CHAMBERS GLOBAL PRACTICE GUIDES

Merger Control
2023
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EU: Law & Practice

Porter Elliott and Catherine Gordley
Van Bael & Bellis
EU
Arctic Ocean

EU

Law and Practice

Contributed by:
Porter Elliott and Catherine Gordley
Van Bael & Bellis

Contents
1. Legislation and Enforcing Authorities p.5
1.1 Merger Control Legislation p.5
1.2 Legislation Relating to Particular Sectors p.5
1.3 Enforcement Authorities p.5

2. Jurisdiction p.6
2.1 Notification p.6
2.2 Failure to Notify p.7
2.3 Types of Transactions p.8
2.4 Definition of “Control” p.8
2.5 Jurisdictional Thresholds p.9
2.6 Calculations of Jurisdictional Thresholds p.9
2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds p.10
2.8 Foreign-to-Foreign Transactions p.10
2.9 Market Share Jurisdictional Threshold p.10
2.10 Joint Ventures p.11
2.11 Power of Authorities to Investigate a Transaction p.11
2.12 Requirement for Clearance Before Implementation p.11
2.13 Penalties for the Implementation of a Transaction Before Clearance p.11
2.14 Exceptions to Suspensive Effect p.12
2.15 Circumstances Where Implementation Before Clearance Is Permitted p.12

3. Procedure: Notification to Clearance p.12

3.1 Deadlines for Notification p.12
3.2 Type of Agreement Required Prior to Notification p.12
3.3 Filing Fees p.12
3.4 Parties Responsible for Filing p.13
3.5 Information Included in a Filing p.13
3.6 Penalties/Consequences of Incomplete Notification p.13
3.7 Penalties/Consequences of Inaccurate or Misleading Information p.14
3.8 Review Process p.14
3.9 Pre-notification Discussions With Authorities p.15
3.10 Requests for Information During the Review Process p.16
3.11 Accelerated Procedure p.16

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4. Substance of the Review p.17

4.1 Substantive Test p.17
4.2 Markets Affected by a Transaction p.17
4.3 Reliance on Case Law p.17
4.4 Competition Concerns p.18
4.5 Economic Efficiencies p.18
4.6 Non-competition Issues p.19
4.7 Special Consideration for Joint Ventures p.19

5. Decision: Prohibitions and Remedies p.19

5.1 Authorities’ Ability to Prohibit or Interfere With Transactions p.19
5.2 Parties’ Ability to Negotiate Remedies p.20
5.3 Legal Standard p.20
5.4 Typical Remedies p.20
5.5 Negotiating Remedies With Authorities p.21
5.6 Conditions and Timing for Divestitures p.21
5.7 Issuance of Decisions p.22
5.8 Prohibitions and Remedies for Foreign-to-Foreign Transactions p.22

6. Ancillary Restraints and Related Transactions p.22

6.1 Clearance Decisions and Separate Notifications p.22

7. Third-Party Rights, Confidentiality and Cross-Border Co-operation p.23

7.1 Third-Party Rights p.23
7.2 Contacting Third Parties p.23
7.3 Confidentiality p.24
7.4 Co-operation With Other Jurisdictions p.24

8. Appeals and Judicial Review p.24

8.1 Access to Appeal and Judicial Review p.24
8.2 Typical Timeline for Appeals p.25
8.3 Ability of Third Parties to Appeal Clearance Decisions p.25

9. Foreign Direct Investment/Subsidies Review p.25

9.1 Legislation and Filing Requirements p.25

10. Recent Developments p.26

10.1 Recent Changes or Impending Legislation p.26
10.2 Recent Enforcement Record p.27
10.3 Current Competition Concerns p.27

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EU Law and Practice
Contributed by: Porter Elliott and Catherine Gordley, Van Bael & Bellis

Van Bael & Bellis is widely acknowledged as dedicated team of EU and UK specialists who
having one of the leading practices in EU and regularly represent merging parties as well as
UK competition law, including merger control. complainants in cases involving key issues of
From its main office in Brussels and its new- jurisdiction, procedure and substantive law. The
est office in London, the competition team at firm has succeeded in obtaining clearance for
Van Bael & Bellis has assisted clients at both numerous complex transactions before the Eu-
the EU and national levels, notably appearing ropean Commission and the CMA. The team
before the European Commission, the UK Com- also routinely helps clients to obtain merger
petition and Markets Authority (CMA) and the clearance from member state authorities for
EU and UK courts, where the firm has acted transactions that do not meet EU thresholds.
as counsel in many landmark cases. Within the The firm is frequently called on to co-ordinate
field of merger control, Van Bael & Bellis has a merger control filing efforts across the world.

Authors
Porter Elliott is the co-head of Catherine Gordley is a counsel
competition law at Van Bael & at Van Bael & Bellis specialising
Bellis and a leading expert on in EU competition law. Her
EU merger control law. For over practice includes advising
25 years, he has successfully clients in EU and multi-
guided dozens of complex and jurisdictional merger
high-profile transactions through the regulatory proceedings, and in antitrust and abuse of
process, both in Europe and elsewhere. He has dominance investigations. Catherine’s
also represented third parties in successfully experience spans a range of sectors, including
challenging and preventing the approval of financial services, media, basic industries and
proposed mergers. Porter regularly teaches, consumer goods. Catherine is a contributing
writes and speaks on issues of competition author of many publications, including Van
and merger control law and has conducted Bael & Bellis’ recently published sixth edition of
training for merger control authorities. Competition Law of the European Community.

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Van Bael & Bellis

Glaverbel Building
Chaussée de la Hulpe 166
Terhulpsesteenweg
B-1170 Brussels
Belgium

Tel: +32 2 647 73 50

Fax: +32 2 640 64 99
Email: brussels@[Link]
Web: [Link]

1. Legislation and Enforcing Additional jurisdictional and procedural guid-

Authorities ance includes:

1.1 Merger Control Legislation • the Consolidated Jurisdictional Notice;

Council Regulation 139/2004 on the control • the Notice on Simplified Procedure (to be
of concentrations between undertakings (the replaced by a revised Notice effective from 1
“EU Merger Regulation” or EUMR) provides the September 2023);
regulatory framework for the assessment of all • the Notice on Case Referrals and Guidance
“concentrations” (including mergers, acquisi- on the Application of Article 22 EUMR (see
tions and certain joint ventures) that have an “EU 2.1 Notification); and
dimension” (ie, that meet the turnover-based • the Notice on Access to File.
thresholds of the EUMR – see 2.5 Jurisdictional
Thresholds). Additional substantive guidance includes:

Commission Regulation 802/2004, as amend- • the Notice on Relevant Market;

ed by Commission Regulation 1269/2013 (the • the Horizontal Merger Guidelines;
“Implementing Regulation”), lays out the dead- • the Non-Horizontal Merger Guidelines; and
lines and other procedural aspects of the review • the Remedies Notice.
process and provides the notification forms.
Effective from 1 September 2023, the current 1.2 Legislation Relating to Particular
Implementing Regulation will be replaced by a Sectors
new Commission Regulation adopted in April There is no separate legislation for foreign trans-
2023 (see 10.1 Recent Changes or Impending actions, nor sector-specific legislation.
Legislation).
1.3 Enforcement Authorities
The European Commission (the “Commission”) The Commission has exclusive jurisdiction with-
has published additional notices, guidelines and in the European Economic Area (EEA) to review
best practices documents, available on its web- concentrations with an EU dimension (ie, those
site, examples of which are listed below. satisfying the EU thresholds). The EEA consists

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of the 27 EU member states plus three European • certain products for which jurisdiction does
Free Trade Association (EFTA) countries: Iceland, not extend over the EFTA states per Protocol
Liechtenstein and Norway. 2 of the EEA Agreement.

