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3 Procedure Of Eu Merger Control Notes

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3 - Procedure of Merger Control Mind Map Abbreviation Working Day - WD Phase 1 - P1 Phase 2 - P2 U.S. Department of Justice - DOJ Federal Trade Commission - FTC Ministry of Commerce of People's Republic of China - MOFCOM Member State - MS General Court - GC Procedural Choice & International Comparison

Introduce certain procedural difference over application of general competition rule (M& A transaction). Objective = degree of certainity for parties, speed of decision-making, to ensure application of competition rules does not stifle M&A activity Mandatory vs Voluntary notification.

First Screen

Fresh Pair of Eyes

(1) For majority of unproblematic mergers (1) Need of independent/fresh pair of eyes can be cleared quickly (1-2 months) at P2 review to avoid confrontation bias. (2) EU (2) EU
 2 phases process
 Same case team involved
 P1 - 25 working days ("WD") + 35 throughout although internal (extension) procedural (Devil's Advocate
 P2 - "serious doubt" - 125 WD Panel), a chief economist, involve

Duration Substantially different between countries: (1) Argentina 12-18 months (2) India P1 - 30days; P2 - 180 days (3) US 1

(3) China directly to Competition Commissioner), mitigate the bias
 P1 - 30 days
 P2 - 90 days - without assessing (3) UK based on substantial threshold
 OFT refers cases requiring further
 P3 - 60 days investigation to a separate independent body, Competition (4) US Commissioner (combine with OFT)
 30days (express) unless agency nd to form Competition & Market issue 2 request for more Agency (CMA) information (a mechanism enabling

Only some of the team members in agencies to extend the review P1 will construe in P2. timetable) (3 months i.e. around 50 days) (4) US
 DOJ+ FTC- construe work after 2nd (5) Germany request
 P1 - 1 month (unproblematic)

Fresh pair of eyes not important -
 Some, 1-2 weeks court grants injunction (6) Poland
 P1 - 30 calendar days


WP - 30 days for each tender offer; 30days for another transaction types 2nd request - 30days after complaint (3-6) moths

Time periods are not adequately reflect overall duration in practice (1) Pre-notification consultation procedure
 Eg. EU: 2 months -6moths
 Not mandatory, but best practice
 Avoid the risk that notification is rejected for incompleteness

(7) Taiwan
 Both Phases - 30 calendar days

(2) Pre-acceptance procedure
 Eg. China: clock will not run until the notification is accepted by MOFCOM
 Survey shows 90% cases go to P2 due to lack of man powers
 Need to consult government

(8) India
 P1 - standard 30 days
 P2 - 180 days

(3) Stop the clock
 Eg. Turkey - information requests subtending the time period

China - will not stop the clock - calculate based on calendar days and not business days, thus public holidays will not extend the period 2

for procedure.

The Structure of European Merger Control Notification

 Art 4 EUMR

 -Concentration with community dimension shall be notified to commission prior to their implementation and conclusion of agreement, announcement for public bid/acquisition of controlling interest

FORM CO - notification is costly & time-consuming ->
failure to response will delay the time of process

Duties of notification & suspension Obliged to pre-notify (art 4) Concentration cannot be implemented prior to notification/until commission has issued a clearance decision unless exception mentioned under Art 7: o Art 7(2): public bids/security transactions o Art 7(3): derogation is granted by Commission (target undertaking will become insolvent before completion of ordinary notification process would be possible) Failure to comply with duties of notification & suspension does not automatically invalidate the transaction (status depend on EU commission's substantive assessment of transaction (art 7(4).

"Loaded" notification:
 EU and China -before the clock begins
 US: further information is requested depending on Failure to notify including (fine 10% of turnover): customers and competitors' views
 Failure to notify
 EU: paper-based, everything has to be recorded
 US: usually adopt phone call to interview the  Implement concentration in breach of suspension obligation
 Do not comply with prohibition decision customers/competitor's views
 Do not comply commitment attached Structure Electrabel's case Pre-Notification General Court upheld imposed a fine of EUR 20 million on
 Mandatory pre-notification of transaction to EC. It may Electrabel. minimize the possibility of an incomplete notification &
may lead to a reduction in amount of information to be 26 March 2008: Electrabel, a Belgian company which is part of the French group, Suez (now GDF Suez), notified to the Commission a provided in a notification concentration consisting in the acquisition of de facto sole control 3

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