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Mergers: Commission revises Remedies Notice and amends Merger Implementing Regulation

European Commission - IP/08/1567   22/10/2008

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IP/08/1567

Brussels, 22nd October 2008

Mergers: Commission revises Remedies Notice and amends Merger Implementing Regulation

The European Commission has revised its guidelines on remedies in merger control in order to ensure that competition concerns are dealt with more effectively and to clarify to companies involved in merger cases how best to address competition concerns. Remedies are modifications to a proposed transaction suggested by the parties involved with a view to eliminating possible competition concerns identified by the Commission. The main changes include the introduction of a form for submitting information on remedies, details on divestiture and access remedies and clarifications on the role of the Trustee. The Commission has also modernised the Remedies Notice in the light of the revised Merger Regulation (EC) No. 139/2004 (see MEMO/04/9), the Commission's experience in a large number of cases, the Commission Mergers Remedies Study (see IP/05/1327) and recent judgements of the European Courts. The Remedies Notice also takes into account comments received from the public consultation held in 2007 on a draft Notice (see IP/07/544). In addition, the Commission has adopted amendments to the Merger Implementing Regulation (Commission Regulation (EC) No. 802/2004) in line with the changes to the Remedies Notice.

Competition Commissioner Neelie Kroes said: "Remedies are very important in merger control as they may clear the way for companies to merge, while at the same time ensuring that effective competition is maintained. This has been demonstrated in recent high-profile cases, such as Gaz de France/Suez or Thomson/Reuters. The new Notice provides companies with clear guidance on the Commission's policy to ensure even more effective remedies in the future."

As a consequence of the Merger Remedies Study and recent jurisprudence, the Remedies Notice emphasises that remedies are only acceptable if they are viable and effectively eliminate the competition concerns identified by the Commission. To allow the Commission to better evaluate the viability and effectiveness of a proposed remedy, the parties have to provide the necessary information for a proper prognosis in a new remedies form ("Form RM"). This has been introduced by an amendment to the Merger Implementing Regulation.

As a divestiture will only be effective in the hands of a suitable purchaser, the Notice further sets out in detail ways to identify such a purchaser, by clarifying, for example, when an up-front buyer will be appropriate. The Notice also underlines the need to include all the assets and personnel necessary to ensure the viability of the business to be divested.

The new guidelines also indicate that the Commission would only accept access remedies, such as giving access to infrastructure or networks, if they are equivalent in their effects to divestitures. Given the limited effectiveness of some access remedies in the past, this benchmark approach will ensure that access remedies will be designed in a way that they will be used effectively.

In relation to the implementation of remedies, the revised Remedies Notice and the amended Merger Implementing Regulation clarify the role of the Trustee.

The revised Remedies Notice replaces the previous Notice adopted in 2001 and reflects the Commission's merger remedy practice as well as comments received to the public consultation launched in 2007. The review of the Notice responds to the conclusions of the Commission's “Merger Remedies Study”, published in October 2005. In this study, the Commission undertook a comprehensive review of past merger remedies cases and analysed the implementation and effectiveness of these remedies. The revised Notice further incorporates recent jurisprudence of the European Courts which has provided useful guidance, notably on the legal framework for accepting or rejecting remedies. Finally, the revised Remedies Notice takes into account the remedies-relevant provisions of the 2004 Merger Regulation (see MEMO/04/9), for instance the possibilities to extend the deadlines to discuss and assess remedies.

The revised Remedies Notice and the amended Merger Implementing Regulation have been published today in the EU Official Journal and will enter into force tomorrow. They can be consulted at:

http://ec.europa.eu/comm/competition/mergers/legislation/merger_remedies.html


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