European Union: Merger Control

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Annual update 2017–2018

The number of cross-border deals in the European Union increased in 2017, and deal value has more than doubled since 2016.2 Correspondingly, and as expected,3 the number of mergers notified to the European Commission (the Commission) in 2017 surpassed the 2016 total (380 versus 362). We are now almost back to pre-financial crisis levels of EU M&A activity (in 2007 an unprecedented 402 mergers were notified to the Commission).4 This trend appears likely to continue in 2018, with 113 mergers already notified to the Commission as at 30 April 2018.

The number of cases reviewed by the Commission under the simplified procedure has increased steadily since 2013, and constitutes the vast majority of cases reviewed (280 in 2017 (74 per cent of all notified cases in 2017) and already 93 (82 per cent of all notified cases) as at 30 April 2018). The seven Phase II investigations opened by the Commission in 2017, although not as many as the 11 in 2015 and eight in 2016, still represent a significant number. The Director-General for Competition, Johannes Laitenberger has seen a ‘clear trend that more cases, often transactions in already highly concentrated markets, require in-depth scrutiny and complex and far-reaching remedies before [the Commission] can approve them’.5 In this regard, it is of note that in 2017 the Commission cleared 20 deals subject to remedies (18 at Phase I, and two at Phase II6) and prohibited two others,7 while nine deals were withdrawn prior to a decision (seven in Phase I and two in Phase II).8

One of the key themes in EU merger control in 2017–2018 has been procedural fairness. In relation to the Commission’s duty to respect the parties’ rights of defence in merger proceedings, it is notable that the General Court (GC) recently annulled two Commission decisions on due process grounds: UPS v Commission9 and KPN v Commission (the Commission has appealed the former to the European Court of Justice (CJEU)). The Commission has brought a number of cases for procedural infringements and this is expected to remain a key priority going forward. In 2017–2018 the Commission imposed a fine of €110 million on Facebook for providing incorrect or misleading information (on which we reported in last year) and a fine of €124.5 million on Altice for gun-jumping. It also opened investigations against a number of companies for similar infringements. In this regard, Johannes Laitenberger has noted that procedural fairness is a ‘key element in merger investigations’ and that it ‘needs to be implemented both ways’, ie, by the Commission and by the parties.10

In 2017–2018 the Commission reviewed three mega-mergers (Dow/DuPont, ChemChina/Syngenta and Bayer/Monsanto) leading to increased consolidation in the agrochemicals industry.11 All three deals were approved subject to significant divestments. In Dow/DuPont and Bayer/Monsanto, potential effects on innovation played an important role in the Commission’s assessment – a continuing trend, and in Dow/DuPont the Commission conducted an analysis of common shareholdings – a topic increasingly part of merger control assessments.

Mergers in the digital industry have remained under close scrutiny in 2017–2018. The Commission has expressed concerns that certain highly-valued targets with no or limited turnover in the digital (and pharmaceutical) industry might escape EU scrutiny under the current EU Merger Regulation (EUMR)12 thresholds, and in early 2017 it suggested complementing the existing turnover thresholds with deal-value-based ones. Austria and Germany have already introduced such thresholds and it remains to be seen if the Commission does so too. We note in this regard that the Apple/Shazam deal did not meet the EU thresholds and was originally notified in Austria (where it met the turnover thresholds), which then submitted a referral request to the Commission. The Commission has opened a Phase II review of this deal, as it did with another technology case, Qualcomm/NXP Semiconductors.

In this article, we consider in more detail key EUMR developments in 2017–2018, including the following.

    • From a jurisdictional perspective:

• the CJEU judgment in Austria Asphalt, which clarified (to some extent) the treatment of non-full-function joint ventures under the EUMR;13

• stakeholders’ responses, published in July 2017, to the 2016 Commission consultation on certain jurisdictional and procedural aspects of the EUMR;14 and

• the Commission’s proposal for screening foreign direct investments into the European Union.15

  • From a procedural perspective:

• the €124.5 million fine imposed on Altice and the Statement of Objections (SO) sent to Canon, both for gun-jumping;16

• the GC’s judgment upholding the fine on Marine Harvest for gun-jumping;17

• the CJEU’s judgment in Ernst & Young regarding the interpretation of the standstill obligation under the EUMR;18

• the SOs sent to Merck, Sigma-Aldrich and General Electric for providing incorrect or misleading information;19

• the GC’s judgment in KPN v Commission annulling conditional merger approval on due process grounds;20 and

• the Commission’s forthcoming best practice guidelines on requests for internal documents.21

  • From a substantive perspective:

• the Commission’s continued focus on innovation in the wake of Dow/DuPont (which we addressed last year) illustrated inter alia by its decision in Bayer/Monsanto;22

• the Commission’s increasingly close scrutiny of conglomerate effects illustrated by its decisions in Qualcomm/NXP Semiconductors, Essilor/Luxottica and Bayer/Monsanto;23

• other notable Phase II cases;24 and

• the Commission’s examination of common ownership issues in merger reviews.25

At the time of writing this article, Brexit negotiations are ongoing and the terms of the United Kingdom’s relationship with the EU post-Brexit remain highly uncertain. Therefore, as regards the impact of Brexit on EU and UK merger control, we refer to last year’s article26 and advise companies to remain alert and regularly check Herbert Smith Freehills’ website27 for the latest developments in this area.

