European Commission - Press release
Mergers: competition authorities agree best practices to handle cross-border mergers that do not benefit from EU one-stop shop review
Brussels, 9 November 2011 - The Heads of European national competition authorities ("NCAs") and the European Commission have agreed a set of best practices (Best Practices on Cooperation between EU National Competition Authorities in Merger Review). The Best Practices aim to foster cooperation and sharing of information between NCAs in the European Union, for mergers that do not qualify for review by the Commission itself (the one-stop shop review) but require clearance in several Member States ("multiple filing").
The 2004 reform of the EU's merger review rules has facilitated the re-allocation of merger cases between the Commission and NCAs. As a result, many cases that do not reach the EC notification thresholds are nevertheless reviewed by the Commission. But many mergers are still reviewed by two or several NCAs simultaneously, applying their respective national rules. In 2007, NCAs reported that several hundred cases were reviewed in at least two Member States. However, multiple filings may, in some cases, entail significant legal uncertainty, cost and delay for merging parties; they may also be the source of conflicting decisions by NCAs.
The Best Practices have been adopted to alleviate the difficulties related to multiple filings. They identify the key steps at which the NCAs should cooperate and the information they may share, for instance on the timing of the review process or on remedies when necessary to avoid a merger harming customers and consumers.
Cooperation on mergers that have the potential to affect competition in more than one Member State, or where remedies need to be designed in more than one Member State, would help both merging parties and NCAs by reducing the risk of divergent outcomes.
The Best Practices were prepared by a Working Group set up in 2010 by the Commission and the NCAs. The European Economic Area's NCAs were also represented.
"The EU merger control system is one of the EU's success stories making sure that consumers benefit from products and services to choose from at competitive prices whilst allowing companies to get their mergers reviewed swiftly, opening them the door to a market of 500 million," said Joaquín Almunia, Commission Vice President and Competition Commissioner. "But companies also want to see more cooperation among national competition authorities and more convergence in their approach to merger control and these Best Practices will deliver just this," he added.
The best practices do not envisage cooperation in all multi-jurisdictional cases. NCAs will decide on a case-by-case basis whether well targeted cooperation could enhance the review process.
The success of cooperation will depend to a great extent on the goodwill and cooperation of the merging parties, because NCAs will in most cases depend on them for permission to exchange confidential information. Both the merging parties and NCAs have an interest in good cooperation, as it can increase the overall efficiency, transparency and effectiveness of the review process. The timing of notifications is also an important area where merging parties can facilitate cooperation between NCAs.
The EU's Merger Regulation first came into force in 1991 and was last revised in 2004. It sets the turnover thresholds to be met, both globally and within the EU, if companies party to a proposed concentration are to benefit from the one-stop review by the Commission, while making sure a deal is assessed where it has its strongest nexus.
First, the so-called "two-thirds rule" assigns jurisdiction to a Member State if more than two thirds of each of the parties' EU-wide turnover is generated in that Member State. Also, under certain conditions merger review can be re-allocated between the Commission and the NCAs. Since the 2004 reform, such referrals may be made before mergers have been notified to a Member State or to the Commission at the initiative of the parties (pre-notification referrals).
Alternatively, they can be made later at the request of a Member State (post-notification referrals).The pre-notification referrals have allowed merger cases to be allocated efficiently to the more appropriately placed authority, thus avoiding parallel proceedings. Since 2004, almost 300 referral requests have been made pre-notification, more than 70% of which were requests for a one-stop-shop review.
The Best Practices are without prejudice to existing guidance on the system of re-allocating cases between the Member States and the Commission. However, the enhanced cooperation recommended in these Best Practices may also facilitate smooth case reallocation.
The Best Practices are the result of thorough reflection following broad stakeholder consultation this spring. On that basis, the Best Practices were amended to clarify for instance the use and scope of the case information system, the voluntary nature of waivers and the timing for providing up-front information about the merger. The Best Practices make it clear that confidential information is protected under the national legislation in all Member States.
The Best Practices are available on the Europa website at:
The EU Merger Working Group is chaired by the Commission, with Ireland and Germany as outgoing joint vice chairs, succeeded by Austria and the UK for the coming two-year period.
The EU has also agreed a set of best practices with the US competition authorities to cooperate on mergers and acquisitions that require approval on both sides.
For merger statistics on number of notified cases, referral to and from NCAs, and types of Commission decisions see: