EU’s merger control faces comprehensive reform

The European Commission presented on 11 December its long-awaited proposals for a comprehensive overhaul of its merger control regime.

The main objectives of the reform are: greater flexibility over the length and timing of merger investigations, strengthening of the economic analysis of merger decisions, clearer guidelines on how to apply the most important principles of competition policy such as the definition of market dominance. The reform also includes a serious shake-up of the Competition Directorate-General with the creation of a post of Chief Competition Economist, the establishment of a peer review panel and the appointment of a Consumer Liaison Officer.

The reform package consists of:

  • A draft proposal for a new Council Regulation (the new EC Merger Regulation);
  • A draft Commission Notice containing comprehensive guidelines on the assessment of dominance in horizontal mergers;
  • A draft set of best practice guidelines on the conduct of merger investigations, to be discussed with the legal and business community;
  • The adoption a number of proposed measures relating to the staffing and resources of DG Competition, as well as to the management and investigation of merger cases within the Directorate-General.

 

An unprecedented series of legal defeats prompted the Commission to re-examine the role of its merger task force. The Court of First Instance ruled this year that the Commission was wrong in blocking mergers between French companies Schneider and Legrand, the UK travel groups Airtours and First Choice and the packaging groups Tetra and Didel.

The Commission reform proposals, however, are the result of a long period of review, which commenced in July 2000 with the submission of a Report to the Council on the functioning of the Merger Regulation and continued with the adoption of a Green Paper by the Commission in December, 2001. More than 120 submissions that were received in reply to the Green Paper, presenting various options for reform.

 

The European Parliament will have to give its Opinion on these reform proposals and the Council needs to decide by unanimity.

 

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