| Author (Person) | Bower, Helen | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Title | In Focus | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series Details | 18.1.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 18/01/2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Content Type | News, Overview, Topic Guide | In Focus | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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2001 proved a controversial year for the European Commission's Merger Task Force, highlighted by the The Green Paper, published on 11 December 2001, is aimed at opening a debate on the functioning of the Merger Regulation and whether it needs to be reformed. The current Regulation has been in force for the past 11 years and as European Commissioner for Competition, Mario Monti, put it,
Background Mergers in the European Union are governed by Council Regulation (EEC) No.4604/89 on the control of concentrations between undertakings (ECMR). This was adopted on 21 December 1989 and entered into force on 21 September 1990 with the aim of controlling the build up of dominant firms through mergers and acquisitions or joint ventures. Major cross border reorganisations were seen as a likely result of the development of the internal market and the Merger Regulation was therefore established to ensure that such reorganisations would not have a lasting negative effect on competition. A level playing field would ensure that the same notification requirements, procedures and legal standards apply to all concentrations with significant cross-border effects. Moreover, the ECMR is only applicable to concentrations with 'a Community dimension', often referred to as a 'one stop shop' principle, which means that large concentrations whose impact would extend beyond national markets are subject to the European Commission's exclusive control. It is this principle which has been the source of most amendments to merger regulation over the last decade because of the need to distinguish between concentrations having a national and a Community dimension. In 1997 an amendment was agreed to lower the thresholds for determining the applicability of the ECMR. Council Regulation (EC) No 1310/97 of 30 June 1997 amending Regulation (EEC) No 4064/89 on the control of concentrations between undertakings came into force in 1998, introducing the following lower thresholds:
The same Council Regulation also required the Commission to report on their success by 1 July 2000. The subsequent report asserted that the 1997 thresholds were still failing to capture a number of cases with a significant cross border impact. However, instead of further lowering the thresholds, the report suggested limiting the number of Member States in which significant turnover is required to two instead of three and counteract the consequent rise in cost of the increased caseload by introducing a filing fee, perhaps to the sum of €30,000. A Notice on a simplified procedure for certain concentrations was consequently introduced on 29 July 2000. More detailed information on the history of EC Merger Regulation can be found within European Sources Online in the Business Guide to EU Initiatives. Latest Reform Proposals The current review of EC Merger Regulation has been prompted by a clause which calls for the European Commission to assess the rules and procedures periodically. However, developments over the last decade such as the onset of the single market in 1993, the launch of the single currency in 1999 and the future enlargement of the Union as well as the phenomenon of globalisation have also meant that a reform of the Regulation is overdue. The Green Paper both puts forward concrete proposals in certain areas while outlining the current situation and calling for a debate in others. The main elements of the proposals focus on the three key issues of jurisdiction, substance and procedure. Jurisdictional Issues
Substantive Issues
Procedural Issues
Reaction to the proposals As with much of the Mergers Task Force's work in 2001 the Green Paper, while being welcomed as a launch pad for further debate, has also met with considerable criticism. The proposals are seen as being essentially technical while the policy's real failings are seen as institutional because there are not the necessary mechanisms to implement the rules. Paramount among these weaknesses is the way the European Commission acts as prosecutor, judge and jury. A frequent criticism made by companies is that they are often made to offer concessions before the European Commission determines whether the planned mergers are anti-competitive. The new 'stop the clock provision', extending the timetable for resolving such issues is unlikely to win over businesses who believe that the functions of investigating cases and negotiating settlements should be separated with different people involved. The proposals also fail to improve the way in which justice is assured. Many stakeholders had hoped that the latest proposals would provide for effective external checks, perhaps modelled on the US system whereby blocked mergers require approval in a court of law. Independent scrutiny of Commission decisions would offer much needed transparency and increased credibility. Future developments With the consultation period for the Green Paper open until 31 March 2002, it will be interesting to not what influence stakeholders will have in determining the reforms. Interested parties may submit their comments to the European Commission's Merger Task Force via email to: Further to the debate, the European Commission intends to adopt a proposal for the revision of the Merger Regulation during the course of 2002. The revision of the Merger Regulation comes within the context of a broader review (scroll down to 'Reform of Regulation 17') of EC competition policy including the implementation of the anti-trust rules in Articles 81 and 82 of the Treaty. Such efforts to radically overhaul competition policy reflect how the Union is trying to respond to the challenges posed by both European integration and globalisation in the 21st Century. Further information within European Sources Online: European Sources Online: Topic Guide:
Further information can be seen in these external links:
Further and subsequent information on the subject of this In Focus can be found by an 'Advanced Search' in European Sources Online by inserting 'merger regulation' in the keyword field. Helen Bower 2001 proved a controversial year for the European Commission's Merger Task Force, highlighted by the blocking of the US merger between General Electric and Honeywell, and the French merger between Schneider and Legrand, and culminating in the publication of a Green Paper on the review of EC merger regulation. |
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