CELEX: 51973PC1210
Language: en
Date: 1973-07-13
Title: PROPOSAL FOR A COUNCIL REGULATION ON THE CONTROL OF CONCENTRATIONS BETWEEN UNDERTAKINGS

31.10. 73                            Official Journal of the European Communities                            No C 92/1
                                                            II
                                                    (Preparatory Acts)
                                                COMMISSION
              Proposal for a Regulation (EEC) of the Council on the control of concentrations
                                                  between undertakings
                           (Submitted to the Council by the Commission on 20 July 1973)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                        Whereas Article 86 applies to concentrations effected
                                                                by undertakings holding a dominant position in the
                                                                common market or in a substantial part of it which
                                                                strengthen such position to such an extend that the
Having regard to the Treaty establishing the Euro-              resulting degree of dominance would substantially
pean Economic Community and in particular to                    restrict competition;
Articles 87 and 235 thereof;
                                                                Whereas the power of action aforesaid extends only
Having regard to the proposal from the Commission;              to such concentrations, as would result in only under-
                                                                takings remaining in the market whose conduct
Having regard to the Opinion of the European                    depended on the undertaking which had effected the
Parliament;                                                     concentration; whereas it does not extend to the
                                                                prevention of such concentrations;
Having regard to the Opinion of the Economic and
Social Committee;                                               Whereas additional powers of action must be pro-
                                                                vided for to make it possible to act against other con-
                                                                centrations which may distort competition in the
Whereas, for the achievement of the objectives of               common market and to establish arrangements for
the Treaty establishing the European Economic Com-              controlling them before they are effected;
munity, Article 3 (f) requires the Community to
institute 'a system ensuring that competition in the
common market is not distorted';                                Whereas under Article 235 of the Treaty the Com-
                                                                munity may give itself the powers of action necessary
                                                                for the attainment of its objectives;
Whereas analysis of market structures in the Com-
munity shows that the concentration process is be-
coming faster and that the degree of concentration              Whereas, to institute a system ensuring that com-
is growing in such manner that the preservation of              petition in the common market is not distorted, it is
effective competition in the common market and the              necessary, in so far as trade between Member States
objective set out in Article 3 (f) could be jeopardized;        may be affected, to submit to control arrangements
                                                                such concentrations which give undertakings the
                                                                power to prevent effective competition in the com-
Whereas concentration must therefore be made sub-               mon market or in a substantial part of it, or which
ject to a systematic control arrangement;                       strengthen such a power;
Whereas the Treaty already provides some powers                 Whereas the power to prevent effective competition
of action of the Community to this end;                         must be appraised by reference, in particular, to the
 ---pagebreak---    No C 92/2                          Official Journal of the European Communities                            31.10. 73
   scope for choice available to suppliers and consumers,         Whereas compliance with this Regulation must be
   the economic and financial power of the undertakings           enforceable by means of fines and periodic penalty
   concerned, the structure of the markets affected and           payments; whereas it is desirable to confer upon the
   supply and demand trends for the relevant goods or             Court of Justice, pursuant to Article 172, unlimited
   services;                                                      jurisdiction to that extent;
   Whereas concentrations which, by reason of the                 Whereas this Regulation should extend both to con-
   small significance of turnover and market share of             centrations which constitute abuses of dominant
  the undertakings concerned, are not likely to impede           positions and to concentrations which give the under-
   the preservation of effective competition in the com-         takings concerned the power to prevent effective
   mon market may be excluded from this Regulation;              competition in the common market; whereas it
                                                                 should therefore be stipulated that Regulations (EEC)
                                                                 Nos 17 and 1017/68 no longer apply to concentra-
  Whereas it may be found necessary, for the purpose             tions from the date of entry into force of the present
  of reconciling objectives to be attained in the com-           Regulation,
  mon interest of the Community, especially within the
  frame of common policies, to exempt certain con-
  centrations from incompatibility, under conditions
  and obligations to be determined case by case;
                                                                 HAS ADOPTED THIS REGULATION:
  Whereas the Commission should be entitled to take
  decisions to prevent or terminate concentrations
  which are incompatible with the common market,                                      Basic provisions
  decisions designed to re-establish conditions of effec-
  tive competition and decisions declaring that a parti-
                                                                                          Article 1
 cular concentration may be considered to be compat-
 ible with the common market; whereas the Com-
 mission should be given exclusive jurisdiction in this          1. Any transaction which has the direct or indirect
  matter, subject to review by the Court of Justice;            effect of bringing about a concentration between
                                                                undertakings or groups of undertakings, at least one
                                                                of which is established in the common market, where-
 Whereas, to ensure effective supervision, prior noti-          by they acquire or enhance the power to hinder
 fication of major concentrations and the suspension            effective competition in the common market or in
 of concentrations by undertakings should be made               a substancial part thereof, is incompatible with the
 obligatory;                                                    common market in so far as the concentration may
                                                                affect trade between Member States.
