European Commission Simplifies Procedures Under the EU Merger Regulation

by Orrick, Herrington & Sutcliffe LLP

On 5 December 2013, the European Commission adopted its “Merger Simplification Package” with the stated objective of cutting red tape and reducing costs for businesses in EU merger filings. The package broadens the scope of the simplified procedure for “no issues” cases and generally eases the information requirements connected with EU merger filings. In addition, the Commission has updated its rules on divestiture commitments.

Extending the Scope of the Simplified Procedure

The EU merger rules define certain types of mergers that are generally seen as unproblematic for competition and that may be examined by the Commission under a simplified and streamlined procedure. If the conditions are satisfied, companies responsible for notifying a concentration may use a specific notification form (the “Short Form CO”), which requires less detailed information than the regular notification form (the “Form CO”). In addition, the Commission may clear such cases without investigating the effects of the proposed deal with the parties’ customers and competitors. The formal time period of the investigation is, however, the same as that for regular mergers.

The Commission has now expanded the scope of the simplified procedure by raising the market share thresholds below which cases qualify for a short review. As a result, it is expected that 60 to 70 percent of all notified mergers will now qualify for the simplified procedure, around 10 percent more than today. The new market share thresholds are as follows:

(i) For markets in which two merging companies compete (“horizontal overlap markets”), the threshold is raised from 15 percent to 20 percent;

(ii) For markets where one of the merging companies sells an input to a market where another merging company operates (“vertically related markets”), the threshold is raised from 25 percent to 30 percent.

In addition, a new threshold has been introduced. Mergers may now also qualify for the simplified procedure where the companies’ combined market shares are between 20 percent and 50 percent, but where the increase in market share after the combination of their activities is limited.

Introduction of a “Super-Simplified Notification”

A “super simplified” procedure has been introduced for joint ventures that are active entirely outside the European Economic Area (EEA). Such joint ventures are caught by the EU merger rules if the parent groups achieve EEA turnover exceeding certain thresholds. The Commission has been criticised for extending its jurisdiction to cover such joint ventures given the lack of any effect in the EEA. While not altogether abolishing the filing requirement for this type of joint venture, the Commission intends to make the notification process more business-friendly. Instead of having to submit a notification form, the companies only need to describe the transaction, their business in general terms and provide turnover figures required for the Commission to establish jurisdiction.

Less-Stringent Information Requirements for Regular Mergers

Regular, non-simplified cases require the submission of extensive data on all markets “affected” by the concentration, for example, information on market volumes and market shares based on both value and volume figures, details of competitors, customers and suppliers and production capacities. This often entails costly and time-consuming data collection exercises for the companies.

Whether a market is affected in this sense is determined by market share thresholds. The Commission has now raised the relevant thresholds, in line with the changes to the simplified procedure, from 15 percent to 20 percent for horizontal overlaps and from 25 percent to 30 percent for vertical links. As a result, it is anticipated that companies will need to provide full market information for fewer markets.

Less-Stringent Information Requirements for Case Referrals

Under certain conditions, where national merger filings are required, a company may request the relevant Member States refer the review of their case to the Commission, or vice-versa. This request is made by way of a standard form (the “Form RS”). The information required by the Form RS has now been substantially reduced and will cover, inter alia, the geographic scope of any relevant markets and the nature of the transaction.

Streamlining the Pre-Notification Process

The changes with the greatest practical impact relate to the pre-notification process. Although this is not required by law, companies that are required to notify a merger to the Commission typically engage in discussions with the Commission case team before making the formal notification. Without such contacts, the parties will not be able to determine the exact scope of information required by the Commission, leading to a significant risk that the notification will be declared “incomplete” and the review process delayed.

There are no set time periods for the duration of such pre-notification contacts. In practice, however, the process may last for a number of weeks, and even months, depending on the complexity of the case, the potential for competition concerns and the workload of Commission case team. The Merger Simplification Package now aims to address this issue by promoting the possibility of “waivers” from the full information requirements set out in the standard notification forms. Parties are encouraged to discuss with the Commission the extent to which the information requirements are relevant to their case, and the notification forms identify certain data that are likely to be good candidates for waiver requests. The Commission has also stated that it will deal with waiver requests promptly and keep the process as short as possible.

Moreover, the new rules provide for cases where companies may forgo the pre-notification phase altogether and proceed directly with the formal filing. This concerns mergers that do not give rise to horizontal overlaps or vertical links between the merging companies in Europe. The Commission expects that around 25 percent of those cases that qualify for the simplified procedure may satisfy the conditions for a filing without pre-notification contacts.

Changes to the Rules on Divestiture Commitments

In order to overcome competition concerns identified by the Commission during an investigation, merging parties often offer to divest parts of their business activities. The Commission has developed model texts for offering such divestiture commitments and for the establishment of a mandate for a trustee who will monitor the implementation of any commitments. While the use of these model texts is not legally required, it is usually expected by the Commission. The Commission has updated these standard texts now to bring them in line with the Commission’s 2008 Notice on remedies and to take into account the Commission's experience since the model texts were first published in 2003.


The Merger Simplification Package is certainly a step in the right direction to streamline the EU merger control process. However, it remains to be seen whether the changes will translate into faster and less bureaucratic procedures. One of the main reasons for the administrative burden caused by EU merger filings, in particular during the pre-notification phase, has been the Commission’s insistence that the parties provide information for “all plausible” relevant product and geographic markets. As a consequence, parties often find themselves confronted with comprehensive request for information, even in cases that ultimately qualify for the simplified procedure. This is unlikely to change, in particular since the Commission has emphasised that it will continue to use the “plausible markets” concept.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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