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Document 52009SC0808R(01)
Staff working paper accompanying the Communication from the Commission to the Council Report on the functioning of Regulation No 139/2004 {COM(2009) 281 final}
Staff working paper accompanying the Communication from the Commission to the Council Report on the functioning of Regulation No 139/2004 {COM(2009) 281 final}
Staff working paper accompanying the Communication from the Commission to the Council Report on the functioning of Regulation No 139/2004 {COM(2009) 281 final}
/* SEC/2009/0808 final/2 */
Staff working paper accompanying the Communication from the Commission to the Council Report on the functioning of Regulation No 139/2004 {COM(2009) 281 final} /* SEC/2009/0808 final/2 */
EN || COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 30.6.2009 SEC(2009) 808 final/2 CORRIGENDUM:
Annule et remplace le document SEC(2009)808 du 18 juin 2009
(modifications apportées dans l'annexe 3) STAFF WORKING PAPER
accompanying the COMMUNICATION FROM THE COMMISSION TO
THE COUNCIL
Report on the functioning of Regulation No 139/2004
{COM(2009) 281 final} TABLE OF CONTENTS 1........... Introduction. 3 1.1........ Background. 3 1.2........ Objective of the analysis. 4 1.3........ Methodology and structure. 5 Part I - Jurisdictional Thresholds. 6 2........... The thresholds under Article 1. 6 2.1........ Introduction. 6 2.2........ Views expressed by the NCAs. 7 2.3........ Views expressed by the stakeholders. 8 2.4........ Commission assessment of the thresholds under
Article 1(2) 9 2.5........ Commission assessment of the thresholds under
Article 1(3) 10 2.6........ The application of the two-thirds rule. 15 2.7........ Conclusion on the operation of the thresholds. 22 Part II - Referral Mechanisms. 23 3........... Pre-notification referrals. 23 3.1........ Referrals under Article 4(4) 23 3.2........ Referrals under Article 4(5) 29 3.3........ Conclusion on the operation of the
pre-notification referral system.. 35 4........... Post-Notification Referrals. 38 4.1........ Referrals under Article 22. 38 4.2........ Referrals under Article 9. 42 Part III – General Conclusion. 44 ANNEX 1 Questionnaire
for the consultation of NCAs ANNEX 2
Questionnaire for the public consultation ANNEX 3 Overview of two-thirds rule cases
between 2001 and 2007 1. Introduction 1.1. Background 1. Council Regulation (EEC)
No 4064/89, the "EC Merger Regulation", entered into force on 21
September 1990. One of the main principles of the EC Merger Regulation is the
exclusive jurisdiction of the Commission to review concentrations which fall
within its scope. According to its Article 1, the EC Merger Regulation thus
applies to operations that satisfy two conditions. First, there must be a
concentration of two or more undertakings within the meaning of Article 3 of
the EC Merger Regulation. Secondly, the turnover of the undertakings concerned,
calculated in accordance with Article 5, must satisfy the thresholds set out in
Article 1 and which thus have a Community dimension in the sense of the EC
Merger Regulation. 2. The concept that the
Commission should have sole competence to review mergers with a Community
dimension follows from the principle of subsidiarity. From the viewpoint of the
European business community, the Commission's exclusive jurisdiction also
provides a "one-stop-shop" advantage, which is widely regarded
as an essential part of keeping the regulatory costs associated with
cross-border transactions at a reasonable level. In addition, the Commission's
exclusive jurisdiction to vet such mergers is an important element in providing
a "level playing field" for the concentrations that were bound
to result from the completion of the internal market. This principle is widely
accepted as the most efficient way of ensuring that all mergers with a
significant cross-border impact would be subject to a uniform set of rules. 3. In 1998, after a careful
review of the experience gained, the EC Merger Regulation was amended through
Council Regulation No 1310/97. The amendments concerned a large number of
areas. In relation to Article 1, a new sub-paragraph - Article 1(3) - was
introduced. The intention was to provide a solution to the problem whereby a
significant number of cases failed to meet the turnover requirements of Article
1(2) and therefore had to be notified in several Member States ("multiple
filings"). Many such concentrations had a significant cross-border impact
but did not benefit from the "one-stop-shop" principle and therefore,
the EC Merger Regulation had not fully succeeded in creating a level playing
field and the application of coherent rules for this category of cases. Council
Regulation No 1310/97 therefore introduced a new set of lower turnover
thresholds in Article 1(3) with a view to capturing transactions which were of
a Community dimension. 4. The adoption of the recast
EC Merger Regulation on 20 January 2004[1]
(also referred to as the "EC Merger Regulation") was the result of a
far-reaching review and a broad debate with all concerned parties which was
launched in 2001 with the Commission Green Paper.[2] The discussion covered a wide
range of jurisdictional, procedural and substantive aspects of the Regulation.
The new EC Merger Regulation introduced a number of substantive and procedural
changes. While the turnover thresholds set out in Articles 1(2) and 1(3) were
left unchanged, a set of voluntary pre-notification referral mechanisms was
introduced in order to "further improve the efficiency of the system
for the control of concentrations within the Community."[3] 5. The Commission Notice on
Case Referral in respect of concentrations[4]
sets out the guiding principles of the referral system. It specifies that decisions
taken with regard to the referral of cases should take due account of all aspects
of the application of the principle of subsidiarity, "in particular
which is the authority more appropriate for carrying out the investigation, the
benefits inherent in a 'one-stop-shop' system, and the importance of legal
certainty with regard to jurisdiction. It also emphasises that
"these factors are inter-linked and the respective weight placed upon each
of them will depend upon the specificities of a particular case. Above all, in
considering whether or not to exercise their discretion to make or accede to a
referral, the Commission and Member States should bear in mind the need to
ensure effective protection of competition in all markets affected by the
transaction."[5] 6. On 10 July 2007, the
Commission adopted a Commission Consolidated Jurisdictional Notice under
Council Regulation (EC) No 139/2004 on the control of concentrations between
undertakings.[6]
The Consolidated Jurisdictional Notice replaces the previous four
jurisdictional Notices, all adopted by the Commission in 1998 under the previous
EC Merger Regulation.[7]
The Consolidated Jurisdictional Notice covers all issues of jurisdiction
relevant for establishing the Commission’s competence under the new EC Merger
Regulation, including in particular, the concept of a concentration, the notion
of control, the concept of full-function joint ventures and the calculation of
turnover.[8] 7. It is in the context of
the above instruments that the notification thresholds and the referral
mechanisms are analysed and discussed in this staff working paper. 1.2. Objective
of the analysis 8. Article 1(4) of the EC
Merger Regulation requires the Commission to report to the Council on the
operation of the thresholds and criteria set out in paragraph 1(2) and 1(3) by 1
July 2009.[9]
Article 4(6) of the EC Merger Regulation stipulates that the Commission shall
report to the Council on the operation of the pre-notification referral
mechanisms under Article 4 by 1 July 2009. 9. The main purpose of the
report is therefore, firstly, to discuss the operation of these thresholds in
allocating cases between the Community level and the national level pursuant to
the objectives of a "one-stop-shop", the "more appropriate authority",
and ultimately the need to achieve a "level playing field". Secondly,
to report on the operation of the pre- and post-notification referral
mechanisms provided for by Articles 4, 9 and 22. 10. The division of competence
between the Commission and the competition authorities of the Member States
("NCAs"), which is based on the concept of "concentration"
in the EC Merger Regulation and the mechanical application of the turnover
thresholds, includes three corrective mechanisms. The first corrective mechanism
is the so-called "two-thirds rule" which applies to both Articles
1(2) and 1(3). The objective of this rule is to exclude from the Commission's
jurisdiction certain cases which contain a clear national nexus to one Member State. 11. The second corrective
mechanism is the pre-notification referral system introduced under the new EC
Merger Regulation in May 2004. This allows for the re-allocation of
jurisdiction at the initiative of the parties prior to notification and subject
to approval by the Member States and/or the Commission. 12. The third corrective
mechanism is the post-notification referral system whereby one or more Member
States can request that the Commission assesses mergers that fall below the
thresholds of the EC Merger Regulation under certain conditions (Article 22). Conversely,
a Member State may, in cases that have been notified under the EC Merger
Regulation, request the transfer of competence to its NCA if certain conditions
are fulfilled (Article 9). 13. The analysis of this Staff
Working Paper covers the turnover thresholds in conjunction with these
corrective mechanisms with the aim of developing a comprehensive overview of
the system of allocation and re-allocation of merger cases between the
Commission and the Member States. 1.3. Methodology
and structure 14. On 26 June 2008, DG COMP launched
a consultation with the Member States' national competition authorities ("NCAs").
All NCAs replied and the Commission received a substantial amount of statistical
data which was necessary for the analysis of the quantitative aspects of the
report. Data were compiled on multiple filings, the operation of the two-thirds
rule and the pre- and post-notification referral mechanisms. The NCAs were also
invited to offer their views and share their experience in respect of the
operation of the thresholds and the referral mechanisms as well as with regard
to the operation of the EC Merger Regulation more generally. The questionnaire
for NCA consultation is attached as Annex 1. 15. On 28 October 2008, DG COMP
also launched a public consultation. This consultation was primarily designed
to collect further information concerning the application of the thresholds in
Article 1 and the referral mechanisms set out in Article 4. Furthermore, the
respondents were invited to forward any comments or suggestions in relation to
the functioning of the EC Merger Regulation more generally. Of the 30 replies
received, 16 were from major law firms frequently involved in EU merger
notifications. In addition, 13 commercial entities including companies and
industry organisations replied, as well as a think tank. The replies are
published on DG COMP's website.[10]
The questionnaire for the public consultation is attached as Annex 2. 16. In addition to these
consultations, DG COMP reviewed its own experience with the application of the
jurisdictional thresholds and the referral mechanisms since the entry into
force of the new EC Merger Regulation and the adoption of the Commission
Notices on case Referrals and Jurisdictional issues. 17. PART I of this staff
working paper will first analyse the functioning of the turnover thresholds set
out in Article 1 of the EC Merger Regulation in the light of the comments
received from NCAs and the respondents to the public consultation. The
operation of the two-thirds rule will also be discussed in the light of the
statistical data received from the NCAs and the experience of the Commission.
PART II will examine the operation of the pre-notification referral system
pursuant to Article 4 EC Merger Regulation. It also includes an examination of
the operation of the post-notification referral mechanisms of Articles 9 and
22. PART III then presents some general conclusions. Part I -
Jurisdictional Thresholds 2. The
thresholds under Article 1 2.1. Introduction 18. Article 1(2) of the EC
Merger Regulation stipulates: For the purposes of this Regulation, a
concentration has a Community dimension where: (a) the combined aggregate worldwide
turnover of all the undertakings concerned is more than ECU 5000 million; and (b) the aggregate Community-wide turnover
of each of at least two of the undertakings concerned is more than ECU 250
million, unless each of the undertakings concerned achieves more than
two-thirds of its aggregate Community-wide turnover within one and the same Member State. 19. Article 1(3), which entered
into force in 1998, extends the Commission's sole competence to assess certain
transactions where the parties have less turnover but requiring notification in
three or more Member States ("multiple filings"). Article 1(3)
stipulates: For the purposes of this Regulation, a
concentration that does not meet the thresholds laid down in paragraph 2 has a
Community dimension where: (a) the combined aggregate worldwide
turnover of all the undertakings concerned is more than ECU 2500 million; (b) in each of at least three Member
States, the combined aggregate turnover of all the undertakings concerned is
more than ECU 100 million; (c) in each of at least three Member
States included for the purpose of point (b), the aggregate turnover of
each of at least two of the undertakings concerned is more than ECU 25
million; and (d) the aggregate Community-wide turnover
of each of at least two of the undertakings concerned is more than ECU 100
million; unless each of the undertakings concerned
achieves more than two-thirds of its aggregate Community-wide turnover within
one and the same Member State. 20. Article 1(3) tests whether
significant turnover is achieved in three or more Member States. In principle,
this means that the Article applies a test of cross-border effects. In this
respect the intention of Article 1(3) could be interpreted as providing
companies recourse to the "one-stop-shop" principle in situations
where the cost of multiple notifications would otherwise be too high. In the
discussions that led to the adoption of this amendment it was felt that the
Community dimension would be more manifest in cases involving three or more Member States and that, as long as only two Member States were involved, potential
conflicts could be avoided through bilateral contacts. 21. The turnover thresholds
provided in Article 1(2) and 1(3) of the EC Merger Regulation have not been
altered since their entry into force in 1990 and in 1998 respectively. 2.2. Views
expressed by the NCAs 22. NCAs have consistently
expressed the view that, as a whole, the system of both the turnover thresholds
and the referral provisions functions well and appropriately assign
jurisdiction. It is also the general perception that the pre-notification
referral system has enhanced the jurisdictional flexibility of merger control
in the EU, thus fine-tuning possible any shortcomings of the thresholds. 23. One respondent pointed out
that while the system of thresholds and corrective mechanisms works well
overall, the level of the thresholds should be adjusted for price inflation and
should take into account the EU enlargement. One NCA also suggested that the
need for such adjustments might be further explored. One NCA considered that
such adjustment is not appropriate at this stage but should be considered in
the future. 24. As regards specifically the
operation of the thresholds of Article 1(3) the NCAs have made only a few
comments. One NCA wondered whether these thresholds would contribute to a more
effective enforcement of merger control in the EU and suggested abolishing
Article 1(3) in the interest of simplification and transparency. One NCA
pointed out that the threshold under Article 1(3) is quite complicated. 25. With regard to specific
markets or economic sectors, most NCAs took the view that the thresholds of
Article 1(2) and (3) function well as an effective means of properly
identifying mergers of a Community dimension. However, one NCA noted that more
guidance as to how the relevant turnover of the parties concerned should be
calculated for the purposes of the jurisdictional assessment might be
appropriate for some economic sectors. Another NCA remarked that the current
rules could lead to an ineffective allocation of cases in the retail trade sector
as such cases would be of a national or of a local dimension and therefore the NCAs
would be the appropriate authorities for considering cases of this kind.
Several Member States pointed out that in any event, the referral mechanism
allows for effective fine tuning wherever appropriate. 2.3. Views
expressed by the stakeholders 26. The public consultation
raised the following questions: A. Functioning of the turnover thresholds
in Article 1(2) and (3) EC Merger Regulation Question 1: Do you believe that Article
1(2) and (3) of the EC Merger Regulation is functioning as an effective means
of distinguishing between those transactions which are most appropriately the
subject to merger control at the Community level from those which are not? […] Question 2: Are there any specific sectors
or markets where, in your view, the turnover thresholds in Article 1(2) and (3)
are not functioning in the manner intended, namely in identifying those
transactions which are most appropriately the subject to merger control at the
Community level? 27. Table 1 below gives a
quantitative overview of the number of replies given on these questions. Table 1: Overview of replies to the public
consultation on the issue of thresholds Questions || Total* || Commercial entities || Law firms || Association Yes || No || Yes || No || Yes || No || Yes || No Question 1: Is Art 1(2) and (3) appropriate instruments to determine Community dimension? || 12 || 3 || 4 || 2 || 8 || 1 || - || - Question 2: Should there be special rules for specific economic sectors? || 7 || 5 || 5 || 2 || 3 || 3 || - || - *All data refer to number of replies. 28. With regard to the system
of jurisdictional thresholds under Article 1 generally, most respondents took
the view that they provide a reasonably good proxy for which cases have a
Community dimension. Considering that the turnover thresholds provide a simple
and objective mechanism that can be handled directly by the companies involved
in a merger in order to determine if their transaction has a Community
dimension, respondents saw no need to change the turnover threshold system. However,
many respondents underlined the importance of efficient referral mechanisms in
order to be able to request the re-allocation of cases where appropriate.[11] 29. As regards the level of the
thresholds in Article 1, whilst most respondents considered the thresholds
appropriate, some suggested lowering them. A few respondents instead suggested
that the thresholds should be raised to adjust for inflation. 30. Regarding the criteria in
Article 1(3), a few respondents considered that this threshold is somewhat
complex and captures few cases. Therefore, they question whether it is still
necessary in its present form. In the same vein, some respondents went further
and proposed to abolish Article 1(3) altogether while others welcomed a
reopening of the debate regarding the introduction of a simpler "3+"
rule. Various options of a "3+" rule have been proposed. Such
suggestions could mean that a notification to the Commission would be
compulsory or voluntary where a concentration is notifiable in at least three
Member States, with more or less far-reaching Member States' powers to retain
cases. 31. Several law firms and
commercial entities pointed out that from their perspective the
pre-notification referral mechanism under Article 4(5)[12] would obviate the need for the
turnover threshold under Article 1(3). 32. Concerning particular rules
for specific sectors, some respondents mentioned one or several possible
sectors where this could be beneficial, including banking and financial
services, investment funds, insurance, reinsurance, travel, airlines, energy,
and defence. A few respondents merely proposed clarifications of the rules
while a few respondents saw no need for sector-specific rules and advised
against, arguing that such rules would make the thresholds too complicated. 33. Finally, most respondents
consider that the current regime imposes excessive notification requirements
with regard to JVs with limited or no activities and therefore little or no
effect within the EU.[13]
The review of such JVs is considered to be unjustified due to their limited
nexus within the EU or somewhat disproportionate to their potential effects.