 Whereas a time limit within which the Commission
 must commence proceedings in respect of a concen-              The power to hinder effective competition shall be
 tration notified to it and a time-limit within which           appraised by reference in particular to the extent to
 it must give a final decision on the incompatibility of        which suppliers and consumers have a possibility of
 a concentration with the common market should                  choice, to the economic and financial power of the
 be laid down;                                                  undertakings concerned, to the structure of the mar-
                                                                kets affected, and to supply and demand trends for
                                                                the relevant goods or services.
Whereas undertakings concerned must be accorded
the right to be heard by the Commission as soon as
proceedings have commenced, and third parties                   2. Paragraph 1 shall not apply where:
showing a sufficient interest must be given the
 opportunity of submitting their comments;                      — the aggregate turnover of the undertakings par-
                                                                    ticipating in the concentration is less than 200
                                                                     million units of account and
Whereas the Commission must have the assistance
of the Member States and must also be empowered                 — the goods or services concerned by the concen-
to require information to be given and to carry out                 tration do not account in any Member State for
the necessary investigations in order to examine con-               more than 25 % of the turnover in identical goods
concentrations in the light of provisions of this                   or services or in goods or services which, by
Regulation;                                                         reason of their characteristics, their price and
 ---pagebreak--- 31.10. 73                            Official Journal of the European Communities                             No C 92/3
     the use for which they .are intended, may be               4. Control of an undertaking is not constituted
     regarded as similar by the consumer.                       where, upon formation of an undertaking or increase
                                                                of its capital, banks or financial institutions acquire
                                                                shares in that undertaking with a view to selling them
3. Paragraph 1 may, however, be declared inapplic-              on the market, provided that they do not exercise
able to concentrations which are indispensable to the           voting rights in respect of those shares.
attainment of an objective which is given priority
treatment in the common interest of the Community.
                                                                                        Article 3
                         Article 2
                                                                         Powers of decision of the Commission
                Definition of concentration
                                                                1. When the Commission finds that a concentration
                                                                is caught by Article 1 (1) and that the conditions
 1. The concentrations referred to in Article 1 are             laid down in Article 1 (3) are not satisfied, it shall
those whereby a person or an undertaking or a group             issue a decision declaring the concentration to be
of persons or undertakings, acquires control of one or          incompatible with the common market.
 several undertakings.
                                                                2. The decision by which the Commission declares
2. Control is constituted by rights or contracts                a concentration to be incompatible within the mean-
which, either separately or jointly, and having regard          ing of paragraph 1 shall not automatically render
to the considerations of fact or law involved, make             null and void the legal transactions relating to such
it possible to determine how an undertaking shall               operation.
 operate, and particularly by:
                                                                3. Where a concentration has already been put into
 (1) Ownership or the right to use all or part of the           effect, the Commission may require, by decision
     assets of an undertaking;                                  taken under paragraph 1 of by a separate decision,
                                                                the undertakings, or assets acquired or concentrated
 (2) Rights or contracts which confer power to in-              to be separated or the cessation of common control
     fluence the composition, voting or decisions of            or any other action that may be appropriate in order
     the organs of an undertaking;                              to restore conditions of effective competition.
