On July 9, 2014, the European Commission (Commission) launched a public consultation on proposals contained in its White Paper, "Towards More Effective EU Merger Control." The proposals aim to introduce a tailor-made review system targeting non-controlling minority shareholdings that may affect competition and to simplify existing referral procedures.
The proposals surrounding minority shareholdings aim to address the current "enforcement gap" that has emerged due to the Commission's current lack of power to address competition concerns arising from acquisitions of minority shareholdings. The Commission proposes to introduce a light review system requiring parties to submit an information notice containing basic information about a proposed acquisition to allow the Commission to determine which cases could potentially be problematic and therefore suitable for full review. The proposals would bring the Commission's powers in line with those held by regulators in some EU Member States (regulators in the UK, Austria and Germany are currently competent to assess the national effects on competition of acquisitions of minority shareholdings) and would allow such acquisitions to be reviewed where they have European Economic Area (EEA)-wide effects.
The proposals contained in the White Paper also aim to streamline and simplify referral procedures between Member States and the Commission. In an attempt to encourage close cooperation between the Commission and national competition authorities, the Commission proposes to: (1) abolish the requirement for two separate submissions for pre-notification referrals; and (2) afford the Commission EEA-wide competence to review a transaction received via post-notification referral to avoid parallel investigations by the Commission and national competition authorities. In addition to streamlining the referral procedures, the Commission also proposes to make procedures simpler by, for example, excluding certain non-problematic transactions (such as transactions that do not involve any horizontal or vertical relationships between the merging undertakings) from the scope of the Commission's merger review.
The Commission’s proposal on minority shareholdings has been criticized for expanding the Commission’s jurisdiction and creating legal uncertainty.
The deadline for the submission of responses to the Commission's consultation is Oct. 3, 2014. The Commission's full White Paper is available here.
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