From 27 March until 19 June 2013, the EU Commission is conducting a public consultation on its proposed changes to the EU Merger Regulation ("EUMR") notification procedure. The purpose of this proposal is to simplify the procedure and make it more business-friendly. This initiative is a "technical reform within the existing framework of EU merger control", meaning that it does not entail an amendment of the EUMR.
The EU Commission envisions expanding the thresholds for undertakings eligible to file a notification through the simplified procedure. Currently, the EU Commission clears mergers through a simplified procedure if they are unlikely to raise competition concerns because their combined market share is below a certain threshold. The proposal would raise the market share threshold from 15% to 20% for horizontal mergers. However, for those mergers that exceed the 20% threshold, the simplified notification procedure would still be available if the resulting increase in market share is small. For vertical mergers, those between two merging companies who are active in upstream and downstream markets, the threshold would be raised from 25% to 30%.
In addition, when two or more undertakings merge or acquire sole or joint control over a third, the simplified notification procedure would be available if the combined market share of the undertakings is less than 50% and the increment of the Herfindahl-Hirschman Index (“HHI”) resulting from the concentration is below 150.
The EU Commission's proposal seeks to establish a more tailored and targeted approach to different categories of cases. For instance, if there are no reportable markets, the merging undertakings would only explain the transaction, turnover, and business. In addition, those with a joint venture outside of the EEA, would only explain the Joint Venture's business and the reasons it will have no effect in the EEA. Moreover, for those mergers that do not fall within the thresholds of the simplified procedure, the merging firms would have to submit a thorough investigation regarding only those markets that exceed the threshold.
The proposed changes are expected to increase by 10% the number of applications that are processed through the simplified notification procedure. That would bring the total percentage of cases handled through simplified notification to 70%.
The next steps after this consultation will be to analyse the feedback and adopt the final proposals. Stakeholders and interested parties have until 19 June 2013 to visit the website and submit their response.
