EU Merger Control and Non-Controlling Minority Shareholdings: The Case Against Change
After several years of debate fuelled by the General Court’s confi rmation in Aer Lingus1 that the EU Merger Regulation2 does not apply to the acquisition of non-controlling minority shareholdings,3 the European Commission (the Commission) has proposed expanding the EUMR to capture such transactions on the ground that the Commission “does not seem to have the tools to systematically prevent anticompetitive effects deriving from such structural links”.4 The Commission’s proposal raises two principal questions—is there a material gap in the EUMR’s scope of application and, if there is, is that gap large enough to justify subjecting a potentially signifi cant number of transactions to EU merger control? As with any expansion of regulatory oversight, the burden rests on the agency proposing such expansion, in this case the Commission, to demonstrate the need for change. The Staff Working Document acknowledges the existence of only “limited” empirical evidence of anticompetitive harm arising from
A Fresh Look at the EU Merger Regulation? The European Commission’s White Paper “Towards More Effective EU Merger Control”
On 9 July 2014 the European Commission published the White Paper “Towards more effective EU merger control”. The White Paper takes stock of the working of the EU Merger Regulation 10 years after the last reform in 2004. It evaluates what degree of coherence and convergence has been achieved in the application of merger control rules and practices at the EU and at Member State level. The White Paper supports recent suggestions to move towards a “European Merger Area”, in which the Commission and national competition authorities (NCAs) apply the same rules to mergers and acquisitions, but does not make concrete proposals in that respect. However, the White Paper proposes amendments to the Merger Regulation in two main areas. First, in order to address an enforcement gap in EU competition law with respect to acquisitions of non-controlling minority shareholdings, the Commission should have the possibility to review certain minority stake transactions creating a “competitively significant link” between the acquirer and the target, without however making all acquisitions of minority shareholdings subject to the prior notification obligation. Second, the system for referring merger cases between the Commission and NCAs should be streamlined in order to reduce the administrative burden on companies and better ensure that cases are being dealt with by the best placed competition authority. Additional proposals made by the White Paper relate to removing joint ventures established outside the European Economic Area (EEA) and with no effect on EEA markets from the scope of the Merger Regulation and alleviating notification obligations for certain categories of unproblematic mergers.
European Parliament: Committee on Economic and Monetary Affairs
The European Parliament's Economic and Monetary Affairs Committee is launching a public consultation on ways to further enhance the coherence of EU financial services legislation. Given the transition to a single rule book in financial services across the EU and the EU legislator's willingness to have "all financial markets, products and actors covered by regulation" it is increasingly important to ensure that legislation fits together seamlessly. The consultation will feed into a programme of reflection to determine future priorities for the remainder of this mandate and to inform the priorities for the incoming Parliament in 2014. All interested stakeholders, including academics and informed individuals, are invited to complete the Committee's questionnaire by 12 noon CET on Friday 14 June and send it by e-mail to: econ-secretariat@europarl.europa.eu. All responses to the questionnaire will be published, so please do not send any confidential material with your response. Please make sure you indicate the identity of the contributor. Anonymous contributions will not be taken into account.