some competitive effects stemming from the transaction[(21)](#ntr21-C_2005056EN.01000201-E0021). |

|  |  |
| --- | --- |
| 18. | As regards the second criterion, the requesting parties are required to show that a geographic market in which competition is affected by the transaction in the manner just described (paragraph 17) is national, or narrower than national in scope[(22)](#ntr22-C_2005056EN.01000201-E0022). |

Other factors to be considered

|  |  |
| --- | --- |
| 19. | Other than verification of the legal requirements, in order to anticipate to the greatest extent possible the likely outcome of a referral request, merging parties contemplating a request should also consider whether referral of the case is likely to be considered appropriate. This will involve an examination of the application of the guiding principles referred to above (paragraphs 8 to 14), and in particular whether the competition authority or authorities to which they are contemplating requesting the referral of the case is the most appropriate authority for dealing with the case. To this end, consideration should be given in turn both to the likely locus of the competitive effects of the transaction and to how appropriate the national competition authority (NCA) would be for scrutinising the operation. |

|  |  |
| --- | --- |
| 20. | Concentrations with a Community dimension which are likely to affect competition in markets that have a national or narrower than national scope, and the effects of which are likely to be confined to, or have their main economic impact in, a single Member State[(23)](#ntr23-C_2005056EN.01000201-E0023), are the most appropriate candidate cases for referral to that Member State. This applies in particular to cases where the impact would occur on a distinct market which does not constitute a substantial part of the common market. To the extent that referral is made to one Member State only, the benefit of a ‘one-stop-shop’ is also preserved. |

|  |  |
| --- | --- |
| 21. | The extent to which a concentration with a Community dimension which, despite having a potentially significant impact on competition in a nation-wide market, nonetheless potentially engenders substantial cross-border effects (e.g. because the effects of the concentration in one geographic market may have significant repercussions in geographic markets in other Member States, or because it may involve potential foreclosure effects and consequent fragmentation of the common market[(24)](#ntr24-C_2005056EN.01000201-E0024)), may be an appropriate candidate for referral will depend on the specific circumstances of the case. As both the Commission and Member States may be equally well equipped or be in an equally good position to deal with such cases, a considerable margin of discretion should be retained in deciding whether or not to refer such cases. |

|  |  |
| --- | --- |
| 22. | The extent to which concentrations with a Community dimension, and potentially affecting competition in a series of national or narrower than national markets in more than one Member State, may be appropriate candidates for referral to Member States will depend on factors specific to each individual case, such as the number of national markets likely to be significantly affected, the prospect of addressing any possible concerns by way of proportionate, non-conflicting remedies, and the investigative efforts that the case may require. To the extent that a case may engender competition concerns in a number of Member States, and require coordinated investigations and remedial action, this may militate in favour of the Commission retaining jurisdiction over the entirety of the case in question[(25)](#ntr25-C_2005056EN.01000201-E0025). On the other hand, to the extent that the case gives rise to competition concerns which, despite involving national markets in more than one Member State, do not appear to require coordinated investigation and/or remedial action, a referral may be appropriate. In a limited number of cases[(26)](#ntr26-C_2005056EN.01000201-E0026), the Commission has even found it appropriate to refer a concentration to more than one Member State, in view of the significant differences in competitive conditions that characterised the affected markets in the Member States concerned. While fragmentation of the treatment of a case deprives the merging parties of the benefit of a one-stop-shop in such cases, this consideration is less pertinent at the pre-notification stage, given that the referral is triggered by a voluntary request from the merging parties. |

|  |  |
| --- | --- |
| 23. | Consideration should also, to the extent possible, be given to whether the NCA(s) to which referral of the case is contemplated may possess specific expertise concerning local markets[(27)](#ntr27-C_2005056EN.01000201-E0027), or be examining, or about to examine, another transaction in the sector concerned[(28)](#ntr28-C_2005056EN.01000201-E0028). |

Referral of cases from Member States to the Commission under Article 4(5)

Legal requirements

|  |  |
| --- | --- |
| 24. | Under Article 4(5), only two legal requirements must be met in order for the parties to the transaction to request the referral of the case to the Commission: the transaction must be a concentration within the meaning of Article 3 of the Merger Regulation, and the concentration must be capable of being reviewed under the national competition laws for the control of mergers of at least three Member States (see also paragraphs 65 et seq and 70 et seq). |

