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   (1)
   After an in-depth survey and extensive consultation among representatives
   of  business  firms, industry associations and legal  practitioners,  the
   Commission has now completed examination of the application so far of the
   EC  Merger Regulation, including the current notification thresholds  and
   referrals  procedures  on which it is required to report to  the  Council
   before the end of 1993.

   In  its  report to the Council, the Commission underlines  there  is  now
   widespread satisfaction with the present arrangements for merger  control
   at  Community level. The results of the Commission's survey also  suggest
   that  with  progressive  integration  of  national  markets  within   the
   Community,   there  are  strong  arguments  for  lowering  the   existing
   thresholds  in order to bring more cases under EC merger  control  rules.
   However,  there  are  still hesitations in many  quarters.  "Business  is
   broadly  in  favour", said Karel Van Miert, Vice-President in  charge  of
   Competition  Policy, "but a significant number of Member states are  not.
   We obviously want to have a "one-stop" shop in the single market to  make
   cross-border transactions as easy as possible. But if we are to widen the
   net,  it must be evident to everyone that the bulk of extra cases  to  be
   handled  by  the  Commission  will be of  genuine  significance  for  the
   Community as a whole, and not related to markets within individual Member
   states."

   The  Commission therefore recommends further experience should be  gained
   before  any  formal changes to the Regulation are put on  the  table.  It
   suggests  in  particular  that  the Council  should  look  again  at  the
   possibility  of  threshold  reduction,  referrals  procedures  and  other
   revisions at the latest by the end of 1996.

   In  the meantime the Commission intends to make the improvements  it  can
   without  amendment  to the Merger Regulation. It wants in  particular  to
   make  its procedures and decisions more transparent, together  with  more
   explicit attention to rights of third parties.

   
   (1) COM(93) 385

   I. IMPLEMENTATION OF THE MERGER REGULATION TO DATE

   The EC Merger Regulation entered into force on 21 September 1990 and,  by
   the  end of June this year, 159 cases had been formally notified  to  the
   Commission.  17  cases fell outside the scope of the Regulation.  Of  the
   other  142 cases, slightly over 90% were cleared within the  initial  one
   month deadline (Phase 1), whereas the remaining cases were subject to  an
   in-depth inquiry within the four months (Phase 2) period.

   Current  implementation  of the Regulation has been  widely  regarded  as
   successful.  The speed, legal certainty and one-stop  regulatory  control
   provided by Commission decisions have been greatly valued by the business
   community  and by legal practitioners. At the same time,  the  Regulation
   creates  a  level playing-field for major acquisitions in  the  Community
   since  these  operations  are  subject to the same  rules  applied  on  a
   Community-wide basis.

   The fundamental objective of the Regulation is to ensure that mergers  do
   not  reduce  competition  and therefore for example  do  not  damage  the
   interests of consumers or suppliers. The Commission has so far intervened
   in  one  case  to prohibit a merger. In 15 other  cases  it  has  imposed
   conditions  on  the parties before clearing the deal. The  proportion  of
   mergers  which the Commission has authorised subject to conditions  (e.g.
   divestitures  and  cancellation  of  exclusive  agreements)  is   broadly
   comparable to the record of other competition agencies.

   II. CONCLUSIONS OF COMMISSION REPORT

   The  Commission's report to the Council was triggered by the  requirement
   in the Regulation to examine the case for revision of turnover thresholds
   and  procedures for referrals to national authorities before the  end  of
   1993.  The  turnover thresholds fixed under Article 1 of  the  Regulation
   determine  the  scope  of Community competence and  case  referral  under
   Article 9  establishes the circumstances in which notified cases  can  be
   transferred to national jurisdictions.

   An   extensive  survey  carried  out  by  the  Merger  Task  Force   with
   approximately 300 of the Community's largest companies indicated that  if
   the  thresholds were reduced to 2 billion ECU (for  world-wide  turnover)
   and 100 million ECU (for Community turnover) the Commission would  handle
   some 110 cases per year as opposed to about 60 per year so far. The large
   majority   of   cases   below   the   existing   thresholds   but   above
   ECU 2 billion/100 million would also have a genuine cross-border effect.

   However, the Regulation itself, which took almost 20 years to  establish,
   has been operational for barely three years and, notwithstanding business
   support  for threshold reduction, there are considerable hesitations,  in
   particular among national authorities, towards changes to the  Regulation
   at this stage. Without adequate preparation and support amongst  business
   and national authorities, a proposal requiring substantive changes  risks
   jeopardising  the  existing consensus and commitment built up  round  the
   Regulation.

   The Commission therefore considers that the case for threshold reduction,
   which  remains  strong, should be looked at again,  together  with  other
   possible  improvements  to  the  Regulation  in  the  light  of   further
   experience and at the latest by the end of 1996.

   III. IMPROVEMENTS IN TRANSPARENCY AND PROCEDURES UNDER THE EXISTING
        REGULATION

   Within  the scope of the review and aided by the case-experience  already
   acquired, the Commission has been able to identify some improvements that
   would  promote  greater  transparency and  procedural  efficiency.  These
   improvements,  which  will be implemented by the Commission  without  any
   change to the Merger Regulation, relate to the following areas:

   -  first-phase commitments: The Commission has accepted commitments  made
      by parties to remedy clear-cut competition problems after its  initial
      one-month  (Phase 1) examination. This remains a efficient  course  of
      administrative  action,  but  it  tends to  result  in  some  loss  of
      transparency.  This  could  be improved by the  prior  publication  of
      proposed commitments.

   -  second-phase    commitments:    Similarly,   subject    to    business
      confidentiality,  commitments  offered  by parties  in  Phase 2  cases
      should as a general rule also be subject to prior publication.

   -  Commission  Guidance  Statements.  The  Commission  intends  to  issue
      guidance  statements  covering  technical and legal  aspects  such  as
      jurisdiction (including a new Notice on cooperative and  concentrative
      joint  ventures),  calculation  of  turnover  and  the  notion  of   a
      concentration.

   -  Lighter notification requirements for minor joint ventures. Some minor
      joint ventures fall under the Regulation merely because of the size of
      the  parents. Others have no direct or indirect effects on markets  in
      the  Community.  The  Commission would  accept  substantially  reduced
      notifications for such operations.

   -  Advisory   Committee.  The  opinion  of  the  Advisory  Committee   on
      concentrations - which  is composed of competition representatives  of
      the national authorities - will now be made known at the same time  as
      the Commission's final decision.

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