Various proposals have been made as to how to address this perceived problem,
ranging from explicitly excluding such JVs from review under the EC Merger
Regulation to at least further simplifying the review process as regards scope,
timing and stand-still obligation. 2.4. Commission
assessment of the thresholds under Article 1(2) 34. Article 1(2) constitutes
the legal basis for the great majority of all notifications under the EC Merger
Regulation and has in the Commission's view operated in the way intended. This
conclusion is generally shared by the NCAs and stakeholders alike. Furthermore,
as will be discussed in more detail in the following sections, the limited use
of referral mechanisms in the direction of the Member States supports this
conclusion. In fact, these mechanisms provide for the possibility to refer for
review by the NCAs concentrations which significantly affect competition in a
market within a Member State, which presents all the characteristics of a
distinct market.[14] The limited use of these mechanisms
indicates that there are few concentrations where referral is deemed necessary. [15] 35. However, Article 1(2) does
not catch a significant number of cases, which, in spite of their cross-border
impact, are still dealt with by the Member States NCAs. This is particularly
true in some industries where transactions involving companies with limited
turnover may nevertheless affect the Common Market or a significant part of it.
In fact, this was acknowledged already in the reform process leading up to the
adoption of the additional thresholds under Article 1(3). 2.5. Commission
assessment of the thresholds under Article 1(3) 36. The objectives of the
adoption of Article 1(3) were first to address the problem that a significant
number of cases failed to meet the turnover requirements of Article 1(2) and
which therefore had to be notified in several Member States. Secondly, many
such concentrations had a significant cross-border impact but did not benefit
from the "one-stop-shop" principle and therefore, the EC Merger
Regulation had not fully succeeded in creating a level playing field and the
application of coherent rules for this category of cases. A discussion follows
below as to what extent these objectives have been achieved by first examining
cases that fell within this threshold and then those that fell outside
Community jurisdiction. 2.5.1. Cases
falling under Article 1(3) 37. In recent years, the number
of notifications received under Article 1(3) was in the order of 20 to 50 per
year, representing 5-15% of the total number of all notifications.[16] By their very nature, these cases would in
most cases have been subject to multiple notifications in view of the way the
threshold in Article 1(3) is designed. Thus, the threshold in Article 1(3) has
decreased the number of potential multiple filings and has thus significantly
decreased unnecessary parallel reviews of transactions with a potential impact
within or across several Member States. 38. With a view to assessing
the cross-border effects and impact on competition of cases notified under
Article 1(3), a statistical comparison with cases notified under Article 1(2)
was carried out. First, it was compared whether cases notified under Article
1(3) are more likely to be of national character with respect to their
geographic impact. Secondly, it was assessed whether cases notified under
Articles 1(2) and 1(3) may present differences as to their likelihood of raising
competition concerns. 39. First, as far as the geographic
impact of cases under Article 1(3) is concerned, this element can be said to
provide one indication as to which competition authority is well placed to
assess any given merger and to take remedial action when necessary. One element
among others to consider when assessing their geographic impact is to look at
the geographic market(s) affected by these mergers. In this exercise it first
has to be stressed that this is only an approximation to be used in the absence
of other readily available indicators. Furthermore, the Commission often leaves
the question of geographic definition open if the merger in question does not
raise any competition concern under any conceivable alternative market
definitions. 40. Nevertheless, it is
instructive that in about a third of cases notified under Article 1(3) the
proposed concentration clearly affected a relevant geographic market which was EU
wide or wider than the EU (albeit the definition of the geographic scope was
left open in most of these cases). More specifically, in 17 of 72 cases notified
under Article 1(3) in 2007 and 2008 the affected geographic markets were EU
wide or wider, and in 5 cases the geographic market was possibly world-wide.[17] A number of cases with
national markets affected more than one national market.[18] 41. Consequently, based on the
Commission's experience there are no indications that cases notified under
Article 1(3) generally affect only a limited geographic area. On the contrary,
these cases generally tend to affect markets broader than national or more than
one national market. 42. Second, from a substantive viewpoint, for the years 2007 and 2008 it
should be noted that competition concerns were found in four of the cases
notified under Article 1(3). Three of these cases were cleared in the first
phase by way of a decision under Article 6(2). One case was cleared by way of
an Article 8(2) decision with commitments after a full second-phase
investigation. Consequently, over the period in question, about 5 % of the
transactions notified under Article 1(3) raised competition concerns. This is
comparable to cases which were notified under Article 1(2), where competition
concerns were also found in some 5 % of the cases.[19] 43. In conclusion, based on the
available information, Article 1(3) has significantly contributed to a proper
allocation of cases which are better dealt with at the European level. This is
first due to the fact that it avoids multiple filings in a large number of
cases which had a potential impact within or across several Member States. In
addition, it appears that many mergers notified under Article 1(3) affect
markets that are wider than national, which makes it even more likely that they
have a Community dimension. Statistics also show that cases notified under
Article 1(3) are as likely to raise competition concerns as those notified
under Article 1(2). 2.5.2. Cases
falling outside the scope of the EC Merger Regulation 44. As noted, one important aspect
of analysing the operation of the turnover thresholds is to analyse cases that
remain outside the scope of the EC Merger Regulation. The following section
will examine the cases which are still notified in more than one Member State. 2.5.2.1. General statistics on
multiple filings 45. NCAs were asked to indicate
how many of the concentrations which were reviewed under their relevant
national merger control laws during the year 2007 were also reviewed in at
least one other EU jurisdiction. Information received from the NCAs shows that
at least 241 transactions were reviewed by more than one NCA.[20] Filings were made in three or more Member
States with regard to 102 (42%) of these transactions whilst the remaining transactions
were reviewed in two Member States. The exact breakdown is shown in the chart
below. Chart 1: Breakdown of multiple filing transactions
by the number of Member States 46. When comparing the numbers
of multiple filings to the total number of cases reviewed by NCAs it appears
that only 5% of all cases were reviewed by more than one NCA.[21] 2.5.2.2. Geographic scope of multiple
filings 47. As regards the geographic
scope of multiple filing cases, the following statistics (based on data
provided by the NCAs) are indicative only, as the geographic scope of markets
was often not reported or was left undefined. Of the 102 identified
transactions reviewed by three or more NCAs, as many as 54 transactions (53%)
involved markets which were wider than national or European-wide markets and 22
transactions (22%) involved worldwide markets.[22]
By contrast, only 26 transactions were limited in their geographic scope to
national markets (25%). 2.5.2.3. Substantive issues 48. The NCAs reported few
competition problems with regard to multiple filing transactions. Indeed, of
the 241 transactions (which gave rise to a total of 663 national cases) 10
transactions gave rise to competition concerns: · One transaction was prohibited in one Member State after an in-depth
investigation (a case reviewed by three NCAs); · Three transactions led to a clearance conditional on remedies after
phase 1 investigations (two of these cases were reviewed by three NCAs and one
reviewed by two NCAs); · Two transactions were abandoned; · Four cases underwent an in-depth investigation leading to a
clearance decision. 49. Of the in-depth cases, one
involved five NCAs, one involved four NCAs, and the other two involved three
NCAs. Hence, overall six out of the 102 transactions involving the review by
three or more NCAs seemed to have presented competition concerns. 2.5.2.4. Views expressed by
stakeholders regarding multiple filings 50. In the public consultation,
interested parties were asked to indicate any concerns with respect to multiple
filings. Many respondents pointed out that the issue of multiple filings must
be assessed against the background of diverging jurisdictional, procedural and
sometimes substantive rules in different Member States. In their view these
divergences cause significant additional legal uncertainty, cost and delay when
multiple filings are required. Some respondents also consider that there is not
always a harmonious coexistence of national rules and EC rules. They would therefore
welcome further measures to reduce the number of multiple filings and, to the
very least, further initiatives by the Commission to foster harmonisation or
further "soft law convergence" of national merger control laws to
alleviate the negative consequences of parallel proceedings. Some pointed to
the successful initiatives towards further convergence in the area of the
application of Article 81 and 82 which resulted in the adoption of Regulation
1/2003 and the Commission's leniency model program as good role models.[23] 2.5.2.5. Commission assessment of
multiple filings 51. While NCAs may be the
"more appropriately" placed authorities to assess individual national
markets, this is not necessarily the case where multiple filings are required.
In fact, cases where the markets are national in scope may nevertheless have a
Community relevance in view of the fact that the Commission may be well placed
to make a comprehensive assessment of competition problems within several
markets and, where necessary, take remedial action. Also, where the geographic
scope of affected markets is wider than national, the likelihood of a case
having a Community relevance is even greater. 52. In the year 2007, there
were 241 concentrations that were reviewed under the competition laws of more
than one Member State. 102 of these concentrations were reviewed by three or
more NCAs (giving rise to about 360 parallel proceedings). The number of
multiple filings clearly exceeded the number of cases notified to the
Commission under Article 1(3) during the same period (i.e. 49 cases). This begs
the question whether some of these transactions would have been better assessed
exclusively by the Commission because of their potential competition impact
within or across several Member States or simply because of the advantages of a
"one-stop-shop". For the business community, the costs of engaging in
diverging parallel proceedings (with their different procedural frameworks,
different time schedules and multiple languages, and, at times, potentially
diverging substantive rules) must be a consideration. 53. Indeed, the vast majority
of these cases included at least one market that was wider than national and
often markets which were EEA-wide or worldwide in geographic scope. If only 25%
of the 102 transactions that were reviewed in three or more Member States were
limited to national markets, then clearly a significant number of transactions
with cross-border effects remain outside the scope of the EC Merger Regulation.
54. Furthermore, about 5-6% of
transactions notified in more than one Member State presented competition
problems (10 out of 241 concentrations, or 6 out of 102 concentrations). The
need for to avoid parallel procedures and to take a common approach in
enforcement is even more compelling in such cases, especially if remedies are
required.[24] 55. In conclusion, in its
current form, Article 1(3) has not entirely removed the need for multiple
filings. 2.6. The
application of the two-thirds rule 2.6.1. Introduction 56. Article 1 provides that
transactions that fulfil the general turnover thresholds set out in paragraphs
2 and 3, are notifiable under the EC Merger Regulation unless each of at least
two of the parties to the transaction achieve more than two thirds of their
aggregate Community wide turnover within one and the same Member State. Below is an analysis of to what extent this provision has distinguished between cases of
a Community relevance and those with a clear national nexus only. 2.6.2. General
statistics 57. The number of cases that
fell under the two-thirds rule for the period between 2001 and 2007 are
provided in the table below.[25]
Table 2 Merger cases by Member State during the
reference period 2001-2007[26] Merger Cases Reviewed by NCAs || 2001 - 2005 || 2006 || 2007 || Total No. of Cases Reviewed || No. of 2/3 Rule Cases || 2/3 Rule Cases as % of Total Austria || 1,500 || 274 || 341 || 2,115 || 2 || 0.1 Belgium || 285 || 15 || 19 || 319 || 1 || 0.3 Bulgaria*** || Na || Na || 79 || 79 || 0 || 0.0 Cyprus* || 14 || 25 || 29 || 68 || 0 || 0.0 Czech Republic**** || 104 || 61 || 60 || 225 || 0 || 0.0 Denmark || 70 || 6 || 13 || 89 || 0 || 0.0 Estonia* || 68 || 34 || 34 || 136 || 0 || 0.0 Finland || 406 || 39 || 35 || 480 || 5 || 1.0 France || 708 || 142 || 160 || 1,010 || 27 || 2.7 Germany || 6,250 || 1,829 || 2,240 || 10,319 || 17 || 0.2 Greece || 76 || 13 || 17 || 106 || 2 || 1.9 Hungary* || 351 || 43 || 46 || 440 || 0 || 0.0 Ireland || 212 || 98 || 72 || 382 || 0 || 0.0 Italy || 3,053 || 717 || 864 || 4,634 || 34 || 0.7 Latvia* || 22 || 27 || 78 || 127 || 0 || 0.0 Lithuania* || 97 || 61 || 78 || 236 || 0 || 0.0 Luxemburg***** || Na || Na || Na || Na || Na || Na Malta* || 13 || 12 || 5 || 30 || 0 || 0.0 Netherland** || 300 || 135 || 108 || 543 || 11 || 2.0 Poland* || 574 || 265 || 263 || 1,102 || 2 || 0.2 Portugal || 325 || 67 || 91 || 483 || 0 || 0.0 Romania*** || 280 || 106 || 45 || 431 || 0 || 0.0 Slovak Republic* || 107 || 42 || 49 || 198 || 0 || 0.0 Slovenia* || 252 || 47 || 50 || 349 || 0 || 0.0 Spain || 464 || 132 || 127 || 723 || 14 || 1.9 Sweden || 385 || 113 || 110 || 608 || 4 || 0.7 United Kingdom || 1,000 || 155 || 116 || 1,271 || 7 || 0.6 Total || 16,916 || 4,458 || 5,129 || 26,503 || 126 || 0.5%
* 01.05.2004 – 31.12.2007
** 01.01.2002 – 31.12.2007
*** year 2007 only
**** number of cases in 2007 based on extrapolation of previous years
*****no merger control regime
58. As can be seen from the
above table, there were at least 126 cases that qualified under the two-thirds
rule threshold during the reference period. These cases therefore represent a
very small proportion (at least around 0.5%) of the total case load at the Member State level of about 26,500 cases. These statistics should be viewed with some
caution. In fact, many Member States did not keep record of the number of
two-thirds rule cases prior to 2004. Given the incomplete data available prior
to 2004,[27]
it is difficult to be precise about the exact number of cases falling into this
category. If anything, the data underestimates the total number of two-thirds
rule cases. For the same reason, it is difficult to draw any firm conclusions
as to trends over time with respect to the number of two-thirds rule cases.
Nevertheless, since 2005 more than 20 cases per annum have been reported. An
overview of all two-thirds rule cases reported between 2001 and 2007 is
provided in Annex 3. Chart 2: Annual overview two-thirds rule cases per Member State 59. As can be seen from the
above chart, the number of two-thirds rule cases varies significantly by year
and by Member State. Nevertheless, these data clearly show that as a whole, and
with few exceptions, the two-thirds rule is mainly applicable with regard to
the larger Member States. In fact, over the six year period, France, Germany, Italy and Spain are the Member States with the largest number of such cases.[28] This is a result of the design of this threshold. It is generally
unlikely that two of the parties to the transaction would meet the general
thresholds provided for by Article 1 while still having two thirds of their
turnover in a small Member State. As regards the economic sectors where this
rule applied, the most important are financial services (33 %), followed
by energy (10 %) and telecommunications (6 %). 60. Concerning the geographic
scope of the markets analysed, as seen from the chart below, in most of the 126
cases the relevant market was defined as national or narrower. In only 12 cases
(i.e. 10%), the geographic market was defined as wider than national or
EEA-wide. Five of these cases involved mergers in the financial services sector
and three concerned mergers in the energy sector. The other cases concerned
mergers in various sectors such as e-commerce, the air-transport supporting
services sector, chemicals and automotive. Chart 3: Geographic scope of two-thirds rule cases 61. Out of total reported
two-thirds rule cases, only 13 (around 10 %) are reported to have involved
filings in one or more additional Member States.[29] Half of these cases related to
the financial services sector while the remaining cases were evenly spread
across different sectors. 2.6.3. Procedure
and outcome 62. As regards procedures and
outcome of the review, the table below shows that 17 cases (about 13%) were
subject to in-depth investigation between 2001 and 2007. As regards regulatory
intervention, one concentration was prohibited and 11 were conditionally
cleared (about 10% of total cases). Table 4: Two-thirds rule cases: Procedures and
outcome Investigation || Outcome first phase || in-depth || clearance || clearance with remedies || prohibition || withdrawal || other 109 || 17 || 107 || 11 || 1 || 3 || 4 83% || 13% || 82% || 8% || 1% || 2% || 3% 2.6.4. Comments
by the NCAs 63. Most NCAs express
satisfaction with the way the two-thirds rule has operated. However, a few
respondents consider that the two-thirds rule may not always appropriately
allocate cases between the EU level and the Member State level. In particular,
one respondent acknowledged that the current regime of case allocation could
(in particular circumstances and in certain sectors) prevent the Commission
from accomplishing its obligations in the construction of the single market.
