Commission Notice on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98 (Text with EEA relevance)
OJ C 68, 2.3.2001, p. 3–11 (ES, DA, DE, EL, EN, FR, IT, NL, PT, FI, SV)
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on remedies acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98
(Text with EEA relevance)
1. Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings(1), as last amended by Regulation (EC) No 1310/97(2) (hereinafter referred to as "the Merger Regulation") expressly provides that the Commission may decide to declare a concentration compatible with the common market following modification by the parties(3). Recital 8 of Council Regulation (EC) No 1310/97 states that "the Commission may declare a concentration compatible with the common market in the second phase(4) of the procedure, following commitments by the parties that are proportional to and would entirely eliminate the competition problem ...". Recital 8 also provides for "commitments in the first phase(5) of the procedure where the competition problem is readily identifiable and can easily be remedied ... Transparency and effective consultation of Member States and interested third parties should be ensured in both phases of the procedure".
2. The purpose of this notice is to provide guidance on modifications to concentrations, including, in particular, commitments to modify a concentration. Such modifications are more commonly described as "remedies" since their object is to reduce the merging parties' market power and to restore conditions for effective competition which would be distorted as a result of the merger creating or strengthening a dominant position. The guidance set out in this notice reflects the Commission's evolving experience with the assessment, acceptance and implementation of remedies under the Merger Regulation since its entry into force on 21 September 1990. The principles contained here will be applied and further developed and refined by the Commission in individual cases. The guidance provided on commitments is without prejudice to the interpretation which may be given by the Court of Justice or by the Court of First Instance of the European Communities.
3. This notice sets out the general principles applicable to remedies acceptable to the Commission, the main types of commitments that have been accepted by the Commission in cases under the Merger Regulation, the specific requirements which proposals of commitments need to fulfil in both phases of the procedure, and the main requirements for the implementation of commitments.
II. GENERAL PRINCIPLES
4. Under the Merger Regulation, the Commission assesses the compatibility of a notified concentration with the common market on the basis of its effect on the structure of competition in the Community(6). The test for compatibility under Article 2(2) and (3) of the Merger Regulation is whether or not a concentration would create or strengthen a dominant position as a result of which effective competition would be significantly impeded in the common market or a substantial part of it(7). A concentration that creates or strengthens a dominant position as described above is incompatible with the common market and the Commission is required to prohibit it.
5. Where a concentration raises competition concerns in that it could lead to the creation or strengthening of a dominant position, the parties may seek to modify the concentration in order to resolve the competition concerns raised by the Commission and thereby gain clearance of their merger. Such modifications may be offered and implemented in advance of a clearance decision. However, it is more common that the parties submit commitments with a view to rendering the concentration compatible with the common market within a specific period following clearance.
6. It is the responsibility of the Commission to show that a concentration creates or strengthens market structures which are liable to impede significantly effective competition in the common market. It is the responsibility of the parties to show that the proposed remedies, once implemented, eliminate the creation or strengthening of such a dominant position identified by the Commission. To this end, the parties are required to show clearly, to the Commission's satisfaction in accordance with its obligations under the Merger Regulation, that the remedy restores conditions of effective competition in the common market on a permanent basis.
7. In assessing whether or not a remedy will restore effective competition the Commission will consider all relevant factors relating to the remedy itself, including inter alia the type, scale and scope of the remedy proposed, together with the likelihood of its successful, full and timely implementation by the parties. Moreover, these factors have to be judged by reference to the structure and particular characteristics of the market in which the competition concerns arise, including of course the position of the parties and other players on the market. It follows that it is incumbent on the parties from the outset to remove any uncertainties as to any of these factors which might cause the Commission to reject the remedy proposed.
8. More generally, the Commission will take into account the fact that any remedy, so long as it remains a commitment which is not yet fulfilled, carries with it certain uncertainties as to its eventual outcome. This general factor must also be taken into consideration by the parties when presenting a remedy to the Commission.
9. In the Gencor case(8), the Court of First Instance established the principle that the basic aim of commitments is to ensure competitive market structures. Accordingly, commitments that would amount merely to a promise to behave in a certain way, for example a commitment not to abuse a dominant position created or strengthened by the proposed concentration, are as such not considered suitable to render the concentration compatible with the common market. According to the Court(9), commitments which are structural in nature, such as the commitment to sell a subsidiary, are, as a rule, preferable from the point of view of the Regulation's objective, inasmuch as such a commitment prevents the creation or strengthening of a dominant position previously identified by the Commission and does not, moreover, require medium or long-term monitoring measures. Nevertheless, the possibility cannot automatically be ruled out that other types of commitments may themselves also be capable of preventing the emergence or strengthening of a dominant position. However, whether such commitments can be accepted has to be determined on a case-by-case basis.
