A merger occurs where two or more formerly independent entities unite. This can bring benefits to the economy and expand the market, but where strengthening a dominant market participant some mergers may also reduce those benefits and harm competition.
It is the purpose of merger control to enable competition authorities to regulate changes in market structure by deciding whether two or more undertakings may merge, combine or consolidate their businesses into one.
Main legal source for European merger control is the “Merger Regulation”, Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (ECMR). Mergers are examined at EU level (by the European Commission) if they have “Community dimension” - i.e. mainly if the merging entities reach certain annual turnover thresholds (see Community dimension - Art 1). In that case only the European Commission is in charge of the merger procedure and no national law applies (”one-stop shop” idea). Otherwise, only national substantive law and procedure will apply.
All proposed mergers notified to the Commission are examined to see if they would significantly impede effective competition in the EU. If they do not, they are approved unconditionally. Mergers going beyond the national borders of any one Member State are examined at European level. This allows companies trading in different EU Member States to obtain clearance for their mergers through a single procedure. The Commission’s investigation is conducted in two phases (see Examination & initiation of proceedings).
Even if the European Commission finds that a proposed merger could distort competition, the parties may commit to taking action to try to correct this likely effect. Parties may appeal from the Commission’s decision to the Court of First Instance, but it may take up to three years before the appeal is heard.
Write a comment
You need to login to post comments!