By: Jay Modrall (Informa Connect)
The European Union (EU) has embarked on the most extensive antitrust reform program in its history. The European Commission (Commission) is working on parallel initiatives to create a “new competition tool” giving the Commission unprecedented powers to force companies to change their practices or make structural changes whether or not they have infringed competition rules, to introduce new antitrust-inspired regulation of “gatekeeper platforms,” to revise the Commission’s approaches to assessing cooperative agreements and defining antitrust markets, and to create a unique hybrid competition and trade law instrument to combat distortions in EU markets caused by subsidies granted by non-EU governments.
What is missing in this ambitious program? Merger control.
The Commission announced some time ago that in the fourth quarter of 2020 it would finally publish the “evaluation results” of its 2016 consultation on procedural and jurisdictional aspects of EU merger control (the 2016 Consultation), which discussed the system of referring cases between the Commission and Member State authorities under the EU Merger Regulation (EUMR), the effectiveness of the EUMR’s turnover-based jurisdictional thresholds and other technical aspects. Unusually, the Commission never published the results of this consultation or followed up with proposed changes. Nonetheless, Executive Vice-President Vestager has repeatedly expressed frustration that the EUMR’s jurisdictional thresholds don’t capture transactions — often, but misleadingly, called “killer acquisitions” – involving large companies buying small ones, even where a high transaction value suggests that the target is competitively significant. Meanwhile, EU merger control became a hot political issue following the Commission’s prohibition of the proposed Siemens-Alstom merger, with France and Germany pushing for far-reaching changes to support “European champions.”
In a recent speech on the future of merger control, Executive Vice-President Vestager outlined her vision of EU merger reform for 2021 and beyond. While pushing publication of concrete proposals back to mid-2021, Vestager’s speech offers the most detailed view so far of how EU merger control will change in the coming years. Perhaps mindful of the political sensitivities, the proposed reforms are limited to changes the Commission can make without amending the EUMR. Working within the existing text may limit the Commission’s ability to make major changes, but also gives the Commission greater flexibility to act quickly, without the need for European Council and Parliament approval…