 (3) Rights or contracts which make it possible to              4. When the Commission finds that a concentration
     manage the business of an undertaking;                     is caught by Article 1 (1) and that the conditions laid
                                                                down in Article 1 (3) are satisfied, it shall issue a
 (4) Contracts made with an undertaking concerning              decision declaring Article 1 (1) to be inapplicable;
     the computation or appropriation of its profits;           conditions and obligations may be attached thereto.
 (5) Contracts made with an undertaking concerning              5. Subject to review by the Court of Justice, the
     the whole or an important part of supplies or              Commission shall have sole power to take the de-
     outlets, where the duration of these contracts or          cisions provided for in this Article.
     the quantities to which they relate exceed what
     is usual in commercial contracts dealing with
     those matters.
                                                                                        Article 4
3. Control is acquired by persons, undertakings or                        Prior notifications of concentrations
groups of persons or undertakings who:
 (1) Are holders of the rights or entitled to rights            1. Concentrations shall be notified to the Commis-
     under the contracts concerned;                             sion before they are put into effect, where the aggre-
                                                                gate turnover of the undertakings concerned' is not
 (2) While not being holders of such rights or entitled         less than one thousand million units of account.
     to rights under such contracts, have power to
     exercise the rights deriving therefrom;                    2. Where concentrations proposed by an undertak-
                                                                ing or a group of undertakings have already reached
 (3) In a fiduciary capacity own assets of an under-            or exceeded the amounts referred to in paragraph 1,
     taking or shares in an undertaking, and have               they shall be exempted from the obligation of prior
     power to exercise the rights attaching thereto.            notification, if the turnover of the undertaking, the
 ---pagebreak--- N o C 92/4                           Official Journal of the European Communities                             31.10. 73
control of which they propose to acquire is less than           not exceeding 3 months unless the relevant under-
30 million units of account.                                    takings agree to extend that period. The period of
                                                                3 months shall commence on the day following re-
3. The obligation to notify shall be discharged by              ceipt of the notification, or if the information to be
the person or undertaking or the group of persons               supplied with the notification is incomplete, on the
or undertakings which proposes to acquire control               day following the receipt of the complete information.
within the meaning of Article 2.
                                                                3. The Commission may commence proceedings
4. Concentrations which are not caught by para-                 after the expiry of the 3 months period where the
graph 1 may nevertheless be notified to the Commis-             information supplied by the undertakings in the
sion before they are put into effect.                           notification is false or misleading.
                                                                4. Without prejudice to paragraph 3 a concentration
                                                                notified to the Commission shall be presumed to be
                          Article S
                                                                compatible with the common market if the Com-
                                                                mission does not commence proceedings before ex-
         Detailed rules for calculating turnover                piration of the period specified in paragraph 2.
                     and market shares
1. (a) The aggregate turnover specified in Articles
        1 (2) and 4 (1) shall be obtained by adding                                       Article 7
        together the turnover for the last financial
        year for all goods and services of:                         Suspension of the effecting of the concentration
        (i) the undertakings participating in the con-
              centration;                                       1. Undertakings shall not put into effect a concen-
        (ii) the undertakings and groups of under-              tration notified to the Commission before the end
              takings which control the undertakings            of the time limit provided for in Article 6 (2) unless
              participating in the concentration within         the Commission informs them before the end of the
              the meaning of Article 2;                         time limit that it is not necessary to commence pro-
        (iii) the undertakings or groups of undertak-           ceedings.
              ings controlled within the meaning of
              Article 2 by the undertakings participat-         2. Where the Commission commences proceedings
              ing in the concentration.                         it may by decision require the undertakings to sus-
                                                                pend the concentration until it has decided whether
    (b) The market shares referred to in Article 1 (2)          the concentration is compatible with the common
        near those held in the last financial year by           market or has closed the proceedings.
        all the undertakings listed in subparagraph
        (a) above.