Other factors to be considered

|  |  |
| --- | --- |
| 25. | Other than verification of the legal requirements, in order to anticipate to the greatest extent possible the likely outcome of a referral request, merging parties contemplating a request should also consider whether referral of the case is likely to be considered appropriate. This will involve an examination of the application of the guiding principles referred to above, and in particular whether the Commission is the more appropriate authority for dealing with the case. |

|  |  |
| --- | --- |
| 26. | In this regard, Recital 16 to the Merger Regulation states that ‘requests for pre-notification referrals to the Commission would be particularly pertinent in situations where the concentration would affect competition beyond the territory of one Member State.’ Particular consideration should therefore be given to the likely locus of any competitive effects resulting from the transaction, and to how appropriate it would be for the Commission to scrutinise the operation. |

|  |  |
| --- | --- |
| 27. | It should in particular be assessed whether the case is genuinely cross-border in nature, having regard to elements such as its likely effects on competition and the investigative and enforcement powers likely to be required to address any such effects. In this regard, particular consideration should be given to whether the case is liable to have a potential impact on competition in one or more markets affected by the concentration. In any case, indications of possible competitive impact may be no more than preliminary in nature[(29)](#ntr29-C_2005056EN.01000201-E0029), and would be without prejudice to the outcome of the investigation. Nor would it be necessary for the parties to demonstrate that the effect on competition is likely to be an adverse one. |

|  |  |
| --- | --- |
| 28. | Cases where the market(s) in which there may be a potential impact on competition is/are wider than national in geographic scope[(30)](#ntr30-C_2005056EN.01000201-E0030), or where some of the potentially affected markets are wider than national and the main economic impact of the concentration is connected to such markets, are the most appropriate candidate cases for referral to the Commission. In such cases, as the competitive dynamics extend over territories reaching beyond national boundaries, and may consequently require investigative efforts in several countries as well as appropriate enforcement powers, the Commission is likely to be in the best position to carry out the investigation. |

|  |  |
| --- | --- |
| 29. | The Commission may be more appropriately placed to treat cases (including investigation, assessment and possible remedial action) that give rise to potential competition concerns in a series of national or narrower than national markets located in a number of different Member States[(31)](#ntr31-C_2005056EN.01000201-E0031). The Commission is likely to be in the best position to carry out the investigation in such cases, given the desirability of ensuring consistent and efficient scrutiny across the different countries, of employing appropriate investigative powers, and of addressing any competition concerns by way of coherent remedies. |

|  |  |
| --- | --- |
| 30. | Similarly to what has been said above in relation to Article 4(4), the appropriateness of referring concentrations which, despite having a potentially significant impact on competition in a nation-wide market, nonetheless potentially engender substantial cross-border effects, will depend on the specific circumstances of the case. As both the Commission and Member States may be in an equally good position to deal with such cases, a considerable margin of discretion should be retained in deciding whether or not to refer such cases. |

|  |  |
| --- | --- |
| 31. | Consideration should also, to the extent possible, be given to whether the Commission is particularly well equipped to properly scrutinise the case, in particular having regard to factors such as specific expertise, or past experience in the sector concerned. The greater a merger's potential to affect competition beyond the territory of one Member State, the more likely it is that the Commission will be better equipped to conduct the investigation, particularly in terms of fact finding and enforcement powers. |

|  |  |
| --- | --- |
| 32. | Finally, the parties to the concentration might submit that, despite the apparent absence of an effect on competition, there is a compelling case for having the operation treated by the Commission, having regard in particular to factors such as the cost and time delay involved in submitting multiple Member State filings[(32)](#ntr32-C_2005056EN.01000201-E0032). |

Post-notification referrals

Referrals from the Commission to Member States pursuant to Article 9

|  |  |
| --- | --- |
| 33. | Under Article 9 there are two options for a Member State wishing to request referral of a case following its notification to the Commission: Articles 9(2)(a) and 9(2)(b) respectively. |

Article 9(2)(a)

