The European Commission recently reaffirmed that industrial policy objectives have no role to play when it comes to applying the EU merger control rules. Despite unusually intense industrial and political pressure to get the Siemens/Alstom railway merger done, Competition Commissioner Vestager has forcefully reiterated that the substantive test under the EU Merger Regulation remains exclusively competition based.

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by Philipp Werner and Christoph Voelk

The European Commission started a public consultation on a draft document which seeks to establish best practices on cooperation between national competition authorities (NCAs) in the EU when reviewing mergers.  Although cooperation between NCAs exists already, especially through the European Competition Network (ECN), the best practices seek to formalize the cooperation between NCAs and thus providing more security and predictability for the parties and their legal advisers.

The best practices should enhance cooperation between NCAs in cases where the same merger is assessed by several NCAs because it does not meet the thresholds for review under the EU Merger Regulation.  The Commission considers cooperation between NCAs as beneficial not only for the authorities but also for the merging parties:  it will speed up the investigation process, reduce burdens on the merging parties and may help NCAs in designing remedies.  Particularly in cases where serious concerns about the post merger situation exist, close cooperation between competition authorities will secure a non-conflicting and coherent outcome. 

The object of the Commission’s draft is twofold: 

First, NCAs should keep each other informed of important developments related to their investigation into the merger.  Also, NCAs should liaise in cases where closer cooperation is necessary and keep each other informed about their progress.  Most importantly, the Commission proposes that NCAs should in future discuss market definition, theories of harm, empirical evidence and the possible impact of a proposed merger. 

Second, the draft also assigns a role to the merging parties.  Merging parties should, as far as possible, provide NCAs with information as to where the merger will be filed, the dates of the proposed filing, geographic areas, sectors involved etc.  Also, merging parties should assist in ensuring that remedies do not lead to inconsistencies and that such remedies are effective.  Of importance is further the proposal that the merging parties, but also third parties, shall – as far as possible – grant waivers of confidentiality so that NCAs actually are permitted to discuss particular issues of a proposed transaction.

Comments on the Commission’s draft can be submitted until 27 May 2011 to comp-a2-mergers@ec.europa.eu.

The consultation page can be accessed via http://ec.europa.eu/competition/consultations/2011_merger_best_practices/index_en.html