Therefore, it would not oppose the adoption of additional jurisdictional
safeguards to ensure that the internal market is not compromised, in particular
in relation to mergers within recently liberalised sectors (e.g. the energy
sector), some of where favouring of national champions has been an issue. 2.6.5. Comments
by the stakeholders 64. The majority of respondents
did not express concerns about the two-thirds rule. A few respondents consider
it to be a useful tool to single out transactions that do not have a Community relevance.[30] 65. Nevertheless, some
respondents consider that as a result of increased market integration this
provision is outdated. In fact, it is seen as capturing cases which, although
having a focus in a particular Member State, have potentially important effects
within the Common Market. For example in the energy sector (which they note is becoming
increasingly integrated and liberalised) there could be an important risk of
foreclosure of markets if two major energy providers in already highly
concentrated markets are allowed to merge. In the view of some respondents, the
Commission would therefore be better placed to review such cases. A few
respondents also expressed the concern that, in some circumstances, national
merger control laws have been applied in potential conflict with competition law
objectives with regard to mergers of strategic importance that fell under this
threshold. 66. Some respondents would
therefore be in favour of abolishing this provision. Many of them pointed to
the availability of referral mechanisms, which in their view provide a more
suitable mechanism for adjusting the allocation of cases when it is clear that
a case has a purely national nexus. Finally, a few respondents consider that
the two-thirds provision serves its purpose but that it could be modified to allow
for a better calibration in the selection of cases that do not have a Community
relevance.[31] 2.6.6. Assessment of the operation of the two-thirds rule 67. Having regard to the small
number of cases involving multiple filings and their likely impact based on
geographic scope, one can conclude that, in most cases the two-thirds rule
appears to have served as a reasonably effective proxy for identifying the
"more appropriate" jurisdiction. 68. However, there is a small
number of important merger cases having a potentially significant cross-border
impact (even in some cases where the market was defined as national in scope)
which, as a consequence of the application of the two-thirds rule were examined
by the NCAs. In addition, the jurisdictional aspects of the two-thirds rule,
i.e. the way it has allocated cases between the Community level and the Member State level, cannot be assessed in isolation from how the cases that fall under this
threshold are liable to be handled in a substantive respect. 69. It is unavoidable that some
of the transactions between large firms falling under the two-thirds rule are
capable of having a significant impact on market structures and on competition
beyond the confines of a single Member State. In fact, mergers involving
national markets but which, due in particular to high concentration levels as
well as entry barriers, may result in increased foreclosure effects, clearly
have a cross-border impact. Cases with cross-border effects are of particular
importance from a Community perspective if they concern markets which are in
the process of Community-driven liberalisation or where intra-EU barriers are
being eroded. The geographic scope of such markets may be in the process of
evolving towards a dimension which is wider than national, or Community-wide,
in scope. Furthermore, mergers giving rise to possible competition concerns in
a series of national or regional markets or being subject to multiple filings
may also be considered cross-border in their impact. 70. These considerations are
well illustrated by some recent cases in the energy sector (which represents
the second largest portion of two-thirds rule cases). In cases such as
Eon/Ruhrgas,[32] Gas Natural/Endesa,[33] Gas
Natural/Iberdrola[34] and a recent transaction involving around 10 electricity producers
and distributors in Poland,[35] the competition structure of the whole national market was
substantially affected. In these types of cases potential effects on cross-border
trade cannot be excluded. These examples also indicate that the two-thirds rule
has sometimes functioned in a way to allocate jurisdiction to the NCAs in cases
of domestic energy mergers within the larger Member States. In fact, it appears
somewhat paradoxical that in the same sector and over the same time period, similar
operations (but taking place in other parts of the EU) did not fall under the
two-thirds rule and were assessed by the Commission. Significant examples are
the EDP/ENI/GDP,[36] EON/MOL,[37] DONG/Elsam/Energi E2,[38] and
the GDF/Suez cases.[39] 71. It goes beyond the scope
and purpose of the report to examine the merits of these cases or whether it
would be necessary, appropriate or possible to take measures at Community
level. In any case, for future reference it may be a useful exercise to analyse
the need for and the possibilities of introducing more efficient and flexible
mechanisms for the re-allocation of certain two-thirds rule cases than those
currently provided by the EC Merger Regulation. 2.6.7. Some
recent developments with regard to cases falling or potentially falling within
the scope of the two-thirds rule 72. Some recent developments at
the national level deserve particular attention. For instance, it appears that
in the above-mentioned Polish energy case, the NCA found that the transaction
would lead to dominance in several markets (both with regard to the supply and
wholesale of electricity). However, for reasons notably of ensuring security of
supply of energy, the transaction was eventually approved. While mostly
involving national or narrower markets, the impact of such mergers would appear
to have effects beyond the territory of that Member State as a result of
maintained or reinforced entry barriers in the energy sector across national
borders. 73. Similar considerations
applied in the Lloyds TSB/HBOS-case,[40] where
the OFT reviewed the transaction and recommended its referral to the UK
Competition Commission in view of the potential competition concerns raised.
This concentration appeared to have its main effects in the UK retail banking sector, but there may be a risk of foreclosure effects in the supply of retail
banking services generally because of the very significant concentration level
that resulted from the transaction along with the potential increase of entry
barriers. However, the UK Secretary of State exercised statutory powers[41] to intervene and decided, on the basis of financial stability
considerations, not to refer the concentration to the Competition Commission. 74. There have also been
situations where the NCA may not have been in a position to carry out an
effective review. In the CAI/Alitalia/AirOne-case, which concerned a proposed
restructuring of Alitalia's and AirOne's air transportation activities, the
Italian NCA was barred by decree from carrying out a review of the case under
the normal procedure provided for by the relevant legislation. The only
remedial powers left with the NCA were those of imposing behavioural
commitments in case competition concern should arise.[42] 75. Finally, in some Member
States, specific legislation introduced to deal with the financial crisis has
excluded certain State rescue measures within the financial services industry
from the scope of application of national merger regimes. In certain instances
the applicability of antitrust law has also been limited. The following
examples bear mention. 76. In Germany, national merger control is suspended for operations within the scope of the Financial
Market Stabilisation Act[43] which covers financial institutions. However, this does not exclude
merger control being applied to operations by the Federal states and by foreign
states, as those measures do not fall under this Act. 77. Similar initiatives were
reported in Ireland, under the Anglo Irish Bank Corporation Act.[44] Also in Portugal, national merger control has been rendered
inapplicable on a temporary basis in respect of nationalisations of financial
institutions, and onward sale by the State of the same undertakings is also
exempt from the standstill obligation under national merger control law.[45] 78. It is desirable that,
independently of which authority is the reviewing agency, merger control across
the EU ensures the protection of undistorted competition. 2.7. Conclusion
on the operation of the thresholds 79. In conclusion, it appears that
the threshold criteria in Article 1(2) and 1(3), seen in conjunction with the
various referral mechanisms, operate in a satisfactory way in allocating
jurisdiction. In fact, based on the Commission's own experience and the views
expressed by NCAs and stakeholders there appears to be a consensus that the
right cases are generally being reviewed at the Community level. The low degree
of referrals in the direction of the Member States also supports this
conclusion. 80. However, the analysis of
data on multiple filings provided by the NCAs indicates that in the year 2007,
some 102 multiple filing cases had to be notified in three or more Member
States. The analysis of the geographic scope of these cases indicates that a
large majority of them include markets which are wider than national. 81. One can therefore conclude
that a number of transactions with significant cross-border effects (and
therefore having Community relevance) would appear to remain outside the scope
of the EC Merger Regulation. As has been pointed out in numerous ways by the
respondents to the public consultation, any perceived need to change or amend
the current turnover thresholds must be assessed in the context of the
corrective mechanisms provided for by the EC Merger Regulation. As will be
discussed in Part II, in many stakeholders view, although the turnover
thresholds do not always distinguish cases that have Community relevance from
those that do not, this could be alleviated by the existence of efficient
pre-notification referral mechanisms between the national level and the
Community level. 82. The two-thirds rule has, in
most cases appropriately distinguished between concentrations having Community
relevance and those that do not. However, there are a small number of cases with
potential cross-border effects in the Community. More generally, it is
desirable that, independently of which authority is the reviewing agency,
merger control across the EU ensures the protection of undistorted competition. 83. Finally, the majority of
stakeholders have indicated that, generally, increased convergence of merger
control rules at the national level and between the EU level and the national
level of the like achieved in the antitrust field would be an important way to
improve the effectiveness of the merger control system across the EU. Part
II - Referral Mechanisms 3. Pre-notification
referrals 84. With the adoption of the
revised EC Merger Regulation in 2004, a set of voluntary pre-notification
referral mechanisms were introduced in order to "further improve the
efficiency of the system for the control of concentrations within the
Community."[46] The principles guiding the system where those that decisions taken
with regard to the referral of cases should take due account "in
particular which is the authority more appropriate for carrying out the
investigation, the benefits inherent in a "one-stop-shop" system,
and the importance of legal certainty with regard to jurisdiction."[47] In the following, the operation of the pre-notification referral
mechanisms after five years of application will be examined considering these
guiding principles. 3.1. Referrals
under Article 4(4) 85. Article 4(4) of the EC
Merger Regulation provides a mechanism allowing concentrations that are
notifiable under the EC Merger Regulation to be referred to the Member States
at the request of the parties if certain conditions are fulfilled. Namely,
unless the Member State disagrees, the Commission, when it considers that the
concentration may significantly affect competition in a market within a Member
State which presents all the characteristics of a distinct market, may decide
to refer the whole or part of the case to the competent authorities of that
Member State with a view to the application of that State's national
competition law. The application of this provision is examined in the following
on the basis of quantitative and qualitative elements. 3.1.1. Statistics
of a general nature 3.1.1.1. Cases referred – geographic
and sectorial scope 86. The number of referrals on
the basis of this provision is illustrated by the chart below. Chart 4: Article 4(4) referrals per year (2004-2008) 87. The above chart serves to
illustrate that between 2004 and 2008, 43 Article 4(4) referrals were requested
of which one was refused and two were withdrawn. Apart from of one partial
referral, in all the 40 cases the entire case was referred to one or
exceptionally two Member States. The flow of referrals over the period has been
volatile, with only two referrals in 2004 while reaching a peak in 2006 with 13
referrals. The major recipients of Article 4(4) referrals cases were the UK, followed by Germany and France. An overview of referrals by country is provided in the chart below. Chart 5: Article 4(4) referrals per Member State (2004-2008) 88. With respect to the
geographic scope, the overwhelming majority of referral cases involve markets
that are clearly national in scope. In fact, between 2004 and 2007, all cases
involved at least one or more local or national markets. Conversely, only three
cases (or less than 10%) involved at least one market broader than national or
EEA-wide. These statistics provide a good indication that from the point of
view of geographic scope of the markets involved, the appropriate kind of cases
are being referred to the Member States.[48] In
fact, it is clear from these cases that their locus was essentially within
individual Member States. 89. As regards the sectors
involved, no particular sector can be singled out as being particularly prone
to referral cases. There is a wide spectrum of industries where the parties
have chosen this mechanism, notably in relation to consumer goods, food and
drink and pharmaceuticals. 3.1.1.2. Procedure, outcome and review
periods 90. Over the period between
2004 and 2007, about a third of the decisions were taken after an in-depth
procedure and the remaining decisions where adopted in phase I. As illustrated
by the chart below, only one case led to a prohibition decision, whereas about
a third of the cases led to conditional clearances. Chart 6: Outcome of Article 4(4) referral decisions
(2004-2008) 91. Statistics with regard to
the duration of review periods is set out in the chart below. Based on a study
of cases between 2004 and 2007, the median review period for referral cases
subject to first phase proceedings was 61 to 70 working days from the submission
of the Form RS to the adoption of a decision. For in-depth cases, the
equivalent time period was 101 to 110 days. These statistics do not take into
account pre-notification discussions prior to submission of the Form RS. Many
factors will influence the total length of the review period, for example the
time it takes between receipt of the submission by the Member States and the
moment when referral is decided upon as well as when a complete filing is
submitted before the NCA. Chart 7: Case duration of Article 4(4) referrals
(2004-2007) 3.1.2. Assessment
of the functioning of the referral system under Article 4(4) 92. The NCAs of the Member States and stake holders were invited to express their views generally on the
functioning of Article 4(4) (see questionnaires in Annexes 1-2). Their
answers and general comments are summarised in the following. 3.1.3. Views
expressed by the NCAs 93. Among the NCAs, there
appears to be a consensus that the referral system provided by Article 4(4)
generally functions effectively as a means of re-allocating
"original" jurisdiction from the Community level to the national
level on the basis that a case is more appropriately dealt with in the national
jurisdiction. The objection was however raised by one respondent that the
conditions for when referral is available could be clarified by reference to their
impact on any given market. No respondent rejected the proposition that the
right kind of cases are being referred to the Member States in terms of their
likely impact on competition and in terms of the likely geographic scope of any
such impact. 94. Most NCAs consider that the
current referral system under Article 4(4) is functioning as effectively as it could
in a procedural respect. A few respondents however expressed the view that
there is scope for shortening the deadlines at least as regards the Commission
while one respondent would not oppose such shortening. Nevertheless, the
general view is that the time periods attributed to the member States are
necessary for an examination of the submission and an internal consultation
within the competent competition agency and government bodies. 3.1.4. Views
expressed by the stakeholders 95. Virtually all respondents
consider that the introduction of a pre-notification referral system, both as
regards referrals to and from the Commission, is a welcome mechanism that has
considerably enhanced the flexibility of merger control within the Community. 96. Nevertheless, there are a
number of issues which are cause for concern. According to some respondents,
the wording of the condition that a referral to the Member States is available
when a transaction is likely to "significantly affect competition"
within one Member State provided for by Article 4(4) acts as a disincentive to
making such a request. Notwithstanding the fact that the effect on competition
must not be adverse as clarified in the referral notice, it may be perceived as
somewhat "self incriminating" giving rise, therefore, to a
presumption that a transaction is harmful to competition. It has been suggested
that this may be a factor contributing to the limited flow of cases to the
Member States compared to the opposite direction. Therefore, some would welcome
that this part of the test is abolished or that at least a more neutral
language is used. For example, some propose that it should be sufficient to
establish that the concentration "has effects" in a distinct market
within a Member State. 97. Many respondents would also
welcome more guidance as regards the motives for either the Member States or the Commission accepting or refusing a referral. In fact, the set of
indicative factors for when a referral is appropriate as set out in the
referral notice are in many respondents' view not put into practice. Also,
since the Member State's decision whether to accept or to refuse a referral are
neither reasoned nor published there is a perceived lack of transparency which
makes it difficult to predict whether a referral will take place or not. This uncertainty
surrounding whether a referral will eventually be accepted is therefore a
source of legal uncertainty. 98. As regards the procedure,
most respondents expressed the view that the length of the process and the amount
of information requested in the Form RS, are an important disincentive for the
parties to request referrals. Many respondents consider it unfortunate and
unjustified that it takes the same time to decide on a referral as it takes to
decide on the substance in first phase case with the Commission. Therefore, it
has been suggested that the parties often chose to remain with the Commission
even though the concentration would be more appropriately reviewed at a
national level. Thus virtually all respondents would welcome a shortening of the
15 working days available to the Member States and the 10 working days
available to the Commission. 99. Furthermore, many
respondents consider that the starting date of the 25 working days period
within which a referral decision must be taken is unclear. In starts only from
the moment when the Member States receive the referral request. However, there
is no clearly defined timeframe within which the Commission must transfer the
request to the Member States (the Commission must do so "without
delay"). As a result, the overall timing of the review process is
unpredictable. It has therefore been proposed that this provision be modified
to specify the time limit within which the Commission must send the referral
request to the Member States, or alternatively, that the time period should
start running from the moment the Commission receives the Form RS. 100. An additional cause for
concern relates to the scope of the information requested for the referral
assessment. Virtually all respondents consider that the amount of information
requested in the Form RS (according to some respondents, fully comparable to
the volume of information requested in a full Form CO) is disproportionate for
the purpose of the jurisdictional assessment. Various proposals have been
presented in order to address this. Some respondents would be in favour of
decreasing the amount of information requested in the Form RS. Others have
proposed that the Form RS should be considered sufficient to comply with national
notification requirements, in order to avoid losing time when converting it
into a national filing. 101. It has been suggested that
such measures would make referrals a more attractive option and that the principle
of "more appropriate authority" would be better fulfilled. 3.2. Referrals
under Article 4(5) 102. Article 4(5) of the EC
Merger Regulation provides a voluntary mechanism in the hands of the parties
which allows for concentrations which do not meet the thresholds under Article
1 and which are capable of being reviewed under the national competition laws
of at least three Member States to be referred to the Commission unless any
Member State competent to examine the concentration under its national
competition law expresses its disagreement. In the absence of such disagreement
the concentration is deemed to have a Community relevance and is thus referred
to the Commission. The application of this provision is examined in the
following on the basis of quantitative and qualitative elements. 3.2.1. Statistics
of a general nature 3.2.1.1. Cases referred – geographic
and sectorial scope 103. The number of referrals made
on the basis of this provision is illustrated by the chart below. Chart 8: Article 4(5) referrals per year (2004-2008) 104. The chart below serves to
illustrate that between 2004 and 2008, 160 Article 4(5) referrals were
requested of which 151 were granted, five were withdrawn and four were refused.
The trend over the reference period has also been towards the increasing use of
this mechanism in line with increased merger activity in general: from only 24
referrals in 2005 to 39 in 2006 and 50 in 2007. However, there has been an
important decrease in 2008 with only 22 referrals (again in line with the
general decrease of merger activity). Overall, Article 4(5) cases represented
almost 10% of the Commission's total merger case load over the reference
period. Chart 9: Article 4(5) referrals: Notification
requirements per Member State (2004- 2008) 105. As can be seen from the figure
above, the countries which is the largest source of referrals under Article
4(5) is Germany which between 2004 and 2008 was among the referring
jurisdictions in 94% of the cases followed by Austria (66%) and Italy (51%). As regards the number of jurisdictions in which the thresholds were met, the
median transaction was notifiable in five countries. There is however a large
variation between transactions. Notification was required in five Member States
in 25% of cases and in 10 or more Member States in 10% of the cases as
illustrated by the below chart. Chart 10: Article 4(5) referrals: Notification
requirements per transaction (2004-2008) 106. As noted, only four referrals
were refused during the reference period. The significance of the low number of
refusals should be treated with some caution. In fact, it may be the case that
the parties to a transaction whose centre of gravity is in a certain Member State may choose not to use the Article 4(5) route unless they are sure that the
competent authorities of that Member State would not oppose the referral. Also,
anecdotal evidence suggests that there are cases were the Member States manifested
their disapproval on an informal basis in pre-notification discussions.