10. Once the concentration has been implemented, despite the possibility of some interim safeguards, the desired conditions of competition on the market cannot actually be restored until the commitments have been fulfilled. Therefore, commitments must be capable of being implemented effectively and within a short period. Commitments should not require additional monitoring once they have been implemented(10).
11. The Commission may accept commitments in either phase of the procedure. However, given the fact that an in-depth market investigation is only carried out in phase II, commitments submitted to the Commission in phase I must be sufficient to clearly rule out "serious doubts" within the meaning of Article 6(1)(c) of the Merger Regulation(11). Pursuant to Article 10(2) of the Merger Regulation, the Commission has to take a clearance decision as soon as the serious doubts established in the decision pursuant to Article 6(1)(c) of the Merger Regulation are removed as a result of commitments submitted by the parties. This rule applies in particular to commitments proposed at an early stage of phase II-proceedings(12). After an in-depth investigation and where the Commission in a Statement of Objections has reached the preliminary view that the merger leads to the creation or strengthening of a dominant position within the meaning of Article 2(3) of the Merger Regulation, the commitments have to eliminate the creation or strengthening of such a dominant position.
12. Whilst commitments have to be offered by the parties, the Commission may ensure the enforceability of commitments by making its authorisation subject to compliance with them(13). A distinction must be made between conditions and obligations. The requirement for achievement of each measure that gives rise to the structural change of the market is a condition - for example, that a business is to be divested. The implementing steps which are necessary to achieve this result are generally obligations on the parties, e.g. such as the appointment of a trustee with an irrevocable mandate to sell the business. Where the undertakings concerned commit a breach of an obligation, the Commission may revoke clearance decisions issued either under Article 6(2) or Article 8(2) of the Merger Regulation, acting pursuant to Article 6(3) or Article 8(5)(b), respectively. The parties may also be subject to fines and periodic penalty payments as provided in Article 14(2)(a) and 15(2)(a) respectively of the Merger Regulation. Where, however, the situation rendering the concentration compatible with the common market does not materialise(14), that is, where the condition is not fulfilled, the compatibility decision no longer stands. In such circumstances, the Commission may, pursuant to Article 8(4) of the Merger Regulation, order any appropriate action necessary to restore conditions of effective competition(15). In addition, the parties may also be subject to fines as provided in Article 14(2)(c).
III. TYPES OF REMEDY ACCEPTABLE TO THE COMMISSION(16)
13. Where a proposed merger threatens to create or strengthen a dominant position which would impede effective competition, the most effective way to restore effective competition, apart from prohibition, is to create the conditions for the emergence of a new competitive entity or for the strengthening of existing competitors via divestiture.
14. The divested activities must consist of a viable business that, if operated by a suitable purchaser, can compete effectively with the merged entity on a lasting basis. Normally a viable business is an existing one that can operate on a stand-alone-basis, which means independently of the merging parties as regards the supply of input materials or other forms of cooperation other than during a transitory period.
15. In proposing a viable business for divestiture, the parties must take into account the uncertainties and risks related to the transfer of a business to a new owner. These risks may limit the competitive impact of the divested business, and, therefore, may lead to a market situation where the competition concerns of the Commission will not necessarily be eliminated.
Object of the divestiture
16. Where the competition problem results from horizontal overlap, the most appropriate business has to be divested(17). This might be the business of the acquiring company in cases of a hostile bid where the notifying party's knowledge of the business to be acquired is more limited. A commitment to divest activities of the target company might, in such circumstances, increase the risk that this business might not result in a viable competitor which could effectively compete in the market on a lasting basis.
17. In determining which overlapping business should be divested, the ability of the business to be operated on a stand-alone-basis is an important consideration(18). In order to assure a viable business, it might be necessary to include in a divestiture those activities which are related to markets where the Commission did not raise competition concerns because this would be the only possible way to create an effective competitor in the affected markets(19).
18. Although it has been accepted in certain specific circumstances(20), a divestiture consisting of a combination of certain assets from both the purchaser and the target may create additional risks as to the viability and efficiency of the resulting business. It will, therefore, be assessed with great care. In exceptional cases, a divestiture package including only brands and supporting production assets may be sufficient to create the conditions for effective competition(21). In such circumstances, the Commission would have to be convinced that the buyer could integrate these assets effectively and immediately.
19. The condition for a clearance decision by the Commission is that the viable business will have been transferred to a suitable purchaser(22) within a specific deadline. The two elements of the viable business and the suitable purchaser are thus inter-linked. The potential of a business to attract a suitable purchaser is, therefore, an important element of the Commission's assessment of the appropriateness of the proposed commitment(23).