2. In place of turnover as specified in Articles 1 (2)                                   Article 8
and 4 (1) and in paragraph 1 of this Article, the
following shall be used:                                              Communications of objections and hearings
— for banking and financial institutions: one tenth
    of their assets;                                            1. Before taking decisions as provided for in Articles
— for insurance companies: the value of the pre-                3, 7, 13 and 14, the Commission shall give the under-
    miums received by them.                                     takings concerned the opportunity of being heard on
                                                                the matters to which the Commission has taken
                                                                objection. The same opportunity shall be given to
                                                                associations of undertakings concerned before de-
                          Article 6                             cisions before being taken as provided for in Articles
                                                                13 and 14.
              Commencement of proceedings
                                                                2. If the Commission or the competent authorities
1. Where the Commission considers that a concen-                of the Member States consider it necessary, the Com-
tration is likely to become the subject of a decision           mission may also hear other natural or legal persons.
under Article 1 (1) or (3), it shall commence pro-              Applications to be heard on the part of such persons
ceedings and so inform the undertakings in question             shall, where they show a sufficient interest, be
and the competent authorities in the Member States.             granted.
2. As regards concentrations notified to it, the Com-           3. Articles 2, 3, 4, 7, 8, 9, 10 and 11 of Regulation
mission shall commence proceedings within a period              No 99/63/EEC shall be applied.
 ---pagebreak--- 31.10. 73                           Official Journal of the European Communities                            N o C 92/5
                         Article 9                                                     Article 11
                 Closure of proceedings                        Investigations by the authorities of the Member States
If, after having commenced proceedings, the Com-               1. At the request of the Commission, the competent
mission considers that there are no grounds for action         authorities of the Member States shall undertake the
against a concentration, it shall close the proceedings        investigations which the Commission considers to be
and so inform the undertakings concerned and the               necessary under Article 12 (1), or which it has ordered
competent authorities of the Member States.                    by decision pursuant to Article 12 (3). The officials
                                                               of the competent authorities of the Member States
                                                               responsible for conducting these investigations shall
                       Article 10                              exercise their powers upon production of an authoriz-
                                                               ation in writing issued by the competent authority of
                                                               the Member State in whose territory the investigation
                Requests for information
                                                               is to be made. Such authorization shall specify the
                                                                subject matter and purpose of the investigation.
1. In carrying out the duties assigned to it by this
Regulation, the Commission may obtain all necessary            2. If so requested by the Commission or by the com-
information from the governments and competent                 petent authority of the Member State in whose terri-
authorities of the Member States and from under-               tory the investigation is to be made, officials of the
 takings and associations of undertakings.                      Commission may assist the officials of such authority
                                                               in carrying out their duties.
2. When sending a request for information to an
undertaking or association of undertakings, the Com-
mission shall at the same time forward a copy of the
request to the competent authority of the Member                                       Article 12
State in whose territory the seat of the undertaking
or association of undertakings is situated.                            Investigating powers of the Commission
3. In its request the Commission shall state the legal         1. In carrying out the duties assigned to it by this
basis and the purpose of the request and also the              Regulation, the Commission may undertake all
penalties provided for in Article 13 (1) (b) for sup-          necessary investigations into undertakings and associ-
plying incorrect information.                                   ations of undertakings.