Therefore, it is likely that the total number of effective refusals exceeds those
arising formally under Article 4(5). The precise extent of this practice is unknown. 107. As regards the geographic
scope, the overwhelming majority of referral cases involve markets which are broader
than national. In 2007, 30 cases involved markets that were broader than national
(i.e. possibly EEA-wide or Global). Conversely, only 4% of the cases involved
markets that are national or narrower in scope (the remaining cases being
national or broader in scope). These statistics provide a good indication that
from the point of view of the geographic scope of markets involved, the
appropriate kind of cases have been referred to the Commission.[49] 108. As regards sectors involved,
no particular economic sector can be singled out as being particularly prone to
referral cases. There is a wide spectrum of industries where the parties have often
chosen this mechanism most notably in area such as telecommunications,
chemicals, consumer electronics, financial services and packaging. 3.2.1.2. Procedure, review periods
and outcome 109. Based on available
statistics with regard to the 151 cases referred to the Commission under
Article 4(5) between 2004 and 2008, around 7% were subject to an in-depth assessment,
about 50% were reviewed under a first phase procedure and a third qualified for
the simplified procedure (the remaining cases were withdrawn). While a large
number of cases are simplified under Article 4(5) it is still lower than for
the Commission case load as a whole (which is about 60% of cases). Furthermore,
the proportion of in-depth cases is much higher for cases referred under 4(5) compared
to the Commission caseload as a whole where the corresponding number for the
same period was about 3%. Out of 14 Article 8 decisions adopted in 2008, six
were referred under Article 4(5). For 2007, the corresponding number was four
out of a total of nine decisions. 110. Indeed, among the most
prominent examples of complex cases referred under Article 4(5) during 2008
were: Google/DoubleClick, Tomtom/TeleAtlas and IBM/Telelogic.
These Phase II cases each involved high tech markets, most of which have not
been assessed by the Commission before.[50] In these
cases, extensive market investigations were conducted in in-depth proceedings
leading to unconditional clearance.[51] 111. The chart below (which
covers the period between 2004 and 2008) shows the outcome of cases referred
under Article 4(5). Four percent of the cases led to conditional
clearance decisions and almost 85% to unconditional clearance decisions
(whether in Phase I or in Phase II). The remaining cases were withdrawn or were
pending. So far no Article 4(5) case has led to a prohibition decision. Chart 11: Outcome of Article 4(5) referrals
(2004-2008) 112. As can be seen from the chart
below the median review period for referral cases subject to first phase
proceedings in 2007 was 46 to 60 working days between date of submission of the
Form RS to issuance of the decision. For in-depth (i.e. Phase II) cases the
equivalent time period was 81 to 100 days. These statistics do not take into
account pre-notification discussions prior to submission of the Form RS. Chart 12: Duration of Article 4(5) referral cases
(2007) 3.2.2. Assessment
of the functioning of the referral system under Article 4(5) 113. The Member State's
competition authorities and stakeholders were invited to express their views on
the functioning of Article 4(5) generally (see the questionnaires in Annexes
1-2). Their answers and their general comments are summarised in the
following sections. 3.2.2.1. Views expressed by the NCAs 114. Among the NCAs of the Member
States, there appears to be a consensus that the referral system provided by
Article 4(5) is in general functioning effectively as a means of re-allocating
jurisdiction from the national level to the Community level on the basis that a
case is more appropriately dealt with by the Commission. Two NCAs however
regretted that there are still a significant number of multiple filing cases
despite the availability of this mechanism. Virtually all the respondents
agreed that the right kind of cases are being referred to the Commission bearing
in mind their likely impact on competition and the likely geographic scope involved. 115. As regards procedural
aspects, most NCAs consider that the current referral system under Article 4(5)
is functioning as effectively as it could. A few respondents expressed the view
that there is scope for shortening the deadline of 15 working days in Article
4(5). However, the general view appears to be that such duration is necessary in
order to carry out the thorough examination and internal consultation which, at
times, also involves discussions with competent government bodies. 3.2.2.2. Views expressed by the
stakeholders 116. Similar to the opinions
expressed with regard to referrals under Article 4(4), virtually all
respondents take issue with what they consider to be lengthy review periods and
cumbersome information requirements for referrals under Article 4(5). Some
respondents also consider that the scope of the information requested is even
more disproportionate given that the test for when referral is possible is
simply that the transaction is notifiable in at least three Member States.
Thus, some of the information requested in the Form RS (for example with regard
to the affected markets) appears to be of little relevance for establishing
jurisdiction. Therefore, they conclude that the Form RS should be reduced. Only
the minimum amount of information of a substantive nature should be required
and should also be limited only to those Member States where a filing is
required. At the very least, a "short form" RS should be introduced for
cases which clearly do not raise competition issues and whose notification is
therefore, more of an administrative matter. 117. Some respondents expressed
concerns (apart from the general length of the formal procedure) that a
practice has arisen which entails what is referred to as a "double
consultation". In other words, the Commission often engages the
parties in pre-notification discussions regarding the completeness and scope of
both the Form RS and the Form CO with the risk of duplication and an unnecessarily
long time lag. 118. Many respondents also
consider that the discretionary refusal powers in the hands of the Member
States are not exercised in a clear way. In fact, since the Member State's decision whether to accept or refuse a referral is neither reasoned nor published,
there is a lack of transparency which makes it difficult to predict whether a
referral will take place. The uncertainty surrounding whether or not a referral
will eventually be accepted is therefore a source of legal uncertainty.
Together with the timing issue, this unpredictable risk is an additional disincentive
to refer. Although the possibility of refusal is not high for most cases, the
significant amount of time that would be lost if indeed it were to be exercised
dissuades the parties from using this mechanism. 119. A recurrent view is
therefore that, having regard to these factors, the parties often prefer to
file in multiple jurisdictions unless a very significant number of filings are
required. A few respondents even provided examples where as much as eight or
even ten national filings were the preferred option. 120. Some respondents therefore
proposed that the existence of or at least the scope of the Member States' refusal
right should be revisited. Some consider that due to the small number of refusal
rights exercised during the reference period, one could question whether the refusal
process is indeed warranted. Some respondents would welcome the complete
abolition of the referral system and introduce an outright "3+"
jurisdictional threshold providing for a mandatory or voluntary notification
when a transaction is notifiable in at least three Member States (with or
without a Member State right to have a case referred back to it). Various intermediate
suggestions have also been made by a few respondents. For example, a system
whereby referral would be automatically available unless one or a majority of
Member States oppose it or making the referral automatic in case the
transaction is reviewable in five or more Member States. 121. A few respondents also
pointed out that the diverging national merger control regimes is a source of
legal uncertainty in the context of the referral process. In particular, it is
argued that the very low notification thresholds in some Member States - which
catch a large number of transactions - give these countries a disproportionate
influence on the referral process. These respondents argue that, as a result,
the relative influence of some Member States on the referral process may not
necessarily be a reflection of the effects of the transaction in their
jurisdiction. A solution proposed to this problem would be to limit the refusal
right not only to those Member States that are competent to review the case but
also require that the transaction gives rise to affected markets in those
Member States. 3.3. Conclusion
on the operation of the pre-notification referral system 122. In conclusion, the available
statistics, the Commission's own experience as well as the reactions from the
NCAs and stakeholders clearly support the view that the referral mechanisms
introduced in 2004 have considerably enhanced the efficiency and jurisdictional
flexibility of merger control in the EU. They have substantially improved the
allocation of cases between the Commission and the Member States taking into
account the principles of "one-stop-shop" and "more appropriate
authority". In fact, available information clearly supports the view that
these mechanisms have allowed the appropriate authority to handle cases whilst
also avoiding unnecessary parallel procedures and inconsistent enforcement
efforts. In fact, it is estimated that the mechanism under Article 4(5) has
allowed for the reduction of the number of proceedings to around 150 from
around 970 parallel proceedings in the period between 2004 and 2008.
Furthermore, the mechanism under Article 4(4) has allowed for the re-allocation
of 40 cases from the Commission to the Member States over the same period.
Referrals were refused only in four cases under Article 4(5) and in one case
under Article 4(4). 123. Nevertheless, some problems
have been highlighted, in particular with regard to the procedure. Stakeholders
have expressed concerns with regard to the overall timing and cumbersomeness of
the referral process. These factors have been identified as the main cause of
the parties' decision not to request referral in a large number of cases. 124. In this regard and in order
to quantify to what extent this mechanism is effectively used, it is necessary
to measure the number of effective referrals against the total number of cases
that meet the conditions under Articles 4(4) and 4(5). As regards referrals to
the Member States, data with regard to concentrations which meet the conditions
in Article 4(4) are not readily available. Concerning referrals to the
Commission, as noted in part I, available data for 2007 indicate that there
were about 102 transactions which were notifiable in at least three Member
States. It can be estimated that these concentrations together required more
than 360 parallel investigations by the NCAs in one year. Available data also
suggest that a large number of these cases would be appropriate for referral.
Among the 102 transactions which meet the three Member State notification test,
the majority involve markets with a geographic scope that is broader than
national and as many as 20% involved global markets. 125. While the geographic scope
of the case is only one relevant factor amongst others for the referral
assessment,[52] this is an indication that a large number of additional
concentrations are appropriate candidates for referral to the Commission not
only from the point of view of a "one-stop-shop" but also when
considering the principle of the "more appropriate authority". This
is particularly relevant for those cases which raise substantive competition
issues. In fact, the negative consequences of duplication and the potential of a
contradictory outcome in different Member States is particularly important in
such cases. As noted in Part I, available data suggest that around 6% of the
cases notifiable in at least three Member States gave rise to competition
concerns. Against this background, one can conclude that there is further scope
for a "one-stop-shop" review of cases that fulfil the three Member State condition. 126. As noted, data is not
readily available as regards further potential use of the referral mechanism
under 4(4). One cannot, however, exclude that there is further potential to also
use this mechanism and therefore further scope for reinforcing the principle of
the “more appropriate authority,” considering for example several stakeholders'
concern that the criteria for referrals under this provision may in fact be a
disincentive for referral. Indeed, it may be useful to further examine more
generally what measures could be envisaged to ensure an improved case
re-allocation to the Member States. 127. Against this background, the
appropriateness of measures to improve the current pre-notification referral
system would merit further examination. While such analysis goes beyond the
scope of the report, a few preliminary remarks bear mention and should be
considered for future reference. 128. In the context of assessing
the need or possibilities for improvements of the system in order to further
reduce multiple filings one could also envisage to examine to what extent any
perceived problem linked to multiple filings could be partially addressed by
Member States reviewing the applicable jurisdictional thresholds under their national
laws[53] rather than by simply increasing the number of cases reviewed by
the Commission. 129. Furthermore, it must be
recalled that the Member States' refusal powers under article 4(5) have been
rarely used whilst stakeholders have pointed to cumbersome, time consuming and
therefore costly referral processes. Many stakeholders therefore consider,
having regard to the experience they acquired over the past years, that one
should re-examine the possibilities of shifting to a system of automatic
notification under the EC Merger Regulation when the three Member State
criterion is met (or other intermediary solutions) as was initially proposed in
the process leading up to the current system. This would, in their view,
significantly increase transparency while lowering the cost and time of the
review. 130. As regards timing, available
data confirm that more than twice as much time is needed for cases involving
referrals compared to own jurisdiction cases. However, it may be difficult to
shorten the time periods for the referral process provided for by the EC Merger
Regulation as has been suggested by stakeholders. Virtually all of the NCAs of
the Member States have indicated that the 15 working days mentioned under both
Article 4(4) and 4(5) is necessary for their assessment. The same applies in
the Commission’s view with regard to the 10 working days period within which the
Commission must decide on referral under Article 4(4). It should also be
recalled that the referral system is voluntary and the parties have the option of
choosing the referral mechanism where suitable, taking into account the overall
timing of the transaction and other factors specific to the case. In this
respect, the reporting requirements and additional time needed for a referral
process must be weighed against the additional benefits of achieving a "one-stop-shop"
or of having the "more appropriate authority" reviewing any given
case. As regards information requirements, the purpose of the data requested in
the Form RS is to allow the Member States (and in case of Article 4(4), the
Commission) to determine whether the referral should be made or not. Therefore,
any efforts to reduce the scope of information requested in the Form RS must
not undermine the NCAs and the Commission's ability to make such assessments. 131. Finally,
the issue of legal uncertainty raised by a large number of respondents - essentially
as regards the scope of and the exercise of a Member State power of refusal - must be assessed
against the actual number of refusals in the past five years. Although the
number of formal refusals (one under Article 4(4) and four under Article 4(5)) probably
underestimates the total number of actual refusals, it still gives some
indication that, overall, there is a low probability of refusal in the great
majority of cases, at least for unproblematic cases involving notifications of
an “administrative” nature. Also, for the more problematic cases, there is
always the possibility of seeking informal guidance from the concerned Member State (s) at an early stage in the process. Furthermore, the refusal power is
limited to the jurisdictions in which the transaction is reviewable. Therefore,
any concern raised by stakeholders in relation to the lack of impact with
regard to any given transaction in a particular Member State having refusal power
is in essence a criticism of the design of the jurisdictional thresholds in
that Member State as such rather than of the scope of the refusal power provided
by the EC Merger Regulation. 4. Post-Notification
Referrals 132. Whilst the EC Merger
Regulation does not require the Commission to report on the operation of the
post-notification referral mechanism, it is appropriate to also evaluate these
mechanisms in order to have a comprehensive view of the operation of the
thresholds and their corrective mechanisms generally. 4.1. Referrals under Article 22 4.1.1. Introduction 133. Article 22 is a referral
provision of the EC Merger Regulation which is at the disposal of the Member
States, post notification. The historical background to Article 22 is that it
was intended to allow Member States without merger control legislation to refer
a case to the Commission (the "Dutch clause"). The new version of
Article 22 makes provision for the referral of cases where a concentration
affects more than one Member State. It allows other Member States to join a
referral request already made. It also describes the deadlines within which
such referrals may be made or joined by Member States as well as acceded to by
the Commission. A Member State joining a referral will now automatically
relinquish its jurisdiction. The EC Merger Regulation does not distinguish
between Member States that have jurisdiction to assess the transaction and
those that do not. Article 22(2) states that any other Member State shall have the right to join the initial referral and, unlike Article 4(5) there is no
minimum number of jurisdictions necessary in order to complete the referral
process.[54] Finally, the scope of a referral is also different since the
Commission can only take jurisdiction for the part of a transaction which was
referred by one or several Member States, the non-referred parts remaining with
other Member States. 134. In order for a Member State's request for referral to be admissible, two legal pre-conditions must be
fulfilled. The concentration must: (i) affect trade between Member States; and (ii) it must threaten to significantly affect competition within the
territory of the Member State(s) making the request.[55] This
is in contrast to the procedure that the parties use to refer cases to the
Commission under Article 4(5) where the case must be capable of being reviewed
under the national competition laws of at least three Member States and where
they must also inform the Commission by means of a reasoned submission before
notifying in any competent Member State.[56]
Article 22, is also used by Member States to curtail parallel procedures: when
a Member State joins a referral, it thereby elects to no longer apply its own
national competition laws to the concentration. 135. Since the EC Merger
Regulation was recast with effect from 1 May 2004,[57] there
have been only 14 referrals under the new Article 22. Of the 14 requests for
referral, the following data was gathered: Table 5: Article 22 Referrals 2004-2008 Total No. of Referral Requests || Ensuing Procedure || Relevant Markets || Geog. Scope of Markets || Referring Countri-es || Joining Countries || Cases with 3 or more Countries involved || Cases with less than 3 Countries involved 14 || Phase II (6); Phase I (5); Refused (2); Withdrawn (1); || Chemicals (8); Satellite Equipment (2); Energy (1); Paper (1); Explosives (1); Soft Drinks (1); || Greater than National (12); National (2); || UK (4); DE (3); E (2); FR (1); FI (1); PT (1); CY (1); S (1); || DE (4); FR (3); UK (2); S (2); PL (1); NO (1); AU (1); IT (1); PT (1); || 5 || 9 136. The fact that 6 of the 14
cases referred under Article 22 entered into Phase II proceedings clearly
indicates that Article 22 is mainly used for cases which are critical and which
have a Community relevance (most of the relevant geographic markets were
greater than national in scope). One should bear in mind that of all the cases
notified to the Commission, those entering Phase II would normally only account
for only about 5% of the total. A corollary to this is the fact that no
simplified cases have ever been referred to the Commission under this provision.