Legal requirements

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 34. | In order for a referral to be made to a Member State or States pursuant to Article 9(2)(a), the following legal requirements must be fulfilled:   |  |  | | --- | --- | | (i) | the concentration must threaten to affect significantly competition in a market; and |  |  |  | | --- | --- | | (ii) | the market in question must be within the requesting Member State, and present all the characteristics of a distinct market. | |

|  |  |
| --- | --- |
| 35. | As regards the first criterion, in essence a requesting Member State is required to demonstrate that, based on a preliminary analysis, there is a real risk that the transaction may have a significant adverse impact on competition, and thus that it deserves close scrutiny. Such preliminary indications may be in the nature of prima facie evidence of such a possible significant adverse impact, but would be without prejudice to the outcome of a full investigation. |

|  |  |
| --- | --- |
| 36. | As regards the second criterion, the Member State is required to show that a geographic market(s) in which competition is affected by the transaction in the manner just described (paragraph 35) is/are national, or narrower than national in scope[(33)](#ntr33-C_2005056EN.01000201-E0033). |

Other factors to be considered

|  |  |
| --- | --- |
| 37. | Other than verification of the legal requirements, other factors should also be considered in assessing whether referral of a case is likely to be considered appropriate. This will involve an examination of the application of the guiding principles referred to above, and in particular whether the competition authority or authorities requesting the referral of the case is/are in the best position to deal with the case. To this end, consideration should be given in turn both to the likely locus of the competitive effects of the transaction and to how well equipped the NCA would be to scrutinise the operation (see above at paragraphs 19-23) |

Article 9(2)(b)

Legal requirements

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 38. | In order for a referral to be made to a Member State or States pursuant to Article 9(2)(b), the following legal requirements must be fulfilled:   |  |  | | --- | --- | | (i) | the concentration must affect competition in a market; and |  |  |  | | --- | --- | | (ii) | the market in question must be within the requesting Member State, present all the characteristics of a distinct market, and must not constitute a substantial part of the common market. | |

|  |  |
| --- | --- |
| 39. | As regards the first criterion, a requesting Member State is required to show, based on a preliminary analysis, that the concentration is liable to have an impact on competition in a market. Such preliminary indications may be in the nature of prima facie evidence of a possible adverse impact, but would be without prejudice to the outcome of a full investigation. |

|  |  |
| --- | --- |
| 40. | As to the second criterion, a requesting Member State is required to show not only that the market in which competition is affected by the operation in the manner just described (paragraph 38) constitutes a distinct market within a Member State, but also that the market in question does not constitute a substantial part of the common market. In this respect, based on the past practice and case-law[(34)](#ntr34-C_2005056EN.01000201-E0034), it appears that such situations are generally limited to markets with a narrow geographic scope, within a Member State. |

|  |  |
| --- | --- |
| 41. | If these conditions are met, the Commission has an obligation to refer the case. |

Referrals from Member States to the Commission pursuant to Article 22

Legal requirements

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 42. | In order for a referral to be made by one or more Member States to the Commission pursuant to Article 22, two legal requirements must be fulfilled:   |  |  | | --- | --- | | (i) | the concentration must affect trade between Member States; and |  |  |  | | --- | --- | | (ii) | it must threaten to significantly affect competition within the territory of the Member State or States making the request. | |

|  |  |
| --- | --- |
| 43. | As to the first criterion, a concentration fulfils this requirement to the extent that it is liable to have some discernible influence on the pattern of trade between Member States[(35)](#ntr35-C_2005056EN.01000201-E0035). |

|  |  |
| --- | --- |
| 44. | As to the second criterion, as under Article 9(2)(a), a referring Member State or States is/are required in essence to demonstrate that, based on a preliminary analysis, there is a real risk that the transaction may have a significant adverse impact on competition, and thus that it deserves close scrutiny. Such preliminary indications may be in the nature of prima facie evidence of such a possible significant adverse impact, but would be without prejudice to the outcome of a full investigation. |

Other factors to be considered

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 45. | As post-notification referrals to the Commission may entail additional cost and time delay for the merging parties, they should normally be limited to those cases which appear to present a real risk of negative effects on competition and trade between Member States, and where it appears that these would be best addressed at the Community level[(36)](#ntr36-C_2005056EN.01000201-E0036). The categories of cases normally most appropriate for referral to the Commission pursuant to Article 22 are accordingly the following:   |  |  | | --- | --- | | — | cases which give rise to serious competition concerns in one or more markets which are wider than national in geographic scope, or where some of the potentially affected markets are wider than national, and where the main economic impact of the concentration is connected to such markets, |  |  |  | | --- | --- | | — | cases which give rise to serious competition concerns in a series of national or narrower than national markets located 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, and where the main economic impact of the concentration is connected to such markets. | |