The Directorate General for Competition (“DG Brexit

Comp”), under the leadership of the current As of 1 January 2021, the UK merger control
Competition Commissioner Margrethe Vestager, regime has operated entirely independently of
administers the merger control process. the EU regime. The “one-stop shop” rule no
longer applies to the UK, and parties will need
The Commission operates according to a “one- to assess whether to notify a transaction in both
stop shop” principle. Concentrations with an jurisdictions.
EU dimension must be notified to the Commis-
sion and need not be notified to any of the EEA
national competition authorities (NCAs), even if 2. Jurisdiction
national notification thresholds are met. NCAs
cannot review or apply their competition rules 2.1 Notification
to a concentration that has been notified to the Parties must notify any concentration with an EU
Commission. dimension (see 2.5 Jurisdictional Thresholds) to
the Commission and receive clearance before it
Under certain circumstances, the Commission can be implemented.
will accept exclusive jurisdiction over cases that
do not meet the EU thresholds upon referral by The EUMR contains several referral mechanisms
one or more EU member state or the parties, or that allow transactions that do not meet the EU
it will agree to transfer its jurisdiction back to one thresholds to be referred to the Commission
or more member states (see 2.1 Notification). for review and that allow deals meeting the EU
thresholds to be referred to the member state
Exceptions NCAs.
The Commission’s exclusive jurisdiction over
concentrations with an EU dimension is subject Referral to the Commission
to several limited exceptions regarding: By the parties (Article 4(5) EUMR)
Where a transaction does not meet the EUMR
• the “legitimate interests” of member states thresholds but requires notification in at least
in public security, media plurality, prudential three member states, the notifying parties may
rules or other exceptional interests under make a “reasoned submission” to the Commis-
Article 21(4) EUMR; sion, requesting that it review the transaction,
• the national security interests of member rather than the member state NCAs. If the NCAs
states relating to the production and/or trade do not object, this reduces the notification bur-
in certain goods intended for exclusively mili- den by allowing the transaction to benefit from
tary purposes under Article 346 of the Treaty the EU’s one-stop shop. Historically, fewer than
on the Functioning of the European Union 4% of such referral requests have been rejected.
(TFEU); and

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By the member states (Article 22 EUMR) nificantly affect competition in a market within
One or more member state NCAs may request that member state that has all the characteristics
that the Commission take jurisdiction over of a distinct market (in which case the Commis-
a transaction that does not meet the EUMR sion will decide whether to refer the case) or that
thresholds if it: the transaction affects competition in a market
within that member state which moreover does
• affects trade between member states; and not constitute a substantial part of the internal
• threatens to significantly affect competition market (in which case, the Commission must
within the territory of the requesting member refer the case). Historically, the Commission has
state(s). rejected around 12% of Article 9 requests.

In practice, fewer than 10% of such referral 2.2 Failure to Notify

requests have been rejected. In early 2021, the The EUMR imposes both a notification and a
Commission clarified that a member state NCA standstill obligation:
need not have jurisdiction over the transaction
in order to refer it to the Commission (see 10.1 • notification obligation – Article 4(1) EUMR
Recent Changes or Impending Legislation). requires that parties notify any concentration
This opens the door for deals that do not meet with an EU dimension before implementation;
the notification thresholds in any member state and
to be referred to the Commission for review. • standstill obligation – Article 7 EUMR requires
parties to wait to implement any concentra-
Referral to the Member States tion with an EU dimension until the transac-
By the parties (Article 4(4) EUMR) tion is notified to and cleared by the Commis-
Before notifying a transaction with an EU dimen- sion (see 2.12 Requirement for Clearance
sion to the Commission, the parties may make Before Implementation).
a “reasoned submission” to the Commission
requesting a full or partial referral of the trans- Fines for a Failure to Notify or Suspend
action to a member state NCA. The parties’ Under Article 14(2) EUMR, the Commission may
submission must demonstrate that the concen- fine parties up to 10% of aggregate worldwide
tration may significantly affect competition in turnover for “gun-jumping” if they fail to notify a
a market within a member state that presents transaction or implement a transaction before
all the characteristics of a distinct market and receiving clearance.
should therefore be examined by that member
state’s NCA. No Article 4(4) request has ever The Commission has become increasingly will-
been rejected. ing to impose large fines for gun-jumping and
other procedural violations:
By the member states (Article 9 EUMR)
A member state may request a full or partial • in July 2023, it imposed the largest fine to
referral from the Commission. To do so, the date (EUR432) on Illumina for an especially
member state must inform the Commission blatant violation of the standstill obligation in
within 15 days of receipt of a copy of the EU relation to its acquisition of Grail;
notification that the transaction threatens to sig-

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• previously, the largest gun-jumping fine was Sole Control

EUR125 million, imposed on Altice for imple- The classic example of an acquisition of sole
menting its acquisition of PT Portugal before control is where Company A acquires 100%
notifying the transaction (confirmed by the of Company C. However, sole control can also
General Court but currently under further arise where Company A acquires less than
appeal to the Court of Justice); and 100% of Company C, provided that A’s stake in
• other recent gun-jumping fines range C allows A to determine, on its own, the key stra-
between EUR20million and EUR30 million tegic commercial decisions of C. This might be
and include: EUR28 million on Canon/Toshiba the case, for example, where all such decisions
Medical Systems Corporation in 2019; EUR20 are to be taken by a simple majority vote of C’s
million on Marine Harvest/Marpol in 2014; board of directors and A is entitled to appoint the
and EUR20 million on Electrabel/Compagnie majority of the directors of C’s board.
Nationale du Rhône in 2009.
The above are examples of “positive” sole con-
2.3 Types of Transactions trol (where A is able to take strategic commercial
The EUMR only applies to “concentrations”, decisions relating to C on its own). Sole control
ie, mergers, acquisitions of control and certain can also be “negative”. This is where A does
“full-function” joint ventures. As a rule of thumb, not have the power to take strategic commercial
in order for a transaction to be considered a decisions relating to C on its own but is the only
concentration, there should be a change in the shareholder of C with the power to veto such
nature of control of an undertaking (see 2.4 Defi- decisions.
nition of “Control”). How this change in control
is brought about (whether through a purchase of Joint Control
assets or shares, or by other means) is immate- Joint control exists where two or more under-
rial. Purely internal restructurings or reorganisa- takings have the possibility of exercising deci-
tions that do not lead to a change of control will sive influence over another undertaking. In this
not qualify as concentrations within the meaning context, decisive influence normally means the
of the EUMR. power to block decisions.

2.4 Definition of “Control” A typical example of joint control would be a

The EUMR defines “control” as rights, contracts 50:50 joint venture (“C”), with both shareholders
or other means which, together or separately, (“A” and “B”) having veto rights over key strate-
confer the possibility of exercising decisive influ- gic decisions of C, such as the approval of C’s
ence over an undertaking. Such control may be business plan or budget, or the appointment of
held solely (ie, by one undertaking) or jointly (by C’s senior management. In such a situation, as
two or more undertakings). The acquisition of A and B must reach a consensus in determining
control, including through changes in the nature the commercial policy of C, they are considered
of control (eg, from sole to joint, or vice versa), to jointly control C. Veto rights that are of the
will generally constitute a concentration under kind typically granted to minority shareholders
the EUMR. for the preservation of their basic shareholder
interests, such as a veto over changes to C’s
corporate statute or the liquidation of C, would

