5.3.2005   

EN

Official Journal of the European Union

C 56/1

5.3.2005   

EN

Official Journal of the European Union

C 56/2

1.

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

2.

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

3.

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

4.

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

5.

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

6.

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

7.

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

8.

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

9.

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

10.

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

11.

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

12.

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

13.

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

14.

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

15.

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

16.

In order for a referral to be made by the Commission to one or more Member States pursuant to Articles 4(4), two legal requirements must be fulfilled:

17.

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

18.

As regards the second criterion, the requesting parties are required to show that a geographic market in which competition is affected by the transaction in the manner just described (paragraph 17) is national, or narrower than national in scope (22).

19.

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

20.

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

21.

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

22.

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

23.

Consideration should also, to the extent possible, be given to whether the NCA(s) to which referral of the case is contemplated may possess specific expertise concerning local markets (27), or be examining, or about to examine, another transaction in the sector concerned (28).

24.

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

25.

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

26.

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

27.

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

28.

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

29.

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

30.

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

31.

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

32.

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

33.

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

34.

In order for a referral to be made to a Member State or States pursuant to Article 9(2)(a), the following legal requirements must be fulfilled:

35.

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

36.

As regards the second criterion, the Member State is required to show that a geographic market(s) in which competition is affected by the transaction in the manner just described (paragraph 35) is/are national, or narrower than national in scope (33).

37.

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

38.

In order for a referral to be made to a Member State or States pursuant to Article 9(2)(b), the following legal requirements must be fulfilled:

39.

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

40.

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

41.

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

42.

In order for a referral to be made by one or more Member States to the Commission pursuant to Article 22, two legal requirements must be fulfilled:

43.

As to the first criterion, a concentration fulfils this requirement to the extent that it is liable to have some discernible influence on the pattern of trade between Member States (35).

44.

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

45.

As post-notification referrals to the Commission may entail additional cost and time delay for the merging parties, they should normally be limited to those cases which appear to present a real risk of negative effects on competition and trade between Member States, and where it appears that these would be best addressed at the Community level (36). The categories of cases normally most appropriate for referral to the Commission pursuant to Article 22 are accordingly the following:

46.

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

47.

Each of the four relevant referral provisions establishes a self-contained mechanism for the referral of a given category of concentration. The provisions can be categorised in the following way:

48.

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

49.

Pre-notification referrals can only be requested by the undertakings concerned (37). It is for the undertakings concerned to verify whether the concentration meets the criteria specified in Article 4(4) (that the concentration has a Community dimension but may significantly affect competition in a distinct market within a Member State) or Article 4(5) (that the concentration does not have a Community dimension but is capable of being reviewed under the national competition laws of at least three Member States). The undertakings concerned may then decide to request a referral to or from the Commission by submitting a reasoned request on Form RS. The request is transmitted without delay by the Commission to all Member States. The remainder of the process differs under Article 4(4) and Article 4(5).

50.

Pursuant to Article 9(2) and Article 22(1), post-notification referrals are triggered by Member States either on their own initiative or following an invitation by the Commission pursuant to Article 9(2) and Article 22(5) respectively. The procedures differ according to whether the referral is from or to the Commission.

51.

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

52.

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

53.

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

54.

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

55.

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

56.

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

57.

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

58.

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

59.

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

60.

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

61.

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

62.

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

63.

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

64.

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

65.

Only concentrations within the meaning of Article 3 of the Merger Regulation are eligible for referral pursuant to Article 4(5) and Article 22. Only concentrations falling within the ambit of the relevant national competition laws for the control of mergers are eligible for referral pursuant to Article 4(4) and Article 9 (52).

66.

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

67.

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

68.

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

69.

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

70.

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

71.

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

72.

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

73.

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

74.

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

75.

In situations where Form RS has been filled in correctly, no complications should arise. The undertakings concerned will have identified correctly all Member States which are competent to review the case. In situations, however, where the undertakings concerned have not filled in Form RS correctly, or where there is a genuine disagreement as to which Member States are ‘competent’ to review the case, complications may arise.

76.

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

77.

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

78.

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

79.

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

80.