This contrasts sharply with the number of standard notifications that are made
directly to the Commission, of which, during the last five years, about 60%
consistently qualify for treatment by the simplified procedure. There are more
cases referred to the Commission under Article 22 involving less than three
Member States than there are involving three Member States or more and this
statistic serves to underline the complementary nature of Article 22 to Article
4(5). 4.1.2. Views
expressed by the NCAs 137. The NCAs generally regard
Article 22 as functioning effectively and that the appropriate cases are being
referred to the Commission[58]. Table 5 above shows that since 1 May 2004 as many as eight
different Member States have requested a referral and that nine have joined a
referral request at least once. Several of the responding NCAs (who have been
actively involved in at least one referral process) made the point that they
felt that there was no scope for shortening the deadlines mentioned in Article
22. 138. On the issue of whether or
not a Member State should be able to make or join a referral without having
jurisdiction in the case, five thought that it should be allowed while nine
thought that it should not. This does raise the question of whether or not a Member
State should be able to refer a case when its jurisdiction is not triggered but
where the activity of the parties does have an effect in that Member State. 139. All of the respondents who
addressed the issue of whether or not "lone referrals"[59] by a single Member State should be permitted agreed that this
practice should continue. On the subject of whether or not it should still be
possible to refer an already implemented (or partially implemented) transaction
under Article 22, a majority of respondents thought that it should be. 4.1.3. Views
expressed by the stakeholders 140. The issue of referring with
or without jurisdiction was mentioned often in the public consultation where some
of the respondents proposed that a Member State without jurisdiction should not
be able to refer or to join a referral under Article 22. Some respondents
referred to what they described as the unpredictability (or the "legal
uncertainty") of the Article 22 procedure and others questioned the need
for it altogether, citing in support of their argument, the greater number of
Article 4(5) referrals compared to those under Article 22. However, such
suggestions must make the assumption that the scope, objectives and function of
both provisions are identical, which is clearly not the case. Firstly, Article
4(5) referrals are at the instigation of the parties, whereas Article 22
referrals are initiated by Member States: two completely different starting
points. Secondly, as mentioned above, an Article 4(5) referral requires that a
concentration be capable of being reviewed under the competition laws of at
least three Member States. This is not a requirement of an Article 22 referral. 141. Respondents also pointed out
that as all but one Member State now has a merger control regime, the original
rationale for having an Article 22 has largely disappeared. There were repeated
proposals for harmonising the procedural differences between Article 22 and
Article 4(5) referrals with respect to the number of Member States where filing
was necessary. Some suggested that, as with Article 4(5) referrals, the
Commission should only be able to accept Article 22 referrals when they are
notifiable in three or more Member States. Whereas the present arrangement may
give the Member States under Article 22 a broader discretion when referring to
the Commission than the parties enjoy when referring under Article 4(5),[60] the outcome of the questionnaire sent to NCAs clearly values the
need to be able to refer cases which have only been notified in one Member State
but which also have a Community relevance. Some respondents also raised the
point that a case with cross-border characteristics which is notified to Member
States might not be able to benefit from a cross-border remedies package. Nor
indeed would there be the essential central influence necessary to obtain and
collate from all jurisdictions the required market information upon which to
make a proper assessment of the effects of the transaction. 142. But by far the most popular
Article 22 topic raised was the difficulty that notifying parties have with the
length of time a referral can take.[61] There
is a trend of opinion that considers that the aggregate of all the time periods
for assessment in Article 22 (added to another likely six weeks devoted to pre-notification
discussions and the preparation of a Form CO) delays the implementation of a
transaction for an unduly long period of time. And delays also mean increased
costs for business. Therefore, the public consultations responses contain
suggestions for reducing all assessment periods. This is clearly at odds with
the position expressed by NCAs who feel that there is no scope for shortening
deadlines (see above). 4.1.4. Conclusion
on the operation of the referral mechanism under Article 22 143. Clearly Article 22 is used
by Member States where cases are complex and not simplified. Even though the
original reason for the existence of Article 22 has become almost obsolete,[62] it clearly serves a purpose where a Member State, after a period of
assessment of a transaction, forms the opinion that a case would be better
assessed by the Commission. This may be based upon factors such as the nature
of the relevant markets - which may turn out to have a Community relevance and
consequently require a corresponding market investigation - as well as the
possibility of an appropriate cross-border remedies package which the
Commission would be better placed to negotiate. 144. On the matter of whether or
not a Member State should be able to make a referral request without having
jurisdiction in the case, there are two issues deserving mention. Firstly,
Article 22(1) of the EC Merger Regulation clearly states that in order to be
able to refer a case, the concentration must threaten to "significantly
affect competition within the territory of the Member State making the
request."[63] The requirement here is unambiguous: there should be some
significant effect on competition within the Member State making the referral.
And this brings us to the second issue: it is possible that a Member State may still have cause to refer a case which has a significant effect within its
borders but which was not caught by its own jurisdictional thresholds. Under
such circumstances, a request for referral would not be automatically excluded
by the EC Merger Regulation. 145. When a referral is joined,
no distinction is made between Member States who have and who do not have
jurisdiction. Joined referrals under Article 22 also reduce parallel procedures
in that the jurisdiction of joining Member States is surrendered. Equally, with
respect to lone referrals, the EC Merger Regulation is silent on the issue of
whether or not a referral must be joined. 146. On balance, although the
original purpose of this referral process has been overtaken by events, the
benefits of being able to re-allocate to a more appropriate jurisdiction are
significant and this mechanism continues to serve an important purpose. 4.2. Referrals under Article 9 4.2.1. Introduction 147. Article 9 of the EC Merger
Regulation provides a mechanism for referring cases to Member States (which
have already been notified to the Commission) in circumstances where it is felt
that the Member State is better positioned to carry out the investigation.[64] A referral may be made of the whole case or of portions of it,
depending on the effect of the concentration in the relevant markets. A Member
State may request (at its own initiative or after an invitation to do so by the
Commission) that a case be referred to it in either of the following circumstances:
(i) the concentration must "threaten to affect significantly
competition in a market" and the market in question must be within the
requesting Member State and "present all the characteristics of a
distinct market",[65] or (ii) the concentration must "affect competition
in a market" and the market in question must be within the requesting
Member State and "present all the characteristics of a distinct market"
and "does not constitute a substantial part of the common market".[66] Sometimes both circumstances are argued. Table 6: Article 9 Referrals 2004-2008 Country || No. of Referral Requests || Comments Germany || 8 || 1 request not renewed; 1 notification withdrawn United Kingdom || 4 || 1 withdrawn Poland || 3 || 2 withdrawn Italy || 2 || Spain || 2 || 1 withdrawn Bulgaria || 1 || 1 request rejected Ireland || 1 || Czech Republic || 1 || Belgium || 1 || 1 withdrawn France || 1 || Slovakia || 1 || || Total 25 || 148. The table above shows that
between 2004 and 2008, there were a total of 25 Article 9 referral requests by
Member states of which six were withdrawn and one not renewed following the
opening of Phase II proceedings. In only one case was a referral rejected by
the Commission. In ten cases, the new article 9(2)(b) was argued.[67] Requests were made for 13 full and 12 partial referrals. 149. The assortment of relevant
product markets was diverse with 14 different relevant product markets
concerned ranging from scrap metal to casinos.[68] The
Member States most active in requesting referrals were Germany and the UK. 4.2.2. Views
expressed by the NCAs 150. The NCAs generally regard
Article 9 as functioning effectively and that original jurisdiction is being
re-allocated from the European Community to the appropriate Member States. Two
NCAs expressed reservations about the length of time it takes and one proposed a
reduction in the assessment periods. However this is a minority view and the
greater trend of opinion is that there is no scope for shortening assessment periods.
It is also the opinion generally of the NCAs that the appropriate kind of cases
are being referred to Member States. 151. Statistically, there has
been a small reduction in the number of Article 9 referrals since the
introduction of Article 4(4). The average of about eight per year in the five
years preceding the new EC Merger Regulation has gone down to roughly five per
year since then. However, the clear view of the NCAs is that this trend is not
because these two provisions are mutually exclusive: they are viewed as two
complementary instruments and in many cases Article 9 is regarded as a safeguard
(or even a "corrective" mechanism) for appropriately
re-allocating jurisdiction. 4.2.3. Views
expressed by the stakeholders 152. On balance the response to
the public consultation indicates that the Article 9 referral mechanism is a
functional vehicle for re-allocating jurisdiction to a Member State. However, there are many instances where shortcomings are highlighted. The most prevalent
of these concerns the time a referral request can take and the ensuing
disruption it can have on the transaction's timetable. Clearly, from the point
of view of the notifying parties, an Article 9 referral is not part of their
objective as otherwise, they would have already used the Article 4(4)
provision. And this is where the debate centres: between the advantage of a "one-stop-shop"
that a central filing provides and the principle of assessment by the
"more appropriate authority" that underpins a referral to a Member State. Regardless of the inconvenience of the re-allocation of a case to another
jurisdiction (including the need to re-notify under the national laws of that Member State) there are many responses which describe the Article 9 assessment periods as
too long. This, allied to the legal uncertainty resulting from a change of
jurisdiction, the lack of precision in paragraphs 9(6)[69] and
9(8),[70] and the resulting extra costs for the undertakings involved make an
Article 9 referral protracted and unpredictable in the eyes of the parties. 153. There are also some
suggestions from the public consultation for mitigating the effects of a
referral request, such as: (i) giving the parties a right to be heard
when such a request is submitted; (ii) adding more transparency to the
process by providing access to key documents from the Commission's case file to
the parties; (iii) allowing the parties to use the same Form CO to
notify to the Member State concerned rather than having to re-assemble more
market information in another form to notify in the Member State. There are
also suggestions to outlaw partial referrals in an effort to curtail parallel
proceedings. Another respondent opined that a more streamlined Article 4(4)
(i.e. with respect to the information burden and the length of time it can
take) would make Article 4(4) referrals more appealing and therefore ultimately
reduce the number of Article 9 referrals. As discussed above, the NCAs differ
slightly in their view on this point, regarding the two provisions as
complementary rather than mutually exclusive. 4.2.4. Conclusion
on the operation of the referral mechanism under Article 9 154. One may conclude therefore that,
on balance, Article 9 is a useful tool underpinned by the principle of the
"more appropriate authority". Nevertheless, the limited use of this
referral mechanism indicates that in most situations the right kind of cases
are being allocated to the Commission on the basis of the current thresholds. There
are a significant number of stakeholders of the opinion that the referral
process could be made more business friendly with regard to cutting down delays,
the resulting costs, and the uncertainty of the outcome. Part
III – General Conclusion 155. The report accompanied by
this staff working paper gives account to the Council of the operation of the
notification thresholds under Article 1 of the EC Merger Regulation in
allocating merger cases between the Community level and the national level and
of the referral mechanisms provided for by its Articles 4, 9 and 22. The
conclusions of this report are limited to taking stock of the situation to date
without proposing any measures. Following the report and considering in
particular the reactions of the Council, the Commission may, pursuant to
Articles 1(5) and 4(6) of the EC Merger Regulation, present proposals to revise
the notification thresholds or the referral mechanisms. 156. The Commission concludes
that overall, the jurisdictional thresholds and the set of corrective
mechanisms provided for by the EC Merger Regulation have provided an
appropriate legal framework for allocating cases between the Community level
and the Member States. This framework has in most cases been effective in
distinguishing cases that have a Community relevance from those with a primarily
national nexus, in pursuit of the objectives of "one-stop-shop" and the
principle of the "more appropriate authority". 157. The two-thirds rule has in
most cases appropriately distinguished between concentrations having Community
relevance from those that do not. However, there are a small number of cases with
potential cross-border effects in the Community. It is outside the scope of the
report to assess whether it would be necessary, appropriate or possible to take
measures to remedy this problem. However, for future reference it may be a
useful exercise to further analyse the need and possibilities for introducing
more efficient and flexible mechanisms for the re-allocation of certain
two-thirds rule cases than those currently provided by the EC Merger
Regulation. More generally, it is desirable that, independently of which
authority is the reviewing agency, merger control across the EU ensures the
protection of undistorted competition. 158. The pre-notification
referral mechanisms of Article 4 as introduced in 2004 have considerably
enhanced the efficiency and jurisdictional flexibility of merger control in the
EU. These mechanisms have improved the allocation of cases between the
Commission and the Member States having regard to the principles of
"one-stop-shop" and "more appropriate authority". They have
contributed to avoiding unnecessary duplication and inconsistent enforcement
efforts to the benefit of all involved parties not least the business
Community. 159. Notwithstanding this success,
there is scope for further improvements of the current system of case
allocation. The business community has expressed concern with regard to the way
the referral system operates. Some would therefore welcome a shift from the
current referral system under Article 4(5) to an automatic notification system
based on the three Member State threshold ("3+"). Others have
emphasised that for the pre-notification mechanisms to achieve their full
potential, there is a need for swifter and less cumbersome referral procedures.
160. While it is outside the
scope of the report to assess whether further procedural or other improvements or
adaptations are feasible, it can be concluded that there is still more scope
for "one-stop-shop" review. In fact, there are still a large number
of cases with a cross-border interest that are neither caught by Article 1(3) nor
referred under Article 4(5). Should further improvements of the pre-notification
referral mechanisms be feasible, this would most likely result in fewer multiple
filings and therefore lower cost for the business community. Conversely, there
may be some scope for more referrals in the direction of the Member States in
application of Article 4(4). 161. The post-notification
mechanisms provided by Articles 9 and 22 of the EC Merger Regulation, have
proven to continue to be useful corrective instruments also after the introduction
of pre-notification referrals. This is a reflection of the different function
of the post-notification mechanisms, allowing for a flexible reallocation of
cases at the initiative of either the Member States or the Commission when
appropriate. Nevertheless, the business community's concern regarding the
timing and cumbersomeness of the procedures extend also to these mechanisms. 162. Looking beyond the
application of the existing jurisdictional thresholds and their corrective
mechanisms, in order to fully achieve the objective of a level playing field in
the Common Market, the public consultation has suggested that efforts towards
further convergence of the various national rules governing merger control and
their relation to Community rules should be envisaged in order to alleviate
difficulties encountered in the context of multiple filings. This would concern
a number of aspects ranging from jurisdictional matters to procedural and, to a
certain extent, also some substantive issues. ANNEX 1 Report on Regulation 139/2004 Questionnaire for Member State Competition Authorities Explanatory Remarks The European Commission must report to the Council by 1 July 2009 on
the operation of Article 1(2) and (3) and of Article 4(4) and (5) of Council
Regulation (EC) No 139/2004[71]
(the "Merger Regulation"), pursuant to Articles 1(4) and 4(6) of that
Regulation. To this end, the Commission is launching a wide-ranging
consultation on the functioning of these jurisdictional provisions in the
Merger Regulation, including a fact-finding exercise which seeks information
and opinions from Member State Competition Authorities and from other
stakeholders in the EU merger control process. The questions are intended to yield a comprehensive picture of how
the turnover thresholds in Article 1 are functioning in combination with the
concentration referral provisions in the Regulation. For that reason,
information and opinions are being sought not only on the pre-notification
referral mechanisms introduced for the first time with the adoption of the
Regulation 139/2004, but also on the pre-existing post-notification referral
mechanisms which were somewhat modified in 2004. Detailed information concerning the operation of the Article 1
thresholds is only requested for the year 2007; this is considered to be a
sufficiently long time period to enable meaningful conclusions to be drawn
concerning the functioning of the thresholds. However, detailed information
concerning the operation of the two thirds rule is requested for a longer time
period[72].
