European Consultation Process on more effective merger control

On 20 June 2013, the European Commission launched another consultation process on its merger control regime, this time focusing on two main topics: (i) minority shareholdings and (ii) case referrals between the European Commission and national competition authorities. The objectives are to extend the scope of application to transactions involving companies with no dominant market position and to reduce procedures in order to achieve a more business-friendly referral system.

Minority Shareholdings

Regarding minority shareholdings the current Merger Regulation applies only to transactions leading to an acquisition of control over a company. However, experience shows that in some specific instances the acquisition of a non-controlling minority stake can harm competition and consumers. Therefore the consultation paper raises the question whether also non-controlling minority shareholdings should be subject to review and suggests a number of respective options, namely:

- Implementing a “notification system”, where all relevant structural links have to be notified in advance;

- Implementing a “self-assessment system”, where the Commission may investigate after closing;

- Implementing a “transparency system”, where undertakings will be obliged to notify the Commission about transactions, who will make it public creating transparency for third parties.

The differing models will affect the investigative powers of the Commission and its relationship to national competition authorities.

Case referral between the Commission and national authorities

In addition, the case referral system between the European Commission and the national competition authorities should be improved in order to be more in line with the "one-stop-shop" principle. Therefore it is suggested that transactions that require a review by three or more Member States can be also notified directly with the European Commission. At the same time the right of each Member State concerned to oppose the Commission’s jurisdiction should not be affected. Also, not only the Member States of the EU, but of the European Economic Area (EEA) should benefit from the “one-stop-shop” principle.

The Consultation Process lasts until 12 September 2013.


Christina Hummer
Ori Kahn