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not normally confer control in the absence of Alternative Thresholds

other factors. • The combined aggregate worldwide turnover
of all the undertakings concerned exceeds
Both sole control and joint control may be de EUR2.5 billion; and
jure (eg, based on contractual rights set out in a • in each of at least three EU member states,
shareholders’ agreement) or de facto (eg, as the the combined aggregate turnover of all the
result of strong economic links or other factors undertakings concerned exceeds EUR100
that confer the possibility to exercise decisive million; and
influence over an undertaking). An assessment • in each of at least three member states
of control must therefore consider the full fac- included above, the aggregate turnover of
tual circumstances of a transaction, including each of at least two of the undertakings con-
the contractual and non-contractual rights of cerned exceeds EUR25 million; and
the parties involved. • the aggregate EU-wide turnover of at least
two of the undertakings concerned exceeds
Minority Shareholdings EUR100 million.
The acquisition of a minority shareholding that
does not grant sole or joint control over an under- Two-Thirds Exception
taking is not a concentration under the EUMR. The primary or alternative thresholds will not
However, such transactions may be notifiable in be met if each of the undertakings concerned
certain EU member states. achieves more than two thirds of its aggregate
EU-wide turnover in one and the same member
2.5 Jurisdictional Thresholds state.
Concentrations that meet either of the turnover
thresholds below have an “EU dimension” and 2.6 Calculations of Jurisdictional
must be notified to the Commission, provided Thresholds
that they do not fulfil the “two thirds” exception. Article 5 EUMR outlines how turnover should be
These thresholds, which are based on the par- calculated for the purposes of the EU jurisdic-
ties’ turnover in the last financial year for which tional thresholds.
audited figures are available, apply to all concen-
trations. There are no additional sector-specific Calculation of Turnover
thresholds. The term “aggregate turnover” refers to revenue
derived from the sale of products and/or ser-
Primary Thresholds vices by the undertakings concerned in the most
• The combined aggregate worldwide turnover recent financial year for which audited accounts
of all the undertakings concerned exceeds are available.
EUR5 billion; and
• the aggregate EU-wide turnover of each of Turnover for each undertaking concerned nor-
at least two of the undertakings concerned mally includes all group-wide turnover, exclud-
exceeds EUR250 million. ing intra-group turnover. If only part of an under-
taking is being acquired (eg, a subsidiary or a
division), only the turnover relating to that part

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counts as the target’s turnover, and the seller’s If the transaction involves the acquisition of joint
turnover is ignored. control over a pre-existing undertaking, then that
undertaking is also an undertaking concerned.
Revenues are calculated only on the basis of net
turnover (ie, after the deduction of sales rebates, Control Group of the Undertakings
value added tax and any other taxes directly Concerned
related to turnover). The calculation of aggregate EU turnover thresholds concern the aggregate
turnover generally excludes any extraordinary turnover of all entities belonging to the control
revenues that do not correspond to the ordinary group of the undertaking concerned. For turn-
activities of the undertakings concerned, such over purposes, the concept of control group
as income from the sale of businesses or assets. includes:

Geographical Allocation of Turnover • the undertaking concerned;

Turnover is generally allocated based on where • any undertakings directly or indirectly con-
the customer is located, as this is normally trolled by the undertaking concerned;
where competition with alternative suppliers • any undertakings that directly or indirectly
takes place. The Commission’s Jurisdictional control the undertaking concerned (ie, its par-
Notice provides additional detail on where turn- ent companies); and
over should be allocated for specific types of • any undertakings other than the undertaking
sales, including internet sales. concerned that these controlling undertakings
also control.
Revenues registered in a foreign currency
must be converted to euros using the average The turnover of a target undertaking is limited to
exchange rate for the 12-month period in ques- that of the target itself and its subsidiaries, but
tion, as published by the European Central Bank. not the turnover of the target’s parent companies
(the sellers) or any other subsidiaries of those
Financial Institutions parent companies.
The EUMR and the Consolidated Jurisdictional
Notice provide specific rules that apply to the 2.8 Foreign-to-Foreign Transactions
calculation and allocation of turnover in the case The EUMR applies to all concentrations with an
of credit and other financial institutions. EU dimension, regardless of the nationality of the
parties involved. There are no special rules for
2.7 Businesses/Corporate Entities foreign-to-foreign transactions or a local effects
Relevant for the Calculation of test beyond the turnover thresholds.
Jurisdictional Thresholds
Undertakings Concerned 2.9 Market Share Jurisdictional
The EUMR jurisdictional thresholds refer to the Threshold
aggregate turnover of “undertakings concerned”. The EU notification thresholds are based solely
In the case of mergers, the merging parties are on turnover. There are no market share-based
both undertakings concerned. In the case of thresholds.
acquisitions, the undertakings concerned are
the acquirer(s) and the target(s) but not the seller.

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2.10 Joint Ventures dimension to suspend implementation until they

The EUMR applies only to “full-function” joint have received clearance.
ventures (JVs). Non “full-function” JVs are not
caught by the EUMR, but are subject to the EU Definition of Implementation
antitrust rules, specifically Article 101 TFEU. The Court of Justice clarified the meaning of
They may also require notification in certain implementation in Ernst & Young/KPMG Den-
member states that take a different approach to mark (2018). Actions taken in anticipation of a
what constitutes a notifiable transaction. merger (eg, the target severing legal ties with its
parent company) do not constitute implementa-
A JV is considered “full-function” if it performs, tion of the transaction, even if they would not
on a lasting basis, all the functions of an autono- have occurred had it not been for the merger,
mous economic entity. It must therefore have suf- and they are irreversible and have an effect on
ficient staff, assets and capital to function on the the market. Rather, implementation in the sense
market independently of its parent companies. of Article 7 EUMR concerns steps that contribute
It must also have its own market presence, and to a lasting change in control of an undertaking.
not merely perform a single function on behalf of
its parent companies (such as customer service Multi-step Transactions
or R&D) or be overly reliant on its parent compa- Transactions achieved through multiple steps
nies as either suppliers or customers. can constitute part of the same notifiable con-
centration, where these steps are interdepend-
Concentrations involving full-function JVs may ent (ie, legally or de facto linked by condition)
arise from the creation of a new greenfield and control is ultimately acquired by the same
operation or through a change in control over undertaking(s). Under Article 5(2) EUMR, two or
an existing business (eg, a change from sole to more transactions between the same two parties
joint control or the addition of a parent company within a two-year period will be considered part
to an existing full-function JV). of the same concentration for turnover calcu-
lation purposes (preventing parties from evad-
2.11 Power of Authorities to Investigate ing merger control by splitting transactions into
a Transaction smaller deals). Any multi-step concentrations
The Commission has no power to investigate or must receive clearance before the first step is
review on its own initiative transactions that do implemented.
not meet the EU jurisdictional thresholds.
2.13 Penalties for the Implementation of
However, the Commission can acquire jurisdic- a Transaction Before Clearance
tion to review such transactions as a result of a The Commission may impose fines of up to 10%
referral request lodged by either the parties or a of aggregate worldwide turnover for implement-
member state (see 2.1 Notification). ing a concentration with an EU dimension before
receiving clearance (see 2.2 Failure to Notify).
2.12 Requirement for Clearance Before
Implementation If the Commission determines that a concen-
Article 7 EUMR imposes a standstill obligation, tration with an EU dimension was implemented
requiring parties to a concentration with an EU without receiving clearance, it can order interim

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measures under Article 8(5) EUMR to restore 2.15 Circumstances Where

or maintain conditions of effective competition Implementation Before Clearance Is
pending a review of the transaction. If the Com- Permitted
mission then issues a decision prohibiting the Other than the exceptions noted in 2.14 Excep-
transaction (see 4.1 Substantive Test), the Com- tions to Suspensive Effect, there are no circum-
mission may order the parties to dissolve the stances in which implementation is permitted
concentration or take other restorative measures before clearance has been received.
to remedy the competitive situation.
In particular, the Commission does not permit a
2.14 Exceptions to Suspensive Effect transaction to close in other jurisdictions pend-
Parties may only implement a transaction with ing EU clearance, regardless of whether the EU
an EU dimension before it has received clear- business could be ring-fenced or held sepa-
ance if one of two limited exceptions is met. rately.

