Union Mergers Research Articles

Chicago, Harvard, Freiburg, or considerations for Single Market integration? Analysis of theoretical and ideational insights underpinning the European Commission’s merger control with exponential random graph models

ABSTRACT The European Commission has central authority over the European Union’s merger control. It is therefore responsible for making important merger decisions that are bound to affect vast markets and EU and non-EU market players, with significant implications for wider economic, political, and societal segments. These decisions are often informed by theoretical and ideational insights from various schools of competition analysis and economic theories, or they are guided by non-economic objectives. This article analyzes merger cases cleared under the current European Union Merger Regulation (EUMR) in an attempt to reveal whether the following insights underpin the Commission’s merger control: the Chicago School, Harvard School, Freiburg School, and considerations for Single Market integration. The analysis is conducted by employing an exponential random graph model (ERGM) approach.

'Capturing Killer Acquisitions in Digital Markets under the European Union Merger Control Rules'

'Capturing Killer Acquisitions in Digital Markets under the European Union Merger Control Rules'

EU General Court Upholds Commission Gun-Jumping Decision: Altice Europe NV v Commission

Judgement of 22 September 2021, Altice Europe NV v Commission, Case T-425/18, EU:T:2021:607. The General Court upheld the European Commission’s decision finding that Altice Europe infringed the European Union Merger Regulation’s prohibition against implementing a notifiable transaction before notification and approval. On 9 December 2014, Altice Europe (‘Altice’), a Dutch-based cable and telecommunications company, agreed to acquire sole control of PT Portugal, a Portuguese telecommunications and multimedia operator, subject to approval by the European Commission (the ‘Commission’) under Regulation 139/2004 (the ‘EUMR’). Altice notified the transaction to the Commission under the EUMR on 25 February 2015, and the Commission approved the transaction, subject to conditions, on 20 April 2015. On 24 April 2018, the Commission adopted Decision C(2018) 2418 (the ‘Decision’), fining Altice for putting the transaction into effect in breach of Article 4(1) and Article 7(1) EUMR; i.e. for gun-jumping. Article 4(1) EUMR requires parties to concentrations with a Union dimension to notify their transaction before implementation, whereas Article 7(1) EUMR prohibits the implementation of a concentration with a Union dimension before its notification or until it has been approved. The Commission imposed a fine of EUR 62,250,000 for each violation.

Ownership-neutral or ownership-blind? The case of Polish state-owned enterprises in EU merger control

Abstract The article discusses the challenges associated with the assessment of economic concentrations involving state-owned enterprises (SOEs) under the European Union (EU) merger control. It reveals inconsistencies in ascertaining the exercise of and the (anti)competitive effects stemming from the state control over the SOEs caused by the strategic use of the ‘single economic unit’ concept in cases involving both European and non-European SOEs. Using the example of Poland and its economic statecraft, the article demonstrates how the use of various ownership-based and regulatory mechanisms employed by the State allows it to preserve control over strategic industries and enterprises. The study suggests that insufficient attention to the state ownership and state control in the EU merger control may create a risk of anti-competitive market distortions caused by the SOE-led industrial policies of the Member States to the detriment of the functioning of the internal market.

Shortcoming in the EU Merger Directive (Academic Dissertation)