Jurisdictional developments

CJEU judgment on changes of control over non-full-function joint ventures – Austria Asphalt

On 7 September 2017, the CJEU delivered its much-anticipated judgment on a request for a preliminary ruling by the Austrian Supreme Court in the Austria Asphalt case. 28

The point at issue was whether articles 3(1)(b) and 3(4) EUMR must be interpreted to mean that a move from sole to joint control over an existing undertaking, in circumstances where the undertaking previously having sole control becomes one of the undertakings acquiring joint control, constitutes a concentration only where the undertaking over which joint control is acquired is a full-function joint venture (JV), ie, where it exercises, on a lasting basis, all the functions of an autonomous economic entity.

The CJEU followed Advocate General Kokott’s opinion29 and held that the creation of a JV will require notification under the EUMR only if it is full-function. This will be the case regardless of whether the JV is created as a new entity (greenfield JV) or formed from a previously solely-controlled undertaking (brownfield JV). This is because the purpose of the EUMR is to control lasting changes in the structure of the market, which depends on the ‘actual emergence of a joint venture into the market’ (ie, an undertaking performing on a lasting basis all the functions of an autonomous economic entity), and not on whether the JV is greenfield or brownfield. 30

According to the CJEU, the opposite interpretation would effectively extend the scope of the ex ante control in the EUMR to transactions that are not capable of having an effect on the structure of the market. At the same time, it would ‘limit the scope of Regulation No 1/2003, which would then no longer be applicable to such transactions, even though they may lead to coordination between undertakings within the meaning of Article 101 TFEU’.31

The CJEU judgment was keenly anticipated as this was an area characterised by a significant degree of uncertainty: the Commission’s Consolidated Jurisdictional Notice (the CJN) 32 and decisional practice were unclear on the point at issue,33 leading to conflicting views amongst the legal community.

The judgment is therefore a welcome development, in particular for industry sectors in which non-full-function JVs are common (eg, energy). The CJEU’s clarification increases legal certainty for companies and has important practical implications. In particular, non-full-function JVs will not be notifiable in the European Union. This does not mean that they escape review: they might still be reportable elsewhere, eg, in those EU member states that do not require full-functionality (such as the United Kingdom, Austria, Germany and Poland);34 further, these JVs may still be at risk of being investigated by the Commission under article 101 of the Treaty on the Functioning of the European Union (TFEU) (if the transaction could lead to anticompetitive coordination between the parents).

Even though the judgment’s rationale appears generally applicable, so that in principle only full-function JVs should be caught by the EUMR (irrespective of the acquisition scenario), some uncertainty remains as the CJEU only addressed the specific scenario of Austria Asphalt. Paragraph 91 of the CJN remains in place and this seems to suggest that an acquisition, from third parties, of a previously full-function JV that will no longer be full-function post-transaction would be notifiable. Hopefully the Commission will clarify this point in the future.

In view of the above and given that the full-functionality analysis can be quite complex in practice, it remains prudent for parties considering a JV that may meet the EU thresholds to always seek specialist advice.

Commission consultation on potential changes to EUMR thresholds and other issues


In October 2016, the Commission launched a public consultation seeking feedback from stakeholders on several jurisdictional and procedural aspects of the EUMR (the Consultation).35

The Consultation was open until mid-February 2017 and attracted wide interest with over 90 stakeholders submitting their views. The responses of the stakeholders and a summary thereof were published on the Directorate-General for Competition (DG Competition) website in July 2017.36

In the paragraphs below, we discuss two key aspects of the Consultation, namely the proposed reform of the jurisdictional thresholds and the treatment of extra-EEA (ie, outside the European Economic Area or offshore) JVs.

Jurisdictional thresholds

The area attracting most interest was the Commission’s suggestion to reform the EUMR jurisdictional thresholds to catch the acquisition of ‘highly-valued targets with no or limited turnover’. The Commission’s main concern in this regard is that transactions involving acquisition of a target with insufficient EU-wide turnover at the time of the transaction, but with competitive significance (a scenario that often arises in the technology or the pharmaceuticals industries37), are likely to escape antitrust scrutiny under the current jurisdictional thresholds. The Commission consulted on whether to complement the existing turnover-based thresholds in the EUMR with alternative criteria, such as a threshold based on transaction value (similar to those recently introduced in Germany and Austria).