Exception for Public Bids

Under Article 7(2) EUMR, transactions involving 3. Procedure: Notification to
a public bid or a series of transactions in publicly Clearance
traded securities, in which control is acquired
from various sellers, are exempted from the 3.1 Deadlines for Notification
standstill requirement provided that: There is no deadline to notify a transaction to
the Commission. However, notification must be
• the concentration is notified to the Commis- made (and clearance granted) before a transac-
sion without delay; and tion with an EU dimension can be implemented
• the acquirer does not exercise the voting (see 2.12 Requirement for Clearance Before
rights attached to the securities in question Implementation).
(or does so only to preserve the full value
of its investments pursuant to a derogation 3.2 Type of Agreement Required Prior to
granted by the Commission). Notification
A notification may be made following the con-
Exception by Reasoned Request clusion of a binding agreement. However, the
Under Article 7(3) EUMR, parties may obtain EUMR also allows parties to notify a transaction
a derogation from the standstill requirement if they can demonstrate a good faith intention
by submitting a reasoned request to the Com- to conclude a binding agreement, for example,
mission. In practice, the Commission grants through a letter of intent or memorandum of
such derogations only exceptionally, where the understanding. Public bids may be notified once
transaction clearly does not threaten competi- the parties have publicly announced an intention
tion and where one of the parties (typically the to make a bid.
target) would suffer serious economic harm (eg,
bankruptcy) if the transaction were not allowed 3.3 Filing Fees
to proceed. There are no filing fees to notify a concentration
to the Commission.

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3.4 Parties Responsible for Filing Increasingly, even in Phase I cases (see 3.8
In the case of an acquisition, the acquirer is Review Process), the Commission requires par-
solely responsible for notifying the transaction. ties to turn over huge volumes of internal docu-
ments – from board presentations and minutes
Where the transaction involves the acquisition to emails of key individuals – concerning either
of joint control, all parties acquiring control are the transaction or the markets at issue.
responsible for making the notification.
Certain transactions may be notified under a
In the case of a merger, both merging parties are simplified procedure using the “Short Form
responsible for filing the notification. CO” (see 3.11 Accelerated Procedure), which
is less burdensome to complete than the stand-
3.5 Information Included in a Filing ard Form CO, although still hefty compared to
Information Required the standard forms in many other jurisdictions.
The notification must be made by completing
the official notification form, “Form CO”, which is Submission
annexed to the Implementing Regulation (a new While Commission notifications previously need-
version of which comes into effect on 1 Sep- ed to be made in hard copy form, during the
tember 2023). COVID-19 pandemic, the Commission started
to accept electronic notifications. As of 1 Sep-
It is generally recognised that the amount of tember 2023, the Commission’s default mecha-
time and detail required to complete Form CO is nism to accept notifications will be electronically,
unparalleled by any other merger control regime through its “EU Send Web” platform (also called
worldwide. Completed Form COs are frequently “eTrustEx”). The Commission’s website provides
longer than 100 pages and can easily eclipse further guidance on the required specifications
1,000 pages – excluding annexes – in complex for submissions. In the interim, parties should
cases involving numerous markets. The pro- verify what format to use with the Commission
cess is front-loaded, requiring parties to submit Registrar in advance of filing.
detailed information regarding, for example:
Notifications may be submitted in any of the EU
• the transaction and its rationale (including official languages, although the overwhelming
extensive internal documentation of the deal); majority of notifications are in English. Any sup-
• the corporate structure, turnover and activi- porting documents not in an official language
ties of the parties; must be translated.
• the definition of the relevant markets;
• competitive overlaps and vertical relation- 3.6 Penalties/Consequences of
ships, including details of any affected mar- Incomplete Notification
kets (see 4.2 Markets Affected by a Transac- The Commission has the discretion to reject a
tion); Form CO as incomplete. In this case, Phase I
• contact details for market participants; of the Commission’s review will begin only once
• any merger-specific efficiencies; and the parties have submitted a notification that the
• any co-operative effects resulting from a JV Commission considers complete.
(where applicable).

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For this reason, it is standard practice for par- or where the clearance was obtained by deceit.
ties to submit a draft of Form CO during pre- In practice, the Commission has only revoked
notification and to wait until the Commission one clearance decision on this basis (Sanofi/
has indicated that the notification appears com- Synthelabo in 1999, although this merger was
plete (see 3.9 Pre-notification Discussions With ultimately conditionally cleared following a new
Authorities), before formally filing. notification and review process).

3.7 Penalties/Consequences of 3.8 Review Process

Inaccurate or Misleading Information The Commission’s review process consists of
Fines and Penalties two phases: a standard Phase I review and, if
The Commission can impose fines of up to 1% necessary, an in-depth Phase II investigation.
of aggregate annual turnover on a party that
intentionally or negligently supplies incorrect or Phase I
misleading information, whether in the notifica- The Phase I review process begins once a
tion form or in response to a request for infor- complete notification is formally submitted to
mation. the Commission. As the length of the statutory
period is fixed regardless of the complexity of
The Commission can also impose periodic pen- the case, the Commission tends to front-load
alty payments of up to 5% of a party’s average the review process in pre-notification (see 3.9
daily aggregate turnover for non-compliance Pre-notification Discussions With Authorities)
with certain Commission decisions, including to avoid running out of time in Phase I.
failing to provide complete and correct informa-
tion in response to a formal request for informa- Phase I lasts 25 working days, running from the
tion. working day following notification. This timeline
may be extended by an additional ten working
The Commission has recently become more days if either:
active in imposing fines on merging parties that
supply incorrect or misleading information. In • the Commission receives a referral request
2017, the Commission imposed a EUR110 mil- from a member state; or
lion fine on Facebook relating to its acquisition • the parties offer remedies to address a com-
of WhatsApp. The Commission also imposed a petition concern.
fine of EUR52 million on General Electric in 2018
and a fine of EUR7.5 million on Sigma-Aldrich During Phase I, the Commission will normally
in 2021. Each of these fines related to failure solicit views from the market (see 7.2 Contacting
to fully disclose products or capabilities still in Third Parties) and may also receive spontaneous
development. feedback in response to its public announce-
ment of the notification.
Revoking Clearance
The Commission has the power to revoke a pre- At the end of Phase I, the Commission must
viously granted clearance decision if it discovers issue one of the following decisions:
that its decision was based on incorrect informa-
tion for which one of the parties was responsible,

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• finding that the transaction does not fall ing its reasons to open a Phase II investiga-
within the scope of the EUMR; tion, to which the parties respond in writing;
• clearing the transaction (with or without con- • a Statement of Objections (SO) – if the Com-
ditions); or mission’s initial doubts are not resolved in the
• opening a Phase II investigation. course of its review, it will issue an SO outlin-
ing its concerns, typically around working day
The majority of cases are cleared – conditionally 40 of Phase II, to which the parties respond in
or unconditionally – after Phase I. Fewer than writing (the Commission must issue an SO if it
4% of all notified transactions go to Phase II, and intends to prohibit a transaction);
another 2% are withdrawn before the initiation • access to file – if an SO is issued, the Com-
of Phase II. mission must provide the parties with access
to the evidence on which the SO relies; and
Phase II • an oral hearing – once an SO is issued, the
Phase II is an exceedingly burdensome process, parties may request an oral hearing (how-
requiring the notifying parties to reply to detailed ever, as complainants are also invited to
requests for information and to produce large participate, in practice, notifying parties often
volumes of internal documents and data. choose not to have a hearing).

