European Union: the latest on merger controls
This article discusses key jurisdictional, procedural and substantive developments in EU merger control from June 2021 to April 2022.
- Jurisdictional developments: application of articles 21 and 22 of the EU Merger Regulation (EUMR) and implications of the Digital Markets Act (DMA)
- Procedural developments: revision of the EU merger control procedures, scrutiny of gun-jumping infringements and damages claims
- Substantive developments: revision of the Market Definition Notice, merger control divergence post-Brexit, energy and media sector mergers
Referenced in this article
- Council Regulation (EC) No. 139/2004 of 20 January 2004
- Case No. M.10188, Illumina/GRAIL
- Case T-425/18, Altice v Commission
- Case T-834/17, United Parcel Service v Commission
- Commission Staff Working Document, SWD(2021) 199 final
- Communication from the Commission, COM(2021)713, 18 November 2021
- Case No. M.9343, Hyundai Heavy Industries Holdings/Daewoo Shipbuilding & Marine Engineering
- Case No. M.9987, NVIDIA/Arm
- Case No. M.10078, Cargotec/Konecranes
- Case No. M.10262, Meta/Kustomer
- Case No. M.10456, Sky/ViacomCBS/JV
- Case No. M.10475, United Group/Wind Hellas
- Case No. M.10153, Orange/TKR
EU merger statistics
Despite the expected continued impact of the covid-19 pandemic, deal value in European mergers and acquisitions (M&A) increased by a record 47 per cent in 2021. In line with global trends, it reached an all-time high of €1.26 trillion. 
Not surprisingly, the rising number of transactions kept the European Commission (the Commission) particularly busy – 405 concentrations were notified last year,  representing not only a 10.9 per cent increase compared to 2020 (361 notifications) but also the second highest annual number of notifications since the introduction of the European merger control regime back in 1990. However, surpassing these figures in 2022 may seem ambitious – only 90 transactions were notified to the Commission in the first quarter of 2022, indicating that the increasing trend may be slowing down. 
With 309 cases reviewed under the simplified procedure in 2021, the Commission reached another record-breaking figure representing a 10 per cent increase compared to the 278 simplified cases reviewed in 2020. This trend may continue given that the Commission has expressed its eagerness to further simplify the merger control procedures.  In 2021, the Commission cleared 13 per cent more deals at Phase I than in 2020, while opening seven Phase II investigations, one less than in 2020. Additionally, as in 2020, there was no prohibition decision in 2021. The Commission, however, blocked a deal in the shipbuilding industry in January 2022.
In 2021, the Commission cleared 11 transactions subject to remedies (seven at Phase I and four at Phase II) compared to 16 in 2020, while 12 deals were withdrawn prior to a decision (nine at Phase I and three at Phase II).
Key developments in EU merger control during the period June 2021 to April 2022 include the following.
In March 2022, the Commission had to grapple with the interplay between EU merger control and national foreign direct investment (FDI) legislation. After the Hungarian government had vetoed VIG’s acquisition of AEGON Group’s Hungarian subsidiaries on the basis of national FDI legislation, the Commission found that the decision violated its exclusive jurisdiction over transactions with an EU dimension and thus breached article 21 of the EU Merger Regulation (EUMR). 
The controversy around the application of article 22 EUMR has continued over the past year. With appeals on jurisdiction and interim measures still pending, Ilumina/GRAIL is yet to clarify the scope of the Commission’s powers. The parallel review of Meta/Kustomer by the Commission and the German Federal Cartel Office (FCO) has put the one-stop shop principle under strain.
On 22 September 2021, the General Court upheld the Commission’s decision to fine Altice for gun-jumping.
For the first time since 2019, the Commission decided to veto a deal. It found that Hyundai Heavy Industries Holdings’ acquisition of Daewoo Shipbuilding & Marine Engineering would have significantly reduced competition in the worldwide market for the construction of large LNG carriers, ultimately leading to higher prices for energy consumers. In the context of rising energy prices, the Commission emphasised the importance of energy security and diversification.
The first year of parallel merger control reviews by the Commission and the UK Competition and Markets Authority (CMA) since Brexit saw some noteworthy differences in the approach taken by the two enforcers. The tension between their respective views on remedies came to the forefront during the review of NVIDIA/Arm and Cargotec/Konecranes. The review of Meta/Kustomer has highlighted differences in the substantive analysis of digital mergers. These divergences provide a useful insight into what future deals facing parallel filings can expect.
Throughout the year, we have witnessed a wave of mergers in the TMT sector. While most were found to be unproblematic, in Orange/TKR the Commission cleared the deal subject to structural remedies on the market for retail mobile telecommunications services.
In this article, we consider the above in more detail and discuss additional jurisdictional, procedural and substantive developments.
Revival of article 21 EUMR
A central idea of the EUMR is the principle of ‘one-stop shop’ merger control, contained in article 21 EUMR, which provides that the Commission has exclusive jurisdiction over mergers with an EU dimension to the exclusion of national competence. However, pursuant to article 21(4) EUMR, member states may investigate concentrations that normally fall within the Commission’s jurisdiction where this is necessary to protect their legitimate (non-competition law) interests, such as public security, media plurality or prudential rules.