According to the Commission, the majority of public and private stakeholders responding to the Consultation do not perceive any (significant) enforcement gap in relation to such acquisitions and accordingly do not see any need for introducing complementary jurisdictional thresholds.

Respondents argue, inter alia, that the few cases of highly valued acquisitions of low turnover targets that do not meet the EU thresholds are typically subject to merger review at national level, and could therefore be referred to the Commission pursuant to articles 4(5) and 22 of the EUMR if appropriate.38 They also considered that the introduction of additional thresholds would be disproportionate and would create an unnecessary administrative burden resulting in a chilling effect on innovation. Moreover, they considered that the purchase price does not give any indication of the possible competitive significance of a transaction.

A number of stakeholders urged the Commission to wait and analyse the implementation of the new thresholds in Germany and Austria (where the transaction value is set at €400 million for Germany and €200 million for Austria) to draw lessons both on the extent of any enforcement gap and how best to address it.

Although it remains to be seen what the Commission will decide, in view of the stakeholders’ responses the introduction of value-based thresholds under the EUMR appears rather unlikely (at least in the short term). The Commission – and other regulators – will no doubt continue to monitor this issue.39

Treatment of non-problematic transactions

In the context of the Consultation, the Commission also invited comments on whether there is scope for further simplification of the treatment of certain categories of non-problematic transactions, such as ‘extra-EEA JVs’ (ie, JVs that operate outside the EEA and have no effect on competition within the EEA, often referred to as ‘offshore’ JVs). Such transactions are currently notifiable on the basis of the turnover of the parents, albeit under a ‘super simplified’ regime, but one which still involves material information burdens.

According to the Commission, private stakeholders overall supported the idea of amending the EUMR to simplify further the applicable procedure (either by means of an exemption system or by means of a ‘lighter information system’). By contrast, only half of the national competition authorities (NCAs) that responded to the Consultation were in favour of amending the current legislative framework to further simplify the procedure.

Next steps

In its Management Plan for 2018, DG Competition notes that the results of the Consultation show that ‘overall the EU merger control system works well and there is no need for a fundamental overhaul’ but ‘there appears to be scope for some limited improvements’ and therefore, the Commission will reflect in 2018 on whether a reform of the EUMR is needed.40 At the time of writing, the Commission has not announced whether it intends to proceed with the proposed reform. Ultimately, any changes to the EUMR would require unanimity at member state level and agreement with the European Parliament.

Commission's proposal for screening foreign direct investments into the EU

Against a backdrop of protectionist political rhetoric worldwide,41 there has been increased interest by governments in recent years to expand their ability to intervene in the M&A process to protect national interests.

The European Union does not currently have a comprehensive legal framework in place which addresses the security and public order risks of foreign direct investment (FDI) into the European Union. The EUMR does not allow for political considerations to be taken into account as part of the merger review process, but allows member states to take appropriate measures to protect legitimate interests.42

Calls for specific EU legislation for the control of FDI into the European Union have been made for some time now, and the debate has intensified following an increasing level of FDI (in particular purchases of key EU companies by Chinese state-owned enterprises).43

On 13 September 2017, as part of his State of the Union address, Commission President Juncker introduced a set of proposals for the screening of FDI into the European Union, stating ‘[w]e are not naïve free traders. Europe must always defend its strategic interests.’44

The core of the Commission’s proposal is a proposed Regulation establishing a framework for screening of FDI.45 The aim is to establish a framework for member states (and in certain circumstances, the Commission) to screen FDI, with a view to ensuring legal certainty while maintaining sufficient flexibility to take into account the diversity between member states. It would not require member states to adopt or maintain a screening mechanism, but would provide a framework for those that do to ensure that the FDI meets a number of basic requirements. The draft Regulation also aims to establish a cooperation and information exchange mechanism between member states and the Commission in relation to FDI.

The proposed Regulation is subject to the ordinary legislative procedure and requires approval of the European Parliament and the Council.46 It remains to be seen when – and indeed if – the proposal will be adopted, and in what form.47

Procedural developments

Merging parties’ procedural obligations remain a top priority

Commission fines Altice for gun-jumping

On 18 May 2017, the Commission sent a SO48 to the multinational telecoms company Altice for implementing its takeover of PT Portugal prior to its notification and prior to the Commission’s approval,49 in breach of articles 4(1) and 7(1) EUMR,50 respectively.