III.   MECHANICS OF THE REFERRAL SYSTEM

A.   OVERVIEW OF THE REFERRAL SYSTEM

|  |  |
| --- | --- |
| 46. | The Merger Regulation sets out the relevant legal rules for the functioning of the referral system. The rules contained in Article 4(4) and (5), Article 9 and Article 22 set out in detail the various steps required for a case to be referred from the Commission to Member States and vice versa. |

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 47. | Each of the four relevant referral provisions establishes a self-contained mechanism for the referral of a given category of concentration. The provisions can be categorised in the following way:   |  |  |  |  |  |  | | --- | --- | --- | --- | --- | --- | | (a) | Pre-notification referrals:   |  |  | | --- | --- | | (i) | From the Commission to Member States (Article 4(4)) |  |  |  | | --- | --- | | (ii) | From Member States to the Commission (Article 4(5)) | |  |  |  |  |  |  |  | | --- | --- | --- | --- | --- | --- | | (b) | Post-notification referrals:   |  |  | | --- | --- | | (i) | From the Commission to Member States (Article 9) |  |  |  | | --- | --- | | (ii) | From Member States to the Commission (Article 22). | | |

|  |  |
| --- | --- |
| 48. | The flowcharts in Annex I to this Notice describe in graphical form the various procedural steps to be followed in the referral mechanisms set out in Articles 4(4) and (5), Article 9 and Article 22. |

Pre-notification referrals

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 49. | Pre-notification referrals can only be requested by the undertakings concerned[(37)](#ntr37-C_2005056EN.01000201-E0037). It is for the undertakings concerned to verify whether the concentration meets the criteria specified in Article 4(4) (that the concentration has a Community dimension but may significantly affect competition in a distinct market within a Member State) or Article 4(5) (that the concentration does not have a Community dimension but is capable of being reviewed under the national competition laws of at least three Member States). The undertakings concerned may then decide to request a referral to or from the Commission by submitting a reasoned request on Form RS. The request is transmitted without delay by the Commission to all Member States. The remainder of the process differs under Article 4(4) and Article 4(5).   |  |  | | --- | --- | | — | Under Article 4(4), the Member State or States concerned[(38)](#ntr38-C_2005056EN.01000201-E0038) have 15 working days from the date they receive the submission to express agreement or disagreement with the request. Silence on the part of a Member State is deemed to constitute agreement[(39)](#ntr39-C_2005056EN.01000201-E0039). If the Member State or States concerned agree to the referral, the Commission has an additional period of approximately 10 working days (25 working days from the date the Commission received Form RS) in which it may decide to refer the case. Silence on the part of the Commission is deemed to constitute assent. If the Commission assents, the case (or one or more parts thereof) is referred to the Member States or States as requested by the undertakings concerned. If the referral is made, the Member State or States concerned apply their national law to the referred part of the case[(40)](#ntr40-C_2005056EN.01000201-E0040). Articles 9(6) to 9(9) apply. |  |  |  | | --- | --- | | — | Under Article 4(5), the Member States concerned[(41)](#ntr41-C_2005056EN.01000201-E0041) have 15 working days from the date they receive the submission to express agreement or disagreement with the request. At the end of that period, the Commission checks whether any Member State competent to examine the concentration under its national competition law has expressed disagreement. If there is no expression of disagreement by any such competent Member State, the case is deemed to acquire a Community dimension and is thus referred to the Commission which has exclusive jurisdiction over it. It is then for the parties to notify the case to the Commission, using Form CO. On the other hand, if one or more competent Member States have expressed their disagreement, the Commission informs all Member States and the undertakings concerned without delay of any such expression of disagreement and the referral process ends. It is then for the parties to comply with any applicable national notification rules. | |