There is no requirement that such decisions be published in the Official Journal of the European Union  (55). The Commission will, however, give adequate publicity to such decisions on DG Competition's website, subject to confidentiality requirements.

81.

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

82.

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

83.

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

84.

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

5.3.2005   

EN

Official Journal of the European Union

C 56/24

1.

Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (1) provides in Article 6(1)(b), second subparagraph, in Article 8(1), second subparagraph and in Article 8(2), third subparagraph that a decision declaring a concentration compatible with the common market ‘shall be deemed to cover restrictions directly related and necessary to the implementation of the concentration’.

2.

The amendment of the rules governing the assessment of restrictions directly related and necessary to the implementation of the concentration (hereinafter also referred to as ‘ancillary restraints’) introduces a principle of self-assessment of such restrictions. This reflects the intention of the legislature not to oblige the Commission to assess and individually address ancillary restraints. The treatment of ancillary restraints under the EC Merger Regulation is further explained in recital 21 in the preamble to the EC Merger Regulation, which states that ‘Commission decisions declaring concentrations compatible with the common market in application of this Regulation should automatically cover such restrictions, without the Commission having to assess such restrictions in individual cases’. While the Recital envisages that the Commission will exercise a residual function with regard to specific novel or unresolved issues giving rise to genuine uncertainty, it is in all other scenarios the task of the undertakings concerned to assess for themselves whether and to what extent their agreements can be regarded as ancillary to a transaction. Disputes as to whether restrictions are directly related and necessary to the implementation of the concentration, and thus automatically covered by the Commission's clearance decision, may be resolved before national courts.

3.

The Commission's residual function is addressed in recital 21 of the Merger Regulation, where it is stated that the Commission should, at the request of the undertakings concerned, expressly assess the ancillary character of restrictions if a case presents ‘novel and unresolved questions giving rise to genuine uncertainty’. The Recital subsequently defines a ‘novel or unresolved question giving rise to genuine uncertainty’ as a question that is ‘not covered by the relevant Commission notice in force or a published Commission decision.’

4.

In order to provide legal certainty to the undertakings concerned, this Notice provides guidance on the interpretation of the notion of ancillary restraints. The guidance given in the following sections reflects the essence of the Commission's practice, and sets out principles for assessing whether and to what extent the most common types of agreements are deemed to be ancillary restraints.

5.

However, cases involving exceptional circumstances that are not covered by this Notice may justify departing from these principles. Parties may find further guidance in published Commission decisions (2) as to whether their agreements can be regarded as ancillary restraints or not. To the extent that cases involving exceptional circumstances have been previously addressed by the Commission in its published decisions (3), they do not constitute ‘novel or unresolved questions’ within the meaning of recital 21) of the Merger Regulation.

6.

Accordingly, a case presents a ‘novel and unresolved question giving rise to genuine uncertainty’ if those restrictions are not covered by this Notice and have not been previously addressed by the Commission in its published decisions. As envisaged in recital 21 of the Merger Regulation, the Commission will, at the request of the parties, expressly assess such restrictions in these cases. Subject to confidentiality requirements, the Commission will provide adequate publicity as regards such assessments that further develop the principles set out in this Notice.

7.

To the extent that restrictions are directly related and necessary to the implementation of the concentration, Article 21(1) of the Merger Regulation provides that this Regulation alone applies, to the exclusion of Council Regulations (EC) No 1/2003 (4), (EEC) No 1017/68 (5) and (EEC) No 4056/86 (6). By contrast, for restrictions that cannot be regarded as directly related and necessary to the implementation of the concentration, Articles 81 and 82 of the EC Treaty remain potentially applicable. However, the mere fact that an agreement or arrangement is not deemed to be ancillary to a concentration is not, as such, prejudicial to the legal status thereof. Such agreements or arrangements are to be assessed in accordance with Article 81 and 82 of the EC Treaty and the related regulatory texts and notices (7). They may also be subject to any applicable national competition rules. Hence, agreements which contain a restriction on competition, but are not considered directly related and necessary to the implementation of the concentration pursuant to this notice, may nevertheless be covered by those provisions.

8.