20. There are cases where the viability of the divestiture package depends, in view of the assets being part of the business, to a large extent on the identity of the purchaser. In such circumstances, the Commission will not clear the merger unless the parties undertake not to complete the notified operation before having entered into a binding agreement with a purchaser for the divested business (known as the "upfront buyer"), approved by the Commission(24).
21. Once a divestiture of a business is made a condition of the clearance decision, it is a matter for the parties to find a suitable purchaser for this business. The parties may therefore add, on their own initiative, other assets to make the package more attractive to buyers(25).
Alternative divestiture commitments
22. In certain cases, the implementation of the parties' preferred divestiture option (of a viable business solving the competition concerns) might be uncertain or difficult in view of, for instance, third parties' pre-emption rights or uncertainty as to the transferability of key contracts, intellectual property rights or employees, as the case may be. Nevertheless, the parties may consider that they would be able to divest this business within the appropriate short time period.
23. In such circumstances, the Commission cannot take the risk that, in the end, effective competition will not be restored. Accordingly, it is up to the parties to set out in the commitment an alternative proposal, which has to be at least equal if not better suited to restore effective competition, as well as a clear timetable as to how and when the other alternative will be implemented(26).
Removal of structural links
24. Divestiture commitments may not be limited to overcoming competition problems created by horizontal overlaps. The divestiture of an existing shareholding in a joint venture may be necessary in order to sever a structural link with a major competitor(27).
25. In other cases, a possible remedy could be the divestiture of minority shareholdings or the elimination of interlocking directorates in order to increase the incentives for competing on the market(28).
2. Other remedies
26. Whilst being the preferred remedy, divestiture is not the only remedy acceptable to the Commission. First, there may be situations where a divestiture of a business is impossible(29). Secondly, competition problems can also result from specific features, such as the existence of exclusive agreements, the combination of networks ("network effects") or the combination of key patents. In such circumstances, the Commission has to determine whether or not other types of remedy may have a sufficient effect on the market to restore effective competition.
27. The change in the market structure resulting from a proposed concentration can cause existing contractual arrangements to be inimical to effective competition. This is in particular true for exclusive long-term supply and distribution agreements if such agreements limit the market potential available for competitors. Where the merged entity will have a considerable market share, the foreclosure effects resulting from existing exclusive agreements may contribute to the creation of a dominant position(30). In such circumstances, the termination of existing exclusive agreements(31) may be considered appropriate to eliminate the competitive concerns if there is clearly no evidence that de facto exclusivity is being maintained.
28. The change in the market structure resulting from a proposed concentration can lead to major barriers or impediments to entry into the relevant market. Such barriers may arise from control over infrastructure, in particular networks, or key technology including patents, know-how or other intellectual property rights. In such circumstances, remedies may aim at facilitating market entry by ensuring that competitors will have access to the necessary infrastructure(32) or key technology.
29. Where the competition problem is created by control over key technology, a divestiture of such technology(33) is the preferable remedy as it eliminates a lasting relationship between the merged entity and its competitors. However, the Commission may accept licensing arrangements (preferably exclusive licences without any field-of-use restrictions on the licensee) as an alternative to divestiture where, for instance, a divestiture would have impeded efficient, on-going research. The Commission has pursued this approach in mergers involving, for example, the pharmaceutical industry(34).
30. Owing to the specifics of the competition problems raised by a given concentration in several markets, the parties may have to offer remedy packages which comprise a combination of divestiture remedies and other remedies that facilitate market entry by granting network access or access to specific content(35). Such packages may be appropriate to remedy specific foreclosure problems arising, for instance, in concentrations in the telecommunication and media sectors. In addition, there may be transactions affecting mainly one product market where, however, only a package including a variety of other commitments will be able to remedy the competitive concerns raised by the specific concentration on an overall basis(36).
IV. SITUATIONS WHERE REMEDIES ARE DIFFICULT, IF NOT IMPOSSIBLE
31. The Commission is willing to explore solutions to the competition problems raised by a concentration, provided that these solutions are convincing and effective. There are, however, concentrations where remedies adequate to eliminate competition concerns within the common market cannot be found(37). In such circumstances, the only possibility is prohibition.
32. Where the parties submit proposed remedies that are so extensive and complex that it is not possible for the Commission to determine with the required degree of certainty that effective competition will be restored in the market, an authorisation decision cannot be granted(38).