Post-notification referrals

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 50. | Pursuant to Article 9(2) and Article 22(1), post-notification referrals are triggered by Member States either on their own initiative or following an invitation by the Commission pursuant to Article 9(2) and Article 22(5) respectively. The procedures differ according to whether the referral is from or to the Commission.   |  |  | | --- | --- | | — | Under Article 9, a Member State may request that the Commission refer to it a concentration with Community dimension, or a part thereof, which has been notified to the Commission and which threatens to significantly affect competition within a distinct market within that Member State (Article 9(2)(a)), or which affects such a distinct market not constituting a substantial part of the common market (Article 9(2)(b)). The request must be made within 15 working days from the date the Member State received a copy of Form CO. The Commission must first verify whether those legal criteria are met. It may then decide to refer the case, or a part thereof, exercising its administrative discretion. In the case of a referral request made pursuant to Article 9(2)(b), the Commission must (i.e. has no discretion) make the referral if the legal criteria are met. The decision must be taken within 35 working days from notification or, where the Commission has initiated proceedings, within 65 working days[(42)](#ntr42-C_2005056EN.01000201-E0042). If the referral is made, the Member State concerned applies its own national competition law, subject only to Article 9(6) and (8). |  |  |  | | --- | --- | | — | Under Article 22, a Member State may request that the Commission examine a concentration which has no Community dimension but which affects trade between Member States and threatens to significantly affect competition within its territory. The request must be made within 15 working days from the date of national notification or, where no notification is required, the date when the concentration was ‘made known’[(43)](#ntr43-C_2005056EN.01000201-E0043) to the Member State concerned. The Commission transmits the request to all Member States. Any other Member States can decide to join the request[(44)](#ntr44-C_2005056EN.01000201-E0044) within a period of 15 working days from the date they receive a copy of the initial request. All national time limits relating to the concentration are suspended a decision has been taken as to where it will be examined; a Member State can re-start the national time limits before the expiry of the 15 working day period by informing the Commission and the merging parties that it does not wish to join the request. At the latest 10 working days following the expiry of the 15 working day period, the Commission must decide whether to accept the case from the requesting Member State(s). If the Commission accepts jurisdiction, national proceedings in the referring Member State(s) are terminated and the Commission examines the case pursuant to Article 22(4) of the Merger Regulation on behalf of the requesting State(s)[(45)](#ntr45-C_2005056EN.01000201-E0045). Non-requesting States can continue to apply national law. | |

|  |  |
| --- | --- |
| 51. | The following section of the Notice focuses on a number of detailed elements of the system with the aim in particular of providing further guidance to undertakings contemplating making requests at the pre-notification stage, or who may be party to transactions subject to the possibility of post-notification referral. |

B.   DETAILS OF THE REFERRAL MECHANISM

|  |  |
| --- | --- |
| 52. | This section of this Notice provides guidance regarding certain aspects of the functioning of the referral system set out in Article 4(4) and(5), Article 9 and Article 22 of the Merger Regulation. |

1.   The network of competition authorities

|  |  |
| --- | --- |
| 53. | Article 19(2) of the Merger Regulation provides that the Commission is to carry out the procedures set out in that Regulation in close and constant liaison with the competent authorities of the Member States (the NCAs). Cooperation and dialogue between the Commission and the NCAs, and between the NCAs themselves, is particularly important in the case of concentrations which are subject to the referral system set out in the Merger Regulation. |

|  |  |
| --- | --- |
| 54. | According to Recital 14 to the Merger Regulation, ‘the Commission and the NCAs should form together a network of public authorities, applying their respective competences in close cooperation using efficient arrangements for information sharing and consultation with a view to ensuring that a case is dealt with by the most appropriate authority, in the light of the principle of subsidiarity, and with a view to ensuring that multiple notifications of a given concentration are avoided to the greatest extent possible’. |

|  |  |
| --- | --- |
| 55. | The network should ensure the efficient re-attribution of concentrations according to the principles described in section II above. This involves facilitating the smooth operation of the pre-notification referral mechanism, as well as providing, to the extent foreseeable, a system whereby potential post-notification referral requests are identified as soon as possible[(46)](#ntr46-C_2005056EN.01000201-E0046). |

|  |  |
| --- | --- |
| 56. | Pursuant to Article 4(4) and (5), the Commission must transmit reasoned requests made by the undertakings concerned ‘without delay’[(47)](#ntr47-C_2005056EN.01000201-E0047). The Commission will endeavour to transmit such documents on the working day following that on which they are received or issued. Information within the network will be exchanged by various means, depending on the circumstances: e-mail, surface mail, courier, fax, telephone. It should be noted that for sensitive information or confidential information exchanges will be carried out by secure e-mail or by any other protected means of communication between these contact points. |