4. The owners of the undertakings or their represen-           T o this end the officials authorized by the Com-
tatives and, in the ease of legal persons, companies or         mission are empowered:
firms, or of associations having no legal personality,
the persons authorized to represent them by law or              (a) to examine the books and other business records;
by their constitution, shall supply the information
requested.                                                      (b) to take or demand copies of or extracts from the
                                                                     books and business records;
5. Where an undertaking or association of under-
takings does not supply the information requested               (c) to ask for oral explanations on the spot;
within the time limit fixed by the Commission, or
supplies incomplete information, the Commission                 (d) to enter any premises, land and means of trans-
shall by decision require the information to be sup-                port of undertakings.
plied. The decision shall specify what information is
required, fix an appropriate time limit within which
it is to be supplied and mention the penalties pro-             2. The officials of the Commission authorized to
vided for in Article 13 (1) (b) and Article 14 (1) (a)          carry out these investigations shall exercise their
and the right to have the decision reviewed by the              powers upon production of an authorization in writ-
 Court of Justice.                                              ing specifying the subject matter and purpose of the
                                                                investigation and the penalties provided for in Article
                                                                13 (1) (c) in cases where production of the required
6. The Commission shall at the same time forward               books or other business records is incomplete. In
a copy of its decision to the competent authority of           good time before the investigation, the Commission
the Member State in whose territory the seat of the             shall inform the competent authority of the Member
undertaking or association of undertakings is situated.        State in whose territory the investigation is to be
 ---pagebreak--- No C 92/6                           Official Journal of the European Communities                             31.10. 73
made of the investigation and of the identity of the           1 000 000 units of account where, either intentionally
authorized officials.                                          or negligently, they commit a breach of the obligation
                                                               to notify under Article 4.
3. Undertakings and associations of undertakings               3. The Commission may by decision impose fines
shall submit to investigations ordered by decision of          not exceeding 10 % of the value of the reorganized
the Commission. The decision shall specify the sub-            assets where undertakings either intentionally or neg-
ject matter and purpose of the investigation, appoint          ligently, conclude an unlawful concentration before
the date on which it is to begin and indicate the              the end of the time limit provided for in Article 6 (2)
penalties provided for in Article 13 (1) (c) and Article       or in spite of a decision taken by the Commission
14 (1) (b) and the right to have the decision reviewed         under Articles 3 (1) or 7 (2).
by the Court of Justice.
4. The Commission shall take decisions referred to                                    Article 14
in paragraph 3 after consultation with the competent
authority of the Member State in whose territory the
                                                                              Periodic penalty payments
investigation is to be made.
5. Officials of the competent authority of the Mem-            1. The Commission may by decision impose on
ber State in whose territory the investigation is to be        undertakings or associations of undertakings periodic
                                                               penalty payments up to 25 000 units of account for
made may, at the request of such authority or of the
Commission, assist the officials of the Commission             each day of the delay calculated from the date ap-
in carrying out their duties.                                  pointed by the decision, in order to compel them:
                                                               (a) to supply complete and correct information which
6. Where an undertaking opposes an investigation                   it has requested by decision taken pursuant to
ordered pursuant to this Article, the Member State                  Article 10;
concerned shall afford the necessary assistance to the         (b) to submit to an investigation which it has ordered
officials authorized by the Commission to enable                   by decision taken pursuant to Article 12.
them to make their investigation. Member States
shall, after consultation with the Commission, take
the necessary measures to this end before                      2. The Commission may by decision impose on
                                                               such undertakings periodic penalty payments up to
                                                               50 000 units of account for each day of the delay,
                                                               calculated from the day appointed by the decision,
                        Article 13                             in order to compel them to apply the measures result-
                                                               ing from a decision taken pursuant to Article 3 (3).
                           Fines
                                                                                      Article 15
 1. The Commission may by decision impose on
undertakings and associations of undertakings fines
                                                                            Review by the Court of Justice
of from 1 000 to 50 000 units of account where
 intentionally or negligently:
 (a) they supply incorrect or misleading information           The Court of Justice shall have unlimited jurisdiction
     in a notification pursuant to Article 4;                  within the meaning of Article 17 of the Treaty to
                                                               review decisions whereby the Commission has fixed
 (b) they supply incorrect information in response to          a fine or periodic penalty payment; it may cancel,
     a request made pursuant to Article 10 or fail to          reduce or increase the fine or periodic penalty pay-
     supply information within the time limit fixed by          ment imposed.
      a decision taken pursuant to Article 10,
 (c) they produce the required books or other business
     records in incomplete form during investigations                                 Article 16
     under Article 11 or 12, or refuse to submit to an
     investigation ordered by decision taken pursuant                            Professional secrecy
     to Article 12.