Phase II runs 90 working days from the Commis- Throughout Phase II, the parties also interact
sion’s decision to open the in-depth investiga- regularly with the case team and usually the
tion. This timeline can be extended in multiple Commission’s Chief Economist’s team.
ways:
At the end of Phase II, the Commission must
• to 105 working days if the parties offer rem- issue a decision either:
edies (provided these are submitted between
working days 55 and 65); • clearing the transaction (with or without con-
• by 20 working days at the request of the ditions); or
parties (made by working day 15) or at the • prohibiting the transaction.
initiative of the Commission with the parties’
agreement; and 3.9 Pre-notification Discussions With
• for a variable period of time, as a result of Authorities
the “stop the clock” mechanism following a While parties are not legally obliged to engage
formal Commission decision to request infor- in pre-notification discussions with the Com-
mation (see 3.10 Requests for Information mission, doing so has become standard prac-
During the Review Process). tice in nearly all cases. This reduces the risk of
a notification being declared incomplete after
Engagement with the case team in Phase II fol- submission (see 3.6 Penalties/Consequences
lows several major milestones: of Incomplete Notification). An extended pre-
notification may also reduce the risk of a Phase
• a 6(1)(c) Decision – at the end of Phase I, the II investigation (see 3.8 Review Process).
Commission issues a detailed decision outlin-

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The notifying parties begin by requesting the allo- The Commission may impose fines if incorrect or
cation of a case team using a standard request misleading information is supplied in response
form available on the Commission’s website. to either type of request (see 3.7 Penalties/Con-
Once a case team is assigned, the parties will sequences of Inaccurate or Misleading Infor-
often submit a briefing paper on the transaction mation).
and may have one or more calls and meetings
with the case team. This would typically be fol- 3.11 Accelerated Procedure
lowed by the submission of one or more drafts A “simplified procedure” may apply for transac-
of Form CO and responses to any comments tions that are unlikely to give rise to any com-
or requests for information from the case team. petitive concerns. The criteria are outlined in the
Commission’s Notice on the Simplified Proce-
As pre-notification is not part of the formal pro- dure (a new version of which comes into effect
cess, it has no fixed timeline. The case team will on 1 September 2023) and currently include:
often wish to ensure that they have a thorough
understanding of the markets and competitive • JVs with no, or negligible, actual or foreseen
issues involved in a transaction before the clock activities in the EEA (ie, the JV generates
officially starts. Once the case team deems the turnover or has assets in the EEA of under
draft to be complete, it will signal to the parties EUR100 million);
that they may file the formal notification. • transactions in which the parties are not
active on the same product and geographic
In “simplified procedure” cases (see 3.11 Accel- market or in markets upstream or down-
erated Procedure), the pre-notification period stream from one another, or if they are, their
may be brief, perhaps a week or two. In more market shares are too low for these to be
complex cases, the pre-notification process can considered “affected” markets (see 4.2 Mar-
last many months. kets Affected by a Transaction);
• acquisitions of sole control of an undertaking
3.10 Requests for Information During the by a party already having joint control over
Review Process that same undertaking; or
The Commission normally first issues requests • at the Commission’s discretion, transactions
for information to parties involved in the trans- where the parties’ combined market shares
action and to third parties by “simple request”. do not exceed 50% on any markets where
both are active and the delta resulting from
Where necessary, the Commission can also the transaction is below 150 on the Herfind-
issue information requests “by decision”. In such ahl-Hirschman Index (HHI).
cases, if the addressee is a party and it fails to
provide the information requested within the time Concentrations that qualify for the simplified
limit specified in the request, the review clock is procedure may be notified using the Short Form
stopped until that information is provided. The CO, which requires less detailed information
Commission may also issue a decision impos- than the standard Form CO. The new Imple-
ing periodic penalty payments on the addressee menting Regulation (effective from 1 September
until the information is provided. 2023) provides a revised template to be used in
completing the Short Form CO, which is intend-

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ed to further reduce the amount of information 4.2 Markets Affected by a Transaction

required to be provided in qualifying cases. Markets can be:

The length of the review period is the same for • horizontally affected – if the parties are both
both a standard case and a simplified procedure active in the same market and hold a com-
case. In practice, however, transactions notified bined market share of 20% or more; or
under the simplified procedure are sometimes • vertically affected – if one party is active in a
cleared in advance of the 25-working day dead- market that is upstream or downstream from
line. a market in which the other is active and in
which the parties’ individual or combined
market share of either market is 30% or more.
4. Substance of the Review
In determining whether a concentration gives
4.1 Substantive Test rise to any affected markets, the Commission
The Commission will assess whether a transac- considers the market definitions proposed by
tion would “significantly impede effective com- the notifying parties, as well as any plausible
petition in the internal market, or a substantial alternative markets based on the Commission’s
part of it, in particular as the result of the crea- or the EU Courts’ prior decisional practice, mar-
tion or strengthening of a dominant position”. ket reports, feedback from competitors and cus-
This is known as the “significant impediment to tomers, or the parties’ own internal documents.
effective competition” or “SIEC” test. The Com- The Commission enjoys considerable discretion
mission must: in determining the scope of the relevant markets
and will often define markets more narrowly than
• clear any transaction that does not give rise the parties may do internally.
to SIEC;
• open a Phase II investigation if it has “serious The Horizontal Merger Guidelines indicate that
doubts” that the concentration is compatible competitive concerns are unlikely where the par-
with the internal market at the end of Phase ties hold a combined market share of 25% or
I; or less, or have a post-merger HHI below 1,000 (or
• prohibit any transaction that gives rise to in certain other situations, have a higher HHI but
SIEC (after a Phase II investigation). a low delta).

The Commission provides guidance on how this 4.3 Reliance on Case Law
test is applied in its Horizontal and Non-Hori- The Commission consistently relies on a sub-
zontal Merger Guidelines (see 4.4 Competition stantial body of case law built up from its own
Concerns). decisional practice and the judgments of the
EU Courts. The notifying parties are expected
to refer to this record as a point of departure
when defining the relevant markets or submitting
other arguments.

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The Commission or the notifying parties may In practice, the vast majority of the Commis-
occasionally rely on case law from other juris- sion’s concerns relate to unilateral effects aris-
dictions, particularly if a transaction relates to ing from the parties having high market shares
markets that the Commission has not previously in markets where they compete.
examined in detail. Analysis provided by mem-
ber state NCAs may be particularly persuasive. Non-horizontal Concerns
However, the Commission’s body of decisions If parties are active on vertically or closely related
is so extensive (more than 8,000 cases decided markets, the Commission will normally consider
over the past 30-plus years) that reliance on the whether a SIEC may be created through:
decisions of other jurisdictions is very rare.
• incentives for the merged entity to foreclose
4.4 Competition Concerns competitors’ access to inputs or customers;
The Commission will investigate whether the or
concentration gives rise to a SIEC (see 4.1 Sub- • anti-competitive conglomerate effects due
stantive Test). In making this determination, the to the merged entity being able to engage in
Commission will assess the impact of the trans- bundling of products or services.
action on various parameters of competition,
including prices, output, quality and innovation. It is rare for the Commission to object to a trans-
The Commission’s Horizontal Merger Guidelines action based on vertical or conglomerate effects
and Non-Horizontal Merger Guidelines outline alone (in the absence of any horizontal effects),
specific theories of harm that the Commission although the Commission did so recently in Illu-
is likely to consider. mina/Grail.

Horizontal Concerns Innovation Concerns

Where the parties to a concentration are active in The Commission is increasingly scrutinising
the same markets, the Commission will typically transactions’ potential impact on innovation and
consider whether a SIEC may arise from: future competition. In particular, the Commission
has considered that a merger may problemati-
• non-coordinated (unilateral) effects, notably cally hinder competition at the general level of
if the transaction creates or strengthens a the “innovation space”, by decreasing incentives
dominant position, or if the transaction both for the merged entity to compete actively in the
eliminates an important competitive con- development of new products and services.
straint that the parties previously exerted on
each other and leads to an overall reduction 4.5 Economic Efficiencies
of the competitive pressure on the remaining The Commission will take efficiencies generated
competitors; or by a concentration into account under certain
• co-ordinated effects, if the remaining market circumstances. Form CO contains a dedicated
players are better able to tacitly co-ordinate section in which notifying parties may present
their market activities as a result of the any evidence of efficiencies.
transaction, including due to the creation
or strengthening of a position of collective
dominance.