The Commission's interpretation of Article 6(1)(b), second subparagraph, and Article 8(1), second subparagraph, and (2), third subparagraph, of the Merger Regulation is without prejudice to the interpretation which may be given by the Court of Justice or the Court of First Instance of the European Communities.

9.

This Notice replaces the Commission's previous Notice regarding restrictions directly related and necessary to concentrations (8).

10.

A concentration consists of contractual arrangements and agreements establishing control within the meaning of Article 3(2) of the Merger Regulation. All agreements which carry out the main object of the concentration (9), such as those relating to the sale of shares or assets of an undertaking, are integral parts of the concentration. In addition to these arrangements and agreements, the parties to the concentration may enter into other agreements which do not form an integral part of the concentration but can restrict the parties' freedom of action in the market. If such agreements contain ancillary restraints, these are automatically covered by the decision declaring the concentration compatible with the Common Market.

11.

The criteria of direct relation and necessity are objective in nature. Restrictions are not directly related and necessary to the implementation of a concentration simply because the parties regard them as such.

12.

For restrictions to be considered ‘directly related to the implementation of the concentration’, they must be closely linked to the concentration itself. It is not sufficient that an agreement has been entered into in the same context or at the same time as the concentration (10). Restrictions which are directly related to the concentration are economically related to the main transaction and intended to allow a smooth transition to the changed company structure after the concentration.

13.

Agreements must be ‘necessary to the implementation of the concentration’ (11), which means that, in the absence of those agreements, the concentration could not be implemented or could only be implemented under considerably more uncertain conditions, at substantially higher cost, over an appreciably longer period or with considerably greater difficulty (12). Agreements necessary to the implementation of a concentration are typically aimed at protecting the value transferred (13), maintaining the continuity of supply after the break-up of a former economic entity (14), or enabling the start-up of a new entity (15). In determining whether a restriction is necessary, it is appropriate not only to take account of its nature, but also to ensure that its duration, subject matter and geographical field of application does not exceed what the implementation of the concentration reasonably requires. If equally effective alternatives are available for attaining the legitimate aim pursued, the undertakings must choose the one which is objectively the least restrictive of competition.

14.

For concentrations which are carried out in stages, the contractual arrangements relating to the stages before the establishment of control within the meaning of Article 3(1) and (2) of the Merger Regulation cannot normally be considered directly related and necessary to the implementation of the concentration. However, an agreement to abstain from material changes in the target's business until completion is considered directly related and necessary to the implementation of the joint bid (16). The same applies, in the context of a joint bid, to an agreement by the joint purchasers of an undertaking to abstain from making separate competing offers for the same undertaking, or otherwise acquiring control.

15.

Agreements which serve to facilitate the joint acquisition of control are to be considered directly related and necessary to the implementation of the concentration. This will apply to arrangements between the parties for the joint acquisition of control aimed at implementing the division of assets in order to divide the production facilities or distribution networks among themselves, together with the existing trademarks of the undertaking acquired jointly.

16.

To the extent that such a division involves the break-up of a pre-existing economic entity, arrangements that make the break-up possible under reasonable conditions are to be considered directly related and necessary to the implementation of the concentration, under the principles set out below.

17.

Restrictions agreed between the parties in the context of a transfer of an undertaking may be to the benefit of the purchaser or of the vendor. In general terms, the need for the purchaser to benefit from certain protection is more compelling than the corresponding need for the vendor. It is the purchaser who needs to be assured that she/he will be able to acquire the full value of the acquired business. Thus, as a general rule, restrictions which benefit the vendor are either not directly related and necessary to the implementation of the concentration at all (17), or their scope and/or duration need to be more limited than that of clauses which benefit the purchaser (18).

18.

Non-competition obligations which are imposed on the vendor in the context of the transfer of an undertaking or of part of it can be directly related and necessary to the implementation of the concentration. In order to obtain the full value of the assets transferred, the purchaser must be able to benefit from some protection against competition from the vendor in order to gain the loyalty of customers and to assimilate and exploit the know-how. Such non-competition clauses guarantee the transfer to the purchaser of the full value of the assets transferred, which in general include both physical assets and intangible assets, such as the goodwill accumulated or the know-how (19) developed by the vendor. These are not only directly related to the concentration but are also necessary to its implementation because, without them, there would be reasonable grounds to expect that the sale of the undertaking or of part of it could not be accomplished.

