SEC is active worldwide in the manufacturing of household appliances, mobiles phones and communication systems, semiconductors and LCD display panels. In particular, SEC sells memory semiconductors; including Dynamic Random Access memory semiconductor chips (DRAM) and flash memories which are incorporated, inter alia, into digital cameras. SDIC specialises in the production of digital still cameras and is active worldwide.

The Proposed Transaction gives only rise to a structural vertical link between the parties in relation to two types of memory semiconductors: Dynamic Random Access Memory semiconductor chips (DRAM) and flash memories.

Following the market investigation, the Commission found that the new entity will not be in a position to limit access to these memory semiconductors for digital cameras competitors of SDIC given the presence of numerous alternatives in the memory semiconductors markets and the fact that memory semiconductors can be used in various applications outside cameras.

Therefore, the Commission found that the proposed transaction does not raise competition concerns.

More information on the case will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_5804

The application provides respondents with a modern, secure and efficient web-based workspace to submit their replies to the Commission. It is designed to accommodate the input of both large corporations and smaller companies, while improving and streamlining the Commission’s market investigations.

Companies requested to provide information will receive an email informing them of the launch of an investigation, inviting them to log on to eQuestionnaire using a unique access code. After first confirming their contact details and the receipt of the request for information, companies can fill in the questionnaire directly online or – if preferred – export the questionnaire to a text editor, complete the responses there and upload the replies into the application afterwards.

(Source: European Commission)

Further information under: http://ec.europa.eu/competition/mergers/equestionnaire_en.html

The European Commission has launched a public consultation on the functioning of the EC Merger Regulation (Council Regulation 139/2004), which sets out the rules for merger control in the European Economic Area (EEA). The purpose of the review is to evaluate how the rules on jurisdictional thresholds and referral mechanisms have worked in practice during the fours years the Regulation has been applied.

Based on the response to the consultation, the Commission’s own experience in applying the Regulation and feedback from national competition authorities, the Commission will prepare a report to the EU Council of Ministers by July 2009. The Commission welcomes comments to the consultation up to 1st December 2008.

According to Articles 1(5) and 4(6) of the Merger Regulation, the Commission must report to the Council on the functioning of the jurisdictional thresholds provided for by Article 1(2) and 1(3) and the pre-notification referral mechanisms provided for by Articles 4(4) and 4(5) of the Merger Regulation by 1 July 2009. The Commission’s own experience indicates that the jurisdictional thresholds and the referral mechanisms have worked well overall. Since May 2004, around 160 referrals to the Commission and around 40 referrals to the Member States have been made at the request of notifying parties. The Commission will analyse the outcome of the consultation in preparing its report, along with its own experience of applying the Regulation and feedback from national competition authorities and other sources.

Receiving feedback from stakeholders is a key element of this report. The Commission welcomes comments from the business community and their representatives as well as other stakeholders including industry associations and consumer interest associations who have had direct experience of the implementation of the Regulation.

Comments can be addressed to the Commission before 1st December 2008 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”

The questionnaire is available at:

http://ec.europa.eu/comm/competition/consultations/

2008_12_merger_regulation.html

Background

One of the major achievements of the revised EU Merger Regulation, which took effect on 1 May 2004, was to strengthen the one-stop-shop for the control of mergers while at the same time ensuring that they are reviewed by the best placed competition authority. While the turnover thresholds for determining jurisdiction remained the same as under the previous Regulation, flexible mechanisms were introduced to enhance the possibilities for case re-allocation between the Commission and the Member States.

The referral mechanisms introduced in 2004 gave the merging parties the right to request the Commission to examine a transaction that was notifiable in at least three Member States, even when the thresholds for Commission review were not met. Conversely, the notifying parties were given the right to request a referral to the Member States when the transaction significantly affected competition in a market in that Member State if it presented all the characteristics of a distinct market.

(Source: European Commission)

The European Commission has revised its guidelines on remedies in merger control in order to ensure that competition concerns are dealt with more effectively and to clarify to companies involved in merger cases how best to address competition concerns. Remedies are modifications to a proposed transaction suggested by the parties involved with a view to eliminating possible competition concerns identified by the Commission.