V. SPECIFIC REQUIREMENTS FOR SUBMISSION OF COMMITMENTS
1. Phase I
33. Pursuant to Article 6(2) of the Merger Regulation the Commission may declare a concentration compatible with the common market, where it is confident that following modification a notified concentration no longer raises serious doubts within the meaning of paragraph 1(c). Parties can submit proposals for commitments to the Commission on an informal basis, even before notification. Where the parties submit proposals for commitments together with the notification or within three weeks from the date of receipt of the notification(39), the deadline for the Commission's decision pursuant to Article 6(1) of the Merger Regulation is extended from one month to six weeks.
34. In order to form the basis of a decision pursuant to Article 6(2), proposals for commitments must meet the following requirements:
(a) they shall be submitted in due time, at the latest on the last day of the three-week period;
(b) they shall specify the commitments entered into by the parties in a sufficient degree of detail to enable a full assessment to be carried out;
(c) they shall explain how the commitments offered solve the competition concerns identified by the Commission.
At the same time as submitting the commitments, the parties need to supply a non-confidential version of the commitments, for purposes of market testing(40).
35. Proposals submitted by the parties in accordance with these requirements will be assessed by the Commission. The Commission will consult the authorities of the Member States on the proposed commitments and, when considered appropriate, also third parties in the form of a market test. In addition, in cases involving a geographic market that is wider than the European Economic Area ("EEA") or where, for reasons related to the viability of the business, the scope of the business to be divested is wider than the EEA territory, the proposed remedies may also be discussed with non-EEA competition authorities in the framework of the Community's bilateral cooperation agreements with these countries.
36. Where the assessment confirms that the proposed commitments remove the grounds for serious doubts, the Commission clears the merger in phase I.
37. Where the assessment shows that the commitments offered are not sufficient to remove the competitive concerns raised by the merger, the parties will be informed accordingly. Given that phase I remedies are designed to provide a straightforward answer to a readily identifiable competition concern(41), only limited modifications can be accepted to the proposed commitments. Such modifications, presented as an immediate response to the result of the consultations, include clarifications, refinements and/or other improvements which ensure that the commitments are workable and effective.
38. If the parties have not removed the serious doubts, the Commission will issue an Article 6(1)(c) decision and open proceedings.
2. Phase II
39. Pursuant to Article 8(2) of the Merger Regulation, the Commission must declare a concentration compatible with the common market, where following modification a notified concentration no longer creates or strengthens a dominant position within the meaning of Article 2(3) of the Merger Regulation. Commitments proposed to the Commission pursuant to Article 8(2) must be submitted to the Commission within not more than three months from the day on which proceedings were initiated. An extension of this period shall only be taken into consideration on request by the parties setting forth the exceptional circumstances which, according to them, justify it. The request for extension must be received within the three-month-period. An extension is only possible in case of exceptional circumstances and where in the particular case there is sufficient time to make a proper assessment of the proposal by the Commission and to allow adequate consultation with Member States and third parties(42).
40. The Commission is available to discuss suitable commitments prior to the end of the three-month period. The parties are encouraged to submit draft proposals dealing with both substantive and procedural aspects which are necessary to ensure that the commitments are fully workable.
41. Proposals for commitments submitted in order to form the basis for a decision pursuant to Article 8(2) must meet the following requirements:
(a) they shall be submitted in due time, at the latest on the last day of the three-month period;
(b) they shall address all competition problems raised in the Statement of Objections and not subsequently abandoned. In this respect, they must specify the substantive and implementing terms entered into by the parties in sufficient detail to enable a full assessment to be carried out;
(c) they shall explain how the commitments offered solve the competition concerns.
At the same time as submitting the commitments, the parties shall supply a non-confidential version of the commitments, for purposes of market testing.
42. Proposals submitted by the parties in accordance with these requirements will be assessed by the Commission. If the assessment confirms that the proposed commitments remove the competition concerns, following consultation with the authorities of the Member States, discussions with non-Member States authorities(43) and, when considered appropriate, with third parties in the form of a market test, a clearance decision will be submitted for Commission approval.
43. Conversely, where the assessment leads to the conclusion that the proposed commitments appear not to be sufficient to resolve the competition concerns raised by the concentration, the parties will be informed accordingly. Where the parties subsequently modify the proposed commitments, the Commission may only accept these modified commitments(44) where it can clearly determine - on the basis of its assessment of information already received in the course of the investigation, including the results of prior market testing, and without the need for any other market test - that such commitments, once implemented, resolve the competition problems identified and allow sufficient time for proper consultation of Member States.
VI. REQUIREMENTS FOR IMPLEMENTATION OF COMMITMENTS
44. Commitments are offered as a means of securing a clearance, with the implementation normally taking place after the decision. These commitments require safeguards to ensure their successful and timely implementation. These implementing provisions will form part of the commitments entered into by the parties vis-à-vis the Commission. They have to be considered on a case-by-case basis. This is in particular true for the fixed time periods laid down for the implementation, which should in general be as short as is feasible. Consequently, it is not possible to standardise these requirements totally.