In 2020, Vienna Insurance Group announced its acquisition of the Hungarian subsidiaries of the financial services group AEGON. Despite the transaction reaching the EUMR thresholds and being subject to the Commission’s exclusive jurisdiction, the Hungarian government decided to veto the transaction based on its emergency FDI legislation introduced in the context of the covid-19 pandemic, arguing that it threatened its legitimate interests under article 21(4) EUMR.
Having found no competition concerns in the relevant markets, the Commission had approved the transaction unconditionally. Subsequently, it opened an investigation into the Hungarian decision and found that the veto was unjustified, unsuitable, disproportionate and in violation of article 21 EUMR, emphasising that ‘the Commission has exclusive competence to examine concentrations with a Union dimension and requires member states not to apply their national laws to these transactions’. 
The Commission was not convinced that the veto genuinely aimed to protect Hungary’s legitimate interests – it considered it to be unclear how the acquisition would pose a threat to a fundamental interest of society, given that both parties are well-established EU insurance companies with an existing presence in Hungary. Additionally, the measure was found to restrict the parties’ legitimate rights to engage in cross-border transactions.
The Commission requested Hungary to withdraw its veto, once again demonstrating its opposition to unjustified national protectionist measures and its determination to apply the derogation under article 21(4) EUMR narrowly.
Commission’s guidance on article 22 EUMR: further developments
Illumina/GRAIL keeping the EU courts busy
In March 2021, in light of its pledge to scrutinise distortional transactions that do not meet the EUMR thresholds, the Commission published new guidance on the referral mechanism set out in article 22 EUMR (the Guidance).  In last year’s edition, we reported that the Guidance changed the Commission’s past practice, by indicating that the Commission is now willing to accept referrals by member states of concentrations that fall below their domestic jurisdictional thresholds, provided that the turnover of at least one of the undertakings concerned does not reflect its ‘actual or future competitive potential’.  While the Guidance applies to all industries, it identifies the digital and pharmaceutical sectors as primary targets.
A month later, the Commission accepted an article 22 referral request of the acquisition by Illumina of GRAIL, initiated by the French Competition Authority and several other member states.  After unsuccessfully challenging the Commission’s attempt to assert jurisdiction over a deal in the French and Dutch national courts, Illumina appealed to the General Court  arguing the Commission’s lack of competence to examine the transaction. 
Nevertheless, Illumina notified the deal to the Commission on 16 June 2021, and on 22 July the Commission opened an in-depth investigation.  The parties have since submitted commitments, which, at the time of writing, the Commission has not yet commented on.
To further complicate things, notwithstanding the ongoing Commission’s review, in August 2021, Illumina publicly announced it had completed its acquisition of GRAIL. Objecting to what it considered ‘an unprecedented early implementation of a concentration’, the Commission subsequently confirmed it would be pursuing a gun-jumping investigation  and adopted interim measures aiming to prevent the impact on competition.  While the parties subsequently challenged the measure, it remains to be seen whether the Commission’s use of interim measures will become more frequent in the context of reviewing implemented transactions under the Guidance.
Illumina’s jurisdictional challenge was heard in December 2021 and has been granted an expedited procedure. Both appeals on jurisdiction and on interim measures, as well as the merger decision, are still pending at the time of writing. The outcome of these will certainly shape the future of the Commission’s approach under the Guidance.
One-stop shop principle under threat?
Another important jurisdictional development comes from the acquisition by Meta (previously Facebook) of Kustomer, an innovative customer services software supplier. In May 2021, the Commission accepted an article 22 referral request from Austria, where the transaction reached the national thresholds, joined by several other member states.
Interestingly, however, during the Commission’s in-depth investigation into the deal, the German FCO, which had not joined the referral request, asserted jurisdiction over the transaction based on its transaction value threshold. The FCO had not joined the referral arguing that ‘in [its] general practice a referral requires a merger to be subject to notification under national competition law, which still had to be clarified in the present case’.  It was only later that the FCO decided that the deal did meet its value of transaction jurisdictional threshold and asserted jurisdiction on this basis. This was, however, too late for the FCO to be able to refer the case to the Commission.
This led to parallel investigations by the Commission and the FCO. Such parallel investigations are possible under article 22 even though they are highly undesirable (and generally to be avoided, as explained in the Commission’s Referral Notice) as they undermine the one-stop shop principle. Under article 22, the Commission may assess a transaction on the basis of a referral, so it may only look into competitive effects in those member states that originally referred the case – in this case, Austria.  It remains to be seen whether the FCO and the Commission diverge in their approach to the case.
Implications of the DMA for merger control
On 24 March 2022, the Council of the EU and the European Parliament reached an agreement on the Commission’s proposal for the Digital Markets Act (DMA).
The DMA has been long-expected and greatly welcomed by regulators around the world, and is seen as a critical move towards the effective regulation of digital platforms. The aim, structure and key principles of the DMA have been widely discussed and have become well known.  Nonetheless, in the context of merger control, one may note the absence of any major proposed changes.
It is expected that, under article 12 of the DMA, designated gatekeepers will have to notify the Commission of any intended concentration prior to its implementation, irrespective of whether it is notifiable to the Commission or to a national competition authority. However, while the Commission’s proposal uses the word ‘notification’, the DMA does not alter the jurisdictional and notification requirements of the EUMR. Notification under the DMA is simply to inform the Commission about a forthcoming concentration. The Commission can then presumably use article 22 EUMR to invite member states to refer the case to it if it is outside its jurisdiction. The DMA process will therefore serve as an important source of information to the Commission, enabling it to keep an eye on the merger activities of gatekeepers and seek to review cases via article 22 EUMR if necessary.
