Numbers of notifications
During calendar year 2012, there were 283 cases notified to the European Commission's Directorate General for Competition ("DG Comp" or "the Commission") under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings ("the Merger Regulation"). This is fewer than 2011 (309), more than 2010 (274) and 2009 (259), but substantially fewer than 2008 (347).
Of the cases notified in 2012, five were withdrawn, four in Phase I and one in Phase II (M.6362 Cin/ Tirrenia Business Branch). This is a substantial decrease on 2011 where 10 were withdrawn, nine in Phase I and one in Phase II.
Phase I clearances
In 2012, there were 254 Phase I clearance decisions. DG Comp issued: 170 simplified procedure clearances (all without commitments); 75 Phase I clearances without commitments under the normal procedure; and nine clearances under the normal procedure with commitments. This is a decrease on 2011, when there were 299 Phase I clearance decisions issued.
The percentage of notified cases dealt with under the simplified procedure remains in the majority: 60% in 2012; 62% in 2011; 52% in 2010; 55% in 2009; and 55% in 2008.
Phase II investigations
In 2012, nine cases were put into Phase II, i.e. an "in-depth investigation", an increase of one case on 2011.
In 2012, there were seven Phase II clearances, six with commitments (M.6266 J&J Synthes, M.6286 Südzucker/ED&FMan, M.6458 Universal/EMI, M.6410 United Technology/Goodrich, M.6471 Outokumpu/Inoxum and M.6497 Hutchison/Orange Austria) and one without (M.6314 Telefonica/ Vodafone JV). At the end of 2012, there were four ongoing Phase II investigations: M.6570 UPS/ TNT Express, M.6663 Ryanair/Aer Lingus, M.6690 Syniverse/Mach and M.6576 Munksjö/Ahlstrom. UPS/TNT Express was subsequently prohibited on 30 January 2012. During 2011, there were five Phase II clearances: four without remedies (M.5907 Votorantim/Fischer JV, M.6101 UPM/Myllykoski and Rhein Papier, M.6106 Caterpillar/MVM and M.6214 Seagate Technology/The HDD Business of Samsung Electronics), and one with remedies (M.6203 Western Digital Ireland/Viviti Technologies).
Between 2010 and 2012, the following interesting statistics emerge. Of the 20 Phase II cases, there were 13 statements of objection issued and approximately nine oral hearings. All those cleared with remedies required extensive divestments. There were voluntary extensions under Article 10(3) in 14 cases1. In seven cases, the maximum possible under Article 10(3) of 20 days was used. In nine cases, remedies were submitted after working day 55 in Phase II, triggering a 15-day extension.
New developments in jurisdictional assessment or procedure
Planned review of the simplified rules
In early 2013, the Commission unveiled a roadmap2 which should eventually lead to more cases being notified under the simplified procedure. Although the document is the first step by the Commission to achieve changes on this issue, it is a welcome move. The proposed improvements aim to reduce the administrative burden on businesses by allowing more deals to be notified using a Short Form filing. First, the Commission intends to increase market share thresholds for both horizontal and vertical transactions from the current 15% and 25%, to 20% and 30% respectively. Second, it is considering allowing simplified treatment of horizontal transactions with very small market share increments, in line with the "safe harbour" provisions of the Commission's Horizontal Merger Guidelines. Finally, the Commission will streamline its notification and referral forms (Form CO, Short Form and Form RS) which will reduce the amount of required information. The Commission expects that these changes will raise the number of total notifications treated under the simplified rules by around 10%, to 70% of the total. A public consultation for this initiative is expected in spring 2013.
Upward referral requests by Member State authorities
The use of Article 22 (three or four cases per annum) is now increasingly coordinated between Member State competition authorities, with more of them "joining" other Member States' requests than in earlier years. This means that in cases where the Merger Regulation thresholds are not met, and even if the parties themselves do not have the option to seek upwards referral in advance of notification because they have a notification obligation in only one or two Member States, the case may still end up in Brussels if it affects trade between Member States, or threatens to significantly affect competition in the territory of the Member State making the request. This is beyond the control of the companies concerned, and can make for a significant extension of the timeline for clearance, increasing legal uncertainty.
For pre-notification upwards referral requests under Article 4(5), which parties have the option to make if the transaction qualifies for national review in three or more Member States, there were 22 such requests made in 2012 and only one case in which a Member State authority blocked the request.
Commissioner Almunia has raised the question of whether the European Competition Network (ECN) model can be applied in the sphere of merger control to bring about more cooperation among competition authorities. In November 2011 DG Comp published a set of Best Practices on cooperation between EU National Competition Authorities in Merger Review, aimed at fostering cooperation and facilitating information-sharing between national competition authorities ("NCAs") within the European Union, for mergers that are not reviewed at an EU level but require clearance in several Member States. The consent of the parties to the transaction is required before confidential information can be exchanged between authorities.
Downwards referral requests
In 2012 there were 13 pre-notification Article 4(4) downward referrals to Member State competition authorities at the request of notifying parties, none of which were refused.
For post-notification downward referrals under Article 9, in 2012 there were two requests made by Member State authorities, resulting in one full referral and one partial referral. In M.6497 Hutchison/ Orange Austria, the Commission, considering itself to be the best placed authority, refused a referral request from Austria even though it fulfilled the legal requirements for referral.
Lack of review of acquisitions of minority shareholdings not conferring control
In a speech in March 2011 Commissioner Almunia acknowledged that there "is probably an enforcement gap" at the EU level concerning transactions involving the acquisitions of minority shareholdings that do not give rise to a "change of control" within the meaning of the Merger Regulation, and announced that he had instructed DG Competition to study the matter. Following up in a November 2012 speech, the Commissioner outlined that there are two options for merger control law reform for cases involving non-controlling minority shareholdings. The first would be a selective system, whereby the Commission identifies the cases that may raise specific competition problems; the other would be a mandatory notification system. The Commissioner indicated his preference for the first option, but it is unclear when the Commission might put forward a proposal for the Council to amend the Merger Regulation on this point.
Key industry sectors reviewed, and approach adopted, to market definition
Exchange derivatives sector
M.6166 Deutsche Börse/NYSE Euronext Prohibition Decision