On 24 April 2018, the Commission fined Altice €124.5 million taking into account that Altice had breached both these provisions.51 The fine is considerably higher than fines imposed in previous gun-jumping cases,52 but in line with other recent fines for procedural infringements.53, 54 Altice has stated that it will appeal.55

In particular, the Commission considered that certain provisions of the purchase agreement resulted in Altice acquiring the legal right to exercise decisive influence over PT Portugal before clearance of the transaction, and that in certain cases Altice did actually exercise such decisive influence. The Commission’s decision has not yet been published, but its press release provides two examples:

  • Altice had instructed PT Portugal on how to carry out a marketing campaign; and
  • Altice sought and received detailed commercially sensitive information about PT Portugal outside the framework of any confidentiality agreement.

This is not the first fine imposed on Altice for gun-jumping. In November 2016, it received a fine of €80 million from the French Competition Authority (FCA) for gun-jumping in the context of its proposed acquisitions of SFR and OTL (concluded in 2014), as the parties had started to integrate and share competitively sensitive information before receiving the FCA’s approval.56

SO to Canon for gun-jumping

On 6 July 2017, the Commission issued a SO to Canon that provisionally concludes that it breached the EUMR by implementing its acquisition of Toshiba Medical Systems Corporation prior to notification to or approval by the Commission. 57

The Commission’s preliminary view is that Canon used a two-step ‘warehousing’ transaction structure involving an interim buyer, which allowed it to acquire Toshiba Medical Systems before obtaining approval. In particular, as a first step, the interim buyer acquired 95 per cent of the share capital of Toshiba Medical Systems for €800, whereas Canon paid €5.28 billion for both the remaining 5 per cent and share options over the interim buyer’s stake. This first step was carried out prior to notification to or approval by the Commission. As a second step, following approval of the merger by the Commission, Canon exercised the share options acquiring 100 per cent of the shares of Toshiba Medical Systems. At the time of writing, the Commission’s investigation is ongoing.58 According to the Commission, its investigation will not impact its approval of the transaction.

General Court confirms €20 million fine imposed on Marine Harvest for gun-jumping

On 26 October 2017, the GC upheld59 the Commission’s decision imposing a fine of €20 million on Marine Harvest for acquiring de facto control of its rival Morpol prior to the Commission’s approval.

Commission decision

On 14 December 2012, Marine Harvest entered into a share purchase agreement (SPA) with Friendmall and Bazmonta (both controlled by a single individual, Mr Jerzy Malek, the founder and CEO of Morpol) to acquire a 48.5 per cent stake in Morpol, which was at the time a publicly listed company. The SPA transaction, which was not notified to the Commission under the EUMR, was completed on 18 December 2012 (the December 2012 Acquisition).

On 15 January 2013, Marine Harvest made a mandatory public offer for the remaining 51.5 per cent shares in Morpol, the majority of which it ultimately acquired on 12 March 2013. It formally notified the transaction to the Commission on 9 August 2013. As part of this process Marine Harvest informed the Commission that, in accordance with article 7(2) EUMR,60 it would not exercise any voting rights or other control over Morpol. On 30 September 2013, the Commission approved the transaction subject to divestment of part of Morpol’s business.61

On 23 July 2014, the Commission issued an infringement decision62 fining Marine Harvest €20 million for breach of the notification and standstill obligations. In particular, it found that the acquisition of the 48.5 per cent stake conferred on Marine Harvest de facto sole control over Morpol, as Marine Harvest enjoyed a stable majority at Morpol shareholders’ meetings in practice, due to the wide dispersion of the remaining shares and previous attendance rates at meetings.

General Court judgment

Marine Harvest appealed the Commission decision to the GC arguing, amongst other things, that under article 7(2) EUMR the December 2012 Acquisition was exempted from the standstill obligation. According to this provision, the standstill obligation does not apply to a public bid or to a series of transactions in securities if certain conditions are met. Marine Harvest argued that the December 2012 Acquisition and the subsequent public bid constituted a ‘single concentration’ and thus the obligation to notify arose only at the time of the stage of the public bid.

In its lengthy judgment, the GC confirmed the Commission’s view that the December 2012 Acquisition alone (which was launched before the public offer) conferred upon Marine Harvest de facto sole control over Morpol.63 The GC held that the exemption from the standstill obligation under article 7(2) EUMR was not applicable, rejecting Marine Harvest’s arguments that the December 2012 Acquisition and the subsequent public offer constituted a ‘single concentration’. The GC noted in this regard that ‘[t]he concept of a single concentration is not intended to apply in a situation in which sole de facto control of the only target company is acquired from one seller by means of a single initial private transaction, even where it is followed by a mandatory public offer’.64

The GC further confirmed the Commission’s approach in finding that Marine Harvest’s breaches of the filing and standstill obligations constituted two separate infringements, justifying two distinct fines in a single decision. As regards the principle of ne bis in idem,65 the GC concluded that this principle does not apply in situations where an authority imposes two penalties in a single decision (even if those penalties are imposed for the same actions), but only to situations where a punitive decision follows a previous one.66

Marine Harvest has appealed to the CJEU and the judgment is pending.