Moreover, the recently reached agreement foresees endowing the Commission with the power to ban mergers for a specific period of time in the case of systemic non-compliance (reported as three non-compliance or fining decisions within eight years), thus restricting future dealmaking activity. The Commission will, therefore, have to balance its desire for greater control over gatekeepers’ M&A activity and the risk of disincentivising investment and innovation in digital markets.
Revision of the EU merger control procedures
In the previous edition, we discussed that, in March 2021, the Commission published a policy paper  that indicated that certain aspects of the EU merger control procedure could be further improved. Following a public consultation, on 6 May 2022 the Commission published a revised draft of the Implementing Regulation and Notice on Simplified Procedure. 
The main proposed changes include further expansion of cases eligible for simplified treatment with two new vertical categories,  and introduction of a ‘flexibility clause’ that would allow the Commission to treat (current) non-simplified cases under the simplified procedure in circumstances where no competition concerns are likely.  Measures to further streamline the merger control review process include the introduction of a new notification form for simplified cases, in a ‘tick-the-box format’, which primarily includes multiple choice questions and tables that must be completed rather than open text questions. The information requirements for non-simplified cases were also streamlined and clarified, and certain sections in the Form CO could be eliminated altogether.  Lastly, the proposal introduces a permanent system of fully electronic merger notifications. Notably, while the Commission formally introduced a ‘super-simplified’ procedure for offshore joint ventures with activities entirely outside of the EEA, it stopped short of fully excluding this type of notification. For many years, stakeholders have advocated for such exclusion given such transactions do not give rise to competition concerns in the EEA, often rendering the entire process pointless, as well as costly and time-consuming.
The Commission invited interested parties to comment on the proposed revisions by 3 June 2022, and expects the new rules to enter into force in 2023.
Gun-jumping under scrutiny by the EU courts
Procedural infringements have been under intense scrutiny in the European Union, leading to a string of Commission decisions and judgments over the past several years. The most recent developments in the Altice saga shed further light on the type of behaviours that may lead to gun-jumping fines.
General Court confirms Commission’s Altice decision
In previous editions, we reported that, in April 2018, the Commission fined Altice, a multinational telecoms company, €124.5 million for implementing its takeover of PT Portugal prior to its notification to and approval by the Commission.  The Commission found that certain provisions in the transaction agreement allowed Altice to exercise decisive influence over PT Portugal before closing, and that Altice did actually exercise such decisive influence on several occasions.
Altice appealed, and on 22 September 2021, the General Court largely upheld the Commission’s decision.  The Court acknowledged that ordinary course of business covenants laid down in the transaction agreements can be appropriate if they are limited to what is necessary to protect the value of the target or its commercial integrity before closing. The Court, however, decided that the three categories of restrictive covenants at issue went beyond what was necessary in this regard. 
Notably, the Court explained that regardless of whether Altice actually made use of these provisions, the mere fact that they granted Altice the possibility of exercising decisive influence over PT Portugal (on matters not necessary for the preservation of its investment) prior to notification of the transaction and its clearance meant that Altice engaged in premature implementation of the concentration in breach of articles 4(1) and 7(1) EUMR as soon as the agreement was signed.
Furthermore, the Court largely confirmed the Commission’s finding that Altice actually exercised influence over PT Portugal on several occasions,  and that several instances in which PT Portugal disclosed commercially sensitive information to Altice ‘contributed to demonstrating that [Altice] had exercised decisive influence over certain aspects of PT Portugal’s business’. 
Lastly, in line with the recent Marine Harvest judgment,  the Court upheld both fines imposed by the Commission,  confirming that obligations under article 4(1) (obligation to notify) and article 7(1) (obligation to not implement transaction before notification and clearance) EUMR pursue autonomous objectives. Therefore, implementation before filing and implementation before clearance constitute two separate infringements, liable to two separate fines. 
On 2 December 2021, Altice appealed the judgment before the Court of Justice, arguing against the dual nature of the fine and the Court’s ‘far reaching’ interpretation of the notion of early implementation.  The appeal is pending at the time of writing.
Practical implications for merging parties
While it has been widely recognised that an acquirer can trigger a gun-jumping violation by actually directing the business of the target and thereby exercising control over it prior to clearance, the Altice judgment goes a step further by finding a violation based on a mere possibility of such direction under a signed transaction agreement.
As a key practical consequence, the merging parties should pay closer attention to the interim covenants in their agreements and are advised to work closely with antitrust counsel, in particular with respect to the types of clauses that were highlighted by the court in its judgment. Such clauses ought to be truly necessary to preserve the target’s value or its commercial integrity between signing and closing. The General Court indicated that interim clauses affecting matters that seem to be within the target’s ordinary course of business are unlikely to be justified as such.
The merging parties also need to be aware that exchanges of sensitive information prior to closing can be considered an element of early implementation and contribute to the finding of gun-jumping. To minimise the risks, companies must put appropriate safeguards in place (eg, non-disclosure agreements and clean teams) and limit such exchanges to what is necessary for appraising the value of the target (prior to signing) and for maintaining this value (prior to closing).
High bar for damages following erroneous merger vetoes
The nearly decade long UPS/TNT saga is nearing its end, with the General Court rejecting earlier this year UPS’ damages lawsuit against the Commission following annulment of the decision blocking its acquisition of rival TNT.