19.

However, such non-competition clauses are only justified by the legitimate objective of implementing the concentration when their duration, their geographical field of application, their subject matter and the persons subject to them do not exceed what is reasonably necessary to achieve that end (20).

20.

Non-competition clauses are justified for periods of up to three years (21), when the transfer of the undertaking includes the transfer of customer loyalty in the form of both goodwill and know-how (22). When only goodwill is included, they are justified for periods of up to two years (23).

21.

By contrast, non-competition clauses cannot be considered necessary when the transfer is in fact limited to physical assets (such as land, buildings or machinery) or to exclusive industrial and commercial property rights (the holders of which could immediately take action against infringements by the transferor of such rights).

22.

The geographical scope of a non-competition clause must be limited to the area in which the vendor has offered the relevant products or services before the transfer, since the purchaser does not need to be protected against competition from the vendor in territories not previously penetrated by the vendor (24). That geographical scope can be extended to territories which the vendor was planning to enter at the time of the transaction, provided that he had already invested in preparing this move.

23.

Similarly, non-competition clauses must remain limited to products (including improved versions or updates of products as well as successor models) and services forming the economic activity of the undertaking transferred. This can include products and services at an advanced stage of development at the time of the transaction, or products which are fully developed but not yet marketed. Protection against competition from the vendor in product or service markets in which the transferred undertaking was not active before the transfer is not considered necessary (25).

24.

The vendor may bind herself/himself, her/his subsidiaries and commercial agents. However, an obligation to impose similar restrictions on others would not be regarded as directly related and necessary to the implementation of the concentration. This applies, in particular, to clauses which would restrict the freedom of resellers or users to import or export.

25.

Clauses which limit the vendor's right to purchase or hold shares in a company competing with the business transferred shall be considered directly related and necessary to the implementation of the concentration under the same conditions as outlined above for non-competition clauses, unless they prevent the vendor from purchasing or holding shares purely for financial investment purposes, without granting him/her, directly or indirectly, management functions or any material influence in the competing company (26).

26.

Non-solicitation and confidentiality clauses have a comparable effect and are therefore evaluated in a similar way to non-competition clauses (27).

27.

The transfer of an undertaking or of part of it can include the transfer to the purchaser, with a view to the full exploitation of the assets transferred, of intellectual property rights or know-how. However, the vendor may remain the owner of the rights in order to exploit them for activities other than those transferred. In these cases, the usual means for ensuring that the purchaser will have the full use of the assets transferred is to conclude licensing agreements in his/her favour. Likewise, where the vendor has transferred intellectual property rights with the business, she/he may still want to continue using some or all of these rights for activities other than those transferred; in such a case the purchaser will grant a licence to the vendor.

28.

Licences of patents (28), of similar rights, or of know-how (29), can be considered necessary to the implementation of the concentration. They may equally be considered an integral part of the concentration and, in any event, need not be limited in time. These licences can be simple or exclusive and may be limited to certain fields of use, to the extent that they correspond to the activities of the undertaking transferred.

29.

However, territorial limitations on manufacture reflecting the territory of the transferred activity are not necessary to the implementation of the operation. As regards licences granted by the seller of a business to the buyer, the seller can be made subject to territorial restrictions in the licence agreement under the same conditions as laid down for non-competition clauses in the context of the sale of a business.

30.

Restrictions in licence agreements going beyond the above provisions, such as those which protect the licensor rather than the licensee, are not necessary to the implementation of the concentration (30).

31.

Similarly, in the case of licences of trademarks, business names, design rights, copyrights or similar rights, there may be situations in which the vendor wishes to remain the owner of such rights in relation to activities retained, but the purchaser needs those rights in order to market the goods or services produced by the undertaking or part of the undertaking transferred. Here, the same considerations as above apply (31).

32.