45. The following guidance is intended to assist the parties in framing commitment proposals. The principles are based on the framework of a divestiture commitment, which, as was seen above, is the most typical commitment. However, many of the principles discussed below are equally applicable to other types of commitments.
1. Essential features of divestment commitments
46. In a typical divestment commitment, the business to be divested normally consists of a combination of tangible and intangible assets, which could take the form of a pre-existing company or group of companies, or of a business activity which was not previously incorporated in its own right. Thus the parties(45), when submitting a divestiture commitment, have to give a precise and exhaustive definition of the intended subject of divestment (hereafter referred to as "the description of the business" or "the description"). The description has to contain all the elements of the business that are necessary for the business to act as a viable competitor in the market: tangible (such as R & D, production, distribution, sales and marketing activities) and intangible (such as intellectual property rights, goodwill) assets, personnel, supply and sales agreements (with appropriate guarantees about the transferability of these), customer lists, third party service agreements, technical assistance (scope, duration, cost, quality) and so forth. In order to avoid any misunderstanding about the business to be divested, assets that are used within the business but that should not, according to the parties, be divested, have to be identified separately.
47. The description has to provide for a mechanism whereby the acquirer of the business can retain and select the appropriate personnel. Such a mechanism is required both for the personnel that are currently working in the business unit as it is operated and for the personnel that provide essential functions for the business such as, for instance, group R & D and information technology staff even where such personnel are currently employed by another business unit of the parties. This mechanism is without prejudice to the application of the Council Directives on collective redundancies(46); on safeguarding employees rights in the event of transfers of undertakings(47); and on informing and consulting employees(48) as well as national provisions implementing those Directives.
48. The divestment has to be completed within a fixed time period agreed between the parties and the Commission, which takes account of all relevant circumstances. The package will specify what kind of agreement - binding letter of intent, final agreement, transfer of legal title - is required by what date. The deadline for the divestment should start on the day of the adoption of the Commission decision.
49. In order to ensure the effectiveness of the commitment, the sale to a proposed purchaser is subject to prior approval by the Commission. The purchaser is normally required to be a viable existing or potential competitor, independent of and unconnected to the parties, possessing the financial resources(49), proven expertise and having the incentive to maintain and develop the divested business as an active competitive force in competition with the parties. In addition, the acquisition of the business by a particular proposed purchaser must neither be likely to create new competition problems nor give rise to a risk that the implementation of the commitment will be delayed. These conditions are hereinafter referred to as "the purchaser standards". In order to maintain the structural effect of a remedy, the merged entity cannot, even in the absence of an explicit clause in the commitments, subsequently acquire influence over the whole or parts of the divested business unless the Commission has previously found that the structure of the market has changed to such an extent that the absence of influence over the divested business is no longer necessary to render the concentration compatible with the common market.
2. Interim preservation of the business to be divested - the hold-separate trustee
50. It is the parties' responsibility to reduce to the minimum any possible risk of loss of competitive potential of the business to be divested resulting from the uncertainties inherent to the transfer of a business. Pending divestment, the Commission will require the parties to offer commitments to maintain the independence, economic viability, marketability and competitiveness of the business.
51. These commitments will be designed to keep the business separate from the business retained by the parties, and to ensure that it is managed as a distinct and saleable business. The parties will be required to ensure that all relevant tangible and intangible assets of the divestiture package are maintained, pursuant to good business practice and in the ordinary course of business. This relates in particular to the maintenance of fixed assets, know-how or commercial information of a confidential or proprietary nature, the customer base and the technical and commercial competence of the employees. Furthermore, the parties must maintain the same conditions of competition as regards the divestiture package as those applied before the merger, so as to continue the business as it is currently conducted. This includes providing relevant administrative and management functions, sufficient capital, and a line of credit, and it may include other conditions specific to maintaining competition in an industry.
52. As the Commission cannot, on a daily basis, be directly involved in overseeing compliance with these interim preservation measures, it therefore approves the appointment of a trustee to oversee the parties' compliance with such preservation measures (a so-called "hold-separate trustee"). The hold-separate trustee will act in the best interests of the business to be divested. The commitment will set out the specific details of the trustee's mandate. The trustee's mandate, to be approved by the Commission, together with the trustee appointment, will include for example, responsibilities for supervision, which include the right to propose, and, if deemed necessary, impose, all measures which the trustee considers necessary to ensure compliance with any of the commitments, and periodic compliance reports.