The main changes include the introduction of a form for submitting information on remedies, details on divestiture and access remedies and clarifications on the role of the Trustee. The Commission has also modernised the Remedies Notice in the light of the revised Merger Regulation (EC) No. 139/2004 (see MEMO/04/9), the Commission’s experience in a large number of cases, the Commission Mergers Remedies Study (see IP/05/1327) and recent judgements of the European Courts. The Remedies Notice also takes into account comments received from the public consultation held in 2007 on a draft Notice (see IP/07/544). In addition, the Commission has adopted amendments to the Merger Implementing Regulation (Commission Regulation (EC) No. 802/2004) in line with the changes to the Remedies Notice.

The European Commission has cleared under the EU Merger Regulation the proposed joint venture between the German Robert Bosch GmbH and the South Korean Samsung SDI Co. Ltd. in the market for battery systems for hybrid electric and electric vehicles. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Bosch is a global supplier of a wide range of technical products, inter alia in the automotive sector. Samsung develops, produces and sells electronic products worldwide. Bosch and Samsung intend to set up a jointly controlled business that would develop, produce and sell battery systems and mid- to large-sized energy storage devices based on the lithium-ion technology for the automotive industry’s increasing demand for battery systems for hybrid electric and electric vehicles. The joint venture would offer its products in its own name and on its own account.

By combining the parties’ know-how in their respective core businesses, they aim at enabling the joint venture to develop rapidly a marketable product that would meet the specific demands of the automotive industry.

With the planned joint venture the parties intend to enter a market in which none of them has been active in the past. The market investigation has revealed that other manufacturers have entered or are in the process of entering the market for battery systems with similar products and solutions. Therefore, the joint venture would not be in a position to engage in anticompetitive behaviour and customers in the automotive industry would have a sufficient array of sourcing alternatives for this component.

The Commission thus concluded that the proposed concentration would not give rise to any competition concerns.

(Source: European Commission)

The European Commission has approved under the EU Merger Regulation the proposed acquisition of control of the Norwegian shipbuilder Aker Yards by STX of South Korea. After an in-depth investigation, launched in December 2007, the Commission concluded that effective competition on the shipbuilding markets would not be significantly impeded as a result of the proposed transaction.

Aker Yards is active in the construction of cruise ships and ferries, and also builds merchant vessels and offshore vessels. It is one of the three main players on the global market for the construction of cruise ships, together with Fincantieri (Italy) and Meyer Werft (Germany). STX is a Korean shipbuilder mostly active in building various types of cargo vessels, such as container ships or gas tankers. Until now, STX has not built cruise ships or ferries.

On 20 December 2007, the Commission opened ain-depth investigation because of concerns that the proposed merger might, in particular, remove STX as a potential new market entrant into a concentrated cruise ship manufacturing market. The Commission’s in-depth investigation of the proposed transaction has however dispelled the initial doubts. The Commission found that by itself STX was still far from close to becoming an effective competitive constraint on the existing cruise ship construction market. The in-depth investigation also showed that STX was not the only possible market entrant and that post-merger a number of other Far-East shipbuilders would be as equally well placed as STX to enter the market.

The Commission also examined a concern brought forward by a third party related to subsidies, that South Korea might have granted or might grant in the future to the merged entity and that might enable the latter to undercut prices and monopolise the cruise ship market. The Commission found that, regardless of whether any of the financial instruments granted to STX in the past were subsidies, the current financial position of STX would not give the merged entity a dominant position.

In addition, the Commission found no evidence indicating that STX was likely to receive subsidies in the future which could significantly strengthen its financial position and enable it to impede competition in the markets concerned. In particular, the Commission found that even if the type of future hypothetical subsidies identified by the third party (subsidised loans and guarantees) were granted, the advantage would not be such as to enable the merged entity to acquire a dominant position on the cruise ship market. This is because:

(i) the current financial position of STX would not give the merged entity a dominant position

(ii) Aker Yards is also not currently dominant, as it competes with the market leader Fincantieri and Meyer Werft

(iii) there are a number of structural features of the market such as buyer power of a few large customers, that would make very unlikely any attempts by STX to monopolise the cruise ship construction market based on the alleged subsidised pricing in the current market structure.

The Commission therefore concluded that competition on the market for cruise ships would not be reduced as a result of the transaction. The Commission also analysed the ferries market, where similar concerns were raised, and came to the same conclusion.

The in-depth investigation also confirmed that there are no competition concerns arising from minor overlaps of the merging companies’ activities in the area of certain types of cargo ships or from the vertical integration of STX into engine production or shipping services.

(Source: European Commission)