The judgment sheds light on certain gun-jumping issues, particularly in cases where the target is a publicly listed company. It confirms that the acquisition of a minority shareholding can in specific circumstances lead to an acquisition of de facto control, which triggers a merger control notification. Moreover, it highlights the importance of notifying transactions that are carried out in stages before control has been acquired. Given that it might be difficult in practice to determine the exact moment of the acquisition of control (in particular in case of a series of transactions), merging parties should seek specialist advice and, if necessary, consult with the Commission well before closing of the transaction to avoid the risk of early implementation.

CJEU judgment in Ernst & Young

On 30 May 2018, the CJEU issued its highly anticipated judgment on a request for a preliminary ruling by a Danish Court regarding the scope of the standstill obligation under article 7(1) EUMR.67

The case arose from a dispute between Ernst & Young (EY) and the Danish Competition and Consumer Authority (DCCA) in relation to EY’s acquisition of KPMG Denmark (KPMG DK). In particular, KPMG DK gave notice to terminate its cooperation agreement with KPMG International (its former parent company) at the time the deal was announced in November 2013, prior to approval of the merger by the DCCA.

DCCA approved the transaction in May 2014, but in December 2014 the DCCA found that KPMG DK’s conduct amounted to a breach of the standstill obligation under Danish rules as the termination of the agreement was

  • merger-specific;
  • irreversible; and
  • had the potential to have market effects prior to approval of the transaction.

EY appealed the DCCA’s decision to a Danish national court, which referred the case to the CJEU on the interpretation of article 7(1) (on which the relevant Danish provisions were based). The Commission intervened in support of the DCCA.

In his opinion issued on 18 January 201868 Advocate General (AG) Wahl adopted a much narrower interpretation of the standstill obligation than that of the DCCA (and the Commission). He noted that this obligation ‘does not affect measures which, although taken in connection with the process leading to a concentration, precede and are severable from the measures actually leading to the acquisition of the possibility of exercising decisive influence on a target undertaking’.69

The CJEU followed the AG’s opinion in its judgment, ruling that in light of the objectives pursued by the EUMR, article 7(1) must be interpreted as meaning that ‘a concentration is implemented only by a transaction which, in whole or in part, in fact or in law, contributes to the change in control of the target undertaking’.70 According to the CJEU, transactions which are carried out in the context of a concentration but are not necessary to achieve a change of control of the target, do not fall within article 7(1), as although they may be ‘ancillary or preparatory to the concentration’, they do not present a ‘direct functional link with its implementation’. The fact that such transactions may produce market effects is in itself insufficient to justify a different interpretation of article 7(1).71

Although it is for the referring court to determine the exact circumstances, the CJEU ruled that the termination of the cooperation agreement in this case did not contribute to the ‘change of control’ of KPMG DK (as it did not give EY the possibility of exercising decisive influence over it) and therefore, it did not bring about implementation of the transaction, irrespective of whether the termination had produced market effects.72

This is the first time the CJEU has ruled on the scope of the standstill obligation. The judgment provides some guidance regarding the permissible steps parties can take prior to merger approval and is a clear loss for regulators as it narrows dramatically the scope of implementation under article 7(1). As mentioned above, procedural infringements (including gun-jumping) are currently under increased scrutiny in the European Union. Therefore, it remains to be seen whether the judgment will curtail the Commission (and NCA’s) enforcement action in this area, and how the GC will view Altice’s appeal (see above).

SOs for provision of incorrect and misleading information

The Commission is increasingly focusing on the procedural obligations of the merging parties. In May 2017 it imposed a fine of €110 million on Facebook for providing incorrect or misleading information during its 2014 investigation of Facebook/WhatsApp.73 Only two months later, in July 2017, it announced that it has sent SOs to General Electric (GE), and Merck KGaA and Sigma-Aldrich for providing incorrect or misleading information during the Commission’s investigations.74

As regards the SO to GE, the Commission alleges that GE failed to provide information concerning its R&D activities and the development of a specific product during its review of GE’s acquisition of LM Wind. The Commission’s preliminary view is that the missing information was necessary for it to assess properly the future position of GE and the competitive landscape on the markets for wind turbines.75

As regards the SO to Merck and Sigma-Aldrich, the Commission alleges that they failed to provide important information about an innovation project with relevance for certain laboratory chemicals, which was at the core of the Commission’s analysis during its review of the proposed acquisition of Sigma-Aldrich by Merck. The Commission’s preliminary view is that if the parties had correctly disclosed this project, it would have been included in the remedy package and that by not including it, the viability and competitiveness of the divested business were impaired.

At the time of writing, both investigations are ongoing. According to the Commission, the investigations will not have an impact on the approval of the two transactions.