The European Union (EU) Merger Directive removes certain tax disadvantages encountered by companies and their shareholders in the course of a restructuring operation. However, in spite of amendments and European Court of Justice's (ECJ) interpretations of its provisions, various shortcomings remain. This thoroughgoing analysis, broader and deeper than any prior work on the subject, addresses all the Directive's subtopics methodically, following the paragraphs of Articles 1-15 in their logical succession. The author analyses the points in which the Merger Directive falls short of attaining its stated objective, and he also examines how these shortcomings could be scaled. To do so, he tests the Merger Directive against its own objective, primary EU law (the fundamental freedoms and the unwritten general principles of EU law) and non-discrimination provisions in relevant treaties. Each of the following questions is addressed and responded to in depth: Which entities have access to the Merger Directive and which entities should have access to it? Which operations are covered by the Merger Directive and which operations should be covered? Which tax disadvantages to cross-border restructuring operations does the Merger Directive aim to remove, which tax disadvantages have been actually removed, which tax disadvantages remain, and how should the Merger Directive be amended to remove the remaining tax disadvantages? How tax avoidance should be combated under Article 15(1)(a) of the Merger Directive, which possible types of tax avoidance can be identified, and how the Merger Directive should be amended? Which cases of double taxation does a taxpayer engaging in cross-border restructuring operations potentially encounter, and how they can be taken away by the Merger Directive? The key shortcomings that are identified are: the Merger Directive's objective is not stated precisely; minimum harmonisation does not lead to a common tax system; exhaustive lists are used as legislative technique; the Merger Directive does not add much to the outcomes reached through negative harmonisation; and the definitions of qualifying operations are not fully aligned with corporate law. Chapter 6 contains a deeply informed and viable proposal for the amendment of the Merger Directive. This is the first treatment not only to evaluate the Directive's efficacy in detail but also to offer real solutions to its shortcomings. It will be welcomed by policymakers, judges, practitioners and academics, and the recommendations it contains are sure to affect ongoing amendments and jurisprudence on the Merger Directive.

Monetary Fines in EU Mergers: In Need for More Regulation

Monetary fines represent an important instrument to address violations of Competition Law. The European Commission (EC) and the EU Courts have been primarily engaged in imposing fines in cases of breach of the first pillar, and have rarely dealt with cases of abuse based on the fining guidelines issued in accordance with Article 23(2) of Regulation 1/2003. Compared to the first two pillars, mergers have not received similar scholarly attention.1 2 Since 2017, the EC has expressed a growing interest in investigating and imposing significant fines to mergers and acquisitions in breach of procedural matters. Therefore this article addresses the application of Article 14 of the European Union Merger Regulation (EUMR) in imposing fines to mergers with European Union (EU) dimension. The EC decisions and EU Courts’ judgments related to fines on mergers in breach of procedural matters are discussed in four specific sections. The first section analyses article 14(1) of the EUMR, which empowers the EC to impose a fine of up to 1% of the total turnover in the preceding business year on undertakings for breach of procedural matters, including, among others, for providing incorrect or misleading information. This section will address the case of Facebook as the first case in which the EC imposed fines based on the new EUMR. In this case, although the undertakings mislead the EC, based on the offered cooperation, the Authority decided to reduce the fine. In addition, it is also important to address the legal basis applied by the EC in accepting the offered cooperation as a mitigating factor and whether this may develop into a guiding “precedent” in the future. The second section deals with five cases of violations of articles 4(1) and 7(1) EUMR related to fines prescribed in article 14(2) EUMR. With regards to four of them, judgments of EU Courts and decisions of the EC and National Competition Authority (NCA) are analysed. The fifth case, the one on Ernst and Young, provides for the first preliminary ruling on the notion of “gun-jumping”. The third section deals with Article 14(3) and the fining methods on mergers. By reviewing each of these five cases, it is important to address factors taken into consideration when imposing fines. An obvious deficiency is the absence of a legal basis, regardless of whether manifested in hard or soft law. Here it is relevant to inquire in what manner the EC imposes fines and why it occasionally mirrors the fining guidelines applicable to other pillars of EU Competition Law. The last point to be addressed is the one of policy and the need to balance EC discretional powers and relevant legal principles such as legal certainty, equal treatment, transparency, and consistency.3 The fourth section provides for concluding remarks.

