Out-Law News 2 min. read
10 Dec 2013, 2:02 pm
The information that companies must provide when notifying a merger to the Commission will also be reduced, particularly for cases being assessed under the simplified procedure, according to the announcement. Companies subject to the simplified procedure may use a shorter notification form, and the Commission may clear the merger without carrying out a market investigation.
"The merger simplification package shows that we are listening to our stakeholders," said Competition Commissioner Joaquín Almunia. "It is the most comprehensive reform of our merger procedures to date and will make them much simpler. This will reduce the administrative burden and cost for business at a time when it needs it most."
The amended regime will take effect from 1 January 2014, and is expected to allow the Commission to treat between 60% and 70% of merger cases under the simplified procedure. The changes follow a public consultation earlier this year, and come ahead of a wider review of the Merger Regulation.
The Commission has a duty to assess mergers and acquisitions involving companies with turnover above certain thresholds, as set out in the Merger Regulation; and to prevent companies from forming 'concentrations that would significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
The vast majority of mergers notified to the Commission do not pose competition problems and are cleared after a routine review, according to the Commission. Under the Merger Regulation, it generally has 25 days from the date that the transaction is notified to decide whether to grant approval or to start an in-depth investigation.
The changes announced by the Commission will expand the scope of the simplified procedure "in light of its experience". From January, merging companies that compete in the same market will now qualify if their combined market share is below 20%, instead of 15% as currently. For 'vertical' mergers, where one of the companies sells an input into a market where the other company is active, the simplified procedure will be available to mergers below a 30% combined market share instead of 25% as currently.
The Commission will also introduce a new criterion, which will allow mergers between companies with a combined market share of between 20% and 50% to be assessed under the simplified procedure if the increase in market share due to the merger is small. Taken together, these mergers will increase the number of cases considered under the simplified procedure by 10%, according to the Commission.
From January, information requirements will also be reduced in all cases, not just those assed under the simplified procedure. The changes are also expected to simplify the 'pre-notification contacts' between merging companies and the Commission before the official notification takes place, and will in some cases allow companies in some very straightforward cases to forgo pre-notification contacts altogether and to notify their merger immediately.