3. Implementation of the commitments - the divestiture trustee
53. The commitment will also set out the specific details and procedures relating to the Commission's oversight of the implementation of the divestiture: for example, criteria for approval of the purchaser, periodic reporting requirements, and approval of the prospectus or advertising material. Here, too, it is noted that the Commission cannot, on a daily basis, be directly involved in managing the divestment. Consequently, in most cases, the Commission considers it appropriate to approve the appointment a trustee with responsibilities for overseeing the implementation of the commitments (the "divestiture trustee").
54. The divestiture trustee's role will vary on a case-by-case basis, but will generally include supervision which includes the right to propose, and if deemed necessary, impose, all measures which the trustee requires to ensure compliance with any of the commitments, and reporting at regular intervals. Where appropriate, the trustee's role will span two phases: in the first phase, he or she will be responsible for overseeing the parties' efforts to find a potential purchaser. If the parties do not succeed in finding an acceptable purchaser within the time frame set out in their commitments, then in the second phase, the trustee will be given an irrevocable mandate to dispose of the business within a specific deadline at any price, subject to the prior approval of the Commission.
4. Approval of the trustee and the trustee mandate
55. Depending on the types of commitments involved and the facts of the case, the divestiture trustee may or may not be the same person or institution as the hold-separate trustee. The trustee will normally be an investment bank, management consulting or accounting company or similar institution. The parties shall suggest the trustee (or a number of trustees) to the Commission. The trustee shall be independent of the parties, possess the necessary qualifications to carry out the job and shall not be, or become, exposed to a conflict of interests. It is the parties' responsibility to supply the Commission with adequate information for it to verify that the trustee fulfils these requirements. The Commission will review and approve the terms of the trustee's appointment, which should be irrevocable unless "good cause" is shown to the Commission for the appointment of a new trustee.
56. The parties are responsible for remuneration of each trustee for all services rendered in the execution of their responsibilities, and the remuneration structure must be such as to not impede the trustee's independence and effectiveness in fulfilling his mandate. The trustee will assume specified duties designed to ensure compliance in good faith with the commitments on behalf of the Commission, and these duties will be defined in the trustee's mandate. The mandate must include all provisions necessary to enable the trustee to fulfil its duties under the commitments accepted by the Commission. It is subject to Commission's approval.
57. When the specific commitments with which the trustee has been entrusted have been implemented - that is to say, when legal title for the divestiture package to be divested has passed or at the end of some specific obligations which continue post-divestiture - the mandate will provide for the trustee to request the Commission for a discharge from further responsibilities. Even after the discharge has been given, the Commission has the discretion to require the reappointment of the trustee, if subsequently it appears to the Commission that the relevant commitments might not have been fully and properly implemented.
5. Approval of the purchaser and the purchase agreement
58. The parties or the trustee can only proceed with the sale if the Commission approves a proposed purchaser and the purchase agreement on the basis of the arrangements set out in the commitment. The parties or the trustee will be required to demonstrate satisfactorily to the Commission that the proposed buyer meets the requirements of the commitments, which means the purchaser's standards, and that the business is sold in a manner consistent with the commitment. The Commission will formally communicate its view to the parties. Before doing so, the Commission officials may have discussed with the proposed purchaser its incentives for competing with the merged entity on the basis of its business plans. Where different purchasers are being proposed for different parts of the package, the Commission will assess whether each individual proposed purchaser is acceptable and that the total package solves the competition problem.
59. Where the Commission determines that the acquisition of the divestiture package by the proposed purchaser, in the light of the information available to the Commission, threatens to create prima facie competition problems(50) or other difficulties, which may delay the timely implementation of the commitment or indicate the lack of appropriate incentives for the purchaser to compete with the merged entity, the proposed purchaser will not be considered acceptable. In this case, the Commission will formally communicate its view that the buyer does not satisfy the purchaser's standards(51).
60. Where the purchase results in a concentration that has a Community dimension, this new operation will have to be notified under the Merger Regulation and cleared under normal procedures(52). Where this is not the case, the Commission's approval of a purchaser is without prejudice to the jurisdiction of merger control of national authorities.
(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13.
(2) OJ L 180, 9.7.1997, p. 1.
(3) The references to "parties" and "merging parties" also cover situations with one notifying party.
(4) Referred to hereinafter as 'phase II'.
(5) Referred to hereinafter as 'phase I'.
(6) Recital 7 of the Merger Regulation.
(7) In the case of the creation of a joint venture, the Commission will also examine the concentration under Article 2(4) of the Merger Regulation. In this respect, the Commission examines whether or not the creation of the joint venture has as its object or effect the coordination of the competitive behaviour of undertakings that remain independent. Such coordination will be appraised in accordance with the criteria of Article 81(1) and (3) of the Treaty, with a view to establishing whether or not the operation is compatible with the common market. The principles set out in this notice would normally also apply to cases dealt with under Article 2(4).