The Commission prohibited the proposed acquisition back in 2013 as it found that the takeover would have restricted competition in the markets for international express delivery of small packages and likely lead to price increases.  Following an appeal by UPS, the General Court annulled the prohibition decision in March 2017 on the grounds that the Commission violated UPS’ rights of defence by not giving it a chance to rebut an econometric model that the Commission used to analyse the merger and reach its conclusion on likely negative effects on prices.  The Court found that UPS might have been in a better position to defend itself during the administrative procedure had the economic model been properly communicated to it, which was sufficient to annul the Commission’s decision in its entirety. 
Following the judgment, UPS sued the Commission for damages alleging that it should be awarded €1.74 billion in compensation, which UPS claimed is the amount of losses (mainly lost profits) it suffered because the deal was unjustifiably blocked.  However, on 22 February 2022, the General Court dismissed UPS’ action for damages because the company failed to show that an infringement of its procedural rights constituted the ‘determining cause’ of the damages it allegedly suffered.  The Court found that there was no direct causal link between this error  and the damages claimed by UPS, mainly because UPS was unable to show that the deal would have been approved had the Commission not committed a procedural error.  Moreover, the fact that UPS abandoned the transaction immediately following the prohibition decision broke any direct causal link between the procedural illegality and the alleged damages in any event according to the Court, suggesting that UPS should have continued to pursue the deal in the hope it would win the court appeal. 
With this judgment, the Court opted to maintain the very high bar for the merging parties to secure compensation for erroneous merger vetoes by the Commission. This will likely discourage companies from pursing such actions in the future.
Update on the revision of the Market Definition Notice
In the previous edition, we reported that the Commission launched a public consultation of the 2020 Evaluation of the Market Definition Notice (the Notice) seeking views from a variety of stakeholders to understand how the Notice has performed since its adoption in 1997.
On 12 July 2021, the Commission published a Staff Working Document  summarising the findings of the evaluation. It showed that, while the Notice helped to provide clarity on the Commission’s approach to market definition and its basic principles remain sound, it did not ‘fully cover recent evolutions in market definition practice, including those related to the digitalisation of the economy’. 
More specifically, the Commission identified six areas where the Notice might not be fully up to date, namely:
- the use and purpose of the SSNIP test;
- digital markets, in particular zero-price markets and digital ‘ecosystems’;
- the assessment of geographic markets in conditions of globalisation;
- quantitative techniques;
- the calculation of market shares; and
- non-price competition.
The Commission subsequently announced it would update the Notice accordingly, in the light of the significant developments of the past 20 years.  On 19 January 2022, the Commission launched a call for evidence inviting stakeholders’ comments on the evaluation of the Market Definition Notice, which closed in February 2022. It aims to publish the first draft of the revised Notice by June 2022, while the final version is expected to be adopted by Q1 of 2023.
Merger control and the protection of sustainable and competitive energy markets
Protecting European energy markets has hardly ever received more attention than in recent months. The Commission has recognised that the goals of ‘mitigat[ing] the impact of rising energy prices, diversify[ing] European gas supply for next winter and accelerat[ing] the clean energy transition’ are very high on its current policy priority list.  Keeping energy markets contestable, including through merger control, will therefore continue to be an important task for the Commission.
Deals in the energy sector and neighbouring markets
In November 2019, the Commission received a notification of a proposed acquisition of Daewoo Shipbuilding & Marine Engineering by Hyundai Heavy Industries Holdings – two South Korean shipbuilders that are two of the three largest global players in the construction of large liquefied natural gas (LNG) carriers. Given the parties’ large market shares and limited competition, coupled with limited market capacity and high entry barriers, the Commission opened an in-depth investigation into the deal. 
Following a more than two-year-long review process and despite the deal being approved by the Singaporean and the Chinese authorities, on 13 January 2022, the Commission issued its first prohibition decision since June 2019.  It found that the concentration would have created a dominant position and reduced competition in the worldwide market for the construction of large LNG carriers, thus leading to higher prices for EU customers and ultimately for energy consumers. Interestingly, the transaction was one of the few prohibited deals for which the parties did not offer remedies. The parties’ appeal before the General Court is pending.
Commissioner Vestager clarified that the decision’s importance extended beyond the industrial manufacturing sector and that the transaction would have had much wider implications for European energy markets, emphasising that:
Large LNG vessels are an essential element in the supply chain of LNG and enable the transport of this source of energy around the globe. LNG contributes to the diversification of Europe’s source of energy and therefore improves energy security.49
Therefore, while the Commission has by no means discouraged M&A activity in the energy sector (see, for instance, its unconditional approvals in Entega/EPS,  Andel/Energi Danmark  and DESFA/Gastrade ), this case shows that the Commission will not hesitate to intervene and block deals where competition issues arise and the deal risks having negative effects on the energy diversification and supply security in Europe. Dealmakers are likely to face additional burdens in national jurisdictions where transactions in the energy sector are candidates for FDI reviews, as illustrated by the recent IIF/Falck Renewables transaction, which required FDI approvals in Italy, France, Spain and the UK. 
How can the European Green Deal help?
While the transition to green energy has long been seen as an important way to reduce greenhouse gas emissions, its role in securing and diversifying energy supply in Europe has recently been put back into focus. Having received contributions to determine how EU competition policy can better support the European Green Deal, in September 2021, the Commission published a competition policy brief  summarising how it plans to adapt competition rules to support the achievement of Green Deal objectives. 
