WIREDGOV

The European Commission has launched a public consultation on the functioning of certain procedural and jurisdictional aspects of EU merger control. The public consultation will seek feedback from citizens, businesses, associations, public authorities and other stakeholders.

The public consultation is part of the Commission's work to promote a consistent review of existing EU laws, so that EU policies achieve their objectives most efficiently, to the benefit of jobs and growth. It will focus in particular on (i) the effectiveness of purely turnover-based thresholds in the EU Merger Regulation; (ii) the treatment of cases that typically do not raise competition concerns; and (iii) the referral mechanisms between Member States and the Commission.

Notification thresholds

Under the EU Merger Regulation, mergers are subject to control by the Commission if they have an EU dimension – defined as when the turnover of at least two of the merging parties meets the relevant notification thresholds.

Recently, questions have been raised regarding the effectiveness of the purely turnover-based notification thresholds of the EU Merger Regulation. In particular, there have been suggestions to complement the existing thresholds by other alternative criteria in order to capture some types of transactions in certain sectors, for example digital services and pharmaceuticals.

Under current EU Merger Regulation thresholds, acquisitions of target companies that do not yet generate significant turnover but that have a high market potential, which may be reflected in a high purchase price, do not have to be notified to the Commission. This can happen, in particular, in the digital services sector.

Similar issues may arise in the pharmaceutical industry if established players purchase highly valued biotech companies that own products under development that have not yet been marketed and therefore do not generate significant turnover.

Therefore, the public consultation seeks views on whether there is a possible enforcement gap under EU merger control, in that it may not cover certain types of cross-border transactions that may potentially have an impact on competition in the EU's Single Market or in a substantial part of it.

Treatment of typically unproblematic cases

At present, certain categories of cases that generally do not raise competition concerns benefit from a simplified procedure. In 2013 the Commission adopted a package of measures aimed at further simplifying procedures for these cases to the fullest extent possible without amending the EU Merger Regulation. In its 2014 White Paper "Towards more effective EU merger control", the Commission proposed amendments to the EU Merger Regulation to make procedures even simpler.

With the present consultation, the Commission invites feedback on the functioning of the simplified procedure to see whether there is scope to further simplify the treatment of certain categories of non-problematic cases beyond the proposals that were already contained in the White Paper.

Referral mechanisms

The Commission is also seeking feedback on the functioning of the case referral system, as well as certain procedural and technical aspects of the EU Merger Regulation.

The referral mechanism allows for the re-allocation of responsibility between Member States and the Commission over specific transactions. It helps ensure that the best-placed competition authority carries out the merger assessment.

The results of the public consultation will feed into the Commission's evaluation of the relevant procedural and jurisdictional aspects of EU merger control. This evaluation will inform the Commission's decision on possible future reforms in the field of EU merger control.

The public consultation will close on 13 January 2017.

Background

A public consultation in 2013 and a 2009 report on the functioning of the EU Merger Regulation, in particular on the allocation of cases between the Commission and Member States, both confirmed that in general the EU Merger Regulation works well. While no fundamental overhaul was needed, there was room for improvements in certain areas. As a result, the Commission published the 2014 White Paper "Towards more effective EU Merger Control". This document, and its accompanying Staff Working Document and Impact Assessment, outlined proposals to amend the Merger Regulation so as to make EU merger control simpler and more efficient.

Press contacts:

• Ricardo CARDOSO (+32 2 298 01 00)
• Yizhou REN (+32 2 299 48 89)

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email