Vestager: New policy for referrals from national competition authorities
In a speech given at the annual competition conference of the International Bar Association, Margrethe Vestager unveiled an expected future change to the European Commission's policy for referrals from national competition authorities. She also revealed that the European Commission is assessing the possibility of simplifying the merger notification process. Read this newsletter to learn more about the upcoming changes.
On 11 September 2020, Margrethe Vestager gave a speech at the annual competition conference of the International Bar Association (IBA). In her speech, she unveiled the Commission's intention to start accepting referrals of mergers to the Commission from national competition authorities, whether or not the national competition authorities have the power to review the mergers themselves.
The new procedure does not require any changes to the Merger Regulation, which in article 22 allows member states to refer a merger to the Commission subject to fulfilment of certain criteria; for example that the merger affects trade between member states and threatens to significantly affect competition within the territory of the member states requesting the referral.
What has changed is, instead, which referrals the Commission will accept in the future. Hitherto, the Commission has only accepted referrals from national competition authorities of cases which the national authorities have had the power to review themselves but considered better dealt with by the Commission. Practice will reportedly be changed from the middle of 2021, after which the Commission will also accept referrals of cases which the national authorities do not, according to their own rules, have the power to review themselves (though still subject to fulfilment of the criteria in article 22).
This is actually a significant extension of the merger control framework, implying that member states whose merger control rules do not allow them to demand notification of cases below their local threshold values are now given an opportunity to refer the cases to Brussels as an alternative. Also, this will increase uncertainty among companies as to whether they risk having to notify a merger.
New guide in the pipeline
The new referral policy involves a risk that a merger that does not meet national or EU thresholds may nevertheless be referred to the Commission – also post-closing in compliance with national law. Merging parties will therefore in future have to assess the referral risk and consider how to mitigate that risk. In this connection there will probably be help at hand in the guide to be published by the Commission in the middle of 2021, which will contain guidelines as to when the Commission will accept referrals under the new referral policy. However, this will typically be an issue that the parties can and should discuss with the national authority.
Margrethe Vestager ended her speech by saying that the Commission is currently also reviewing its simplified notification procedure and best practices for merger notification procedures with the aim of making the procedures simpler; for example by reducing the amount of information that the parties have to provide, and by making it simpler to submit that information. The Commission will also look at whether there are ways to make the procedures faster, for example by reducing the pre-notification stage for uncomplicated notifications.
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