CELEX: 51981PC0773
Language: en
Date: 1981-12-09
Title: AMENDED PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON THE CONTROL OF CONCENTRATIONS BETWEEN UNDERTAKINGS ( MERGER CONTROL REGULATIONS )

12. 2. 82                          Official Journal of the European Communities                                           N o C 36/3
                                                           II
                                                    (Preparatory Acts)
                                              COMMISSION
               Amended proposal for a Council Regulation on the control of concentrations between
                                      undertakings (merger control Regulation) (')
               (Submitted by the Commission to the Council, pursuant to the second paragraph of Article
                                      149 of the EEC Treaty, on 16 December 1981)
                       I. Background                            competitiveness of o u r industries a n d , in so d o i n g ,
                                                                also contributes to o v e r c o m i n g the c u r r e n t crisis.
On 20 July 1973 the Commission submitted to the
Council a proposal for a Council Regulation on the              It goes w i t h o u t saying t h a t in applying the m e r g e r
control of concentrations between undertakings                  control rules, a c c o u n t must be t a k e n of t h e
(merger control Regulation).                                    differences in e c o n o m i c situations (particularly h o w
                                                                open markets are) a n d , w h e r e a p p r o p r i a t e , of
                                                                exigencies stemming from o t h e r C o m m u n i t y policies.
The European Parliament (2) and the Economic and
Social Committee (*) were consulted by the Council,
                                                                T h e a m e n d e d proposal attempts to confine the
and both approved the Commission proposal by large
                                                                control measures t o mergers with a C o m m u n i t y
majorities.
                                                                dimension a n d to involve the M e m b e r States m o r e in
                                                                the decision-making process.
Discussions in the Council revealed significant
differences of opinion, relating mainly to the scope of
the Regulation and to the division of decision-making                    II. Proposals o n the assessment criteria
power between the Commission and the Council.
                                                                                         (Article 1 (1))
In its resolution on the ninth report on competition
policy, Parliament deplored the fact that the Council           (a) Taking        into account         of   the          international
had still not adopted the merger control Regulation,                 competitive situation
which would give the Commission the means to take                    (Second subparagraph of Article 1 (1))
effective action at Community level against any irre-
versible structural evolution which could seriously                  This subparagraph has been added in response to
jeopardize competition (").                                          a request made by Parliament. Its purpose is to
                                                                     make it clear that account must be taken of the
                                                                     competitive situation and the development of
A policy designed to strengthen effective competition                trade at international level.
plays a significant role in achieving more flexible
structural      adjustment     and     maintaining    the       (b) Reference to the Community               dimension          of the
                                                                     merger
                                                                     (Second subparagraph of Article 1 (1))
0) OJ No C 92, 31. 10. 1973, p. 1.
(2) OJ No C 23, 8. 3. 1974.                                          Such reference is intended to make it clearer that,
(3) OJ N o C 88, 26. 7. 1974.                                        as was the intention with the original Commission
(4) O J N o C 144, 15.6. 1981.                                       proposal, the Regulation is to apply to mergers
 ---pagebreak--- No C 36/4                             Official Journal of the European Communities                             12. 2. 82
    which are of a scale that transcend the national                findings have suggested that this is the case. It is
    context and produce effects at Community level.                 not possible to envisage a higher market share
                                                                    threshold if the creation or strengthening of
                                                                    regional monopolies is to be avoided.