In many cases, the transfer of an undertaking or of part of it can entail the disruption of traditional lines of purchase and supply which have existed as a result of the previous integration of activities within the economic unity of the vendor. In order to enable the break-up of the economic unity of the vendor and the partial transfer of the assets to the purchaser under reasonable conditions, it is often necessary to maintain, for a transitional period, the existing or similar links between the vendor and the purchaser. This objective is normally attained by purchase and supply obligations for the vendor and/or the purchaser of the undertaking or of part of it. Taking into account the particular situation resulting from the break-up of the economic unity of the vendor, such obligations can be recognised as directly related and necessary to the implementation of the concentration. They may be in favour of the vendor as well as the purchaser, depending on the particular circumstances of the case.

33.

The aim of such obligations may be to ensure the continuity of supply to either of the parties of products necessary for carrying out the activities retained by the vendor or taken over by the purchaser. However, the duration of purchase and supply obligations must be limited to a period necessary for the replacement of the relationship of dependency by autonomy in the market. Thus, purchase or supply obligations aimed at guaranteeing the quantities previously supplied can be justified for a transitional period of up to five years (32).

34.

Both supply and purchase obligations providing for fixed quantities, possibly with a variation clause, are recognised as directly related and necessary to the implementation of the concentration. However, obligations providing for unlimited quantities (33), exclusivity or conferring preferred-supplier or preferred-purchaser status (34), are not necessary to the implementation of the concentration.

35.

Service and distribution agreements are equivalent in their effect to supply arrangements; consequently the same considerations as above shall apply.

36.

A non-competition obligation between the parent undertakings and a joint venture may be considered directly related and necessary to the implementation of the concentration where such obligations correspond to the products, services and territories covered by the joint venture agreement or its by-laws. Such non-competition clauses reflect, inter alia, the need to ensure good faith during negotiations; they may also reflect the need to fully utilise the joint venture's assets or to enable the joint venture to assimilate know-how and goodwill provided by its parents; or the need to protect the parents' interests in the joint venture against competitive acts facilitated, inter alia, by the parents' privileged access to the know-how and goodwill transferred to or developed by the joint venture. Such non-competition obligations between the parent undertakings and a joint venture can be regarded as directly related and necessary to the implementation of the concentration for the lifetime of the joint venture (35).

37.

The geographical scope of a non-competition clause must be limited to the area in which the parents offered the relevant products or services before establishing the joint venture (36). That geographical scope can be extended to territories which the parent companies were planning to enter at the time of the transaction, provided that they had already invested in preparing this move.

38.

Similarly, non-competition clauses must be limited to products and services constituting the economic activity of the joint venture. This may include products and services at an advanced stage of development at the time of the transaction, as well as products and services which are fully developed but not yet marketed.

39.

If the joint venture is set up to enter a new market, reference will be made to the products, services and territories in which it is to operate under the joint venture agreement or by-laws. However, the presumption is that one parent's interest in the joint venture does not need to be protected against competition from the other parent in markets other than those in which the joint venture will be active from the outset.

40.

Additionally, non-competition obligations between non-controlling parents and a joint venture are not directly related and necessary to the implementation of the concentration.

41.

The same principles as for non-competition clauses apply to non-solicitation and confidentiality clauses.

42.

A licence granted by the parent undertakings to the joint venture may be considered directly related and necessary to the implementation of the concentration. This applies regardless of whether or not the licence is an exclusive one and whether or not it is limited in time. The licence may be restricted to a particular field of use which corresponds to the activities of the joint venture.

43.

Licences granted by the joint venture to one of its parents, or cross-licence agreements, can be regarded as directly related and necessary to the implementation of the concentration under the same conditions as in the case of the acquisition of an undertaking. Licence agreements between the parents are not considered directly related and necessary to the implementation of a joint venture.

44.

If the parent undertakings remain present in a market upstream or downstream of that of the joint venture, any purchase and supply agreements, including service and distribution agreements are subject to the principles applicable in the case of the transfer of an undertaking.

5.3.2005   

EN

Official Journal of the European Union

C 56/32

1.

This Notice sets out a simplified procedure under which the Commission intends to treat certain concentrations pursuant to Council Regulation (EC) No 139/2004 of 20 January 2004, on the control of concentrations between undertakings (the EC Merger Regulation) (1) on the basis that they do not raise competition concerns. This Notice replaces the Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EEC) No 4064/89 (2). The Commission's experience gained in applying Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (3) has shown that certain categories of notified concentrations are normally cleared without having raised any substantive doubts, provided that there were no special circumstances.

