COMPETITION • EUROPEAN LAW • MERGERS
Difficulties in implementing de-merger measures where a transaction is found to be incompatible with the internal market have led the EU legislature to adopt a system of preventive control in this field. Among the various pre-control possibilities, Regulation No 139/200 has opted for the most rigorous form by instituting mandatory prior notification: Article 4(1) provides that, “Concentrations with a Community dimension defined in this regulation shall be notified to the Commission prior to their implementation and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest”. In case of a merger or the acquisition of joint control, the concentration must be notified jointly by the participating undertakings which must designate a joint representative; in the other cases, the notification must be effected by the acquirer. Representatives must produce written proof that they are authorized to act (Regulation No 802/2004, Article 2).
The notification is carried out using a Form CO as described in the Annex of Regulation No 802/2004. The requested information not only concerns the merging parties (ownership and control, personal and financial links, affected markets…) but more generally tends to determine the conditions of competition in the relevant markets (structure of supply and demand, market entry, research and development, cooperative agreements, trade associations, conglomerate aspects, worldwide context, efficiencies). The required data are sometimes so precise and difficult to grasp, even for the undertakings which are parties to the transaction, that they can easily be considered to have given inaccurate or incomplete information. However, the Commission may dispense undertakings with the obligation to provide any information required by the form which “is not necessary for the examination of the case” (Regulation No 802/2004, Article 4(2)). The EU authorities, while protecting business secrets, publish a summary of the notification in order to obtain the observations of any third parties concerned (Regulation No 139/2004, Article 4(3)).
Article 14(1) of Regulation No 139/2004 imposes a fine of up to 1 % of the undertaking’s total turnover if undertakings concerned supply incorrect or misleading information in a notification. The infringement may be committed intentionally or negligently. Each of the undertakings is responsible for the information which it provides despite the appointment of a single representative.Furthermore, Article 14(2) provides for a fine of up to 10% of the aggregate turnover of the undertakings concerned which, “intentionally or negligently”, fail to notify a concentration.