|  |  |
| --- | --- |
| 57. | All members of the network, including the Commission and all NCAs, their officials and other servants, and other persons working under the supervision of those authorities as well as officials and civil servants of other authorities of the Member States, will be bound by the professional secrecy obligations set out in Article 17 of the Merger Regulation. They must not disclose non-public information they have acquired through the application of the Merger Regulation, unless the natural or legal person who provided that information has consented to its disclosure. |

|  |  |
| --- | --- |
| 58. | Consultations and exchanges within the network is a matter between public enforcement agencies and do not alter any rights or obligations arising from Community or national law for companies. Each competition authority remains fully responsible for ensuring that due process is observed in the cases it deals with. |

2.   Triggering the pre-notification referral system; information to be provided by the requesting parties

|  |  |
| --- | --- |
| 59. | For the referral system to work swiftly and smoothly, it is crucial that the requesting parties, provide complete and accurate information, whenever required, in a timely fashion and in the most efficient way possible. Legal requirements concerning the information to be provided and the consequences of providing incorrect, incomplete or misleading information are set out in the Merger Regulation, Regulation (EC) No 802/2004 (hereinafter ‘the Merger Implementing Regulation’) and Form RS[(48)](#ntr48-C_2005056EN.01000201-E0048). |

|  |  |
| --- | --- |
| 60. | Form RS states that all information submitted in a reasoned submission must be correct and complete. If parties submit incorrect or incomplete information, the Commission has the power to either adopt a decision pursuant to Article 6(1)(a) of the Merger Regulation (where failure to fulfil the conditions of Article 4(5) comes to its attention during the course of the investigation), or to revoke any decision it adopts pursuant to Article 6 or Article 8, following an Article 4(5) referral, pursuant to Article 6(3)(a) or 8(6)(a) of the Merger Regulation. Following the adoption of a decision pursuant to Article 6(1)(a) or following revocation, national competition laws would once again be applicable to the transaction. In the case of referrals under Article 4(4) made on the basis of incorrect or incomplete information, the Commission may require a notification pursuant to Article 4(1). In addition, the Commission has the power to impose fines under Article 14(1)(a) of the Merger Regulation. Finally, parties should also be aware that, if a referral is made on the basis of incorrect or incomplete information included in Form RS, the Commission and/or the Member States may consider making a post-notification referral reversing a pre-notification referral based on such incorrect or incomplete information[(49)](#ntr49-C_2005056EN.01000201-E0049). |

|  |  |
| --- | --- |
| 61. | When providing information on Form RS or generally in making a request for a pre-notification referral, it is not envisaged or necessary for the undertakings concerned to show that their concentration will lead to detrimental effects on competition[(50)](#ntr50-C_2005056EN.01000201-E0050). They should, however, provide as much information as possible showing clearly in what way the concentration meets the relevant legal criteria set out in Article 4(4) and (5) and why the concentration would be most appropriately dealt with by the competition authority or authorities specified in the request. The Merger Regulation does not require publication of the fact that a Form RS has been lodged, and it is not intended to do so. A non-public transaction can consequently be the subject of a pre-notification referral request. |

|  |  |
| --- | --- |
| 62. | Even though, according to the Merger Implementing Regulation, the Commission will accept Form RS in any official Community language, undertakings concerned providing information which is to be distributed to the network are strongly encouraged to use a language which will be understood by all addressees of the information. This will facilitate Member State treatment of such requests. Moreover, as regards requests for referral to a Member State or States, the requesting parties are strongly encouraged to include a copy of the request in the language(s) of the Member State(s) to which the referral is being requested. |

|  |  |
| --- | --- |
| 63. | Beyond the legal requirements specified in Form RS, the undertakings concerned should be prepared to provide additional information, if required, and to discuss the matter with the Commission and the NCAs in a frank and open manner in order to enable the Commission and the NCAs to assess whether the concentration in question should be the subject of referral. |

|  |  |
| --- | --- |
| 64. | Informal contacts between merging parties contemplating lodging a pre-filing referral request, on the one hand, and the Commission and/or Member State authorities, on the other, are actively encouraged, even following the submission of Form RS. The Commission is committed to providing informal, early guidance to firms wishing to use the pre-notification referrals system set out in Article 4(4) and (5) of the Merger Regulation[(51)](#ntr51-C_2005056EN.01000201-E0051). |