Insofar as the referral system is concerned, information is sought concerning
all cases referred to Member States since 1 May 2004. Bulgaria and Romania are
only required to submit information concerning the operation of the Article 1
thresholds relating to cases dealt with by their authorities in the year 2007,
and concerning cases referred to those Member States during the period since 1
January 2007. This questionnaire also seeks any comments which Member State Competition Authorities may have on the operation of the Merger Regulation more
generally. Replies to this questionnaire should be communicated to the
Commission by no later than Friday 29 August 2008. Questionnaire A. The functioning of the turnover
thresholds in Article 1(2) and (3) of Council Regulation (EC) No 139/2004 (the
EC Merger Regulation) (i) Your authority's views about the functioning of the
turnover thresholds in Article 1(2) and (3) The
functioning of the turnover thresholds in Article 1(2) and (3) generally 1. Does your Competition Authority believe that Article 1(2)
and (3) of the Merger Regulation is functioning as an effective means of
distinguishing those transactions which are most appropriately the subject of
merger control at the Community level from those which are not? Please explain
your answer, if possible illustrating your explanation by reference to your
practical experience with the provisions.[73] If you do not
believe that Article 1(2) and (3) of the Merger Regulation is functioning
effectively in this way, please indicate any suggestions you may have as to
how any shortcomings might be remedied. The
functioning of the turnover thresholds in Article 1(2) and (3) in specific
markets or economic sectors 2. Are there any specific markets or economic sectors
where, in the view of your Competition Authority, the turnover
thresholds in Article 1(2) and (3) are not functioning in the manner
intended, namely to identify those concentrations which would most
appropriately be the subject of merger control at the Community level? Do you, for
example, consider that the turnover thresholds are functioning effectively
with regard to mergers in industries where revenues are generated by fees or
commissions (e.g. stock exchanges or similar trading platforms)? If there are any
such specific markets or economic sectors where, in the view of your Authority,
the turnover thresholds are not functioning in the manner intended, please indicate
them and explain why your Competition Authority believes that the turnover
thresholds do not always identify those concentrations which would most
appropriately be the subject of merger control at the Community level. Please
also indicate any manner in which you think this shortcoming might be
remedied. The
functioning of the two-thirds rule in Article 1(2) and (3) 3. Please describe any specific concerns you may have about
the functioning of the "two-thirds rule" in Article 1(2) and
(3) of the Merger Regulation, if possible by reference to your practical
experience with the provisions. Please also describe any suggestions you may
have as to how these concerns might be remedied. (ii) Factual information
concerning cases dealt with by your authority since 2004 Number of
merger control filings at the national level 4. Please indicate the total number of concentrations
reviewed by your Competition Authority under the relevant national merger
control law/s in each of the four years 2004–2007. Turnover
details concerning merger control filings at the
national level 5. For each concentration reviewed by your Competition
authority in 2007, please indicate the number of cases where the combined
aggregate worldwide turnover of all the undertakings concerned exceeded (i) EUR
2500 million and (ii) EUR 5000 million. Merger
control filings in more than one Member State 6. Please indicate how many of the concentrations
reviewed by your Competition Authority under the relevant national merger
control law/s in the year 2007 were also reviewed in at least one
other EU jurisdiction under its/their relevant national merger control
law/s. Please then also
answer the questions included in the form attached as Annex 1 to
this Questionnaire for each concentration reviewed by your Competition
Authority in the year 2007 which was reviewed in at least one other EU
jurisdiction. Please use one form per concentration. The
functioning of the two-thirds rule in Article 1(2) and (3) 7. Please indicate how many of the concentrations
reviewed by your Competition Authority in each of the two years 2006–2007 (both
years included) fell under the "two-thirds rule" in Article
1(2) and (3) of the Merger Regulation. In other words, please indicate how many
concentrations reviewed by your Competition Authority under the relevant
national merger control law/s in this two-year period would, in the absence of
the "two-thirds rule" in Article 1(2) and (3) of the Merger
Regulation, have constituted a "concentration" within the meaning of
Article 3 of the Merger Regulation, and would have had a "Community
dimension" within the meaning of Article 1(2) and (3) of the Merger
Regulation. Please then also
provide the information requested in the form attached as Annex 2
to this Questionnaire concerning each of the concentrations reviewed by
your Competition Authority in the two-year period 2006-2007 (both years
included) which fell under the "two-thirds rule". Please use one
form per concentration. The information
requested in Annex 2 concerning the operation of the two-thirds rule is
virtually identical to what was requested in the questionnaire attached to
Commission Competition D-G Philip Lowe's letter to Member State Competition
Authorities of 16/12/2005 (*30849) for the 5-year period 2001-2005. If your
authority did not provide the requested information – or all of the requested
information – on that occasion, you are requested to do so in response to this
questionnaire, by filling out Annex 2 for each concentration reviewed by your
Competition Authority in the five-year period 2001-2005 (both years included)
which fell under the "two-thirds rule". B. The functioning of the case referral
provisions in Article 4(4), 4(5), 9 and 22 of Council Regulation (EC) No
139/2004 (the EC Merger Regulation) since May 2004 The functioning of the case referral
provisions generally 8. Does your Competition Authority believe that the merger
case referral system in general, which was the subject of a major overhaul
with the entry into force of Council Regulation (EC) No 139/2004 on 1 May 2004,
is functioning effectively as a means of re-allocating "original"
jurisdiction from the Community level to the national level or vice versa
on the basis that a case is more appropriately dealt with in the jurisdiction
to which referral is requested? Please explain your answer, if possible
illustrating your explanation by reference to your practical experience with
the case referral system. Please also describe any suggestions you may have
as to how any shortcomings in the system might be remedied. The
functioning of Article 4(4) 9. Does your Competition Authority believe that Article 4(4)
is in general functioning effectively as a means of re-allocating
"original" jurisdiction from the Community level to the national
level on the basis that a case is more appropriately dealt with in the national
jurisdiction to which referral is requested? If there are any
particular concerns which your Competition Authority has about the
functioning of Article 4(4), please describe those concerns – if possible by
reference to your Competition Authority's practical experience with the
functioning of the provision – and any suggestions you may have as to how they
might be remedied. Do you consider
that the right kinds of cases (in terms of their likely impact on
competition, and in terms of the likely geographic scope of any such impact)
are being referred pursuant to Article 4(4)? Please explain your answer. Do you consider
that Article 4(4) is functioning as effectively as it could in procedural
terms? In particular, do you think that the deadlines in Article 4(4) are
appropriate, or do you believe there would be scope to shorten them? Please
explain your answer. Information
concerning cases referred under Article 4(4) 10. For each concentration referred to your Competition
Authority pursuant to Article 4(4) since 1 May 2004, please provide the
information requested in the form attached as Annex 3 to this
Questionnaire. Please use one form per concentration. The
functioning of Article 4(5) 11. Does your Competition Authority believe that Article 4(5) is in
general functioning effectively as a means of re-allocating
"original" jurisdiction from the national level to the Community
level on the basis that a case is more appropriately dealt with by the
Commission? If there are any
particular concerns which your Competition Authority has about the
functioning of Article 4(5), please describe those concerns – if possible by
reference to your Competition Authority's practical experience with the
functioning of the provision – and any suggestions you may have as to how they
might be remedied. Do you consider
that the right kinds of cases (in terms of their likely impact on
competition, and in terms of the likely geographic scope of any such impact)
are being referred pursuant to Article 4(5)? Please explain your answer. If your
Authority has vetoed a referral pursuant to Article 4(5) at any time since 1
May 2004, please explain why this was done. Do you think it
would be appropriate for a concentration to be referred pursuant to Article
4(5) if the concentration appeared likely to have an impact on competition in a
market/s which represent/s a non-substantial part/s of the common market?
Please explain your answer. Do you consider
that Article 4(5) is functioning as effectively as it could in procedural
terms? In particular, do you think that the deadline of 15 working days in
Article 4(5) is appropriate, or do you believe there would be scope to shorten
it? Please explain your answer. Have you
encountered any difficulties in establishing whether or not your Member State has been correctly considered capable of reviewing a concentration for the
purposes of Article 4(5) by the party or parties requesting referral? Please
explain your answer, with reference to any specific experience you have had. The
functioning of Article 9 12. Does your Competition Authority believe that Article 9 is in
general functioning effectively as a means of re-allocating
"original" jurisdiction from the Community level to the national
level on the basis that a case is more appropriately dealt with in the national
jurisdiction to which referral is requested? If there are any
particular concerns which your Competition Authority has about the
functioning of Article 9, please describe those concerns – if possible by
reference to your Competition Authority's practical experience with the
functioning of the provision – and any suggestions you may have as to how they
might be remedied. Do you consider
that the right kinds of cases (in terms of their likely impact on
competition, and in terms of the likely geographic scope of any such impact)
are being referred pursuant to Article 9? Please explain your answer. Do you consider
that Article 9 is functioning as effectively as it could in procedural terms?
In particular, do you think that the deadlines in Article 9 are appropriate, or
do you believe there would be scope to shorten them? Please explain your
answer. Has the
introduction of Article 4(4) had, in the opinion of your Competition Authority,
any impact on the functioning/usefulness of Article 9? Please explain your
answer. Information concerning cases referred
under Article 9 13. For each concentration referred to your Competition
Authority pursuant to Article 9 since 1 May 2004, please provide the
information requested in the form attached as Annex 3 to this
Questionnaire. Please use one form per concentration. The
functioning of Article 22 14. Does your Competition Authority believe that Article 22 is in
general functioning effectively as a means of referring a concentration to
the Commission on the basis that the case is more appropriately dealt with at
the Community level? If there are any
particular concerns which your Competition Authority has about the
functioning of Article 22, please describe those concerns – if possible by
reference to your Competition Authority's practical experience with the
functioning of the provision – and any suggestions you may have as to how they
might be remedied. Do you consider
that the right kinds of cases (in terms of their likely impact on
competition, and in terms of the likely geographic scope of any such impact)
are being referred pursuant to Article 22? Please explain your answer. Do you consider
that Article 22 is functioning as effectively as it could in procedural
terms? In particular, do you think that the deadlines in Article 22 are
appropriate, or do you believe there would be scope to shorten them? Please
explain your answer. Do you consider
that it should be possible for a Member State to make a request for referral of
a concentration under Article 22, or to join a request for referral made by
another Member State, if the requesting Member State is not itself capable of
reviewing the concentration under its national competition laws? Please explain
your answer. Do you consider
that a request for referral of a concentration under Article 22 by a single Member State (i.e. one which is not joined by any other Member State) should normally be
accepted by the Commission? Please explain your answer. Do you consider
that it is appropriate for a Member State to make a request for referral of a
concentration under Article 22, or to join a request for referral made by
another Member State, if the concentration in question has already been
implemented or partially implemented? Please explain your answer. Before
contemplating making or joining a referral request under Article 22, how
extensive would your Authority's examination of the likely impact of the
concentration on competition normally be? Please explain your answer by reference
to any specific referral requests you have made or joined under Article 22. Has the
introduction of Article 4(5) had, in the opinion of your Competition Authority,
any impact on the functioning/usefulness of Article 22? Please explain your
answer. C. The functioning of Council Regulation
(EC) No 139/2004 (the EC Merger Regulation) generally 15. Does your Competition Authority have any comments on the
functioning of the Merger Regulation generally? In particular, are there
any aspects of the Regulation, or of its application in practice, which you
believe are not functioning effectively? If so, please explain your answer –
if possible by reference to your Competition Authority's practical experience
with the functioning of the Regulation – and any suggestions you may have as to
how this/these shortcoming/s might be remedied. Please feel free to raise any
issue, whether relating to the jurisdictional, substantive or procedural
aspects of the functioning of the Regulation. Annex
1 Questionnaire
for concentrations subject to multiple national filings This form is
to be completed for each concentration reviewed by your Competition Authority
under the relevant national merger control law/s which, to the knowledge of
your Competition Authority, was also reviewed in another EU national
jurisdiction. Please answer the questions included in the form for each case
fulfilling this condition which has been dealt with by your Competition
Authority in the year 2007. Please use one form per concentration. Questions 1. Concentration
(please indicate case reference, reference of publication or link to the
website and the date of decision): ………………………………….. 2. Parties to the concentration (please specify the
undertakings concerned)[74] Undertaking
A: …………………………………………… Undertaking B: …………………………………………… Undertaking
C: ………………………………………..…. Undertaking D: …………………………………………… 3. Reviewed in which other Member State/s? (Please indicate here in which one/s): …………………… 4. Economic sector/s concerned: ……………………………………………. 5. First phase
only or in-depth investigation? FIRST PHASE ONLY / IN-DEPTH 6. Outcome: CLEARANCE
/ CLEARANCE WITH REMEDIES / PROHIBITION / ABANDONMENT 7. Please
indicate whether the investigation was in any way hampered by difficulties in
fact-finding outside of the territory of your Member State. If so, please
explain the nature of those difficulties, and any impact they had on the
effectiveness of the investigation. 8. For each
market where the concentration might have had a possible impact on competition,
please indicate in the table below the relevant product market, its geographic
scope, and whether competition problems have been identified in this market. Relevant Product Market || Geographic Scope || Competition Problems? || || || || || || || || || || || || || || || || Annex
2 Questionnaire
for concentrations falling under the "two-thirds rule" This form is
to be completed for each concentration reviewed by your Competition Authority
under the relevant national merger control law/s which, in the absence of the
"two-thirds rule" in Article 1(2) and (3) of the Merger Regulation,
would have constituted a "concentration" within the meaning of
Article 3 of the Merger Regulation, and would have had a "Community
dimension" within the meaning of Article 1(2) and (3) of the Merger Regulation.
Please answer the questions included in the form for each of the cases
fulfilling this condition which have been dealt with by your Competition
Authority in the two-year period 2006-2007 (both years included). Please use
one form per concentration. Questions 1. Concentration
(please indicate case reference, reference of publication or link to the
website and the date of decision): ………………………………….. 2. Parties to the concentration (please specify the
undertakings concerned)[75] Undertaking
A: …………………………………………… Undertaking B: …………………………………………… Undertaking
C: ………………………………………..…. Undertaking D: …………………………………………… 3. Annual turnover (in EUR) Undertaking || Member State || EU-wide || World-wide A || || || B || || || C || || || D || || || 4. Reviewed/Subject to review in other EU Member States?
YES / NO (if YES, please indicate in which one/s): …………………… 5. Economic sector/s concerned: ……………………………………………. 6. First phase
only or in-depth investigation? FIRST PHASE ONLY / IN-DEPTH 7. Outcome: CLEARANCE
/ CLEARANCE WITH REMEDIES / PROHIBITION / ABANDONMENT 8. For each
market where the concentration might have had a possible impact on competition,
please indicate in the table below the relevant product market, its geographic
scope, and whether competition problems have been identified in this market. Relevant Product Market || Geographic Scope || Competition Problems? || || || || || || || || || || || || || || || || Annex
3 Questionnaire
for concentrations subject to referral under Article 4(4) or 9 This form is
to be completed for each concentration reviewed by your Competition Authority
under the relevant national merger control law/s following a referral from the
European Commission pursuant to Article 4(4) or Article 9 of the Merger
Regulation. Please answer the questions included in the form for each case
referred under either of these provisions which has been dealt with by your
Competition Authority since 1 May 2004. Please use one form per concentration. Questions 1. Concentration
(please indicate case reference, reference of publication or link to the
website and the date of decision): ………………………………….. 2. First phase
only or in-depth investigation? FIRST PHASE ONLY / IN-DEPTH 3. Outcome: CLEARANCE
/ CLEARANCE WITH REMEDIES / PROHIBITION / ABANDONMENT 4. Please
indicate the total duration of proceedings between the date of referral and the
date of clearance, clearance with remedies, prohibition or abandonment:
……………………………… 7. For each
market where the concentration might have had a possible impact on competition,
please indicate in the table below the relevant product market, its geographic
scope, and whether competition problems have been identified in this market. Relevant Product Market || Geographic Scope || Competition Problems? || || || || || || || || || || || || || || || || ANNEX 2 Report on Regulation 139/2004 Questionnaire for respondents to the public
consultation Explanatory
Remarks The European
Commission must report to the Council by 1 July 2009 on the operation of
Article 1(2) and (3) and of Article 4(4) and (5) of Council Regulation (EC) No
139/2004[76]
(the “Merger Regulation”), pursuant to Articles 1(4) and 4(6) of that
Regulation. To this end, the Commission is launching a wide-ranging
consultation on the functioning of these jurisdictional provisions in the
Merger Regulation, including a fact-finding exercise which seeks information
and opinions from Member State Competition Authorities and from other
stakeholders in the EU merger control process. The questions
are intended to yield a comprehensive picture of how the turnover thresholds in
Article 1 are functioning in combination with the concentration referral
provisions in the Regulation. For that reason, information and opinions are
being sought not only on the pre-notification referral mechanisms introduced for
the first time with the adoption of the Regulation 13.9/2004, but also on the
pre-existing post-notification referral mechanisms which were somewhat modified
in 2004. This
questionnaire also seeks any comments which you may have on the operation of
the Merger Regulation more generally. Replies to
this questionnaire should be communicated to the Commission by no later than 1
December 2008. In your response, please indicate clearly your identity and
that of any interest you represent. Please also specify whether you are, or
are representing, a company, business association, consumer interest
organisation, public authority, law firm, academic institution or individual,
private individual or some other entity. Responses should
be addressed to the Commission at: European
Commission DG
Competition Merger
Registry B-1049 BRUSSELS or by email
to comp-merger-registry@ec.europa.eu specifying
the reference "HT.1277 – reply to public consultation" All submissions
may be published on the Commission's website. However, information which is
clearly marked “confidential” will be treated as such. You are kindly
requested to identify them in your reply by putting them in a separate annex.
You may alternatively consider providing a non-confidential version of your
reply, which is the Commission’s preferred option. Questionnaire A. The
functioning of the turnover thresholds in Article 1(2) and (3) of Council
Regulation (EC) No 139/2004 (the EC Merger Regulation) The
functioning of the turnover thresholds in Article 1(2) and (3) generally 1. Do you believe that Article 1(2) and (3) of the Merger
Regulation is functioning as an effective means of distinguishing those
transactions which are most appropriately the subject of merger control at the
Community level from those which are not? Please explain your answer, if
possible illustrating your explanation by reference to your practical
experience with the provisions.[77] If you do not
believe that Article 1(2) and (3) of the Merger Regulation is functioning
effectively in this way, please indicate any suggestions you may have as to how
any shortcomings might be remedied. The
functioning of the turnover thresholds in Article 1(2) and (3) in specific
markets or economic sectors 2. Are there any specific markets or economic sectors where,
in your view, the turnover thresholds in Article 1(2) and (3) are not
functioning in the manner intended, namely to identify those concentrations
which would most appropriately be the subject of merger control at the
Community level? If there are any
such markets or sectors, please indicate them and explain why you believe that
the turnover thresholds do not always identify those concentrations which would
most appropriately be the subject of merger control at the Community level.