In the context of merger control, the Commission emphasised a strong consensus that EUMR enforcement is aligned with the European Green Deal objectives. However, the Commission indicated it would seek to incorporate sustainability considerations into its competitive assessment, including by looking into consumer preferences for sustainable products, the ‘green’ innovation theories of harm and the environmental performance of proposed remedies. Additionally, the Commission has recognised that the ‘vigorous enforcement’ of merger rules must contribute to the Green Deal objectives and ‘to preventing dependencies and increasing the resilience of the EU economy by making sure the supply chains remain diversified’.  It remains to be seen whether, and how, the Commission will further adapt its merger control rules to ensure resilient and sustainable energy markets in the following months.
Merger control divergence between the EU and the UK
As we reported in the previous edition, the EU and the UK merger control regimes started to run in parallel as of January 2021, and transactions falling within the scope of the EUMR have also been subject to UK review where the relevant thresholds were met.
In the course of 2021, the CMA initiated reviews of 12 transactions that were also notified to the Commission.  Cases examined in parallel were generally high-profile deals, often in the TMT sector, involving listed firms. While the majority of these cases were cleared unconditionally by both authorities, the assessment and outcomes in some of the investigations highlight important differences between the two jurisdictions and provide an insight into what future deals facing parallel reviews can expect.
In early January 2021, the CMA initiated a review into NVIDIA’s proposed acquisition of Arm. After a long pre-notification stage the deal was formally notified to the Commission in September 2021.  Both authorities initiated Phase II proceedings in view of potential vertical issues resulting from the combination.  Arm designs architectures for chips and licenses its intellectual property (IP) to companies such as NVIDIA, Qualcomm and Intel, which use this technology to produce semiconductor chips and related products for various end-applications.  The authorities were concerned that, post-transaction, the merged entity would have the ability and incentive to harm NVIDIA’s rivals by restricting their access to Arm’s IP.
In an attempt to address these concerns, the parties offered comprehensive behavioural remedies that they argued would ensure Arm’s neutrality and guarantee equal access to its IP. Unlike the Commission, which has adopted a relatively permissive stance on behavioural remedies in vertical and conglomerate tie-ups, the CMA has in the past expressed scepticism as to their effectiveness.  This tension became apparent following the Commission’s clearance of Google’s acquisition of Fitbit subject to complex behavioural remedies,  when the CMA’s chief executive Andrea Coscelli said that such behavioural remedies would probably not have been accepted in the UK. 
In the same spirit, the CMA explicitly rejected the behavioural remedies proposed by NVIDIA when initiating the in-depth probe, indicating that the competition issues that were identified were unlikely to be adequately addressed by a behavioural-type remedy. 
The deal was eventually abandoned in early 2022 following an administrative challenge by the US Federal Trade Commission.  Had the parallel EU and UK investigations been allowed to run their course, it is likely that the CMA’s stance on the behavioural remedies would have stopped the deal in any event, even if such remedies were accepted by the Commission.
Perhaps an even clearer illustration of the clashing views on remedies between the two enforcers and the impact this can have on transactions is the recently abandoned merger between two Finnish cargo-handling equipment makers, Cargotec and Konecranes.
Both companies manufacture a range of container and cargo handling equipment and solutions mainly used in port terminals. Following formal notifications of the proposed merger in May 2021, the Commission and the CMA initiated their first parallel in-depth investigation in July.  Both authorities were mainly concerned that the proposed combination would eliminate competition between two close rivals and result in high market shares in the supply of certain types of cargo-handling equipment in an already concentrated market in the EEA and the UK, respectively.
To address the authorities’ concerns, the merging parties offered to carve out packages of assets from within each of their existing businesses, which could then be sold as a new combined business. The Commission accepted these commitments, noting that the ‘divested assets constitute a viable business that would enable suitable buyers to effectively compete with the merging entity’, and cleared the deal in February 2022. 
However, the same remedy package was rejected by the CMA a month later. In its press release the CMA underlined that the offered asset package ‘lacked important capabilities, so [it] would not enable whoever bought them to compete as strongly as the merging businesses do at present’. Moreover, the CMA explained that the process of carving out these assets from the merging parties’ existing operations and knitting them together into a new one would be complex and risky, which could further impair how effectively the purchaser would be able to compete.  In the absence of alternative offers, the CMA decided to block the transaction. Faced with similar issues in the US,  the parties abandoned the deal.
There have also been some noteworthy differences in the assessment of digital mergers. Generally, there appears to be a consensus on the issues that tend to arise in the digital sector and how to solve them.  However, the authorities had divergent views with respect to Meta’s proposed acquisition of Kustomer, a US-based start-up that provides customer relationship management (CRM) software to businesses.
The transaction was notified to the Commission in June 2021, and a month later to the CMA. In August, the Commission decided to open an in-depth investigation in view of potential vertical issues.  The CRM software offered by Kustomer and its rivals integrate with a range of communication tools, including Meta’s Messenger, Instagram and WhatsApp, which help businesses to interact with their own customers. The Commission was mainly concerned that, following the transaction, Meta would have the ability, as well as the economic incentive, to engage in an input foreclosure strategy by denying competing CRM software providers access to its messaging tools. 
