Abstract
The reforms proposed in this paper pursue one common objective. Our aim is to reduce the burden of notifying and controlling unproblematic mergers, such that resources can be focused on the most complex cases. This would facilitate adequate assessment of complex transactions. These are more and more common in the new economy, where the variety of both potential harm and possible efficiencies has dramatically increased. Therefore, enforcement agencies now, more than ever, need to concentrate resources on complex cases and design procedures that allow for a thorough debate. This paper identifies three main avenues for the improvement of the ECMR. We first argue that the current time pressure during phase II mergers, and in particular after the SO has been sent, is counterproductive and against the interests of all parties. The tight time constraint does not allow for a serene and thorough debate that is needed. We propose to allow more time for the exchange of views in complex merger cases. In such cases, it is actually very challenging to have a debate through only one exchange of pleadings. This exposes the parties and the Commission to serious legal risks. While it is possible that just releasing time pressure will be sufficient to enable an adequate dialogue, it could be worthwhile to consider moving from one exchange of pleadings to two in merger control, just as it is done in Courts. Second, as turnover thresholds are not correlated with harm, they do not lead to a proper prioritization of cases in merger control in Europe. Thresholds could increase or decrease with no effect on the proportion of non-problematic mergers being notified. Regardless of the change in thresholds, this proportion would remain high, therefore wasting the scarce resources of all parties to the proceedings, including enforcement agencies. We show that no other threshold, or combination of thresholds, would perform better. Therefore, there is no room for further incremental improvements to the merger control system. We believe that only moving in the direction of a properly framed voluntary notification would significantly enhance the efficiency of merger control in Europe. This would be consistent with the 2003 reform in antitrust. However, the Commission should be able to intervene in due time against problematic mergers that are not notified. At the same time, the parties that decide not to notify need to know when it is safe to implement the merger. Therefore, we propose that parties planning to implement a merger of European interest should disclose their intentions to the Commission by submitting an electronic form containing readily available information about the merger. This would be similar to the HSR document used in the United States. We also propose that the parties make their intentions regarding the transaction public, or at least that they inform their largest customers and suppliers. The completion of these two steps would start the period when the Commission can receive complaints and use its market investigation tools. At the end of this period, the Commission could decide to take no action, clearing the way for the implementation of the merger, or to open proceedings. This would be more efficient for all parties than the simplified procedure or any reform of the notification thresholds. Here, the Commission would not be required to make a formal investigation and draft a clearance decision in all cases that are clearly not anticompetitive, as is currently the case. The parties would not be required to enter in formal contacts with the Commission in these cases. Last, we also propose to further the integration of the ECN, which, as the Commission mentions in its own documents, is not working perfectly yet. We first propose to increase the efficiency of one stop shopping by letting parties self-assess whether their operation affects trade between Member States. If they believe it does, they would then either voluntarily notify to the Commission, or simply disclose their intentions to merge by submitting the electronic form mentioned earlier. Member States would naturally be able to request a referral, but they would have the burden to prove that either trade is not affected or that they are better placed than the Commission to control the merger. Moreover, there has not been any systematic review of the effective application of the new substantive test by Member States. We would welcome such a review, followed by a public consultation on the ways to promote more convergence in the competitive assessments and rights of defence in the EEA.
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