(8) Judgment of the Court of First Instance of 25 March 1999 in Case T-102/96 Gencor v Commission  ECR II-753, at paragraph 316.
(9) Op. cit., at paragraph 319.
(10) Only in exceptional circumstances will the Commission consider commitments which require further monitoring: Commission Decision 97/816/EC (IV/M.877 - Boeing/McDonnell Douglas; OJ L 336, 8.12.1997, p. 16).
(11) Commitments in phase I can only be accepted in certain types of situation. The competition problem needs to be so straightforward and the remedies so clear-cut that it is not necessary to enter into an in-depth investigation.
(12) Commission Decision of 30 March 1999 (IV/JV.15 - BT/AT & T); Commission Decision 2000/45/EC (IV/M.1532 - BP Amoco/Arco; OJ L 18, 19.1.2001, p. 1).
(13) If the Commission's final assessment of a case shows that there are no competition concerns or that the resolution of the concerns does not depend on a particular element of the submitted commitments, the parties, being informed, may withdraw them. If the parties do not withdraw them, the Commission may either take note of their proposals in the decision or ignore them. Where the Commission takes note of them, it will explain in its decision that they do not constitute a condition for clearance.
(14) The same principle applies where the situation that originally rendered the concentration compatible is subsequently reversed; see the last sentence of paragraph 49.
(15) These measures may also lead to periodic penalty payments as provided in Article 15(2)(b).
(16) The following overview is non-exhaustive.
(17) Where the competition problem arises in vertical integration cases, divestiture may also resolve the competition concern.
(18) Commission Decision of 29 September 1999 (IV/M.1383 - Exxon/Mobil, at paragraph 860); Commission Decision of 9 February 2000 (COMP/M.1641 Linde/AGA, at paragraph 94).
(19) Commission Decision 1999/229/EC (IV/M.913 - Siemens/Elektrowatt; OJ L 88, 31.3.1999, p. 1, at paragraph 134); Commission Decision 2000/718/EC (COMP/M.1578 - Sanitec/Sphinx; OJ L 294, 22.11.2000, p. 1, at paragraph 255); Commission Decision of 8 March 2000 (COMP/M.1802 - Unilever/Amora Maille); Commission Decision of 28 September 2000 (COMP/M.1990 - Unilever/Bestfoods; OJ C 311, 31.10.2000, p. 6).
(20) Commission Decision 96/222/EC (IV/M.603 - Crown Cork & Seal/CarnaudMetalbox; OJ L 75, 23.3.1996, p. 38).
(21) Commission Decision 96/435/EC (IV/M.623 - Kimberly-Clark/Scott Paper; OJ L 183, 23.7.1996, p. 1).
(22) See paragraph 49 for the purchaser standards.
(23) IV/M.913 - Siemens/Elektrowatt: cited above.
(24) Commission Decision of 13 December 2000 (COMP/M.2060 - Bosch/Rexroth).
(25) IV/M.1532 - BP Amoco/Arco (cited above) where the commitment was to divest the interests in certain gas pipelines and processing facilities in the North Sea, also the interests in the related gas fields were divested.
(26) Commission Decision of 8 April 1999 (COMP/M.1453 - AXA/GRE; OJ C 30, 2.2.2000, p. 6).
(27) Commission Decision 98/455/EC (IV/M.942 - VEBA/Degussa; OJ L 201, 17.7.1998, p. 102).
(28) Commission Decision of 9 February 2000 (COMP/M.1628 - TotalFina/Elf); Commission Decision of 13 June 2000 (COMP/M.1673 - VEBA/VIAG); Commission Decision of 1 September 2000 (COMP/M.1980 - Volvo/Renault; OJ C 301, 21.10.2000, p. 23).
(29) IV/M.877 - Boeing/McDonnell Douglas (cited above). The Commission's investigations revealed that no existing aircraft manufacturer was interested in acquiring Douglas Aircraft Company (DAC, the commercial aircraft division of McDonell Douglas) from Boeing, nor was it possible to find a potential entrant to the commercial jet aircraft market who might achieve entry through the acquisition of DAC.
(30) Commission Decision 98/475/EC (IV/M. 986 - AGFA Gevaert/DuPont; OJ L 211, 29.7.1998, p. 22).
(31) Commission Decision of 28 October 1999 (IV/M.1571 - New Holland/Case: OJ C 130, 11.5.2000, p. 11); Commission Decision of 19 April 1999 (IV/M.1467 - Rohm and Haas/Morton; OJ C 157, 4.6.1999, p. 7).