3.   Concentrations eligible for referral

|  |  |
| --- | --- |
| 65. | Only concentrations within the meaning of Article 3 of the Merger Regulation are eligible for referral pursuant to Article 4(5) and Article 22. Only concentrations falling within the ambit of the relevant national competition laws for the control of mergers are eligible for referral pursuant to Article 4(4) and Article 9[(52)](#ntr52-C_2005056EN.01000201-E0052). |

|  |  |
| --- | --- |
| 66. | Pre-filing referral requests pursuant to Article 4(4) and (5) of the Merger Regulation must concern concentrations the plans for which are sufficiently concrete. In that regard, there must at least exist a good faith intention to merge on the part of the undertakings concerned, or, in the case of a public bid, at least a public announcement of an intention to make such a bid[(53)](#ntr53-C_2005056EN.01000201-E0053). |

4.   The concept of ‘prior to notification’ under Article 4(4) and (5)

|  |  |
| --- | --- |
| 67. | Article 4(4) and (5) only apply at the pre-notification stage. |

|  |  |
| --- | --- |
| 68. | Article 4(4) specifies that the undertakings concerned may make a referral request by means of reasoned submission (Form RS), ‘prior to the notification of a concentration within the meaning of paragraph 1’. This means that the request can only be made where no Form CO has been submitted pursuant to Article 4(1). |

|  |  |
| --- | --- |
| 69. | Likewise, Article 4(5) specifies that the request may be made ‘before any notification to the competent [national] authorities’. This means that the concentration in question must not have been formally notified in any Member State jurisdiction for that provision to apply. Even one notification anywhere in the Community will preclude the undertakings concerned from triggering the mechanism of Article 4(5). In the Commission's view, no penalty should be imposed for non-notification of a transaction at the national level while a request pursuant to Article 4(5) is pending. |

5.   The concept of a ‘
concentration capable of being reviewed under national competition law
’ and the concept of ‘
competent Member State
’ in Article 4(5)

|  |  |
| --- | --- |
| 70. | Article 4(5) enables the undertakings concerned to request a pre-notification referral of a concentration which does not have a Community dimension and which is ‘capable of being reviewed under the national competition laws of at least three Member States’. |

|  |  |
| --- | --- |
| 71. | ‘Capable of being reviewed’ or reviewable should be interpreted as meaning a concentration which falls within the jurisdiction of a Member State under its national competition law for the control of mergers. There is no need for a mandatory notification requirement, i.e. it is not necessary for the concentration to be required to be notified under national law[(54)](#ntr54-C_2005056EN.01000201-E0054). |

|  |  |
| --- | --- |
| 72. | Pursuant to the third and fourth subparagraphs of Article 4(5), where at least one Member State ‘competent to examine the concentration under its national competition law’ has expressed its disagreement with the referral, the case must not be referred. A ‘competent’ Member State is one where the concentration is reviewable and which therefore has the power to examine the concentration under its national competition law. |

|  |  |
| --- | --- |
| 73. | All Member States, and not only those ‘competent’ to review the case, receive a copy of the Form RS. However, only Member States ‘competent’ to review the case are counted for the purposes of the third and fourth subparagraphs of Article 4(5). Pursuant to the third subparagraph of Article 4(5), ‘competent’ Member States have 15 working days from the date they receive the Form RS to express their agreement or disagreement with the referral. If they all agree, the case will be deemed to acquire a Community dimension pursuant to the fifth subparagraph of Article 4(5). According to the fourth subparagraph of Article 4(5), by contrast, if even only one ‘competent’ Member State disagrees, no referral will take place from any Member State. |