Please also indicate any manner in which you think this shortcoming might be
remedied. Merger
control filings at the national level 3. Some merger transactions are subject to review under the
merger control laws of more than one EU Member State. If you have any specific
concerns about the fact or the manner in which some transactions are reviewed
under the merger control laws of multiple EU jurisdictions, please explain
those concerns - if possible by reference to your practical experience - and
any suggestions you may have as to how they might be remedied. The
functioning of the two-thirds rule in Article 1(2) and (3) 4. Please describe any specific concerns you may have about
the functioning of the "two-thirds rule" in Article 1(2) and (3) of
the Merger Regulation, if possible by reference to your practical experience
with the provisions. Please also describe any suggestions you may have as to
how these concerns might be remedied. B. The functioning of the case referral
provisions in Article 4(4), 4(5), 9 and 22 of Council Regulation (EC) No
139/2004 (the EC Merger Regulation) since May 2004 The
functioning of Article 4(4) 5. Do you believe that Article 4(4) is functioning effectively
as a means of re-allocating "original" jurisdiction from the
Community level to the national level on the basis that a case is more
appropriately dealt with in the national jurisdiction to which referral is
requested? If there are any
particular concerns which you have about the functioning of Article 4(4),
please describe those concerns – preferably by reference to your experience
with a specific cases/s – and any suggestions you may have as to how they might
be remedied. The
functioning of Article 4(5) 6. Do you believe that Article 4(5) is functioning effectively
as a means of re-allocating "original" jurisdiction from the national
level to the Community level on the basis that a case is more appropriately
dealt with by the Commission? If there are any
particular concerns which you have about the functioning of Article 4(5),
please describe those concerns – preferably by reference to your experience
with a specific cases/s – and any suggestions you may have as to how they might
be remedied. The
functioning of Article 9 7. Do you believe that Article 9 is functioning effectively as
a means of re-allocating "original" jurisdiction from the Community
level to the national level on the basis that a case is more appropriately
dealt with in the national jurisdiction to which referral is requested? Has the
introduction of Article 4(4) had, in your opinion, any impact on the
functioning/usefulness of Article 9? Please explain your answer. If there are any
particular concerns which you have about the functioning of Article 9, please
describe those concerns – preferably by reference to your experience with a
specific cases/s – and any suggestions you may have as to how they might be
remedied. The
functioning of Article 22 8. Do you believe that Article 22 is functioning effectively
as a means of referring a concentration to the Commission on the basis that the
case is more appropriately dealt with at the Community level? Has the
introduction of Article 4(5) had, in your opinion, any impact on the
functioning/usefulness of Article 22? Please explain your answer. If there are any
particular concerns which you have about the functioning of Article 22, please
describe those concerns – preferably by reference to your experience with a
specific cases/s – and any suggestions you may have as to how they might be
remedied. C. The functioning of the Council
Regulation (EC) No 139/2004 (the EC Merger Regulation) generally 9. Do you have any comments on the functioning of the Merger
Regulation generally? In particular, are there any aspects of the Regulation,
or of its application in practice, which you believe are not functioning
effectively? If so, please explain your answer – if possible by reference to
your practical experience with the functioning of the Regulation – and any suggestions
you may have as to how this/these shortcoming/s might be remedied. case || country || year || # MS || geographic market || sector || Investiga-tion || outcome OÖ Landesbank/Immofinanz Immobilien/Raiffeissen-Landesbank/Wr Städtische Versicherung || austria || 2005 || 1 || national || real estate || first-phase || clearance WIENER STÄDTISCHE Versicherung AG Vienna Insurance Group || austria || 2007 || 2 || national || Financial Services || in-depth || Clearance Belgacom/LaPoste || belgium || 2002 || 1 || EU || e-commerce || in-depth || clear remedies Varma Sampo/Sampo Oy Kapiteeli Oy/Kiinteistövarma Oy || finland || 2002 || 1 || not defined || real estate || first-phase || clearance Keswell Oy/Indoor Group Oy || finland || 2004 || 4 || not defined || retail trade furniture || first-phase || clearance SOK Corporation/Spar Finland || finland || 2005 || 1 || national || retail daily cons goods || in-depth || clear remedies SOK Corporation/Inex Partners Oy || finland || 2006 || 1 || L/O || consumers goods || first-phase || Clearance SOK Corporation/oy Esso ab’s 44 service areas and the liquid fuel procurement business || finland || 2007 || 1 || L/O || consumer goods || first-phase || Clearance Gaz de France/Société Générale/gaselys || france || 2001 || 1 || not defined || gas || first-phase || clearance PAI-BNP/Groupe Lustucru || france || 2002 || 1 || national || foodstuffs || first-phase || Conditional clearance Groupe Eiffage/Société Générale Routière || france || 2002 || 1 || national || road construction || first-phase || clearance PAI-BNP/Holdelis || france || 2002 || 1 || not defined || other || first-phase || clearance TF1/M6/TPS || france || 2002 || 1 || national || audiovisual || first-phase || clearance Banque Fédérale des Banques Populaires/Groupe Crédit Coopératif || france || 2002 || 1 || national || banking || first-phase || clearance Socpresse/Groupe Express-Expansion || france || 2002 || 1 || national || written press || first-phase || clearance Groupe Finaref/Crédit Agricole || france || 2003 || 3 || not defined || banking and insurance || first-phase || clearance Crédit Agricole/Crédit Lyonnais || france || 2003 || 1 || national || banking || first-phase || clearance Telecom Developpment/Cegetel || france || 2003 || 1 || national || telecom || first-phase || clearance MAAF/MMA || france || 2003 || 1 || not defined || banking || first-phase || clearance Crédit Foncier de France/Entenial || france || 2003 || 1 || not defined || banking || first-phase || clearance Groupe Caisse d'Epargne/Compagnie Financière Eulia || france || 2004 || 2 || national || banking || first-phase || clearance Caisse de Dépôts et Consignations/IXIS || france || 2004 || 1 || not defined || banking || first-phase || clearance Sodiaal/Entremont/Unicopa/Beuralia || france || 2004 || 1 || national || dairy products || first-phase || clearance Cegetel/Neuf Telecom || france || 2005 || 1 || national || e-commerce || first-phase || Conditional clearance TF1/France Televisions/CFII || france || 2005 || 1 || national || audiovisual || first-phase || clearance BNP Paribas/Galeries Lafayette/Laser et Cofinoga || france || 2005 || 1 || not defined || banking || first-phase || clearance Casino/Vindemia || france || 2005 || 1 || national || supermarket || first-phase || clearance Geimex/Casino || france || 2005 || 1 || national || supermarket || first-phase || clearance Jet Publishing/e-TF1 filiale de TF1 || france || 2005 || 1 || not defined || e-commerce || first-phase || clearance SGAM COVEA/AZUR-GMF || france || 2005 || 1 || national || insurance || first-phase || clearance SGAM COVEA/Banque Populaire/SBE || france || 2005 || 1 || national || banking || first-phase || clearance Vinci/ASF || france || 2006 || 1 || national || public works || first-phase || Clearance CNCE/BANQUE POPULAIRE/NATIXIS || france || 2006 || 1 || national || Financial Services || first-phase || Clearance SFR/Somart/Debitel || france || 2007 || 1 || national || telecommunications || first-phase || Clearance Caisse des depots et consignations/COFIDIM || france || 2007 || 1 || broader than national || automobile || first-phase || Clearance Rethmann/Remondis Unternehmenbeteiligungs/RWE Umwelt || germany || 2004 || 1 || regional || waste management || in-depth || Conditional clearance REWE Deutscher Supermarkt/Karstadt Warenhaus || germany || 2004 || 1 || regional || supermarket || first-phase || clearance Deutsche Post/Geschäftsbereich Logistik-stationärer Einzelhandel Karstadt Quelle || germany || 2004 || 1 || national || post || first-phase || clearance STEAG Energie Contracting/BMK Biomasse Kraftwerk Lünen/Rethmann-Entsorgungswirtschaft || germany || 2004 || 1 || national || energy || first-phase || clearance Rethmann/Entsorgungservice Anhalt Mitte/Karl Tönsmeier Entsorgungswirtschaft/Gesellschaft Abfallwirtschaft Köthen || germany || 2004 || 1 || local || waste management || in-depth || prohibition Edeka Zentrale/SPAR Handels || germany || 2005 || 1 || regional || supermarket || in-depth || clearance case || country || year || # MS || geographic market || sector || Investiga-tion || outcome Deutsche Post/Logistiekbereich Groszgut-Stückgut Karstadt Quelle || germany || 2005 || 1 || national || other || in-depth || clearance Quelle/Christ Juweliere/Christ Homeshopping || germany || 2005 || 1 || national || jewelry || first-phase || clearance Lone Star Partners/Allgemeine Hypothekenbank Rheinboden || germany || 2005 || 1 || national || mortgage || first-phase || clearance Star Finanz Software Entwicklung/FIDUCIA IT/GAD/Deutsche Postbank || germany || 2005 || 1 || not defined || financial services || first-phase || clearance Commerzbank/Eurohypo || germany || 2005 || 1 || national || mortgage || first-phase || clearance Postbank/BMW || germany || 2005 || 1 || national || mortgage || first-phase || clearance DB Zug Bus Regionalverkehr Alb-Bodensee/Stadtwerke Ulm Verkehr || germany || 2005 || 1 || regional || public transport || in-depth || Withdrawal Commerzbank AG/Eurohypo AG || germany || 2006 || 1 || national || financial services || first-phase || Clearance Deutsche Ban AG, Berlin/T-SystemsEnterprise Services GmbH, Frankfurt (Deutsche Telekom AG)/Wissenschaftszentrum Berlin fuer Sozialforschung Gemeinnuetzige GmH, Berlin || germany || 2006 || 1 || national || market research || first-phase || Clearance DB Zug Bus Regionalverkehr Alb-Bodensee GmbH/Ulm Verkehr GmbH, Ulm (SWU Verkehr) || germany || 2006 || 1 || national || Transport || in-depth || Pending Landesbank Baden-Wruettemberg. Stuttgart-Karlsruhe/SachsenLB Landesbank Sachsen Girozentrale, Leipzig || germany || 2007 || 1 || national || Financial Services || first-phase || Clearance COSMOTE SA (subsidiary of "OTE Group")/GERMANOS' SA/MOBILBEEP || greece || 2006 || 1 || national || telecommunications || in-depth || Conditional clearance WIND HELLAS TELCOM SA (subsidiary of Weather Investment Holding S.A.)/WIND PPC Holding (Tellas Holding S.A) || greece || 2007 || 1 || national || telecommunications || in-depth || Conditional clearance Enel/Camuzzi Gazometri || italy || 2001 || 1 || national || gas and electricity || first-phase || clearance Banca Monte dei Paschi di Siena/Ticino Assicurazioni-Montepaschi Vita Spa || italy || 2001 || 1 || national || insurance || first-phase || clearance SAI/Società Assicuratrice Industriale/la Fondiaria Assicurazioni || italy || 2002 || 1 || EU || insurance || in-depth || Conditional clearance Banca Intesabci/Epsilon Associati || italy || 2002 || 1 || national || investment banking || first-phase || clearance San Paolo IMI/Cardine Banca || italy || 2002 || 1 || national || banking || first-phase || clearance Cassa di Risparmio de Firenze/Findomestic Banca || italy || 2002 || 1 || national || banking || first-phase || clearance Enel/Camuzzi Gazometri || italy || 2002 || 1 || national || gas and electricity || first-phase || clearance San Paolo Vita/Noricum Vita || italy || 2003 || 1 || national || insurance || first-phase || clearance Unicredito Italiano/Ramo di Azienda di Abbey National Bank Italia || italy || 2003 || 1 || not defined || insurance || first-phase || clearance Compagnia Assicuratrice Unipol/Winterthur Assicurazioni || italy || 2003 || 1 || national || insurance || first-phase || clearance Capitalia/Roma Vita || italy || 2003 || 1 || national || insurance || first-phase || clearance I2 Capital/Car World Italia-Car World Rental Italia || italy || 2004 || 1 || national || car rentals || first-phase || clearance Capitalia/Cofiri || italy || 2004 || 1 || national || financial services || first-phase || clearance Cassa Depositi e Prestiti/Trasmissione Elettricità Rete Nazionale || italy || 2005 || 1 || national || electricity || in-depth || Conditional clearance Unipol Assicurazioni/Banca Nazionale del Lavoro || italy || 2005 || 1 || national || investement banking and insurance || first-phase || clearance Almaviva Technologies/Finisiel-Consulenza e Applicazioni Information Technology || italy || 2005 || 1 || national || information technology || first-phase || clearance Banca Popolare di Lodo/Banca Antoniana Popolare Veneta || italy || 2005 || 1 || national || investement banking and insurance || first-phase || clearance API Anonima Petroli Italiana/ENI || italy || 2005 || 1 || national || lubrificating oil || first-phase || clearance Aurelia Srl/Enel Spa/Compagnia Porto di Civitavecchia || italy || 2006 || 1 || national || public works || first-phase || Clearance Banco Popolare di Verona e di novara Soc. Coop a r.l./Banca Popolare di Vicenza Soc. Coop. p.a./Linea Spa || italy || 2006 || 1 || national || Financial Services || first-phase || Clearance case || country || year || #MS || geographic market || sector || Investiga-ion || outcome Gruppo San Paolo Imi/Quadrivio SGR Spa/E-work Spa || italy || 2006 || 1 || national || staff Leasing || first-phase || Clearance m-dis Distribuzione Media Spa/Gruppo FIAT/to-dis Srl || italy || 2006 || 1 || national || publshing || first-phase || Clearance Società Cattolica Assicurazioni Soc. Coop./Banca Lombarda e Piemontese/Lombarda Vita Spa || italy || 2006 || 1 || national || Insurance || first-phase || Clearance Fondiaria-SAI Spa/Capitalia Spa || italy || 2006 || 1 || broader than national || Insurance || first-phase || Clearance Banco Popolare di Verona e di novara Soc. Coop a r.l./Società Cattolica di Assicurazioni Soc. Coop./ABC Assicura Spa || italy || 2006 || 1 || broader than national || Insurance || first-phase || Clearance Meliorbanca Spa/San Paolo Imi Spa/Prima Spa || italy || 2006 || 1 || broader than national || chemicals || first-phase || Clearance Gruppo San Paolo Imi/Gruppo Monte dei Paschi di Siena/Azienda Prodotti Artistici Spa || italy || 2006 || 1 || national || manifacture || first-phase || Clearance San Paolo IMI Spa/MPS Spa/Banche Popolari Unite || italy || 2006 || 1 || national || Health care || first-phase || Clearance Banca Intesa S.p.A./SanPaolo IMI S.p.A. || italy || 2006 || 1 || national || Financial Services || in-depth || Conditional clearance Banco Popolare di Verona e Novara Soc.Coop. a r.l./Banca Popolare Italiana Soc. Coop || italy || 2007 || 1 || national || Financial Services || first-phase || Clearance Gruppo BPU/Gruppo BLP || italy || 2007 || 1 || national || Financial Services || first-phase || Clearance Banco Popolare di Verona e Novara Soc.Coop. a r.l./Fondiaria-SAI S.p.A./BPV Vita S.p.A. || italy || 2007 || 1 || national || Financial Services || first-phase || Clearance AEM Spa/ASM Brescia Spa || italy || 2007 || 1 || national || energy || first-phase || Clearance Pirelli & C Real Estate S.p.A., Via Gaetano Negri 10, 20121 Milano, Italy/Intesa Sanpaolo S.p.A., Piazza San Carlo, 156, 10121 Torino, Italy/Pirelli & C Real Estate Facility Management S.p.A., Viale Piero e Alberto Pirelli, 21, 20126 Milano, Italy || italy || 2007 || 6 || not available || real estate management || first-phase || Clearance Koninklijke Volkers Wessels Stevin/KPN Netwerk Bouw || netherlands || 2002 || 1 || not defined || ict-infrastructure || first-phase || clearance Pon/Geveke || netherlands || 2003 || 3 || not defined || machinery || first-phase || clearance Rabobank/Assumij || netherlands || 2003 || 1 || national || real estate || first-phase || clearance ABN AMRO/Borstlap Fasteners || netherlands || 2004 || 3 || not defined || fasteners || first-phase || clearance ABP/Loyalis || netherlands || 2005 || 1 || national || insurance pension funds || first-phase || clearance Koninklijke KPN/Telfort || netherlands || 2005 || 1 || national || telecom || first-phase || clearance Archand Holding SàRL/Petroplus Bunkering International B.V || netherlands || 2006 || 1 || not available || bunkering || first-phase || Clearance Coöperatieve Centrale Raiffeisen- Boerenleenbank B.A., (Part of Rabobank Group)/ABN AMRO Bouwfonds N.V., (Part of ABN AMRO Bank N.V.) || netherlands || 2006 || 3 || not available || Financial Services || first-phase || Clearance SNS REAAL Property Finance B.V/Bouwfonds Property Finance B.V || netherlands || 2006 || 1 || not available || Financial Services || first-phase || Clearance SNS REAAL N.V/De Zwitserleven Business/Swiss Life Asset Management (Nederland) B.V. || netherlands || 2007 || 3 || broader than national || Financial Services || first-phase || Clearance Essent N.V/N.V. Nuon || netherlands || 2007 || 1 || broader than national || Electricity || in-depth || Withdrawal case || country || year || # MS || geographic market || sector || Investiga-tion || outcome Polskie Sieci Elektroenergetyczne S.A. (Poland)/BOT Górnictwo i Energetyka S.A. (Poland)/Zespół Elektrowni Dolna Odra S.A. (Poland)/Zakład Energetyczny Białystok S.A. (Poland)/Zakład Energetyczny Łódź - Teren S.A. (Poland)/Zakład Energetyczny Warszawa - Teren S.A. (Poland)/Zamojska Korporacja Energetyczna S.A. (Poland)/Rzeszowski Zakład Energetyczny S.A. (Poland)/Lubelskie Zakłady Energetyczne S.A. (Poland)/Łódzki Zakład Energetyczny S.A. (Poland)/Zakłady Energetyczne Okręgu Radomsko–Kieleckiego S.A. (Poland)/Zakłady Energetyczne Okręgu Radomsko–Kieleckiego S.A. (Poland) || poland || 2007 || 1 || national || Electricity || first-phase || Clearance Maxcor Inc. (USA)/Ex-Cell-O Machine Tools Inc. (USA)/Ex-Cell-O GmbH (Germany) || poland || 2007 || 2 || broader than national || machinery || first-phase || Clearance Banco Santander Central Hispano/Seguros Génesis || spain || 2001 || 1 || national || insurance || first-phase || clearance Telefonica Media/Banco Bilbao Vizcaya y Argentaria/Tick Tack Ticket || spain || 2001 || 1 || national || other || first-phase || clearance Banco Santander Central Hispano/Endesa Telecomunicaciones/Unión Fenosa Inversiones/Auna || spain || 2002 || 1 || national || telecom || first-phase || clearance Iberia/Zenit Servicios Integrales/Clece/Multiservicios Grupo Ramel || spain || 2002 || 1 || EU || supporting air transport services || first-phase || clearance Grupo Actividades de Construcción y Servicios/Grupo Dragados || spain || 2002 || 1 || national || construction || first-phase || clearance Union Fenosa Gas/Iberdrola Gas/Endesa Generacion/Planta de Regasificacion de Sagunto || spain || 2002 || 1 || national || gas || first-phase || clearance Ferroser/Cespa-Trasa || spain || 2003 || 1 || national || sewage and refuse disposal || first-phase || clearance Mapfre Caja Madrid Holding/Musini || spain || 2003 || 1 || EU || insurance || first-phase || clearance Sociedad General de Aguas de Barcelona/Banco de Crédito Local de España || spain || 2003 || 1 || national || tax services || first-phase || clearance Gas Natural/Iberdrola || spain || 2003 || 1 || national || electricity || in-depth || withdrawal EK/FCC || spain || 2004 || 1 || national || construction || first-phase || clearance Sociedad General de Aguas de Barcelona/Union Fenosa/Sociedad de Empresarial Caja Madrid/Applus || spain || 2005 || 1 || national || technical consulting || first-phase || clearance ACS/Union Fenosa || spain || 2005 || 1 || national || electricity and construction || first-phase || clearance Gas Natural/Endesa || spain || 2005 || 3 || EU || gas and electricity || in-depth || pending Svenska Handelsbanken/SPP Fonder/SPP Livförsäkring || sweden || 2001 || 2 || national || insurance || first-phase || clearance Storebrand/SPP Livförsäkring || sweden || 2001 || 1 || not defined || insurance || first-phase || clearance Andra AP Fonden/Sjatte AP Fonden/NS Holding AB || sweden || 2006 || 1 || L/O || real estate management || first-phase || clearance Kooperativa Forbundet/Coop Sverige Aktiebolag || sweden || 2007 || 1 || L/O || retail market for daily consumer goods || first-phase || clearance Balfour Beatty plc/Birse Group plc || UK || 2006 || 1 || national || construction || first-phase || Clearance Balfour Beatty plc/Covvlin Group Limited || UK || 2007 || 1 || national || construction || first-phase || Clearance HBOS plc/David Lloyd Leisure Ltd/Next Generation clubs Holding Ltd || UK || 2007 || 1 || national || Health care || first-phase || Clearance Macquarie/Airwaive Safety Communications Limited || UK || 2007 || 1 || national || telecommunications || first-phase || Clearance National Express Group plc/Inter City East Coast rail franchise || UK || 2007 || 1 || national || Transport || first-phase || Clearance Punch Taverns plc/Matthew Clark Wholesale Limited/Forth Wines Limited/The Wine Studio Limited || UK || 2007 || 1 || national || food and beverages || first-phase || Clearance Macquarie/Assets of National Grid Wireless Limited || UK || 2007 || 1 || national || telecommunications || first-phase || Conditional clearance || || || || || || || [1] Council Regulation (EC) No 139/2004 of 20 January
