1. 1 © F-D & B, 2002 The new Green Paper on EC Merger Control Presented by Mathias Görg Vienna, Austria March 2002

2. 2 © F-D & B, 2002 Introduction publ. Dec. 2001 specific proposals - mere identification of topics globalisation, Monetary Union and enlargement better allocation of resources - reduction of costs and enhanced legal certainty for undertakings

3. 3 © F-D & B, 2002 Substantive criteria at present: –creation or strengthening of a dominant position –also applied by the Member States > ”Substantial Lessening of Competition”-test instead?

4. 4 © F-D & B, 2002 Substantive criteria SLC-test: US, Canada and Australia considerations in Great Britain > Art. 7 US Clayton Act: –”tendency to create a monopoly” –”danger of considerable lessening of competition” –”Herfindahl-Hirschmann Index” –> summing the square of market shares of each firm included in the relevant market –less than 1000: unconcentrated

5. 5 © F-D & B, 2002 Substantive criteria global divergence > problematic for multiple filings oligopolies –argument: dominance test insufficient –ECJ: collective dominance Commission´s stance rather negative

6. 6 © F-D & B, 2002 Applicability of EC law partitioning of competences between Commission and Member States ”Community dimension” ”One Stop Merger Control”

7. 7 © F-D & B, 2002 Applicability of EC law 1. alternative: –combined worldwide turnover more than EUR 5,000 mio –two undertakings each more than EUR 250 mio in the EC –unless each achieves more than 2/3 in one MS

8. 8 © F-D & B, 2002 Applicability of EC law 2. alternative: –combined worldwide turnover EUR 2,500 mio –in each of 3 MS combined turnover of all undertakings more than EUR 100 mio –therein: at least two undertakings more than EUR 25 mio each –EC turnover of at least two undertakings is more than EUR 100 mio each –unless each achieves more than 2/3 in one MS

9. 9 © F-D & B, 2002 Applicability of EC law experience: numerous multiple filings, although cross border effects proposal: notifiability in at least three different MS > exclusive competence of the Commission suggestions as to the establishment of applicability of national law

10. 10 © F-D & B, 2002 Referrals promotion of referrals as complementary measure referral by Commission ex officio only one joint referral so far

11. 11 © F-D & B, 2002 Controlling influence Merger Reg.: –sole or at least joint control –as opposed to minority shareholdings minority shareholdings and strategic alliances –rising importance structural change? –Commission occasionally itself requires alienation of minority shareholdings

12. 12 © F-D & B, 2002 Controlling influence Austria and Germany: acquisition of 25 per cent notifiable Commission´s stance conservative –no controlling influence > Art. 81 ECT

13. 13 © F-D & B, 2002 Joint Ventures - production sector ”full-function jv” > subject to Merger Reg. ”partial function jv” > subject to Art. 81 ECT production sector > no exception for partial function jv - no sufficient distinction from R&D, distribution –similarly high proportion of capital cost –applicability of block exemptions

14. 14 © F-D & B, 2002 Venture capital controlling influence > Merger Reg. applicable –also new enterprise with no turnover, if investment consortium Commission considers exemption from the Merger Reg. due to positive effects for the economy

15. 15 © F-D & B, 2002 Simplified procedure applied to harmless cases one third –> shorter proceedings –> not as much sensitive information proposal: consolidation into a separate block exemption –> cases covered would not have to be processed any further

16. 16 © F-D & B, 2002 Time limit for filing At present: –not more than one week after conclusion –earliest possible time? > considerable flexibility of the Commission anyway some call for –complete abolition of time limits –informal notification

17. 17 © F-D & B, 2002 Commitments to be made within 3 weeks/3 months –> undertakings often at the end > little time for consultations and draft decision “stop the clock provision” ? –no discretion in the second phase

18. 18 © F-D & B, 2002 Further procedural changes immediate sanction for non-compliance with demand for information general market inquiries by Commission electronic filing

19. 19 © F-D & B, 2002 Prospects comments until end of March draft in summer? Parallels to Regulation 17 ?