June 2003
- New EU Merger Control Regulations in force
On 1st May
2004, the same day as the European Union's enlargement, the new
Merger Control Regulations (Regulations) came into force. The
Rules now apply to all 25 Member States.
The aim
behind the new regime is to improve the referral process and to
try to ensure that mergers are examined by the best placed authority.
Which authority
examines the proposed merger?
Under the
Regulation the procedure is simplified on the referral of mergers
from the Commission to the national authorities and vice versa
to ensure that the best placed authority examines the deal.
Companies
that are party to a merger that does not meet the turnover threshold
can ask to benefit from the Commission's "one stop shop"
procedure if the transaction would have to be notified in at least
three member States.
Conversely
where the effects are limited primarily to one country the firms
can request the Commission to refer the case to the national regulator
to review.
What is
the review timetable for the proposed merger?
The time-table
is legally binding and has been changed to give the Commission
more time to discuss remedies to a potential competition problem.
However, merging parties continue to be prohibited from implementing
the merger unless or until the deal has been approved.
| Pre 1st
May 2004 |
Post 1st
May 2004 |
| 1st phase |
|
•
One month starting on the day which follows the receipt of
the notification
• Extended to six weeks if undertakings
are offered or a referral request is received |
•
25 working days starting on the day which follows the receipt
of the notification
•
Extended to 35 working days if undertakings are offered or
a referral request is received |
| 2nd phase |
|
| •
Four months from the day that follows the decision to carry
out an in depth inquiry |
•
90 working days from the day that follows the decision to
carry out an in depth inquiry
+ 20 working days if requested by the notifying parties or
by the Commission with the agreement of the notifying parties |
| |
•
+ 15 working days if companies offered remedies after the
54th working day that followed the initiation of the in depth
inquiry2 |
There are detailed and helpful guidelines published on the Commission
website on best practices to be followed by undertakings on the
conduct of EC merger control proceedings. The web-address is http://europa.eu.int/comm/competition/index_en.html
What test
will the Commission use in deciding whether the merger can proceed
or not?
Under the new rules a merger will be blocked by the Commission
if it would "significantly impede effective competition".
This replaces the "dominance" test. The new wording
expressly permits the Commission to prohibit more mergers than
in the past but how the test will be applied in practice remains
to be seen.
The new Regulations strengthen the Commission's enforcement powers
including the power to impose higher fines if companies fail to
supply information requested by the Commission or supply incorrect
information.
It is hoped that the new rules will benefit consumers by helping
to prevent higher prices and avoiding less choice of products.
For further
information please contact:
Anthony Layng
T: +353-1-4395600
F: +353-1-4395601/4395602
E: alayng@kilroys.ie
© Kilroys Solicitors 2004
|