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Any efficiencies claimed must: The EUMR provides the limited possibility for
member states to take action to protect their
• be merger-specific, in that they are directly national security or other legitimate interests, but
created by the transaction and are not such exceptional actions do not form part of the
achievable through any other, less anti-com- merger control process (see 1.3 Enforcement
petitive means; Authorities). The Commission has also imple-
• be quantifiable and verifiable to a reasonable mented legislation to establish separate mecha-
degree of certainty; and nisms to monitor and control foreign investment
• benefit consumers. and subsidies in concentrations (see 9. Foreign
Direct Investment/Subsidies Review).
In practice, this is a difficult standard to meet.
The Commission rarely accepts efficiencies put 4.7 Special Consideration for Joint
forward by parties to a concentration as suffi- Ventures
ciently persuasive and has not yet cleared an Full-function JVs are assessed using the same
otherwise problematic transaction based purely substantive test as all other concentrations – the
on efficiencies. “SIEC” test (see 4.1 Substantive Test).

4.6 Non-competition Issues In addition, the Commission may also assess

The Commission is generally lauded for adhering whether the JV gives rise to so-called “spill-
to competition law principles in its assessments over effects” – namely a risk of co-ordination
of transactions and eschewing non-competition between the parents in markets where they are
related considerations. The Commission has both active outside the JV or operate upstream
repeatedly emphasised the independence of its or downstream from one another. The Com-
review process from political considerations and mission will assess any risk of co-ordination
has resisted calls from certain member states to between the parent companies under Article 101
adopt a more protectionist view in order to allow TFEU, which prohibits anti-competitive agree-
for the creation of “European champions” (see ments between undertakings.
10.3 Current Competition Concerns).

Nonetheless, in particularly sensitive or high-pro- 5. Decision: Prohibitions and

file cases, the Commission will often receive lob- Remedies
bying pressure from national governments and
third parties, which may have an impact on the 5.1 Authorities’ Ability to Prohibit or
overall context in which the Commission views a Interfere With Transactions
particular transaction. In a Phase II investigation, If the Commission determines that a notified
the Commission’s decision to clear or prohibit concentration will lead to a SIEC, it must pro-
the concentration will be taken by the full Col- hibit the transaction (see 4.1 Substantive Test),
lege of European Commissioners. As a result, unless remedies are offered that eliminate the
other broad considerations (eg, employment, Commission’s concerns. The Commission can
environment, energy and growth) may have a prohibit transactions without prior approval from
limited influence in some merger reviews. the EU Courts or any other EU or member state
body. Prohibition decisions may be appealed to

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the General Court (see 8.1 Access to Appeal In assessing the likely effectiveness of a rem-
and Judicial Review). edy, the Commission will consider the nature of
the market, any risks inherent in implementing
In practice, prohibition decisions are rare. To the remedy and the likelihood of the remedies
date, the Commission has prohibited only 32 being maintained over time. The Commission is
transactions since 1990, out of over 8,000 noti- sceptical of remedies that are too complex or
fied (although over 240 notifications have been require significant ongoing monitoring to ensure
withdrawn, often as a result of the Commission’s compliance.
objections). Most problematic transactions are
cleared, subject to remedies designed to elimi- In addition to these basic principles, the Com-
nate the competition concerns. mission’s Notice on Remedies lays out more
specific requirements for both structural reme-
5.2 Parties’ Ability to Negotiate dies and behavioural remedies (see 5.4 Typical
Remedies Remedies).
The parties may propose remedies to address
competition concerns raised by the Commission 5.4 Typical Remedies
(see 5.5 Negotiating Remedies With Authori- Structural Remedies
ties). The Commission has expressed a clear prefer-
ence for structural remedies, especially divest-
The Commission’s 2008 Remedies Notice con- ments, as these bring about a lasting change on
tains extensive guidance on the legal require- the market and do not require ongoing oversight.
ments that remedies must meet (see 5.3 Legal
Standard). To be acceptable, a divestment must consist of
a viable business that is operated by a suitable
5.3 Legal Standard purchaser and can compete effectively with the
The Remedies Notice notes that any remedy merged entity going forward. While the Com-
must: mission prefers the divestment of an existing,
standalone business, it will accept the carve-out
• entirely eliminate the SIEC; the remedies of a particular business activity where the parties
offered by the parties must be sufficient to can demonstrate, to the Commission’s satisfac-
restore the conditions of competition that tion, that the divestiture has sufficient resources,
would have existed in the absence of the assets, personnel, R&D capacity and any other
transaction; and capabilities needed to compete.
• be capable of being implemented effectively
within a short period of time. The Notice on Remedies requires that purchas-
ers of divestment businesses must:
In particular, the remedies must offer the Com-
mission a sufficient degree of certainty that the • be independent of, and unconnected to, the
commercial structures or relationships resulting parties;
from the remedy can be maintained. • have the financial resources, relevant exper-
tise, incentives and ability to maintain the
business as a competitive force; and

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• not give rise to new competition concerns by Remedies may be offered:

acquiring the divestment business.
• during pre-notification (in draft form);
Behavioural Remedies • in Phase I – before working day 20 (as Phase I
The Commission is generally more sceptical of is very short, the Notice on Remedies speci-
behavioural remedies (ie, commitments by the fies that in order to be accepted, remedies
parties to act in a certain way on the market) as offered in Phase I must provide “a clear-cut
these tend to be more complex to implement answer to a readily identifiable competition
and monitor. As such, they will only be accept- concern”, and most Phase I remedies there-
ed “exceptionally in specific circumstances”. In fore take the form of divestitures); and
particular, the Notice on Remedies states that • in Phase II – before working day 65 (the Com-
commitments not to raise prices, reduce qual- mission will only accept remedies submitted
ity or output are generally not workable. The later in exceptional circumstances).
Commission has been more open to accepting
behavioural remedies to resolve concerns relat- Market Testing and Consultation
ing to access to key infrastructure, networks and The Commission will “market-test” proposed
interoperability, or concerns relating to exclusive remedies with market participants to ensure
long-term contracts or product bundling. that they will resolve the competitive concerns
at issue (see 7.2 Contacting Third Parties).
5.5 Negotiating Remedies With
Authorities The Commission will also consult with member
The parties are responsible for offering remedies state NCAs and (where relevant) the EFTA Sur-
– the Commission will neither impose nor pro- veillance Authority. If the competitive concern
pose remedies on its own initiative. In practice, at issue affects markets broader than the EEA
the case team will work with the parties to further or requires a global remedy (such as the divest-
refine the parameters of remedies offered by the ment of a worldwide business), the Commission
parties so that they sufficiently address the case will typically also co-ordinate with other compe-
team’s concerns. tition authorities. The Commission may be reluc-
tant to accept global remedies that may not be
Process accepted by other authorities.
Remedies are offered by submitting commit-
ments, which become the operative terms of 5.6 Conditions and Timing for
the remedy, accompanied by “Form RM”. The Divestitures
Commission’s “Best Practice Guidelines for According to the Notice on Remedies, the par-
Divestiture Commitments” provide a model text ties may be allowed to close their transaction
for divestment commitments. Form RM is an immediately after receiving the Commission’s
annex to the Implementing Regulation. Both the conditional clearance decision. In such cases,
commitments and Form RM require consider- the parties would typically have a set deadline
able time and effort to complete. (eg, six months from the Commission’s approval
decision) to conclude a binding agreement to sell
the divestment business to a suitable purchaser.
(If no such purchaser is found, a divestiture trus-