EU Merger Control and Harm to Innovation—A Long Walk to Freedom (from the Chains of Causation)

In a string of recent merger decisions, culminating in the Dow/DuPont case, the European Commission has profoundly revisited its traditional analysis of innovation and, ultimately, introduced what some authors have labeled “a novel theory of harm in EU merger policy.” According to this theory, the Commission does not look at harm to innovation on a specific product market in which parties are developing similar pipeline products, but adopts a general assessment of harm to innovation, unrelated to a specific product market and without considering potential anticompetitive effects on this basis. The purpose of this article is to show that over the last few years, the European Commission has been progressively departing from a “traditional” theory of harm in its assessment of mergers affecting innovation. In particular, we argue that the novel theory of harm developed in Dow/DuPont, based on a generic prejudice to innovation, is the landing place of a long journey through which the Commission has progressively altered the analytical framework applicable to traditional cases affecting pipeline products/potential competitors. And while this stance may be inspired by a legitimate policy goal, it brings the Commission on a collision route with the principles of causation and symmetry governing European Union merger control analysis.

Union Mergers; Some Questions Raised by a “Disorderly Breakup”

This essay discusses the 2004 merger between UNITE, a clothing workers’ union, and HERE, the hotel and restaurant workers union. Many labor scholars and union proponents believed that this merger would revive a dormant US labor movement and lead to great success in union organizing. Although much was expected, there was very little accomplished by this merger. While union mergers can either be amalgamations or absorptions, the UNITE-HERE merger took the former form. Although successful amalgamations usually occur when the two unions share a common jurisdiction, additional problems occur when the unions are dissimilar in size and type of members. The UNITE-HERE merger displayed none of these three above-mentioned characteristics. This essay also discusses issues of the centralization/decentralization of union mergers, the negotiation and promotion of such combinations, local union and national union mergers while concluding with a discussion of whether union mergers are an appropriate strategy for dealing with a struggling US labor movement early in the twenty-first century.

Introduction to “Union Mergers; Some Questions Raised by a “Disorderly Breakup””

Introduction to “Union Mergers; Some Questions Raised by a “Disorderly Breakup””

The Making of UNITE the Union: The Dynamics of Amalgamation

In 2007, UNITE the Union became Britain’s largest trade union with 2.1 million members, following the amalgamation of the Transport and General Workers’ Union (TGWU) and AMICUS. Given their similar size and status, UNITE can be defined as a ‘balanced-partner’ amalgamation. The initial plan had included the GMB but it had withdrawn from the talks in 2006. Since 1979, in response to the adverse industrial relations context and loss of members all three potential partners had competed for new members by launching rival bids for mergers. An amalgamation offered a way to replace such competition with institutionalized co-operation, and resources could then be committed to regenerate union membership. The article analyses unions’ strategies and policies in relation to Mintzberg and Waters’s categories of ‘deliberate’ and ‘emergent’ strategies. However, such strategies may not be realized or only partially so, as a result of unintended consequences and unknown or misunderstood factors. Union mergers are beset with such examples because unions embody complex, political processes in which discrete groups – lay members and full-time officers – interact and compete to promote and negotiate distinctive visions as to the role and future of the union. Hence to analyse mergers in and between distinctive trade unions, a longitudinal, processional analysis, which explores the role of key personnel and their power resources, was required.

The effects of union mergers and internal restructuring: a bottom‐up perspective by Danish shop stewards

AbstractThis article explores how recent union mergers and restructuring affect union's service provision, interest representation and perceived union influence. We find that Danish shop stewards are just as satisfied with their union's service provision and interest representation but report of greater influence on federal and local branch union politics in 2010 compared to 1998.

Accommodating Minority Shareholdings Within the European Union Merger Control Regime: Advocating a More Cooperative Way Forward

