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European Commission Adopts Merger Procedure Simplification Package


On December 5, 2013, the European Commission ("Commission") published a merger procedure simplification package aimed at reducing the administrative burden and thus the costs associated with merger filings at the EU level (Commission press release and memorandum). The measures adopted affect procedural aspects and aim to increase the ratio of cases that can be filed under the so-called simplified procedure from a current 50-60 percent to 60-70 percent. A closer look at the simplification package reveals however that extending the scope of the simplified procedure will not necessarily "cut red tape for businesses" as the Commission claims. Instead, by simultaneously adding further information requirements, the Commission's revisions appear likely to raise the administrative bar for merger notifications. In practice, whether unproblematic mergers can be cleared quickly and cost efficiently will still largely depend on the case team's willingness to accept derogations from the regulation's standard data obligations.


Companies are frequently puzzled by the sheer amount of data that has to be provided with a merger filing to the Commission even in cases that clearly do not raise any competition concerns. The scope of the data to be submitted is laid down in a regulation enacted by the Commission itself (the so-called Implementing Regulation). This regulation already provides for a simplified merger or Short Form CO procedure for non-problematic cases. Compared to the normal or Form CO procedure, the Short Form CO involves the provision of less but still a significant amount of data. 

The Implementing Regulation also authorizes the case teams dealing with the notification to grant, on an individual basis, derogations from data obligations. The success of such waiver requests largely depends on how experienced the case team is in the respective business sector. The waiver requests are usually discussed during the so-called pre-notification procedure. This frequently lengthy procedure has evolved outside the statutory merger procedure and aims at reducing the risk of incomplete notifications. In practice, the pre-notification procedure involves the parties providing the Commission with one or multiple drafts of their notification until the Commission gives the green light for the formal filing.

The merger procedure simplification package provides for an expansion of the scope of the simplified procedure as of 1 January 2014. It introduces a "super-simplified" procedure and earmarks specific data requirements as particularly worth being considered for waiver requests. This good news is however dampened by the fact that contrary to its claim, the Commission does not reduce the information that needs to be submitted in a merger filing – but rather increases it.

The Good News: Extension of the Scope of the Simplified Procedure

The cases that qualify for the simplified procedure are established on the basis of various criteria including turnover and asset value, the nature of the concentration and, most relevant in practice, market share thresholds. The merger procedure simplification package raises the current market share thresholds so that mergers will be eligible for the simplified procedure if:

  1. the combined market share of merging parties in a horizontal relationship is less than 20 percent (currently 15 percent) and
  2. the individual or combined market share(s) of the merging parties in a vertical relationship is less than 30 percent (currently 25 percent) both on the down- and the upstream market.

The Commission also introduces a new market share threshold whereby horizontal mergers also qualify for the simplified merger procedure in cases where the parties' combined market share is above 20 percent but below 50 percent, and the increase in market concentration post-merger is low because the increment of the Herfindahl-Hirschman Index is below 150. In such cases, the notifying parties will have to provide some additional information on the markets in order to show that no competition concerns arise.

Moreover, the Commission introduces what it calls a "super-simplified" filing procedure for joint ventures with no actual or foreseen activities within the European Economic Area. For such joint ventures, it will be sufficient to lay out the concentration and the parents' activities and to provide turnover data required to establish that the Commission has jurisdiction in the first place.

The Bad News: Increased Data Burden on Companies

In addition to extending the scope of the simplified procedure, the Commission claims that it will also reduce the information that needs to be submitted in a merger notification. While some data requests have indeed been dropped from the merger notification forms, others have been added. On balance, the data burden on the notifying parties will increase to a considerable extent. Some of the major changes can be summarized as follows:

  1. Information on interlocking directorates will in the future only be required upon specific request from the Commission.
  2. The parties will not be required to calculate the changes in market concentration, and market data will not be required on a national level if the relevant geographic market is clearly European or world-wide.
  3. On the other hand, under the revised rules, the parties will be under an obligation to submit market data for each plausible alternative market. This requirement increases the risk of incomplete notifications and will likely further expand the duration of the pre-notification procedure.
  4. Merging parties will be required to provide more background documents on the concentration. The merger notification form now expressly requests meeting minutes of certain management bodies, regardless of whether they contribute to the substantive assessment of the transaction.  The requirement to produce internal documents will now also extend to notifications under the simplified merger procedure.
  5. In addition, under the normal procedure, merging parties will have to submit not only analyses of the transaction, but also documents that deal with the affected market(s) in general, and all this dating back two years. Such documents do not need to be prepared for or by the merging parties, but simply received by them.

Admittedly, some of this information is now explicitly earmarked as candidate for waiver requests, and waiver requests also will still be possible for all other categories of information. A more generous waiver practice would indeed be a tool to reduce the burden on the parties. Previous experience shows however that there is no uniform waiver practice at Commission level and that the willingness to be more "lenient" largely depends on the case team dealing with the notification.

For more information on the procedure and also the substantive assessment of EU merger notifications, please refer to the chapter on the European Union in The International Comparative Legal Guide (ICLG) Merger Control 2014, co-authored by Werner Berg and Sean-Paul Brankin.

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