General Court annuls the Commission’s conditional approval of the acquisition of Ziggo by Liberty Global on due process grounds (KPN v Commission)

On 26 October 2017, the GC annulled the Commission’s conditional approval76 of the acquisition of Ziggo by Liberty Global following an appeal by KPN, a third-party complainant.77

During the Commission’s review of the transaction in 2014, KPN had voiced concerns about possible vertical anticompetitive effects arguing that the transaction could allow Liberty – as a wholesale supplier of one of the two pay-TV sports channels – to foreclose access to that input for downstream competitors (such as KPN).

Pursuant to its established practice, the Commission analysed the effects of the transaction on the market for the wholesale supply of premium pay-TV channels and noted that this market could be further segmented into two narrower markets, premium pay-TV film and premium pay-TV sports channels. The Commission explained in its decision why the transaction would not lead to vertical effects on the market for the wholesale supply of premium pay-TV channels and on the possible narrower market for premium pay-TV film channels; however, it did not analyse the effects of the transaction on the possible narrower market for premium pay-TV sports channels.

The GC ruled that the Commission could leave the market definition open provided it ‘clearly and unequivocally’ demonstrates in the decision that the transaction would not generate anticompetitive effects under any of the possible market definitions.78 The Commission argued in its defence that Liberty Global did not have the ability to foreclose the market as it did not have any upstream market power (since it owned only one of the two premium pay-TV sports channels). However, the GC considered that the mere existence of a competitor, in the absence of any further analysis, cannot in itself exclude the possibility of market power.79

Moreover, the GC rejected the Commission’s argument that the need for speed and the short timescales under the EUMR, in the light of the low probability of vertical effects, justified the lack of analysis noting that the Commission could not escape its obligation to explain ‘at least briefly’ why there would be no vertical concerns on the market for premium pay-TV sports channels.80

In view of the above, the GC annulled the decision for failure to state reasons and the Commission did not appeal the judgment. As a result of the judgment, the parties had to renotify the transaction and the Commission had to re-assess it in view of the current market conditions (and not those in 2014). On 30 May 2018, the Commission reapproved the transaction subject to commitments similar to those offered in 2014. According to the Commission’s press release, its reassessment confirmed that there are no concerns on the potential market for premium pay TV sports channels.81

This is one of the very few cases where a clearance decision has been annulled by the GC.82 The judgment highlights the importance the GC places on procedural safeguards and the necessity for the Commission to provide sufficient and clear reasoning in its decisions.

Commission announces best practice guidelines on requests for internal documents

In recent years, the Commission has increasingly relied on internal documents to inform its analysis in complex merger cases. As such, the number of documents it requests from parties has increased significantly. As a result, in Phase II cases, the parties often receive from the Commission very burdensome information requests in response to which they need to produce hundreds of thousands of documents (which might not be readily available).83 In view of the short time frames under the EUMR, such information requests may result in the suspension of the review period (ie, the Commission ‘stops the clock’) until the parties provide the requested information, which might impact the timing of the transaction.84

Competition Commissioner Vestager announced in January 2018 that the Commission is preparing a set of best practices on requests for internal documents in merger cases, which will be published in the coming months. The purpose of these is to ‘help businesses handle these requests more efficiently – without compromising on our responsibility to protect consumers’.85

More recently, Johannes Laitenberger also referred to the proposed best practices, noting that the Commission’s aim is to clarify its approach and give practical guidance to companies. He mentioned further that ‘early cooperation with companies will make requests simpler and better targeted’ and that the Commission may also ‘allow for flexible submission of documents on a rolling basis’.86

At the time of writing, the Commission is reportedly consulting informally with lawyers on the draft guidance documents, and they are expected to be published ‘relatively soon’.87

Substantive developments

Continued focus on innovation


A continuing important trend in the Commission’s analysis of mergers has been its focus on innovation in sectors where R&D plays an important role. The most important case to date on innovation is Dow/DuPont in which, as we reported last year,88 the Commission’s analysis of innovation focused on the impact of the deal on the parties’ ability to innovate in general, and not just on its impact on specific pipeline products; this is widely viewed as a novel theory of harm. To obtain clearance the parties agreed to divest almost all of DuPont’s global R&D activities.89 This approach can be contrasted to previous cases where, when considering innovation, the Commission in general tended to focus on the constraint pipeline products (in particular those soon to come to market) placed on products already on the market, or between late-stage pipeline products.

J&J/Actelion Pharmaceuticals

The Commission’s Phase I conditional clearance of Johnson & Johnson’s (J&J) acquisition of Actelion Pharmaceuticals90 provides an example of its more traditional approach to overlaps involving pipeline products. The case also provides insight into the Commission’s review of minority stakes and consequent remedies.