The paper focuses upon a neglected area of EU merger control, the acquisition of minority shareholdings that have the potential to cause competitive harm at the European Union level, and which therefore should be vetted under EU law. Using economic theory and actual cases vetted by European Regulators, the paper demonstrates an EU regulatory enforcement gap in respect of the aforesaid minority shareholdings. The Commission’s recent proposal to end this gap, the so-called targeted transparency system, is then critically explored, revealing that the proposed system suffers from the same problem as the EU merger control regime in respect of mergers with a potential community competition concern: neither can guarantee that nearly all the said mergers and minority shareholdings cases would be vetted under EU law. Therefore, an alternative more cooperative approach, which guarantees that virtually all such cases would come under EU law, is put forward. The more cooperative approach concerning mergers is discussed first, as the approach toward minority shareholdings is an extension of it, establishing an integrated approach. The paper demonstrates how this approach would guarantee that virtually all mergers with a potential community competition concern would come under EU law, leading to a number of positives: the near elimination of the misallocation problem and associated issues, in addition to streamlining the operation of the said architecture. Thereafter, the paper reveals how the more cooperative approach ensures that virtually all minority shareholdings with a potential to cause competitive harm at the EU level would be vetted under EU law, not only ending this enforcement gap but also leading to an architecture that is more streamlined than would be the case if the Commission’s proposal became law. It is, of course, recognised that the more cooperative approach does not address the minority shareholdings’ enforcement gap that exists at the national level, excluding the three member states which already have this vetting capability.

TRADE UNIONS’ PROTECTION OF SOCIAL AND ECONOMIC INTERESTS OF YOUNG PEOPLE: PROBLEMS AND LIMITATIONS

The article considers factors that hamper the protection of social and economic interests of young people in trade unions and the development and performance improvement of trade unions. For this purpose, the authors analyze the data of their study which includes questionnaire surveys among trade unions’ youth and experts, expert interviews and content analysis of the trade union newspaper. The study reveals that young people have high demand for help and assistance provided by trade unions to protect their social and economic interests as at least one-third of the trade unions’ young people get the help they need. The trade union’s potential is mainly used to solve individual problems rather than to fulfill collective social and economic interests. The factors that hamper active practices among young people are bureaucracy, ineffective personnel policy, the merger of trade unions with the authorities and enterprises’ administration, gaps in legislation, law percentage of young people in sectoral and territorial trade unions, and especially ineffective outreach and awareness-raising work. The authors prove that most of barriers are caused by paternalistic settings and expectations of young people who have law motivation to become members of trade unions, law awareness of their rights and trade union membership opportunities, as well as their failure to define their request to trade unions.

Free and Open Source Software Programs in European Union Merger Control

This article proposes an analytical framework for assessing free and open source software programs in merger control procedures. When one of the merging parties owns the intellectual property rights associated with a Free and Open Source Software (FOSS) program, the competition authorities should first assess the ability and likelihood of the merged undertaking to remove this program from the market. To this end, the authority must evaluate whether the incentive of the merged undertaking to make the program involved in the transaction available post-merger under a FOSS licence will be reduced in comparison with the pre-merger situation. If, post-merger, it is still more profitable for the merged undertaking to provide the program under a FOSS licence than under a proprietary one, this program will then continue to exercise a significant competitive constraint in the market and no competitive concern will arise. By contrast, if the competition authority concludes that the FOSS program may disappear from the market, the authority must assess whether the competitive pressure this program wielded pre-merger will be taken up postmerger. In addition, this article discusses the possible role of FOSS licences in the design of merger remedies.

Minority Shareholdings in European Union Merger Control

From the perspective of competition policy, which looks into how the competitive field in industry markets are enhanced or threatened, mergers and acquisitions are closely observed especially with regard to how they disrupt the level playing field of otherwise competitive industries. That is, there are laws in many countries that enforce anti-trust competition policies and the application of these policies are strictly enforced in many major mergers and acquisitions in market-based nation-state economies and regional economies such as the European Union and its component countries. This research looks into merger control in the European Union and the important focus that the EU has put on minority shareholdings in mergers and acquisitions and full joint ventures. Specifically, the central issue is the lack of mechanism at the EU level to effectively deal with undue decisive influence that minority shareholdings bring to the table of merger strategic, and therefore, competitive decision-making.

