Status quo of structural assumption in merger control
Public discussion on merger control in the last few years of has put the spotlight on two elements of contemporary merger analysis: market definition and market concentration, of which the former has raised considerable debate, in particular. It has been asked if market definition has de facto become superfluous to merger analysis due to some modern developments in merger assessment techniques, and if not, has its role still changed? Along with this debate, a more intense discussion on the role of market concentration in merger analysis has been revived. By somewhat generalizing, overall the discussion has made us face the question: are the days of traditional structural assumption really ov [...]
How to deal with Chinese State-owned Enterprises under the EUMR?
On 13 September, the Commission published its decision of 31 March 2011 in China National Bluestar/Elkem. After DSM/Sinochem/JV (decision of 10 May but published in June), this was the second published decision which dealt in some detail with the question how to treat Chinese State-owned Enterprises or SOEs under the EUMR. The question has both procedural and substantive implications.
Procedurally, the question is whether the revenues of other SOEs should be taken into account when calculating the revenues of the SOE involved in the transaction. From a substantive perspective, the Commission may need to analyze competitive effects of a combination of a company with an SOE, taking into acc [...]
The FCO continuously fines merger implementation without prior approval
On May 10, 2011, the FCO fined Interseroh in the amount of €206,000 for having implemented a concentration without merger approval. The decision is the second instance this year in which the FCO imposed a fine for implementing a merger without approval, and the second in which the FCO settled dissolution proceedings. Interestingly, it seems to be one of the first cases in which a “voluntary” notice of a merger implementation without prior approval triggered a fine.
The concentration concerned the increase of a 40%-stake held by HHR Stahlschrott und Metallrecycling GmbH & Co. KG (“HHR”) in fm Beteiligungsgesellschaft to 49%, through HHR exercising an option. At the same time, fm’ [...]
Court raises question on the test for considering future potential competition under German merger control rules
The case concerns the question under which conditions the possible future creation of potential competition can be considered to strengthen a dominant position under German merger control rules (see decision of December 22, 2010, VI-Kart 4/09 (V)).
The FCO had prohibited a merger between two local publishers that were active in separate, but neighboring geographic markets (decision of April 21, 2009, B6 – 150/08). The FCO considered each of them as dominant in the newspaper and advertising markets in their local areas. It found that the merger would eliminate potential competition between them, thereby strengthening their dominant positions.
The merging parties successfully appealed the [...]
Syngenta/Monsanto Sunflower Seeds – More Analysis, Please
The European Commission’s Phase II decision of 17 November 2010 concerning Syngenta’s acquisition of Monsanto’s sunflower seeds business raises a number of questions.
First, it took the European authorities long to decide who should review the case. The transaction was signed in August 2009 – it did not have an EU dimension and was notifiable only in Spain and Hungary. The Spanish Comisión Nacional de la Competencia or CNC received the notification on 19 August 2009. Only on 1 October did the Commission receive the CNC’s request for a referral of the case to the Commission, more than two weeks after the 15 working days post-notification deadline. The CNC argued that it had suspended the [...]
The “Small Market Problem” in EU Merger Control: Time to move on from the market definition argument
The fairness of EU competition policy has been frequently challenged in the 2000s. It has been argued that the European Commission discriminates against small market companies in its merger assessment. Discussion on the reasons of the alleged discrimination has frequently revolved around the Commission’s method of market delineation in its merger assessment, which would result in a so-called “false positive” or “type I error”. This would imply an incorrect finding of dominant position / the SIEC considerably more often and more easily in mergers between two small market companies, relative to the same sized rivals based on large national markets. Almost as often it has been argued [...]
