COMPETITION• FRENCH AND EUROPEAN LAW • MERGERS
In order to guarantee the efficiency of the prior notification obligation without paralyzing the activity of the undertakings concerned for too long a period, Regulation No 139/2004 provides for the suspension of the concentration (standstill) for a relatively short period – in principle, one month (10 additional days may be granted to the Commission when the parties offer commitments). According to Article 7(1) of the regulation, it cannot be implemented either before its notification or until it has been declared compatible following the preliminary examination or control on the merits. The principle of suspension of the concentration has two derogations: one is automatic and specifically relates to public bids or transactions by which control is acquired from various sellers by means of series of transactions in securities, at least as long as the acquirer does not exercise the voting rights attached to the securities (Art. 7(2)); the second, on request, is subject to a decision of the Commission which, must “[…] take into account inter alia the effects of the suspension on one or more undertakings concerned by the concentration or on a third party and the threat to competition posed by the concentration”(Article 7(3)). In the absence of an exemption, exercising decisive influence over the target, even in the absence of any transfer of assets and associated rights, as soon as the concentration is notified, prior to its authorization, constitutes “gun jumping” , falling within the scope of the prohibition.
Undertakings which, intentionally or negligently, carry out a concentration during its suspension period, or without complying with the conditions and charges to which a derogation to suspension may be made subject, may therefore be imposed fines not exceeding 10% of the aggregate turnover of the undertakings concerned (Article 14(2)), as well as periodic penalty payments (Article 15(1)). Civil sanctions are defined in Article 7(4) of the regulation, which provides that the validity of any transaction carried out in contravention of the suspension is dependent on a decision made by the Commission during the preliminary or final examination of the concentration. If that decision is a compatibility decision, transactions are retroactively declared valid; for an incompatibility decision, transactions are not automatically cancelled, as their status is dependent on measures ordered by the Commission to restore effective competition on the market following the finding of the incompatibility of the concentration; before a decision of compatibility or incompatibility is made, the implementation of those transactions should be suspended.