|  |  |
| --- | --- |
| 74. | Given the above mechanism, it is crucial to the smooth operation of Article 4(5) that all Member States where the case is reviewable under national competition law, and which are hence ‘competent’ to examine the case under national competition law, are identified correctly. Form RS therefore requires the undertakings concerned to provide sufficient information to enable each and every Member State to identify whether or not it is competent to review the concentration pursuant to its own national competition law. |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 75. | In situations where Form RS has been filled in correctly, no complications should arise. The undertakings concerned will have identified correctly all Member States which are competent to review the case. In situations, however, where the undertakings concerned have not filled in Form RS correctly, or where there is a genuine disagreement as to which Member States are ‘competent’ to review the case, complications may arise.   |  |  | | --- | --- | | — | Within the period of 15 working days provided for in the third subparagraph of Article 4(5), a Member State which is not identified in Form RS as being competent may inform the Commission that it is competent and may, like any other competent Member State, express its agreement or disagreement with the referral. |  |  |  | | --- | --- | | — | Likewise, within the period of 15 working days provided for in the third subparagraph of Article 4(5), a Member State which has been identified as competent in Form RS may inform the Commission that it is not ‘competent’. That Member State would then be disregarded for the purposes of Article 4(5). | |

|  |  |
| --- | --- |
| 76. | Once the period of 15 working days has expired without any disagreement having been expressed, the referral, will be considered valid. This ensures the validity of Commission decisions taken under Articles 6 or 8 of the Merger Regulation following an Article 4(5) referral. |

|  |  |
| --- | --- |
| 77. | This is not to say, however, that undertakings concerned can abuse the system by negligently or intentionally providing incorrect information, including as regards the reviewability of the concentration in the Member States, on Form RS. As noted at paragraph 60 above, the Commission may take measures to rectify the situation and to deter such violations. The undertakings concerned should also be aware that, in such circumstances, where a referral has been made on the basis of incorrect or incomplete information, a Member State which believes it was competent to deal with the case but did not have the opportunity to veto the referral due to incorrect information being supplied, may request a post-notification referral. |

6.   Notification and Publication of Decisions

|  |  |
| --- | --- |
| 78. | According to the fourth subparagraph of Article 4(4), the fourth subparagraph of Article 4(5), Article 9(1) and the second subparagraph of Article 22(3), the Commission is obliged to inform the undertakings or persons concerned and all Member States of any decision taken pursuant to those provisions as to the referral of a concentration. |

|  |  |
| --- | --- |
| 79. | The information will be provided by means of a letter addressed to the undertakings concerned (or for decisions adopted pursuant to Article 9(1) or Article 22(3), a letter addressed to the Member State concerned). All Member States will receive a copy thereof. |

|  |  |
| --- | --- |
| 80. | There is no requirement that such decisions be published in the Official Journal of the European Union [(55)](#ntr55-C_2005056EN.01000201-E0055). The Commission will, however, give adequate publicity to such decisions on DG Competition's website, subject to confidentiality requirements. |

7.   Article 9(6)

|  |  |
| --- | --- |
| 81. | Article 9(6) provides that, when the Commission refers a notified concentration to a Member State in accordance with Article 4(4) or Article 9(3), the NCA concerned must deal with the case ‘without undue delay’. Accordingly, the competent authority concerned should deal as expeditiously as possible with the case under national law. |

|  |  |
| --- | --- |
| 82. | In addition, Article 9(6) provides that the competent national authority must, within 45 working days after the Commission's referral or following receipt of a notification at the national level if requested inform the undertakings concerned of the result of the ‘preliminary competition assessment’ and what ‘further action’, if any, it proposes to take. Accordingly, within 45 working days after the referral or notification, as appropriate, the merging parties should be provided with sufficient information to enable them to understand the nature of any preliminary competition concerns the authority may have and be informed of the likely extent and duration of the investigation. The Member State concerned may only exceptionally suspend this time limit, where necessary information has not been provided to it by the undertakings concerned as required under its national competition law. |

IV.   FINAL REMARKS

|  |  |
| --- | --- |
| 83. | This Notice will be the subject of periodic review, in particular following any revision of the referral provisions in the Merger Regulation. In that regard, it should be noted that, according to Article 4(6) of the Merger Regulation, the Commission must report to the Council on the operation of the pre-notification referral provisions in Article 4(4) and (5), by 1 July 2009. |

|  |  |
| --- | --- |
| 84. | This Notice is without prejudice to any interpretation of the applicable Treaty and regulatory provisions by the Court of First Instance and the Court of Justice of the European Communities. |

---

[Top](#document1)