In order to address the Commission’s concerns, Meta committed to guarantee non-discriminatory access to its messaging channels and their future improvements to rival CRM software providers, for a period of 10 years. The Commission accepted Meta’s proposed commitment and cleared the transaction in January 2022. 
In a parallel investigation, contrary to the Commission, the CMA found that while Meta would have the ability to restrict access to its messaging channels to Kustomer’s rivals, it would have no economic incentive to do so. The UK enforcer considered that any potential gains to Meta on the CRM software market stemming from a foreclosure strategy were likely to be outweighed by the losses, given that Meta collects significant data from the use of its messaging tools that is monetised through advertising, and thus Meta has an interest in retaining as many businesses as possible in its ecosystem.  The CMA concluded that the merger would not give rise to competition concerns and cleared the transaction unconditionally.
This case is a clear warning to companies that, even in view of seemingly similar market conditions, the competition authorities in Brussels and London may take divergent views on the substance of their case. Furthermore, had the CMA agreed with the Commission’s assessment of Meta’s incentives to engage in foreclosure, it seems likely that the parties would have faced an uphill battle in the UK with respect to the rather complex behavioural remedy that was accepted by the Commission.
Wave of TMT mergers
The changing nature of the TMT industry powered by a transition to digital environment and mobile access has led to consolidation in the TMT sector, with a record level of M&A activity in 2021. 
Established media companies have looked for collaboration opportunities to expand their activities into new and innovative markets. For instance, Sky and ViacomCBS decided to combine their strengths and set up a joint venture to operate a video streaming service distributing audio-visual (AV) content directly to consumers or via third-party platforms in a number of European countries. Having concluded that retailers do not depend on Sky and ViacomCBS’ audio-visual content and pay-TV channels, and that the companies will continue to face competition from other players, the Commission found no competition concerns and decided to clear the transaction unconditionally. 
The Commission also unconditionally cleared Amazon’s acquisition of MGM Studios, a producer and distributor of AV content. As Amazon’s largest media acquisition and an add-on to its AV content business, the US$8.45 billion deal was expected to raise competition concerns, particularly in the current political context in which the regulators vouch to crack down on big tech deals. Nonetheless, the Commission decided that the transaction would raise no competition concerns in Europe, in view of limited horizontal overlaps and vertical relationships between the parties. 
Another unconditional clearance involved a transaction by which United Group, a telephony, broadband and pay-TV services provider active in South East Europe, acquired Wind Hellas, active in mobile, fixed and internet services as well as retail pay-TV in Greece. The Commission found that the transaction would not lead to any horizontal concerns due to the strong competition exerted by other players, while disregarding vertical concerns because of the combined entity’s lack of ability and incentive to implement an input foreclosure strategy. 
A number of cases in the sector did require structural remedies. The Commission initially found that the proposed acquisition of Telekom Romania Communications (TKR), a Romanian telecommunications operator, by Orange, a global telecommunications operator, would have raised serious horizontal concerns on the market for retail mobile telecommunications services in Romania. In particular, Orange would have acquired TKR’s 30 per cent minority shareholding in TRMC, one of its key competitors, which would have given it access to the competitor’s commercially sensitive information and reduced its incentives to compete. To address the Commission’s concerns, Orange committed to divest TKR’s 30 per cent shareholding in TRMC to an upfront buyer before closing its acquisition of TKR. Finding that these commitments fully removed the identified competition concerns, the Commission approved the transaction. 
 This article aims to provide an overview of the main EU merger control developments over the period from June 2021 to April 2022. The contents of this article are for reference purposes only: they do not constitute legal advice and should not be relied upon as such.
 See ‘Global M&A activity smashes all-time records to top $5 trillion in 2021’, Reuters (20 December 2021).
 See Directorate General for Competition, ‘Merger statistics’.
 In the same line, press reports suggest that in the first quarter of 2022 global M&A activity fell to its lowest level since the start of the covid-19 pandemic. See, for instance, ‘Global dealmaking falls to lowest level since start of pandemic’, Financial Times (1 April 2022).
 See Commission Staff Working Document, ‘Evaluation of procedural and jurisdictional aspects of EU merger control’, SWD(2021) 66 final, discussed below in ‘Procedural developments: Revision of the EU merger control procedures’.
 Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings, OJ L24, 29.01.2004, pp. 1–22.
 See Commission press release, ‘Mergers: Commission finds that Hungary’s veto over the acquisition of AEGON’s Hungarian subsidiaries by VIG breached Article 21 of the EU Merger Regulation’, IP/22/1258.
 ‘Communication from the Commission: Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases’, C(2021) 1959 final (26 March 2021).
 For further information, see HSF Competition Notes, ‘Commission publishes guidance on Article 22 referrals for transactions falling below national thresholds – New approach can impact pharma, tech and other deals involving start-ups or innovators’ (1 April 2021), available at: https://hsfnotes.com/crt/2021/04/01/commission-publishes-guidance-on-article-22-referrals-for-transactions-falling-below-national-thresholds-new-approach-can-impact-pharma-tech-and-other-deals-involving-start-ups-or-innovator/.
 Commission’s daily news for 20 April 2021.
 France was joined by Belgium, the Netherlands, Greece, Iceland and Norway. See ‘Illumina loses French legal challenge to EU referral of Grail deal’, MLex (1 April 2021).