2.

The purpose of this Notice is to set out the conditions under which the Commission usually adopts a short-form decision declaring a concentration compatible with the common market pursuant to the simplified procedure and to provide guidance in respect of the procedure itself. When all necessary conditions set forth at point 5 of this Notice are met and provided there are no special circumstances, the Commission adopts a short-form clearance decision within 25 working days from the date of notification, pursuant to Article 6(1)(b) of the EC Merger Regulation (4).

3.

However, if the safeguards or exclusions set forth at points 6 to 11 of this Notice are applicable, the Commission may launch an investigation and/or adopt a full decision under the EC Merger Regulation.

4.

By following the procedure outlined in the following sections, the Commission aims to make Community merger control more focused and effective.

5.

The Commission will apply the simplified procedure to the following categories of concentrations:

6.

In assessing whether a concentration falls into one of the categories referred to in point 5, the Commission will ensure that all relevant circumstances are established with sufficient clarity. Given that market definitions are likely to be a key element in this assessment, the parties should provide information on all plausible alternative market definitions during the pre-notification phase (see point 15). Notifying parties are responsible for describing all alternative relevant product and geographic markets on which the notified concentration could have an impact and for providing data and information relating to the definition of such markets (12). The Commission retains the discretion to take the ultimate decision on market definition, basing its decision on an analysis of the facts of the case. Where it is difficult to define the relevant markets or to determine the parties' market shares, the Commission will not apply the simplified procedure. In addition, to the extent that concentrations involve novel legal issues of a general interest, the Commission would normally abstain from adopting short-form decisions, and would normally revert to a normal first phase merger procedure.

7.

While it can normally be assumed that concentrations falling into the categories referred to in point 5 will not raise serious doubts as to their compatibility with the common market, there may nonetheless be certain situations, which exceptionally require a closer investigation and/or a full decision. In such cases, the Commission may revert to a normal first phase merger procedure.

8.

The following are indicative examples of types of cases which may be excluded from the simplified procedure. Certain types of concentrations may increase the parties' market power, for instance by combining technological, financial or other resources, even if the parties to the concentration do not operate in the same market. Concentrations where at least two parties to the concentration are present in closely related neighbouring markets (13) may also be unsuitable for the simplified procedure, in particular, where one or more of the parties to the concentration holds individually a market share of 25 % or more in any product market in which there is no horizontal or vertical relationship between the parties but which is a neighbouring market to a market where another party is active. In other cases, it may not be possible to determine the parties' precise market shares. This is often the case when the parties operate in new or little developed markets. Concentrations in markets with high entry barriers, with a high degree of concentration (14) or other known competition problems may also be unsuitable.

9.

The Commission's experience to date has shown that a change from joint to sole control may exceptionally require closer investigation and/or a full decision. A particular competition concern could arise in circumstances where the former joint venture is integrated into the group or network of its remaining single controlling shareholder, whereby the disciplining constraints exercised by the potentially diverging incentives of the different controlling shareholders are removed and its strategic market position could be strengthened. For example, in a scenario in which undertaking A and undertaking B jointly control a joint venture C, a concentration pursuant to which A acquires sole control of C may give rise to competition concerns in circumstances in which C is a direct competitor of A and where C and A will hold a substantial combined market position and where this removes a degree of independence previously held by C (15). In cases where such scenarios require a closer analysis, the Commission may revert to a normal first phase merger procedure (16).

10.

The Commission may also revert to a normal first phase merger procedure where neither the Commission nor the competent authorities of Member States have reviewed the prior acquisition of joint control of the joint venture in question.

11.

Furthermore, the Commission may revert to a normal first phase merger procedure where an issue of coordination as referred to in Article 2(4) of the EC Merger Regulation arises.

12.

If a Member State expresses substantiated concerns about the notified concentration within 15 working days of receipt of the copy of the notification, or if a third party expresses substantiated concerns within the time-limit laid down for such comments, the Commission will adopt a full decision. The time-limits set out in Article 10(1) of the EC Merger Regulation apply.

13.