(c) Introduction of a market share criterion
                                                                   However, market share is only one assessment
     (Third subparagraph of Article 1 (1) — new)                   factor among others, though the others cannot be
                                                                   quantified (see the second subparagraph of
     In its original proposal, the Commission applied a            Article 1 (1)).
     market share criterion, in addition to turnover, as
     a quantitative threshold below which Community
     merger control would not apply. It set the                    Market share may nevertheless be used to make it
    threshold at 25 % of the relevant market in a                  clear to undertakings and the appropriate
     member country.                                               national authorities that, except in specific cases,
                                                                   the Commission considers that, below the critical
                                                                   threshold envisaged, mergers are not normally
     Should it be envisaged, in view of the unity of the           likely to have significant repercussions on the
    common market, to relate this criterion to the                 maintenance of effective competition.
    common market as a whole, the Commission
    must underline that it would be difficult to apply
    and be inappropriate for determining the scope of              However, the Commission will still be able to
    the Regulation.                                                determine that, below the critical threshold, a
                                                                   merger does nevertheless have repercussions that
                                                                   would be harmful to the maintenance of effective
    The reason is that, if it is difficult to determine a          competition because of other assessment factors;
    market share with precision at national level, as is           for example, in the event of a conglomerate
    shown by experience in the Federal Republic of                 merger, because of the size and the financial
    Germany and the United Kingdom, the difficulty                 resources of the undertakings concerned.
    is even greater at common market level, both for
    the undertakings concerned and for the
    Commission, creating legal uncertainty for under-               It goes without saying that, even if a merger gives
    takings.                                                       the undertakings concerned a market share that is
                                                                   equal to or above the critical threshold, it will
                                                                   always be up to the Commission, in the light of
    However, market share, used as an indicator of                 the other assessment criteria (second subpara-
    market structure, is without any doubt an                      graph of Article 1 (1)), to determine that the
    important element in assessing whether a merger                merger gives the undertaking concerned the
    threatens to eliminate effective competition. It is            power to hinder effective competition.
    therefore proposed that the market share criterion
    be retained as an assessment criterion.
    As regards the definition of the geographical
    market to be taken into account, it is proposed            III. Proposals on the thresholds for determining
    that, in order to make it clear that the                                 applicability of the Regulation
    Community control applies only to mergers with
    effects on competition at common market level,                                   (Article 1 (2))  ,
    reference be made to the market share in the
    common market as a whole.
                                                               So as to ensure that mergers of lesser significance
                                                               were not subject to Community merger control, the
    As far as the threshold is concerned, it is                Commission's original proposal provided for market
    proposed that this be fixed at 20 % : taking the           share and turnover thresholds, to be used on an alter-
    common market as a whole, a market share of                native basis.
    20 % may represent a critical threshold for the
    working of competition, regardless of the market
    shares held by competitions. This is because, in a
                                                               (a) Market share
    market with a low level of concentration,
    acquiring a 20 % market share may result in the                 For the reasons set out at II (c), it is proposed
    creation of a dominant position. On the other                   that market share should now be used as one of
    hand, if the market already has a high level of                 the criteria allowing the effects of a merger on
    concentration, there is a danger of strengthening               the working of effective competition to be
    an oligopolistic structure. Economic research                   assessed (assessment criterion), and not as a
 ---pagebreak---  12. 2. 82                         Official Journal of the European Communities                            No C 36/5
     criterion indicating the limits below which the                 IV. Proposal on decision-making procedures
     Regulation would not apply (applicability
     criterion).                                               The underlying idea is that in the fields where
                                                               common policies do not exist, Member States may be
                                                               concerned by the effects which the prohibition of a
(b) Turnover                                                   given merger might have on the implementation of
                                                               their national policies. Account should be taken of
     As a criterion for defining the scope of the Regu-        such circumstances, provided that the attainment of a
     lation, turnover has the advantage of being easier        priority objective of the Community is not thereby
     to determine and to verify; it also reflects the          endangered. The proposed solution is based on
     economic and financial strength of the under-             Article 17 of Council Regulation (EEC) No 1017/68
     takings concerned, particularly in view of the            (') which gives the Member States a right to convene
     thresholds envisaged. However, the level origi-           the Council.
     nally proposed (200 million ECU) must be raised
     (500 million ECU) to take account of economic
     developments that have taken place.                       0) OJ No L 175, 23. 7. 1968.