 For further information, see HSF Competition Notes, ‘Illumina challenges the European Commission’s new approach on merger case referrals: lessons for M&A deals’ (19 October 2021), available at: https://hsfnotes.com/crt/2021/10/19/illumina-challenges-the-european-commissions-new-approach-on-merger-case-referrals-lessons-for-ma-deals/.
 See Commission Notices, OJ, 28.06.2021.
 Commission decision in Case No. M.10188, Illumina/GRAIL; see Commission press release ‘Mergers: Commission opens in-depth investigation into proposed acquisition of GRAIL by Illumina’, IP/21/3844.
 See Commission press release, ‘Mergers: Commission starts investigation for possible breach of the standstill obligation in Illumina/GRAIL transaction’, IP/21/433.
 See Commission press release, ‘Mergers: Commission adopts interim measures to prevent harm to competition following Illumina’s early acquisition of GRAIL’, IP/21/5661.
 German FCO press release, ‘Bundeskartellamt clears acquisition of Kustomer by Meta (formerly Facebook)’ (11 February 2022).
 Commission Notice on case referral in respect of concentrations, OJ C56, 05/03.2005, pp. 2–23, para. 50, footnote 45.
 For further information, see HSF Competition Notes, ‘European Commission proposed legislation to overhaul regulation of digital platforms in the EU’ (18 December 2020), available at: https://hsfnotes.com/crt/2020/12/18/european-commission-proposed-legislation-to-overhaul-regulation-of-digital-platforms-in-the-eu/.
 See Commission Staff Working Document, ‘Evaluation of procedural and jurisdictional aspects of EU merger control’, SWD(2021) 66 final.
 The regulatory texts under revision are the Commission Regulation (EC) No 802/2004 implementing Council Regulation No 139/2004 on the control of concentrations between undertakings (the Implementing Regulation), and the Commission Notice on a simplified procedure for treatment of certain concentrations (the Notice on Simplified Procedure). The draft texts are available at https://ec.europa.eu/competition-policy/public-consultations/2022-merger-simplification_en.
 This includes cases with low downstream purchasing share and cases with limited increments to a pre-existing vertical integration.
 For instance, for horizontal overlaps where the combined market share of the parties to the concentration is 20–25 per cent and for vertical relationships with shares upstream and downstream from 30–35 per cent; and for joint ventures with turnover or assets value in the EEA between €100 and €150 million.
 This includes information requirements in section 8 of the Form CO concerning ‘Cooperative Agreements’, ‘Trade between Member States and imports from outside the EEA’, and ‘Trade Associations’.
 See Commission decision in Case No. M.7993, Altice/Pt Portugal.
 See General Court judgment in Case T-425/18, Altice v Commission.
 The covenants analysed by the Court include: (1) covenants granting Altice veto rights to appoint any new director or officer; (2) covenants that required PT Portugal to obtain Altice’s consent to practically any change in its pricing policy; and (3) covenants requiring Altice’s consent to enter, terminate or modify certain types of contracts covering a wide range of commercial matters. See Case T-425/18, Altice v Commission, paras. 109–131.
 Including by approving (ordinary) commercial decisions of PT Portugal. See Case T-425/18, Altice v Commission, paras. 170–218.
 The Court stopped short of saying that such exchanges of sensitive information in themselves would amount to an early implementation. See Case T-425/18, Altice v Commission, para. 236.
 See ECJ judgment in Case C-10/18 P, Marine Harvest v Commission.
 The total fine of €124.5 million imposed by the Commission consisted of two parts: (1) €62.5 million for implementing the transaction before notification in breach of article 4(1) EUMR; and (2) €62.5 million for implementing the transaction before approval in breach of article 7(1) EUMR. The Court reduced the fine imposed in relation to the violation of article 4(1) by 10 per cent on account of gravity as it viewed the infringement as less serious than the Commission.
 See Case T-425/18, Altice v Commission, paras. 262–277.
 See Case C-746/21 P, Altice v Commission grounds of appeal.
 The Commission found that the merger would reduce the number of significant players to only three or two in several EU member states, leaving DHL and (sometimes) FedEx as the only viable alternatives to customers. See Commission press release, ‘Mergers: Commission blocks proposed acquisition of TNT Express by UPS’, IP/13/68.
 In particular, after issuing a statement of objections the Commission modified the econometric model that it used in its analysis and failed to communicate the final version to UPS and allow the company to submit is observations before adopting its decision. See Case T-194/13, United Parcel Service v Commission.
 A subsequent appeal of the judgment brought by the Commission was dismissed by the Court of Justice in January 2019; see Case C-265/17 P, Commission v United Parcel Service.
 The damages that UPS claimed resulted from the blocked transaction and its inability to complete the merger consisted of: (1) loss of profits reflecting the net value of synergies that the parties expected to achieve; (2) the payment to TNT of a break-up fee following the abandonment of the deal; and (3) costs associated with UPS’ participation in the EU merger review of the later deal between FedEx and TNT.
 See Case T-834/17, United Parcel Service v Commission.
 The Court, first, decided that out of several breaches alleged by UPS only the one relating to the failure to communicate the econometric model, which was established earlier by the Court, was sufficiently serious to give rise to the Commission’s liability.
 This is because, first, UPS was not able to show that the Commission’s procedural error was sufficient to invalidate in its entirety the economic analysis of the transaction between UPS and TNT, and second, the Commission’s decision not to clear the deal was based on the economic analysis of several factors, not only on the analysis carried out on the basis of the econometric model that was vitiated by the infringement. See Case T-834/17, United Parcel Service v Commission, paras. 81–88, 92–123, 342 and 358.