In relation to treatments for multiple sclerosis, the Commission assessed competition between a product J&J marketed and an Actelion pipeline product. It found no concerns, as the products are likely to have different uses. In relation to treatments for insomnia, the Commission assessed competition between two pipeline products: both parties were developing products based on a novel mechanism of action for which no products are currently marketed in the EEA and for which only a very limited number of products are in development. Actelion’s insomnia R&D would be transferred to newly-formed company Idorsia pre-closing, but the Commission concluded that J&J could still influence Idorsia’s strategic decisions as it would be an important shareholder (with up to 32 per cent shareholding) and finance provider. J&J’s insomnia R&D was co-developed with Minerva Neurosciences, which would commercialise the product in the EEA, but the Commission found that J&J could still influence it (in particular using information obtained through its minority stake in Idorsia). The Commission was concerned that J&J would have the ability and incentive to rationalise R&D by delaying or discontinuing one of these programmes.

To secure clearance, J&J committed to ensure that it could not influence Idorsia’s strategic decisions or get commercially sensitive information,91 and also committed to grant Minerva new global development rights and to waive royalty rights on Minerva’s EEA sales.


Similarly, in BD/Bard,92 the Commission found that the merger would reduce competition in the market for core needle biopsy devices, where both parties marketed products. It also had concerns in the market for tissue markers, where Bard was the market leader and BD was developing a product that could potentially compete with Bard in the near future. BD committed to divest its worldwide core needle biopsy business, and the pipeline projects related to that business and to tissue markers.


In Bayer/Monsanto93 the Commission had concerns that the deal would significantly reduce price competition and innovation in Europe and globally, and it would have strengthened Monsanto’s dominant position in certain markets where Bayer is an important challenger. Following a Phase II investigation, the Commission cleared the transaction subject to commitments.

As regards seeds, the Commission found that Bayer and Monsanto competed in Europe in the markets for vegetable seeds, oilseed rape and cotton seeds and the transaction would have removed important competition on seeds between the parties. Also, Bayer was challenging Monsanto on the global markets for the development and licensing of traits that genetically modify seeds. In response to both concerns, Bayer committed to divest almost all of its global seeds and trait business, including its R&D organisation.94 As regards pesticides, Bayer’s glufosinate competed with Monsanto’s glyphosate. Bayer was also very active in the research race to develop a challenger to glyphosate. The Commission had concerns that some of this important innovation effort would be lost post-merger. The parties therefore agreed to divest Bayer’s glufosinate business as well as the relevant research activities. Both companies were also active in the emerging market of ‘digital agriculture’. In response to the Commission’s concerns, Bayer committed to license its global digital agriculture products and pipeline products to ensure that the race to become a leading supplier in Europe in this field remains open.95

In its commitments, Bayer proposed BASF as the purchaser of the remedy package and the Commission approved that transaction subject to conditions. It is still assessing whether BASF is a suitable purchaser and whether the agreements between Bayer and BASF are in line with the commitments (as these are part of its Bayer/Monsanto procedure, not part of BASF/Bayer Divestment Business96).

In Bayer/Monsanto, the Commission applied the same principles as in Dow/DuPont; this confirms that it will continue to review closely the impact of the proposed transactions on ‘innovation competition’ in industries where R&D is of great importance.

Innovation theories are here to stay

The Commission has stressed on a number of occasions in the last year that its analysis in Dow/DuPont is not novel, referring in particular to the statements in its Horizontal Merger Guidelines (the Guidelines).97 In particular, the Commission considers that the reference to ‘increased prices’ throughout the Guidelines is ‘shorthand’ for the different ways in which a merger may result in competitive harm, which may include a reduction in innovation.98 Consequently, the Commission considers that it ‘has a duty to prevent significant impediments to effective competition, by assessing not only price effects or product and price competition, but also whether a merger is likely to lead to diminished future innovation and innovation competition’.99

Further, the DG Competition Chief Economist’s team has produced a number of drafts of a paper developing an economic model examining how a merger can affect innovation, which provides useful insight into DG Competition’s thinking. The latest version of this paper concludes that ‘[a] merger suppresses innovation competition between rivals, and hence leads to weaker innovation incentives’.100 Separately, DG Competition has published a study exploring the feasibility of assessing the impact of competition policy enforcement on innovation.101 Innovation will thus continue to be a hot topic in the Commission’s merger reviews.

Conglomerate cases

A second trend to note in 2017–2018 is the increasingly close review of conglomerate effects (non-horizontal concerns of competitor foreclosure arising from the combination of merging parties’ complementary products). For the first time in a number of years, the Commission conducted two Phase II investigations into such cases. It also closed a number of others at Phase I with remedies. Of the two Phase II cases, one was cleared with remedies and the other unconditionally.