(32) Commission Decision of 5 October 1992 (IV/M.157 - Air France/Sabena; OJ C 272, 21.10.1992, p. 1; Commission Decision of 27 November 1992 (IV/M.259 - British Airways/TAT; OJ C 326, 11.12.1992, p. 1); Commission Decision of 20 July 1995 (IV/M.616 - Swissair/Sabena; OJ C 200, 4.8.1995, p. 10); Commission Decision of 13 October 1999 (IV/M.1439 - Telia/Telenor); Commission Decision of 12 April 2000 (COMP/M.1795 - Vodafone/Mannesmann).
(33) Commission Decision of 9 August 1999 (IV/M.1378 - Hoechst/Rhône-Poulenc; OJ C 254, 7.9.1999, p. 5); Commission Decision of 1 December 1999 (COMP/M.1601 - Allied Signal/Honeywell); Commission Decision of 3 May 2000 (COMP/M.1671 - Dow/UCC).
(34) Commission Decision of 28 February 1995 (IV/M.555 - Glaxo/Wellcome; OJ C 65, 16.3.1995, p. 3).
(35) COMP/M.1439 - Telia/Telenor; COMP/M.1795 - Vodafone Airtouch/Mannesmann (cited above); Commission Decision of 13 October 2000 (COMP/M.2050 - Vivendi/Canal+/Seagram; OJ C 311, 31.10.2000, p. 3).
(36) Commission Decision 97/816/EC (IV/M.877 - Boeing/McDonnell Douglas; OJ L 336, 8.12.1997, p. 16); COMP/M.1673 - VEBA/VIAG.
(37) Commission Decision 94/922/EC (MSG Media Service, OJ L 364, 31.12.1994, p. 1); Commission Decision 96/177/EC (Nordic Satellite Distribution, OJ L 53, 2.3.1996, p. 20); Commission Decision 96/342/EC (RTL/Veronica/Endemol, OJ L 134, 5.6.1996, p. 32); Commission Decision 1999/153/EC (Bertelsmann/Kirch/Premiere; OJ L 53, 27.2.1999, p. 1; Commission Decision 1999/154/EC (Deutsche Telekom BetaResearch; OJ L 53, 27.2.1999, p. 31); Commission Decision 97/610/EC (St Gobain/Wacker Chemie/NOM; OJ L 247, 10.9.1997, p. 1); Commission Decision 91/619/EEC (Aerospatiale/Alenia/De Havilland, OJ L 334, 5.12.1991, p. 42); Commission Decision 97/26/EC Gencor/Lonrho, OJ L 11, 14.1.1997, p. 30); Commission Decision 2000/276/EC (M.1524 - Airtours/First Choice; OJ L 93, 13.4.2000, p. 1).
(38) Commission Decision of 15 March 2000 (COMP/M.1672 - Volvo/Scania); Commission Decision of 28 June 2000 (COMP/M.1741 - WorldCom/Sprint).
(39) Article 18(1) of Commission Regulation (EC) No 447/98 (Implementing Regulation), OJ L 61, 2.3.1998, p. 1.
(40) By way of a market test, customers, competitors, suppliers and other companies which might be affected or have specific expertise are requested to indicate to the Commission their reasoned opinion as to the effectiveness of the commitment.
(41) See recital 8 of Council Regulation (EC) No 1310/97 referred to in paragraph 1.
(42) M.1439 - Telia/Telenor; and in Commission Decision 98/335/EC (M.754 - Anglo American/Lonrho; OJ L 149, 20.5.1998, p. 21).
(43) See paragraph 35.
(44) COMP/M.1628 - TotalFina/Elf, LPG, cited above, at paragraph 345.
(45) Commitments must be signed by a person duly authorised to do so.
(46) Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ L 225, 12.8.1998, p. 16).
(47) Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees rights in the event of transfers of undertakings, businesses or parts of a business (OJ L 61, 5.3.1977, p. 26) as amended by Council Directive 98/50/EC (OJ L 201, 17.7.1998, p. 88).
(48) Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ L 254, 30.9.1994, p. 64), as amended by Directive 97/74/EC (OJ L 10, 16.1.1998, p. 22).
(49) The Commission does not accept seller-financed divestitures because of the impact this has on the divested company's independence.
(50) This is most likely to arise where the market structure is already highly concentrated and where the remedy would transfer the market share to another market player.
(51) COMP/M.1628 - TotalFina/Elf - motorway service stations.
(52) Commission Decision of 29 September 1999 (Case M.1383 - Exxon/Mobil) and the Commission Decisions of 2 February 2000 in the follow-up Cases M.1820 - BP/JV Dissolution (not published) and M.1822 - Mobil/JV Dissolution (OJ C 112, 19.4.2000, p. 6).