 See Case T-834/17, United Parcel Service v Commission, paras. 359–365.
 Commission Notice on the definition of relevant market for the purposes of Community competition law, OJ C 372, 09.12.1997, pp. 5–13.
 Commission Staff Working Document, SWD(2021) 199 final.
 See Commission press release, ‘Competition: Commission publishes findings of evaluation of Market Definition Notice’, IP/21/3585.
 Communication from the Commission, COM(2021)713 (18 November 2021).
 Commission press release, ‘REPowerEU: Joint European action for more affordable, secure and sustainable energy’, IP/22/1211.
 Commission press release, ‘Mergers: Commission opens in-depth investigation into proposed acquisition of DSME by HHIH’, IP/19/6792.
 Commission decision in Case No. M.9343, Hyundai Heavy Industries Holdings/Daewoo Shipbuilding & Marine Engineering.
 Commission press release, ‘Mergers: Commission prohibits proposed acquisition of Daewoo Shipbuilding & Marine Engineering by Hyundai Heavy Industries Holdings’, IP/22/323.
 Commission decision in Case No. M.10181, Entega/Viessmann/EMS/EPS.
 Commission decision in Case No. M.10212, Andel/Energi Danmark.
 Commission decision in Case No. M.10139, DESFA/GasLog/BTG/Gastrade.
 Commission Competition policy brief 2021-01, September 2021.
 For further information, see HSF Competition Notes, ‘The European Commission sheds ‘greener’ light on the relationship between Competition policy and the Green Deal objectives’ (28 September 2021), available at: https://hsfnotes.com/crt/2021/09/28/the-european-commission-sheds-greener-light-on-the-relationship-between-competition-policy-and-the-green-deal-objectives/.
 Communication from the Commission, COM(2021)713 (18 November 2021).
 Out of a total of 50 merger reviews initiated by the CMA in 2021, the following 12 were reviewed in parallel with the Commission: SK Hynix/Intel NAND, IAG/Air Europa, AMD/Xilinx, Cargotec/Konecranes, AstraZeneca/Alexion, IHS Markit/CME Global/JV, Meta/Kustomer, S&P/IHS Markit, NVIDIA/Arm, Veolia/Suez, Thermo Fisher/PPD and Microsoft/Nuance.
 See CMA’s invitation to comment on anticipated acquisition by NVIDIA of Arm’s Intellectual Property Group business of 6 January 2021.
 Commission press release, ‘Mergers: Commission opens in-depth investigation into proposed acquisition of Arm by NVIDIA’, IP/21/5624. See also referral by the Secretary of State for Digital, Culture, Media and Sport to the CMA for a Phase II in-depth investigation of 16 November 2021.
 These end-applications include, for example, data centres, automotive, gaming and Internet of Things devices.
 ‘Comment: Nvidia-Arm deal’s EU notification likely to herald a clash of regulators’, MLex (3 September 2021).
 For a detailed discussion of the Google/Fitbit transaction see ‘European Union: Merger Control Updates’, GCR, 2021.
 ‘Google-Fitbit’s EU behavioral remedies would likely have failed in UK, CMA chief says’, MLex, (9 February 2021).
 CMA, ‘A report to the Secretary of State for Digital, Culture, Media & Sport on the anticipated acquisition by NVIDIA Corporation of Arm Limited’ (20 July 2021).
 Federal Trade Commission (FTC) press release, ‘ FTC Sues to Block $40 Billion Semiconductor Chip Merger’ (2 December 2021).
 See Commission press release, ‘Mergers: Commission opens in-depth investigation into proposed merger of Cargotec and Konecranes’, IP/21/3428; and Case ME/6927/21 Cargotec/Konecranes CMA referral for an in-depth Phase II investigation of 13 July 2021.
 See Commission press release, ‘Mergers: Commission clears the merger of Cargotec with Konecranes, subject to conditions’, IP/22/1329.
 See Case ME/6927/21 Cargotec/Konecranes, final report (29 March 2022).
 See United States Department of Justice press release, ‘Shipping Equipment Giants Cargotec and Konecranes Abandon Merger After Justice Department Threatens to Sue’ (29 March 2022).
 This was reflected in the recent tie-up between Nuance and Microsoft, which was cleared unconditionally by both the Commission and the CMA. See Commission decision in Case No. M.10290, Microsoft/Nuance and CMA decision in Case ME/6940/21 Microsoft/Nuance.
 See Commission press release, ‘Mergers: Commission opens in-depth investigation into proposed acquisition of Kustomer by Facebook’, IP/21/4021.
 CRM providers rely on Meta’s application programming interface (APIs) to connect to Facebook Messenger, Instagram and WhatsApp, and to integrate them into their software.
 See Commission decision in Case No. M.10262, Meta/Kustomer.
 See CMA decision in Case ME/6920/20, Meta/Kustomer.
 The Lawyer Portal, ‘Media Mergers and Acquisitions’ (16 December 2021).
 Commission decision in Case No. M.10456, Sky/ViacomCBS/JV.
 Commission decision in Case No. M.10349, Amazon/MGM.
 Commission decision in Case No. M.10475, United Group/Wind Hellas.
 Commission decision in Case No. M.10153, Orange/TKR.