                                                        ANNEX
               Amendments to the proposal for a Regulation on the control of concentrations between
                                        undertakings (merger control Regulation)
                    ORIGINAL PROPOSAL                                               NEW PROPOSAL
                         Article 1                                                     Article 1
                     Basic provisions                                             Basic provisions
1.    Any transaction which has the direct or indirect         1.   First subparagraph unchanged.
effect of bringing about a concentration between
undertakings or groups of undertakings, at least one
of which is established in the common market,
whereby they acquire or enhance the power to hinder
effective competition in the common market or in a
substantial part thereof, is incompatible with the
common market in so far as the concentration may
affect trade between Member States.
The power to hinder effective competition shall be            The power to hinder effective competition shall be
appraised by reference in particular to the extent to         appraised at Community level and by reference in
which suppliers and consumers have a possibility of           particular to the extent to which suppliers and
choice, to the economic and financial power of the            consumers have a possibility of choice, to the
undertakings concerned, to the structure of the               economic and financial power of the undertakings
markets affected, and to supply and demand trends             concerned, to the structure1 of the markets affected, to
for the relevant goods or services.                           the effects of international competition, and to supply
                                                               and demand trends for the relevant goods or services.
                                                              A concentration shall be presumed to be compatible
                                                              with the common market where the market share of
                                                               the goods or services concerned accounts in the
                                                               common market for less than 20 °/o of the turnover in
 ---pagebreak--- No C 36/6                             Official Journal of the European Communities                            12. 2. 82
                     ORIGINAL PROPOSAL                                               NEW PROPOSAL
                                                               identical goods or services of in goods or services
                                                               which, by reason of their characteristics, their price
                                                               and their use are regarded as similar by the consumer.
                                                               The presumption of compatibility with the common
                                                               market can be rebutted if the Commission establishes
                                                               that a concentration giving a market share below this
                                                               threshold is nonetheless incompatible with the
                                                               common market.
2.    Paragraph 1 shall not apply where:                       2.    Paragraph 1 shall not apply where the aggregate
                                                               turnover of the undertakings participating in the
— the aggregate turnover of the undertakings parti-            concentration is less than 500 million ECU.
    cipating in the concentration is less than 200
    million units of account and
— the goods or services concerned by the                       Deleted.
    concentration do not account in any Member
    State for more than 25 % of the turnover in
    identical goods or services or in goods or services
    which, by reason of their characteristics, their
    price and the use for which they are intended,
    may be regarded as similar by the consumer.
3.    Paragraph 1 may, however, be declared inappli-           3.    Unchanged.
cable to concentrations which are indispensable to the
attainment of an objective which is given priority
treatment in the common interest of the Community.
                          Article 5                                                      Article 5
Detailed rules for calculating turnover and market                    Calculation of turnover and market shares
                           shares
1. (a) The aggregate turnover specified in Articles 1          1. (a) Unchanged.
        (2) and 4 (1) shall be obtained by adding
        together the turnover for the last financial year
        for all goods and services of:
          (i) the undertakings      participating  in  the
              concentration;
        (ii) the undertakings and groups of under-
              takings which control the undertakings
              participating in the concentration within
              the meaning of Article 2;
        (iii) the undertakings or groups of under-
              takings controlled within the meaning of
              Article 2 by the undertakings participating
              in the concentration.
    (b) The market shares referred to in Article 1 (2)             (b) The market shares referred to in Article 1 (1)
        near those held in the last financial year by all              shall be those . . . (rest unchanged).
        the undertakings listed in subparagraph (a)
        above.
 ---pagebreak---  12.2.82                            Official Journal of the European Communities                            No C 36/7
                     ORIGINAL PROPOSAL                                               NEW PROPOSAL
 2.     In place of turnover as specified in Articles 1 (2)          Unchanged.
 and 4 (1) and in paragraph 1 of this Article, the
 following shall be used:
 — for banking and financial institutions: one tenth of
     their assets;
 — for insurance companies:           the   value  of    the
     premiums received by them.