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tee will have a mandate to sell the business to a trustee), the Commission has the discretion to
a suitable purchaser at no minimum cost.) The revoke its clearance decision.
parties would then have a further period (eg,
three months) after the Commission approves The Commission may also fine the parties up to
the purchaser to complete the sale of the divest- 10% of annual turnover and/or issue periodic
ment business. penalty payments for failing to comply with com-
mitments.
In cases where it may be more difficult to iden-
tify a suitable purchaser, the Commission may 5.7 Issuance of Decisions
require the parties not to close the main trans- The Commission will notify its decision to the
action until they have entered into an agree- parties and to the member states and may also
ment with a suitable purchaser approved by issue a press release providing a basic summary
the Commission (an “upfront buyer” remedy). of its conclusions.
Less commonly, the parties may name a spe-
cific purchaser, with whom they have already The Commission will publish a non-confidential
entered into an agreement, in their original com- version of any Phase II decision in the EU’s
mitment proposal (a “fix-it-first” remedy). In that Official Journal and on its website, often after
case, the buyer is approved in the Commission’s a delay of several months. The Commission pro-
decision clearing the main transaction (without vides non-confidential copies of all its merger
the need for a separate approval process) and decisions on its website.
the Commission will take its assets/capabilities
into account when evaluating the sufficiency of 5.8 Prohibitions and Remedies for
the remedy. Foreign-to-Foreign Transactions
The Commission adopts the same review pro-
In any case, between the time that the Com- cess, including with regard to prohibitions and
mission accepts a divestment commitment and remedies, regardless of the nationality of the
the close of the sale to the approved purchas- parties to a transaction. The Commission has
er, the divestment must be held separate and required remedies in numerous transactions
ring-fenced from the parties’ other operations. involving non-European parties and has also
The parties must appoint a monitoring trustee, blocked such transactions.
who monitors the parties’ compliance with the
commitments, evaluates the suitability of any
potential purchasers and advises the Commis- 6. Ancillary Restraints and Related
sion accordingly. Transactions
Failure to Comply With Commitments 6.1 Clearance Decisions and Separate
If the parties fail to comply with a condition of Notifications
clearance (eg, by failing to divest or by re-acquir- The Commission’s clearance decision covers
ing the divestment business), the Commission’s restrictions that are “directly related and nec-
clearance decision automatically becomes void. essary to the implementation of the concentra-
If the parties breach an obligation (ie, a step tion” (otherwise known as “ancillary restraints”).
implementing the remedy, such as appointing The Commission’s Notice on Ancillary Restraints

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provides guidance on the types of restrictions 7.2 Contacting Third Parties

that commonly arise (eg, licensing arrange- The Commission actively seeks input from third
ments, non-compete clauses, and purchase parties, which can decisively affect the outcome
or supply obligations). Any restrictions that do of its review.
not qualify as ancillary restraints are reviewable
under Article 101 TFEU. Investigation
Form CO requires parties to supply contact
details for their top customers, competitors and
7. Third-Party Rights, suppliers, and any relevant trade associations.
Confidentiality and Cross-Border The Commission will begin its market investiga-
Co-operation tion early in Phase I (or even during pre-notifica-
tion with the agreement of the notifying parties)
7.1 Third-Party Rights by sending detailed electronic questionnaires
Third parties play an important role in the Com- to these third parties (especially customers and
mission’s review process, and the Commission competitors). Answering these questionnaires
will actively solicit their feedback (see 7.2 Con- can be extremely burdensome, especially for
tacting Third Parties). smaller companies or those with little or no inter-
est in the transaction. The Commission will also
Third parties able to show “sufficient interest” publish the announcement of the notification on
in the proceedings (eg, competitors, customers, its website, inviting any interested parties to pro-
suppliers, or recognised workers’ representa- vide their views on the concentration.
tives of the undertakings concerned) may be
granted specific participation rights, including: The Commission will continue to solicit views
from third parties throughout its investigation,
• the right to be heard – interested third parties including through the use of additional question-
may give oral or written evidence, including in naires. Third parties may engage with the Com-
an oral hearing, if one is held in Phase II; mission in writing, through meetings, or at the
• access to documents – interested third oral hearing (see 7.1 Third-Party Rights).
parties may be given access to a non-
confidential copy of the SO (under the Best In practice, it will be very difficult for a transac-
Practices Merger Guidelines, such access is tion to be approved if it faces strong opposi-
only granted at the Commission’s discretion tion from the market (particularly from custom-
in “appropriate cases”); and ers). Likewise, the Commission is unlikely to
• the right to appeal – interested third parties challenge a transaction if third parties have not
can appeal Commission clearance decisions voiced significant opposition.
to the General Court.
Remedies
In order to have standing, third parties must nor- The Commission will market-test proposed rem-
mally have actively participated in the Commis- edies in order to ensure that they will resolve the
sion’s investigation. competition concerns at issue and can be imple-
mented effectively. The Commission will send
third parties a questionnaire and a non-confiden-

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tial version of the proposed commitments. If the The Commission will also consult the EFTA Sur-
market response is strongly negative, the Com- veillance Authority where a transaction is likely
mission may not accept the remedies offered to have significant effects in the EFTA states.
(see 5.5 Negotiating Remedies With Authori-
ties). Other Authorities
The Commission routinely co-operates with
7.3 Confidentiality other competition authorities. The Commission
Form CO requires the parties to supply a non- must obtain a confidentiality waiver from the par-
confidential summary of the transaction, which ties in order to share information with a non-EEA
the Commission will publish in the Official Jour- competition authority.
nal and on its website when the notification is
filed. Bilateral co-operation
The Commission has entered into a number of
The Commission has a legal obligation not to co-operation agreements and memoranda of
disclose any confidential information obtained understanding with various competition authori-
during the course of the merger review process, ties including those of the USA, Canada, Japan,
including during pre-notification. The Commis- China, South Korea and Brazil. The EU and
sion takes this duty very seriously. UK were expected to conclude a co-operation
agreement following Brexit, but this bilateral
7.4 Co-operation With Other instrument is not yet in place. The degree of co-
Jurisdictions operation these arrangements envisage varies.
The Commission routinely co-operates with The Commission has a very close relationship
member state NCAs and other national compe- with the US competition authorities (the Fed-
tition authorities worldwide. eral Trade Commission and the Department
of Justice’s Antitrust Division), and in practice
Within the EU/EEA the authorities try to align their positions to the
The Commission co-operates with member extent possible.
states through the European Competition Net-
work (ECN). It provides the NCAs with copies of Multilateral co-operation
notifications, proposed remedies and any other The Commission also plays an active role in the
major documents submitted by the parties. The International Competition Network’s (ICN) Merg-
Commission must consult an Advisory Commit- er Working Group.
tee made up of NCA representatives before it
takes a decision following a Phase II review, or
any decision imposing fines, but is not bound by 8. Appeals and Judicial Review
the Committee’s opinion. The Commission and
NCAs also participate in an EU Merger Working 8.1 Access to Appeal and Judicial
Group with the aim of increasing consistency Review
and co-operation in the merger control process. Commission merger decisions can be appealed
to the General Court for annulment on proce-
dural or substantive grounds under Article 263
TFEU. The General Court’s rulings may be fur-

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ther appealed to the Court of Justice on points can show urgency and where the case revolves
of law. around a small number of clear legal issues.