The simplified procedure will not be applied if a Member State requests the referral of a notified concentration pursuant to Article 9 of the EC Merger Regulation or if the Commission accepts a request from one or more Member States for referral of a notified concentration pursuant to Article 22 of the EC Merger Regulation.

14.

Subject to the safeguards and exclusions set out in this Notice, the Commission may apply the simplified procedure to concentrations where:

15.

The Commission has found pre-notification contacts between notifying parties and the Commission beneficial even in seemingly unproblematic cases (17). The Commission's experience of the simplified procedure has shown that candidate cases for the simplified procedure may raise complex issues for instance, of market definition (see point 6) which should preferably be resolved prior to notification. Such contacts allow the Commission and the notifying parties to determine the precise amount of information to be provided in a notification. Pre-notification contacts should be initiated at least two weeks prior to the expected date of notification. Notifying parties are therefore advised to engage in pre-notification contacts, particularly where they request the Commission to waive full-form notification in accordance with Article 3(1) 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 (18) on the grounds that the operation to be notified will not raise competition concerns.

16.

The information to be published in the Official Journal of the European Union upon receipt of a notification (19) will include the names of the parties to the concentration, their country of origin, the nature of the concentration and the economic sectors involved, as well as an indication that, on the basis of the information provided by the notifying party, the concentration may qualify for a simplified procedure. Interested parties will then have the opportunity to submit observations, in particular on circumstances which might require an investigation.

17.

If the Commission is satisfied that the concentration fulfils the criteria for the simplified procedure (see point 5), it will normally issue a short-form decision. This includes appropriate cases not giving rise to any competition concerns where it receives a full form notification. The concentration will thus be declared compatible with the common market, within 25 working days from the date of notification, pursuant to Article 10(1) and (6) of the EC Merger Regulation. The Commission will endeavour to issue a short-form decision as soon as practicable following expiry of the 15 working day period during which Member States may request referral of a notified concentration pursuant to Article 9 of the EC Merger Regulation. However, in the period leading up to the 25 working day deadline, the option of reverting to a normal first phase merger procedure and thus launching investigations and/or adopting a full decision remains open to the Commission, should it judge such action appropriate in the case in question.

18.

The Commission will publish a notice of the fact of the decision in the Official Journal of the European Union as it does for full clearance decisions. The public version of the decision will be made available on DG Competition's Internet website for a limited period. The short-form decision will contain the information about the notified concentration published in the Official Journal at the time of notification (names of the parties, their country of origin, nature of the concentration and economic sectors concerned) and a statement that the concentration is declared compatible with the common market because it falls within one or more of the categories described in this Notice, with the applicable category(ies) being explicitly identified.

19.

The simplified procedure is not suited to cases in which the undertakings concerned request an express assessment of restrictions which are directly related to, and necessary for, the implementation of the concentration.

—

in the case of a joint acquisition of a target company, the turnover to be taken into account is the turnover of this target (the joint venture),

—

in the case of the creation of a joint venture to which the parent companies contribute their activities, the turnover to be taken into account is that of the contributed activities,

—

in the case of entry of a new controlling party into an existing joint venture, the turnover of the joint venture and the turnover of the activities contributed by the new parent company (if any) must be taken into account.

5.3.2005   

EN

Official Journal of the European Union

C 56/36

—

the movement certificate EUR.1 has been made out on a form other than the prescribed one (e.g. no guilloche background, differs significantly from the model in size or colour, no serial number, not printed in one of the officially-prescribed languages),

—

one of the mandatory boxes (e.g. Box 4 on the EUR.1) has not been filled in, except for box 8,

—

the movement certificate EUR.1 has not been stamped and signed (i.e. in Box 11),

—

the movement certificate EUR.1 is endorsed by a non-authorised authority,

—

the stamp used is a new one which has not yet been notified,

—

the movement certificate EUR.1 presented is a copy or photocopy rather than the original,

—

the entry in Box 5 refers to a country that does not belong to the Agreement (e.g. Israel or Cuba).

