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At Last: an EEC-Regulation on the Control of Concentrations

Published online by Cambridge University Press:  21 July 2009

H.G. Sevenster
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Extract

After sixteen years of negotiation and numerous Commission's proposals, on December 21, 1989 the Council of Ministers of the EC finally adopted a Regulation on the Control of Concentrations Between Undertakings. The Regulation enters into force on September 21, 1990.

Although the first draft regulation had been issued by the Commission as long ago as 19732, the Council has been unable to reach consensus on the subject for some time. Several amended proposals followed the 1973 draft, but it was only recently that things became really serious, as the Council has been put under considerable pressure by the Commission and industry to finally decide. The increasing pressure has been considered due largely to the EC Court's decision in the BAT-Reynolds Case and the rather active behaviour the EC Commission has displayed in intervening in concentrations since that judgment.

Type
Current Legal Developments
Information
Leiden Journal of International Law , Volume 3 , Issue 1 , April 1990 , pp. 63 - 72
Copyright
Copyright © Foundation of the Leiden Journal of International Law 1990

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References

1. Reg. No. 4064/89, O.J. 1989, L 395/1.

2. O.J. 1973, C 92/1. This original draft followed the EC Coult's judgments in Continental Can (Case 6/72, ECR 1973, 215) in which it stated that the saengthening of a dominant position through the acquisition of a competing company could be regarded as abuse of that dominant position within the meaning of Art. 86 EEC.

3. O.J. 1982, C 36/3; OJ. 1984, C 51/8. O.J. 1986, C 324/5; O.J. 1988, C 130/4; O.J. 1989, C 22/14.

4. Joint Cases 142 and 156/84, BAT & Reynolds v. Commission, ECR 1987, 4487. In this case the Court upheld the view taken by the Commission that Art. 85 EEC can be applicable to agreements between underlakings on the acquisition of a (minority) share holding in a competing company.

5. Cf. Hoyng, W.A. & Biesheuvel, M.B.W.Towards a pre-merger control in the European Community, 1 LJIL 79–83 (1988).Google Scholar

6. Merger Control in the EEC, Survey of European Competition Laws prepared by the Brussels Offices of Several Law Firms, Kluwer Law & Taxation Publishers (1988); Koran, V. & Lasok, P.Philip Morris and its qftermatch - merger controll, 1988 CMLRev 333–368;Google Scholar, Mestmäcker, E.J.Fusionskontrolle im Gemeinsamer Markt zwischen Wettbewerbspolitik und lndustriepolitik, 4 Europaheft 349–377 (1988); Homsby, National and Community Control of Concentrations in a Single Market; should Member States be allowed to impose stricter rules?, 1988 ELR 295;Google ScholarBanks, K.Mergers and partial mergers under EEC Law, in B.E. Hawk (ed), Annual Proceedings of the Fordham Corporation Law Institute 373 (1988);Google ScholarBos, P.V.F. & Stuyk, J.H.V.Concentratiecontrole now EEG-recht. 5 SEW 300–4041 (1989).Google Scholar

7. The words ‘concentrations’ and ‘mergers’ have been used in the same sense here, unless a distinction is explicitly indicated.

8. Cf. notes 1, 4.

9. Reg. No. 17/62, OJ. 1962, 13, al 204–262.

10. A lively report of the negotiations can be found in the daily messages in ‘Agence Europe’ Nos. 4919 (1988), 4996 (1989), 5006 (1989), 5026 (1989), 5092 (1989) and 5097 (1989).

11. Cf. note 10.

12. Preamble, considerations 3–5.

13. Art. 90(2) EEC opens a (limited) possibility for ‘exemptions’ of the application of the EEC-Treaty and in particular the rules on competition in the case of undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly.

14. In the last proposal (OJ. 1989, C 22/14) these thresholds were: ECU 1.000 million, ECU 100 million and three-quarters.

15. The Commission may be empowered with a mandate for negotiations with non-EEC countries in the case of non-reciprocity of treatment of undertakings (Art. 24(3)).

16. Art. 2(3) of the last draft (Cf. note 13) provided for a third possible decision which approved a concentralion-although ‘at first sight’ incompatible with the common market The requirements for such an approval-decision were quite similar to those for an exemption ex Art 85(3) EEC. Rudiments of these requirements can be found in the list of considerations of the present Art 2(1.b.).

17. In the Preamble (!), consideration 15, it is suggested that where the market share of the undertakings concerned does not exceed 25% of the relevant market (within the EEC), their concentration is ‘presumed’ to be compatible with the common market

18. The Dutch version of the Reg. wrongly indicates two weeks!

19. This procedure constitutes a major change in relation to the last published draft (Cf. note 3).

20. Cf. note 9.

21. The same is stated for the various regulations in the sectors of transport, containing provisions, similar to those of Reg. No. 17; Reg. 1017/68 (OJ. 1968, L 175/1), Reg. 4056/86 (OJ. 1986, L 378/4) and Reg. 3975/87 (OJ. 1987, L 374/1). Consequently, new implementary provisions will be needed on the details of notification and the hearing of parties (Art 23).

22. There is a footnote to the Regulation, announcing that the statements entered in the Council minutes relating to this Regulation will be published later in the Official Journal of the EC Perhaps these statements contain useful information in this respect

23. Agence Europe No. 5026, at 9 (1989).