Shortcomings in the European Union Merger Directive: Lessons for Future Harmonization

The European Union (EU) has recently demonstrated with the Anti-Tax Avoidance Directive (ATAD) that it can deliver harmonized measures in areas where controversies exist. With even further-reaching measures, such as the common consolidated corporate tax base (CCCTB) and the Financial Transaction Tax (FTT), (re)gaining momentum it is sensible to learn from the experiences with previous harmonization measures. One of them is the EU Merger Directive. This article will address five broad shortcomings that have been identified in this directive and conclusions will be drawn from them. The lessons to be learned from the EU Merger Directive – and those would apply to any future harmonization measure – are, amongst others, that the objective of the measure has to be defined razor sharp, that minimum harmonization measures may still lead to distortions among the Member States, and that it should be crystal clear on which foundations certain demarcations are made.

Impact evaluation of merger decisions: lessons from the Greek experience

During the last decade, the importance of a thorough and coherent ex-post merger review by competition authorities and courts has been increasing. Although it is widely acknowledged that addressing the competition concerns, which stem from consummated mergers, is a costly and time-consuming process, and that remedies (e.g. either structural or behavioural), when adopted, are often imperfect at best, sophisticated quantitative techniques are now available for competition agencies, attorneys and courts to help them assess the impact of a merger and the efficacy of related enforcement decisions, thus leading to improved decision-making. This article aims to cast light on the role of economic analysis in the merger case decisions. For this reason, I focus on the main quantitative techniques used in merger analysis in the Greek jurisdiction. In this way, I try to offer some suggestions to other competition agencies derived from the Hellenic Competition Commission experiences in assessing selected merger cases. Finally, I also delve into discussions of Greek competition law matters, as an example of emerging merger regime model, with respect to certain aspects of the European Union Merger Regulation.

The Impact of Union Amalgamation on Membership

In 1980s and 1990s, Australian trade unions tried to combat declining influence and membership numbers by amalgamating with other unions in the same or related industries. Much has been written on union mergers, but little on how these affect the membership. This article aims to contribute to the literature of the impact of mergers and amalgamations on members but studying just one union, The West Australian Locomotive Engine Drivers, Firemen’s and Cleaners Union (LEDU; 1898-1999). In 1993, the three federal railway unions—the Australian Railways Union (ARU), the Australian Federated Union of Locomotive Employees (AFULE), and the National Union of Railworkers (NUR), and one bus and tram union, the Australian Tramway & Motor Omnibus Employees Association (ATM)—amalgamated to become the Australian Rail Tram and Bus Industry Union (RTBU). The LEDU reluctantly joined the RTBU in 1999. This article examines rank and file reaction to the initial proposals and ultimately to becoming part of a larger union, covering workers with many different interests. The article concludes that, irrespective of whether or not amalgamation was inevitable, given the circumstances in Western Australia at the time, its impact upon the rank and file membership was devastating.

'Back to the Future?' EU Merger Control 30 Years after the Commission's White Paper on the Completion of the Single Market: Case Study of the Automobile Industry

This article charts the period between 1985 and 2015 and looks at the impact that the European Union Merger Regulation has had during that time on the ways in which modern businesses can collaborate to innovate. Particular attention is paid to the car manufacturing industry. The car manufacturing industry affects millions of people around the world and the strategic business decisions of automakers can have deep political and economic consequences. This makes it prone to political intervention on both sides of the Atlantic, which can prove to be a burden by preventing rational actions and hindering the implementation of a group’s planned industrial strategy. The case study describes recent developments in the car industry from the perspective of the theories of harm which lawyers and economists have identified as being worthy of the attention of competition regulators.

Between Strategy and Unpredictability

Restructuring through mergers has been a key strategy of union revitalization. In Germany, union merger activity has been extensive but seemingly unpredictable in its outcomes, with failed mergers outnumbering successful attempts by a ratio of 2:1. The authors use case studies of two attempted union mergers in Germany—one failed and one successful—to exemplify how these complex processes unfold. Drawing on Walton and McKersie’s (1991) work on negotiation, the authors show how common decision-making processes involving key actors at various organizational levels shape the trajectory of merger attempts. Looking beyond mergers to broader questions of union strategy, the authors argue that the concept of negotiated decision making can help reveal the strategic and logical dimensions of apparently unpredictable processes.