—

the goods description box (Box 8 on EUR.1) is not filled in or refers to goods other than those presented;

—

the proof of origin has been issued by a country which does not belong to the Agreement even if the goods originate in the Community or in Chile (e.g. EUR.1 issued in Israel for products originating in Chile);

—

one of the mandatory boxes on the movement certificate EUR.1 bears traces of non-authenticated erasures or alterations (e.g. the boxes describing the goods or stating the number of packages, the country of destination or the country of origin);

—

the time limit on the movement certificate EUR.1 has expired for reasons other than those covered by the regulations (e.g. exceptional circumstances), except where the goods were presented before expiry of the time limit;

—

the proof of origin is produced subsequently for goods that were initially imported fraudulently;

—

Box 4 on the movement certificate EUR.1 names a country not party to the agreement under which preferential treatment is being sought.

5.3.2005   

EN

Official Journal of the European Union

C 56/38

European Commission

Directorate-General for Competition

State Aid Greffe

B-1049 Brussels

Fax (32-2) 296 12 42

—

According to the data provided by the UK authorities, 85 % of all relevant expenditure in the UK is undertaken by larger businesses and only 15 % by SMEs. Although the scheme is open for all enterprises regardless of their size, the main beneficiaries of the BPRA will mainly be large businesses.

—

However, the UK authorities have stated that even in those cases where large companies own the business premises, SMEs would nevertheless be able to benefit from the measure indirectly as they are often renting business outlets from large enterprises. This is underlined by data provided by the UK indicating that of new leases taken out on premises vacant for more than one year, 31 % are by large businesses and 69 % by SMEs. For the most deprived areas according to the definition of the UK, the respective figures are 26 % for large enterprises and 74 % for SMEs.

—

The Commission notes that the notified measure is not restricted to small and medium-sized companies within the Commission definition. Furthermore, the Commission also notes that the scheme is not restricted to assisted areas pursuant to Article 87(3)(a) or Article 87(3)(c) of the EC Treaty.

—

The use of the 2 000 designated most deprived areas of the UK as target area of the notified measure raises the same issues as already in the case of the Stamp duty exemption scheme. It deviates from the standard practice of the Commission when dealing with regional aid. The Commission continues to believe that such a deviation needs to be justified in order to avoid that beneficiaries in areas which are not designated as assisted areas according to Article 87(3)(a) areas and/or Article 87(3)(c) areas receive a disproportionate economic advantage adversely affecting trading conditions to an extent contrary to the common interest.

—

Furthermore, in approving the Stamp duty exemption scheme on the basis of the specific merits of this scheme, the Commission imposed a number of conditions. Amongst others, the Commission decided that monitoring needed to be ensured and that the beneficial effects of the scheme on physical regeneration and notably on brownfield sites needed to be demonstrated. The Commission so far has not received any ex-post analysis enabling it to assess the beneficial effects of the scheme.

—

Although the UK authorities state that the average aid intensity would be between 9 % and 10 % net, maximum aid intensities under the notified measure can reach up to 40 % net in case of unincorporated businesses and up to 30 % net in case of companies, respectively.

5.3.2005   

EN

Official Journal of the European Union

C 56/45

1.

On 24 February 2005, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1) by which the undertakings Goldman Sachs Mortgage Company (‘GSMC’, USA) controlled by Goldman Sachs Group, Inc. (‘Goldman Sachs’, USA) and The Cerberus Group (‘Cerberus’, USA) acquire within the meaning of Article 3(1)(b) of the Council Regulation joint control of part of the undertaking Transamerica European Trailers (‘TET’, UK) by way of purchase of shares.

2.

The business activities of the undertakings concerned are:

3.

On preliminary examination, the Commission finds that the notified transaction could fall within the scope of Regulation (EC) No 139/2004. However, the final decision on this point is reserved. Pursuant to the Commission Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC) No 139/2004 (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice.

4.

The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.

Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (No (32-2) 296 43 01 or 296 72 44) or by post, under reference number COMP/M.3678 — Goldman Sachs/ Cerberus/TET/JV, to the following address:

5.3.2005   

EN

Official Journal of the European Union

C 56/46

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by deprivation of liberty or a detention order for at least 12 months, or

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by a fine of at least EUR 15 000.’,

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by deprivation of liberty or a detention order for a maximum period of at least 12 months, or

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by a fine of at least EUR 15 000.’.