                         Article 19                                                   Article 19
    Liaison with the authorities of the Member States             Liaison with the authorities of the Member States
1.     The Commission shall forthwith transmit to the          1 and 2: Unchanged.
competent authorities of the Member States a copy of
the notifications together with the most important
documents lodged with the Commission pursuant to
this Regulation.
2.     The Commission shall carry out the procedure
set out in this Regulation in close and constant
cooperation with the competent authorities of the
Member States; such authorities shall have the right
to express their views upon that procedure, and in
particular to request the Commission to commence
proceedings under Article 6.
3.     The Advisory Committee on                Restrictive    3.   The Advisory Committee on               Restrictive
Practices and Monopolies shall be consulted prior to           Practices and Dominant Positions shall . . . (rest
the taking of any decision under Articles 3, 13 and            unchanged).
14.
4.     The Advisory Committee shall consist of                 4.    The Advisory Committee shall consist of officials
officials having responsibility for restrictive practices      having responsibility for restrictive' practices and
and monopolies. Each Member State shall appoint an             dominant positions. Each . . . (rest unchanged).
official to represent it; he may be replaced by another
official where he is unable to act.
5.     Consultation shall take place, at a meeting             5 and 6: Unchanged.
convened at the invitation of the Commission, not
earlier than fourteen days following dispatch of the
invitation. A summary of the facts together with the
most important documents and a preliminary draft of
the decision to be taken, shall be sent with the
invitation.
6.     The Committee may deliver an opinion even if
certain members are absent and unrepresented. The
outcome of the consultation shall be annexed to the
chaft decision. The minutes shall not be published.
 ---pagebreak---  No C 36/8                          Official Journal of the European Communities                              12.2.82
                   ORIGINAL PROPOSAL                                                  NEW PROPOSAL
                                                               7.    If a majority of the members of the Advisory
                                                               Committee opposes the draft Decision under Article 3
                                                               (1), the Commission shall not adopt a decision until a
                                                               period of 20 days has elapsed from the date on which
                                                               the Advisory Committee was consulted.
                                                               8.    If, within the period laid down in the preceding
                                                               paragraph, A Member State raises in the Council an
                                                               objective which in its opinion should be considered as
                                                               having priority, within the meaning of Article 1 (3),
                                                               the Council shall meet within 30 days of the date of
                                                               the request made by the Member State concerned. In
                                                               that case the Commission shall take no decision until
                                                               after the Council meeting, and shall take account of
                                                               the policy guidelines which emerged in the course of
                                                               the Council's deliberations.
             Proposal for a Council Decision on the collection of information concerning the activities
             of road hauliers participating in the carriage of goods to and from certain non-member
                                                      countries
                          (Submitted by the Commission to the Council on 15 January 1982)
THE COUNCIL OF THE EUROPEAN                                   Whereas this is in the interest of shippers' ability to
COMMUNITIES,                                                  choose and the freedom of international trade;
Having regard to the Treaty establishing the                  Whereas, however, the existence of distortions of
European Economic Community, and in particular                competitive conditions between hauliers based in the
Article 213 thereof,.                                         Community and those of State-trading countries
                                                              creates disadvantages for the former;
Having regard to the draft Decision submitted by the
Commission,                                                   Whereas in particular State-trading countries apply in
                                                              road haulage trade practices such as prices which do
Having regard to the opinion of the           European        not reflect costs as established in accordance with
Parliament,                                                   normal market rules, control of terms of trade, and
                                                              the imposition of administrative and other barriers;
Having regard to the opinion of the Economic and
Social Committee,                                             Whereas the means of overcoming these difficulties
                                                              should be examined;
Whereas the Communities' economic and trading
interests require an international road haulage               Whereas it is appropriate to establish the exchange of
situation in which efficient Community hauliers can           information      enabling the institutions of the
compete under normal commercial conditions with               Community to be informed of developments in road
road hauliers of non-member countries;                        transport relations with State-trading countries,