                                                                1. Information acquired as a result of the application
2. The Commission may by decision impose on                     of Articles 10, 11 and 12 shall be used only for the
natural or legal persons fines of from 1 000 to                 purpose of the relevant request or investigation.
 ---pagebreak--- 31.10. 73                           Official Journal of the European Communities                                N o C 92/7
2. The Commission and the competent authorities                2. The Commission shall carry out the procedure
of the Member States, their officials and other ser-           set out in this Regulation in close and constant
vants shall not disclose information acquired by               cooperation with the competent authorities of the
them as a result of the application of this Regulation         Member States; such authorities shall have the right
and of the kind covered by the obligation of pro-              to express their views upon that procedure, and in
fessional secrecy.                                             particular to request the Commission to commence
                                                               proceedings under Article 6.
3. The provisions of paragraphs 1 and 2 shall not
prevent publication of general information or sur-             3. The Advisory Committee on Restrictive Practices
veys which do not contain information relating to              and Monopolies shall be consulted prior to the taking
particular undertakings or associations of under-              of any decision under Articles 3, 13 and 14.
takings.
                                                               4. The Advisory Committee shall consist of officials
                                                               having responsibility for restrictive practices and
                       Article 17                              monopolies. Each Member State shall appoint an
                                                               official to represent it; he may be replaced by another
        Time limits and publication of decisions               official where he is unable to act.
1. (a) Decisions under Article 3 (1) and (4) shall be          5. Consultation shall take place, at a meeting con-
        taken within 9 months following the date of            vened at the invitation of the Commission, not ear-
        commencement of proceedings, save where                lier than fourteen days following dispatch of the
        there is agreement with the relevant under-            invitation. A summary of the facts together with the
        takings to extend that period.                         most important documents and a preliminary draft
                                                               of the decision to be taken, shall be sent with the
    (b) The period of 9 months shall not apply where           invitation.
        the Commission is obliged to request infor-
        mation by decision taken pursuant to Article           6. The Committee may deliver an opinion even if
        10 or require an investigation by decision             certain members are absent and unrepresented. The
        taken pursuant to Article 12.                          outcome of the consultation shall be annexed to the
                                                               draft decision. The minutes shall not be published.
2. The Commission shall publish           the   decisions
which it takes pursuant to Article 3.
                                                                                       Article 20
3. The publication shall state the names of the par-
ties and the main content of the decision; it shall
                                                                       Exclusive application of this Regulation
have regard to the legitimate interest of undertakings
in the protection of their business secrets.
                                                               Regulations (EEC) N o 17 and 1017/68 shall not
                                                               apply to the concentrations covered by this Regu-
                                                               lation.
                       Article 18
                    Unit of account
                                                                                       Article 21
For the purpose of this Regulation the unit of account
                                                                               Implementing provisions
shall be that used in drawing up the budget of the
Community in accordance with Articles 207 and 209
of the Treaty.                                                 The Commission shall have power to adopt imple-
                                                               menting provisions concerning the form, content and
                                                               other details of notifications pursuant to Article 4 of
                                                               this Regulation.
                       Article 19
   Liaison with the authorities of the Member States
                                                                                       Article 22
1. The Commission shall forthwith transmit to the
competent authorities of the Member States a copy              This Regulation shall enter into force . . . . . .
of the notifications together with the most important
documents lodged with the Commission pursuant to               This Regulation shall be binding in its entirety and
this Regulation.                                               directly applicable in all Member States.