2004 on the control of concentrations between undertakings Official Journal L
24, 29.01.2004, p. 1-22. [2] COM(2001) 745/6 – 11.12.2001. [3] Recital 16 of the EC Merger Regulation. [4] Commission Notice on Case Referral in respect of
concentrations, Official Journal C 56, 05.03.2005, p. 2-23. [5] Ibid, at para. 8. [6] Corrected French and German versions of the
Commission Consolidated Jurisdictional Notice and the remaining languages
versions of the Notice were adopted by the Commission on 17/03/2008. [7] These are: (i) the Notice on the concept of
concentration (OJ C 66, 02.03.1998, p. 5), (ii) the Notice on the concept of
full-function joint ventures (OJ C 66, 02.03.1998, p.1), (iii) the Notice on
the concept of undertakings concerned (OJ C 66, 02.03.1998, p.14) and (iv) the
Notice on calculation of turnover (OJ C 66, 02.03.1998, p.25). [8] Referrals are only dealt with in the Commission
Notice on Case Referrals mentioned before. [9] Article 1(4) of the EC Merger Regulation stipulates
that "[o]n the basis of statistical data that may be regularly provided
by the Member States, the Commission shall report to the Council on the
operation of the thresholds and criteria set out in paragraphs 2 and 3 by 1
July 2009 and may present proposals pursuant to paragraph 5." [10] http://ec.europa.eu/competition/consultations/2008_merger_regulation/index.html [11] In particular the length of the referral procedures and
the reporting requirements were the subject of many observations from industry
representatives, as will be discussed in more detail in PART II. [12] See discussion in PART II. [13] Under Article 1, a concentration can only have a
Community dimension where at least two of the undertakings concerned have
turnover in the EU. However, as regards JVs, this can have the result that
Community dimension is at hand where both parents to the JV meet the threshold
but the actual JV has limited or no activities within the EU. [14] See Articles 4(4) and 9. [15] It is instructive that only 43 pre-notification
referral requests and 25 post-notification referral requests were made between
2004 and 2008 compared to the total number of about 1,530 own jurisdiction
cases dealt with by the Commission over the same reference period. [16] For 2007, the total number of notifications is 402, of
which 7 were subsequently withdrawn. Out of these we identified 48 decisions
where the notification was based on Article 1(3) = 12%. In 2008 out of a total
of 347 notifications (minus 13 withdrawals) only 24 decisions were identified
to have been notified on the base of Article 1(3) = 7%. [17] In 48 of the 72 cases notified under Article 1(3) in
the two years 2007 and 2008 the Commission took a simplified decision which
makes no reference to the geographic scope of the market. [18] The fact that a concentration affects markets in more
than one Member State is an indication that a case may benefit from a
"one-stop-shop" treatment. However, this must be balanced against the
advantages of allowing the most appropriate authority dealing with the case
taking into account factors such as the NCAs knowledge of particular sectors
and geographic proximity. [19] Out of about 650 cases notified under Article 1(2),
more than 31 cases were closed with conditional clearances or were withdrawn/
aborted following a finding by DG COMP that there were competition problems (22
after Phase 1, 4 after phase 2, and between 5 to 10 cases aborted for reasons
of competition concerns). [20] Member States reported a total of 935 cases that in
their view were reviewed in at least one other EU jurisdiction. However, only
for 663 of them was it possible to find a corresponding matching case in at
least one other MS. These 663 cases formed part of a total of 241 transactions
filed in more than one MS (multiple filings). The remaining 272 reported cases
could not be matched with any case from another Member State and therefore were
not considered as part of a transaction involving multiple filings. More than
half of these unrelated cases (149) were reported by Austria. [21] For the year 2007, NCAs reported a total of 5,129 cases
notified or reviewed by their authority. Considering that 663 of them formed
part of 241 multiple filing transaction, we calculated on the basis of:
5,129-663+241=4,707 cases. The original data of 5129 cases is heterogeneous in
the sense that data for Belgium and for the Slovak Republic refer to the number
of decisions, while data for Austria, Cyprus, and Ireland refer to the number
of notifications. The numbers for the Czech Republic were not reported for 2007
and are assumed at equivalent levels of the earlier three years that were
reported. [22] The respective numbers for all 241 multiple filing
transactions are: 69 transactions were limited in their geographic scope to
national markets (29%). 104 transactions (43%) involved wider than national
and/or European-wide markets, and 42 transactions (17%) involved even worldwide
markets. For the remaining 26 transactions (11%) the geographic scope of the
markets was not defined or not indicated. [23] Many stakeholders consider divergences with regard to
the following parameters to be particularly problematic and potential sources
of legal uncertainty: jurisdictional thresholds (turnover vs. market share),
the definition of concentration (e.g. control vs. minority shareholdings),
hold-separate obligation, derogations from hold-separate obligation, appeal,
filing fees and review periods. [24] While this is comparable to the percentage of cases
with competition concerns that were notified under the EC Merger Regulation,
which is in the order of 7%, no firm conclusions can be drawn from such
comparison in light of the fact that some national merger control regimes have
very low notification thresholds and a definition of concentration which is
wider than the one used in the EC Merger Regulation. For reference, in 2007,
402 notifications resulted in 1 prohibition, 4 conditional clearances after
phase 2, 18 conditional clearances after phase 1, and 7 withdrawals.
Furthermore, there were 5 full referrals to a MS under Article 4(4), 1 under
Article 9, and 50 referrals to the Commission under Article 4(5) and 2 full
referrals under Article 22. [25] The reference period for this assessment has been
extended back to 2001 in order to have a comprehensive view on the operation of
this threshold. [26] This table contains the number of concentrations
reviewed, except for Belgium and the Slovak Republic where data refer to the
number of decisions taken, while data for Austria, Cyprus, and Ireland refer to the number of notifications received. [27] Prior to 2005, data with regard to the number of
two-thirds rule cases are incomplete or non-existent for Austria, the Czech
Republic, Ireland, Italy, Germany, Poland and the UK. Several Member States, Czech Republic, Cyprus, Denmark, Estonia, Greece, Hungary, Ireland, Lithuania, Malta, Poland, Slovakia and Slovenia, had no two-thirds cases prior to 2005. Latvia, did not provide information. As from 2005 all Member States notification forms request all
information necessary for the assessment as to whether the two-thirds rule is
fulfilled. [28] Data with regard to the UK prior to 2006 is not
available. [29] In some case, the number of total filings could not be
confirmed given that data was not on record. [30] One respondent noted that, absent the two-thirds rule,
many cases with their centre of gravity in one Member State would anyway be
referred back to that Member State and took the view that, as referral
processes can be time-consuming and cumbersome it is preferable for the
jurisdiction to be established at the outset. [31] For example, it has been suggested that an additional
threshold should be added to pre-empt cases with effects outside the territory
to be reviewed at the national level. Thus in addition to the existing
thresholds, it should also be required that neither party to the transaction
achieves more than 250 million Euros elsewhere in the EU. [32] Case B8 - 109/01. [33] N-05082 GAS NATURAL / ENDESA. [34] N-03012 GAS NATURAL / IBERDROLA. [35] Case DOK-163/2006 dated 22.12.2007. [36] Case M.3440, Commission decision of 9 December 2004. [37] Case M.3696, Commission decision of 21 December 2005. [38] Case M.3868, Commission decision of 14 March 2006. [39] Case M.4180 Commission decision of 14 November 2006 [40] Decision by the Secretary of State for Business, not to
refer to the Competition Commission the merger between Lloyds TSB Group plc and
HBOS plc under Section 45 of the Enterprise Act 2002 dated 31 October 2008. [41] Changes were introduced in the Competition Act to allow
the Secretary of State to overrule any recommendation to refer a case to the
Competition Commission on financial stability grounds, thus effectively giving
the Government the final say on any merger matter in this area. [42] Only if the entity would still enjoy a
"monopoly" position by 2011, the NCA will be in a position to impose
structural remedies. [43] Gesetz zur Umsetzung eines Maßnahmenpaketes zur
Stabilisierung des Finanzmarktes (Finanzmarktstabilisierungsgesetz –
"FMStG"), Bundesgesetzblatt Jahrgang 2008 Teil I Nr. 46 vom 17. Oktober 2008; The application of national merger control to
operations within the scope of the Financial Market Stabilisation Act is excluded by Art. 2 § 17 FMStG. [44] Section 15, §1 explicitly disapplies Parts 2 and 3 of
the Competition Act 2002 to the acquisition by the Minister, or the transfer by
the Minister to the Minister’s nominee, of shares in Anglo Irish Bank under the
Act. [45] Lei nº 63-A/2008 of 24 of November published in DR 1ª
série-Nº228-24 de Novembro de 2008. Article 20 (1) renders merger control
inapplicable to nationalizations of the type defined in Article 2.1, which is
applicable only until 31st December 2009. Article 20 (3) provides that
the sell on by the State of financial institutions nationalized in order to
ensure that the legal requirements on solvability and liquidity are met is not
subject to the stand still obligation provided for in national merger
legislation. [46] Recital 16 of the EC Merger Regulation. [47] Commission Notice on Case Referral in respect of
concentrations, Official Journal C 56, 05.03.2005, p. 2-23, paragraph 8. [48] Geographic scope of market being one among other
factors in assessing the competitive impact within any given jurisdiction of
any given concentration, and the competition authority's ability to assess such
impact and, where necessary, impose remedies. [49] Geographic scope of market being one among other
factors in assessing the competitive impact within any given jurisdiction of
any given concentration, and the competition authority's ability to assess such
impact and, where necessary, impose remedies. [50] Case M.4731 Google/DoubleClick concerned the markets
for advertising space and ad serving technology; Case M.4854 Tomtom/TeleAtlas
concerned markets for digital navigeable maps as well as the corresponding
hardware, namely PNDs; Case M.4747 IBM/Telelogic concerned overlaps which occurred
in the markets for modelling and requirements management tools which is software
used for the development of software. [51] The remaining cases are M.4187 Metso/Aker Kvaerner
Commission decision of 12 December 2006, M.4647 AEE/Lentjes, Commission
decision of 3 August 2007, M.4523 Travelsport/Worldspan, Commission decision of
21 August 2007, M.4525 Kronospan/Constania, Commission decision of 19 September
2007, M.4662 Syniverse/BSG (wireless business), Commission decision of 4
December 2007, M.4513 Arjowiggins/M-Real Zanders Reflex, Commission decision of
13 June 2008, M.4942 Nokia/Navteq, Commission decision of 2 July 2008, M.4874
Itema Holding/Barcovision Division, Commission decision of 4 August 2008. [52] Key factors to take into account are necessarily the
competitive impact within any given jurisdiction of any given concentration,
and the competition authority's ability to assess such impact and, where
necessary, impose remedies. [53] It is noted that such a measure was recently taken by Germany by amending the applicable jurisdictional thresholds. Mandatory notification is now
required if the parties' combined worldwide turnover exceeds 500 million euros,
one party's turnover exceeds 25 million euros and the other party's turnover
exceeds 5 million euros. The stated objective of the reform which took effect
on 25 March 2009 is to reduce the number of notifications for transactions with
insufficient local nexus. [54] In Article 4(5), the referral of a case is to the
Commission but by the parties concerned; in Article 22 a Member State makes the referral request to the Commission. [55] See Commission Notice on Case Referral, Official
Journal C 56, 05.03.2005, para. 42. [56] This involves filing a Form RS to establish
jurisdiction see Annex II of Commission Regulation (EC) No 802/2004 of 7 April
2004 implementing Council Regulation (EC) No 139/2004 on the control of
concentrations between undertakings. [57] Council Regulation (EC) No. 139/2004 of 20 January 2004
on the control of concentrations between undertakings (OJ L 24, 29.1.2004) (the
"EC Merger Regulation") which entered into force on 1 May 2004. [58] Source: Replies by the National Competition Authorities
to a questionnaire sent by the Commission. [59] I.e. referrals not joined by any other Member State. There have been four such lone referrals. [60] I.e. as seen from the perspective of the parties. [61] One respondent described an Article 22 referral as
"…the most disruptive of all referrals". [62] All but one Member state now has a merger control
regime. [63] This new formulation of Article 22 is a lower legal
standard than that contained in the old Regulation which required the creation
or strengthening "of a dominant position as a result of which effective
competition would be significantly impeded within the territory of the Member State concerned". [64] The Commission Notice of Case Referral in respect of
concentrations (2005/C 56/02) elaborates on this (paragraph 9): "…having
regard to the specific characteristics of the case as well as the tools and
expertise available to the authority". [65] Article 9(2)(a) EC Merger Regulation. [66] Article 9(2)(b) EC Merger Regulation. [67] Article 9(2)(b) can be argued in the alternative to
Article 9(2)(a). [68] The list of relevant product markets included: Cable
TV; Casinos; Printing; Airport Services; Construction; Daily Retail Markets;
IT; Press; Bottling; Gases; Chemicals; Scrap Iron; Beer; Water Services. [69] Paragraph 9(6) states that: The competent authority of
the Member State concerned shall decide upon the case without undue delay."
Furthermore, it provides that "within 45 working days after the
Commission's referral, the competent authority of the Member State concerned shall inform the undertakings concerned of the result of the preliminary
competition assessment and what further action, if any, it proposes to take.
The Member State concerned may exceptionally suspend this time limit where
necessary information has not been provided to it by the undertakings concerned
as provided for by its national competition law" (emphasis added). [70] Article 9(8) provides that "[i]n applying the
provisions of this Article, the Member State concerned may take only the
measures strictly necessary to safeguard or restore effective competition
on the market concerned" (emphasis added). [71] OJ L24 (Vol. 47) of 29 January 2004; p.1 [72] The information requested concerning the operation of the
two-thirds rule in Article 1(2) and (3) of the Merger Regulation is virtually
identical to what was requested in the questionnaire attached to Commission
Competition D-G Philip Lowe's letter to Member State Competition Authorities of
16/12/2005 (*30849) for the 5-year period 2001-2005. [73] To the extent that you would in this context like to
make any specific remarks on the functioning of the case referral system
provided for in Articles 4(4), 4(5), 9 and 22 of the Merger Regulation, please
make these remarks in response to the questions in Section B of this
questionnaire. [74] For the sake of clarity, the notion of
"undertaking concerned" is explained in detail at paragraphs 129-131
of the Commission's Consolidated Jurisdictional Notice under Council Regulation
(EC) No 139/2004 on the control of concentrations between undertakings, of
10.07.2007. [75] For the sake of clarity, the notion of
"undertaking concerned" is explained in detail at paragraphs 129-131
of the Commission's Consolidated Jurisdictional Notice under Council Regulation
(EC) No 139/2004 on the control of concentrations between undertakings, of
10.07.2007. [76] OJ L24 (Vol. 47) of 29 January 2004; p. 1 [77] To the extent that your would in this context like to
make any specific remarks on the functioning of the case referral system
provided for in Articles 4(4), 4(5), 9 and 22 of the Merger Regulation, please
make these remarks in response to the questions in Section B of this
questionnaire.