EXCLUSIVE / A report commissioned by the French minister of finance, Pierre Moscovici, and obtained by EURACTIV, calls for simplifying rules governing company mergers in the EU, with the aim of avoiding conflicting decisions by national competition authorities, EURACTIV France reports.
The move comes amidst tension between the EU commissioner in charge of competition, Joaquín Almunia, and the French minister for industry, Arnaud Montebourg, about the rules governing competition in the Union.
Moscovici and Bruno Lasserre, president of the French Competition Authority, ordered a report on the control of mergers, which EURACTIV.fr has obtained.
The report was conducted by Fabien Zivy, former legal director of the Competition Authority, and is expected to be presented to the finance ministry on 21 February in the presence Almunia and the former Italian prime minister Mario Monti.
The idea emerged after the company EuroTunnel had been authorised under certain conditions by the French competition authority to take over assets from the ferry company SeaFrance, which went bankrupt. However, the UK Competition Commission then blocked EuroTunnel from operating the company created for this purpose, MyFerrylink.
The move aded fuel to the fire for Zivy, who then denounced the obstacles companies face when making acquisitions in Europe.
Too many national competition authorities
There are currently 30 competition authorities in the European Union, compared to only three in 1989. About a quarter of the world's 125 competition authorities are therefore located in the EU, which represents only 7% of the world’s population.
Companies therefore have to submit as many files as there are supervising authorities.
The first recommendation of the report is to allow companies that plan a merger with partners from at least three countries to file a single document to the European Commission.
Similarly, some files would need to be redirected at national level to avoid parallel proceedings.
The proposal echoes those of Montebourg who is furious at the Commission's tendency to control small scale mergers.
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"Cases redirected to the European Commission in accordance with these mechanisms have amounted on average to two per annum over the past ten years, while those redirected to the national competition authorities can be counted each year on the fingers of one hand, or, very exceptionally, one and a half hand," the report states.
"These corrective mechanisms therefore only play a marginal adjustment role," the report concludes.
Speaking the same language
The consistency of competition decisions across Europe also suffers from different legal interpretations. In the case of EuroTunnel/Myferrylink, a British court has annulled the decision of the UK competition commission under the pretext that it was not a merger, all the while confirming the positions of the authority's analysis regarding competition issues raised by the takeover.
One obvious solution would be to systematically refer such cases directly to European competition authorities in Brussels rather than national ones in cases of cross-border mergers.
Cooperation between competition authorities could also be extended further, according to the report. As things stand, cooperation on merger control remains limited since it is not formally organised legally speaking. By contrast, the control of anti-competitive practices in Europe relies on a well-organised network of national authorities.
The rapporteur also proposes simplifying the declaration mechanism so that a simple administrative document suffices for mergers that are unlikely to raise any competition concerns.
'Status-quo is not an option'
The report warns that businesses, competitiveness and innovation may suffer in the long term if nothing changes, stressing that the status-quo is not an option.
Specifically, Zivy suggests that France should put the issue on the table of EU leaders at their next summit in March, with the aim of making regulators work better together and putting in place simpler and more responsive procedures.
The legal basis for merger control in the European Union is covered by the so-called Merger Regulation (Council Regulation (EC) No 139/2004).
The regulation prohibits mergers and acquisitions which threaten to significantly reduce competition in the Single Market, for example if they risk creating dominant companies that are likely to use their position to raise end-prices prices for consumers.