The General Court is willing to engage in a rigor- 8.3 Ability of Third Parties to Appeal
ous review of Commission decisions, although Clearance Decisions
the Commission enjoys a margin of defer- Sufficiently interested third parties may appeal a
ence, particularly in matters involving complex clearance decision (see 7.1 Third-Party Rights
economic analyses. Ultimately, only a dozen and 8.1 Access to Appeal and Judicial Review).
Commission merger decisions have ever been
annulled. As the appeals process is lengthy
(see 8.2 Typical Timeline for Appeals), costly, 9. Foreign Direct Investment/
and rarely successful, few merger decisions are Subsidies Review
appealed. Nevertheless, the Commission care-
fully considers the likelihood of an appeal when 9.1 Legislation and Filing Requirements
issuing its decisions. Foreign Subsidies
On 12 January 2023, Regulation 2022/2560 on
If a Commission decision is annulled, the case Foreign Subsidies (“FSR”) came into effect. The
reverts to the Commission, which is obliged to FSR includes notification requirements in cer-
reassess the concentration. An annulment of tain concentrations and public procurement
a prohibition decision does not automatically processes and also allows the Commission to
result in the clearance of the transaction, nor investigate ex officio potentially distortive foreign
does the Commission have the discretion to subsidies.
avoid undertaking a second review.
As of 12 October 2023, the FSR will require man-
8.2 Typical Timeline for Appeals datory, ex ante notification to the Commission of
An application for annulment may be lodged any concentration in which:
by the notifying parties or any other sufficient-
ly interested third party (see 7.1 Third-Party • the target, JV or at least one of the merging
Rights). Such actions must be filed within two parties is established in the EU and generates
months and ten days of: an aggregate turnover in the EU of at least
EUR500 million; and
• the date of notification of the decision (if filed • all undertakings involved (ie, the merging par-
by an addressee of the decision); or ties, acquirer and target, or the JV and its par-
• the date the party is made aware of the deci- ents) received from third countries combined
sion (if filed by a third party). aggregate financial contributions of more than
EUR50 million in the three financial years prior
It normally takes two to three years for the Gen- to notification.
eral Court to issue a judgment. An expedited
procedure is available, which can shorten the Financial “contributions” is a term that is very
timeline to less than a year. The court has dis- broadly defined under the FSR to include a wide
cretion about whether to use the expedited pro- range of interactions with state-controlled enti-
cess and will tend to do so where the parties ties that extend far beyond the traditional notion

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EU Law and Practice
Contributed by: Porter Elliott and Catherine Gordley, Van Bael & Bellis

of subsidies (contributions include, among other sion to provide its opinions on particular invest-
things, the transfer of funds or liabilities, the fore- ments. However, decisions on FDI are ultimately
going of revenue that is otherwise due, and even at the discretion of the member states affected.
the provision/purchase of goods or services). It
is therefore advisable that any party engaging in
a transaction that meets the EU turnover thresh- 10. Recent Developments
old above conduct a thorough assessment to
determine whether an FSR filing is required. 10.1 Recent Changes or Impending
Legislation
As under the EUMR, merging parties are required The current EUMR has remained in force and
to wait to receive Commission clearance under unamended since 2004.
the FSR before implementing the concentration.
Penalties for failing to observe the FSR notifica- The Commission has adopted a new Implement-
tion and standstill obligations are the same as ing Regulation, Notice on Simplified Procedure,
under the EUMR (see 2.2. Failure to Notify). The and Communication on the Transmission of
Commission published the Foreign Subsidies Documents, which will all become effective as
Implementing Regulation in July 2023, which of 1 September 2023. The new Implementing
provides further detail on the required format Regulation provides updated versions of the
and contents of the FSR notification. notification forms. The most significant changes
have been made to the Short Form CO, which
As a result of the above thresholds, there may places a greater emphasis on market data and
be cases in which a concentration requires an eliminates the need to provide as much narrative
FSR notification and no EUMR notification (or explanation. This is consistent with the revised
vice versa). The EUMR and FSR notifications Notice on Simplified Procedure, which identi-
are made to the Commission separately. The fies a few new instances in which the shorter
FSR notification timeline is statutorily similar to process may be used and gives the Commis-
the EUMR (involving a first phase review and a sion greater flexibility to allow parties to use the
second phase in-depth investigation in complex Short Form, particularly where their horizontal
cases). However, as different Commission case or vertical market shares are slightly above the
teams will review FSR and EUMR notifications prescribed limits.
under different standards, the two clearance
processes can proceed at different speeds and Referral of Small but Competitively
reach different substantive outcomes. Significant Transactions
In 2021, the Commission announced that it
Foreign Direct Investment would be encouraging the use of the Article
Unlike foreign subsidies, foreign direct invest- 22 referral process to ensure that transactions
ment (FDI) is a competence of the individual that did not meet relevant EU or member state
EU member states. There is no notification or notification thresholds but that presented signifi-
assessment of FDI at EU level. In 2020, the EU cant threats to competition could nonetheless
established a mechanism to harmonise member be reviewed at EU level (see 2.1 Notification).
state approaches to FDI screening through Reg- While such referrals were technically allowed in
ulation 2019/452, which enables the Commis- the past, it has not been Commission policy to

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EU Law and Practice
Contributed by: Porter Elliott and Catherine Gordley, Van Bael & Bellis

accept referrals from member states where the period, three Phase II cases were cleared with
transaction did not meet the notification thresh- remedies, two were prohibited (Illumina/Grail in
olds. This change in policy will likely open many healthcare and Hyundai/Daewoo in shipbuild-
smaller transactions to possible review that ing), none were cleared unconditionally and four
would have previously escaped scrutiny (notably were withdrawn. The Commission does not keep
in the pharmaceutical and digital sectors where separate statistics for, nor does it draw any dis-
targets may lack the turnover needed to meet tinction with regard to, foreign-to-foreign trans-
any jurisdictional thresholds). The Commission’s actions.
first decision to accept a referral under this new
policy, in the Illumina/Grail transaction (which the 10.3 Current Competition Concerns
Commission prohibited on 6 September 2022), Protectionism and the Creation of European
was upheld on appeal to the General Court on Champions
13 July 2022, although it remains under further The Commission has been engaged in a debate
appeal to the Court of Justice. – especially since it prohibited the Siemens/
Alstom merger in 2019 – over what role merger
Assessment of Foreign Funds in EU control should play in allowing the emergence
Transactions of “European champions” to combat compe-
On 12 January 2023, the Regulation 2022/2560 tition from non-EU state-subsidised (notably
on Foreign Subsidies (FSR) came into effect. Chinese) companies. Commissioner Vestager
Through the FSR the Commission aims to has remained firm that DG Comp’s role should
address the potentially distortive role of foreign remain solely focused on reviewing potential
subsidies on EU competition, particularly in the harm to competition, without regard to European
areas of deal-making and public procurement. industrial policy concerns. This debate is certain
The FSR will require prior notification and clear- to reignite in future transactions.
ance of concentrations that meet certain turno-
ver and foreign contribution thresholds (see 9. Protecting Innovation
Foreign Direct Investment/Subsidies Review). The Commission has expressed increased
The FSR does not alter the standard EU merger interest in assessing the competitive effects of
control process as laid down in the EUMR. How- mergers on innovation (see 4.4 Competition
ever, it will likely considerably increase the time Concerns).
and effort needed to notify, clear and close a
transaction in the EU. Reliance on Internal Documents
The EU process increasingly relies on the pro-
10.2 Recent Enforcement Record duction and review of large volumes of internal
In 2022 and the first four months of 2023, 549 documents requested from the parties (see 3.5
cases were notified to the European Commis- Information Included in a Filing). Notifying par-
sion. During that period, 436 cases were cleared ties should take care that information contained
unconditionally in Phase I, either through the in Form CO and other submissions to the Com-
normal or simplified procedure. Ten cases were mission is consistent with and supported by any
withdrawn in Phase I (although some of these internal records or communications.
may have subsequently been re-filed) and 11
cases were referred to Phase II. During the

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EU Law and Practice
Contributed by: Porter Elliott and Catherine Gordley, Van Bael & Bellis

Enforcing Procedural Compliance

In recent years, the Commission has increased
its enforcement efforts against parties that com-
mit procedural violations under the EUMR, in
particular by gun-jumping (see 2.2 Failure to
Notify) or by supplying incorrect or misleading
information (see 3.7 Penalties/Consequences
of Inaccurate or Misleading Information).

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