Qualcomm/NXP Semiconductors

Qualcomm/NXP Semiconductors102 concerned two players that had dominant or strong market positions with highly complementary products and owned a significant amount of intellectual property (IP) relevant to smartphone manufacturers. Qualcomm supplies baseband chipsets (which allow smartphones to connect to cellular networks). NXP supplies several types of semiconductors, including near-field communication (NFC) and secure element (SE) chips (which enable short-range connectivity, including for payments) and the MIFARE technology used as a ticketing or fare collection platform. Both parties also hold a significant amount of IP relating to NFC chips, including standard and non-standard essential patents.

The Commission opened a Phase II investigation primarily on the basis of conglomerate concerns (albeit that in some cases these could also be characterised as vertical). It considered that the merged entity would have had the ability and incentive to make it more difficult for other suppliers to access NXP’s MIFARE technology, by raising the licensing royalties or ceasing to license MIFARE altogether; and likewise to degrade the interoperability of Qualcomm’s baseband chipsets and NXP’s NFC and SE chips with rivals’ products. As a result, smartphone manufacturers would have preferred the merged entity’s products over those of rival suppliers, who risked being marginalised. The Commission was also concerned about the combination of the parties’ significant NFC IP portfolios. This would have increased the merged entity’s bargaining power, allowing it to charge significantly higher royalties for its NFC patents than absent the transaction.

To secure clearance, Qualcomm gave a mix of structural and behavioural remedies. It committed to license MIFARE for an eight-year period, on terms at least as advantageous as at the time of the merger clearance, thus enabling competitors’ access to MIFARE so that they can compete effectively with the merged entity. To address interoperability concerns, Qualcomm committed to ensure that, for an eight-year period, it would provide the same level of interoperability between its own baseband chipset and NXP’s NFC and SE chips as with competing products. To address concerns relating to licensing NXP’s NFC patents, Qualcomm committed not to acquire NXP’s standard essential NFC patents, or certain of NXP’s non-standard essential NFC patents.103 For the NXP non-standard essential NFC patents Qualcomm will acquire, it committed for as long as it owns these patents not to enforce its rights and to grant worldwide royalty-free licenses.


Essilor/Luxottica104 concerned a proposed merger of Essilor, the largest supplier of ophthalmic lenses, and Luxottica, the largest supplier of eyewear (with well-known brands including Ray-Ban and Oakley). The parties mainly sell complementary products, which do not compete with each other. However, the Commission opened a Phase II investigation, based on conglomerate concerns, primarily that the merged entity might leverage its powerful eyewear brands to make opticians buy its lenses and exclude other lenses suppliers from the markets, or vice versa, through practices such as bundling or tying.

The Commission cleared the case following a Phase II review.105 It concluded that Luxottica brands are generally not essential products for opticians and the merged company would have limited incentives to engage in practices such as bundling and tying to exclude rival suppliers of lenses from the market because of the risk of losing customers. Moreover, even if it followed such practices, this would be unlikely to marginalise competing suppliers of lenses and harm effective competition. Likewise, it would not be able to exclude rival eyewear suppliers since Essilor has insufficient market power and incentives to do so.106


In Bayer/Monsanto, one of the Commission’s concerns leading it to open a Phase II investigation was a bundling theory of harm. In particular, it investigated whether the merged entity would have had the ability to exclude competitors from the market through bundling sale of seeds and pesticides products. However, its in-depth investigation did not confirm any of its bundling concerns, and thus no remedies were required in relation to this aspect.

Conglomerate effects – back in fashion?

It is notable that the Commission has not prohibited a case on the basis of a conglomerate theory of harm since its prohibitions in GE/Honeywell107 and Tetra Laval/Sidel108 which were annulled by the EU Courts in the early 2000s (at least in respect of the conglomerate grounds in the case of GE), with the EU Courts setting a very high bar to prohibit a transaction on the basis of conglomerate effects. The Commission’s subsequent Non-Horizontal Merger Guidelines109 state that conglomerate mergers ‘in the majority of circumstances will not lead to any competition problems’ but ‘in certain specific cases there may be harm to competition’.

Nevertheless, in the last couple of years the Commission has required remedies to secure clearance in a number of cases with conglomerate elements, and last year it opened two Phase II cases primarily on this basis.110 While Commissioner Vestager commented in September 2017 that the Commission’s recent focus on conglomerate theories is a ‘coincidence’,111 the number of recent cases leading to remedies or a Phase II review on, inter alia, conglomerate concerns suggests that it may be a trend, and is here to stay.

Other Phase II cases

The Commission had opened a Phase II investigation into the proposed acetate flake and acetate tow JV between Celanese and Blackstone, but the deal was abandoned by the parties prior to the Commission’s decision.112 In addition to preliminary concerns that the merged entity would become the new market leader with the risk of significantly reducing competition in the industry, the Commission was notably also investigating whether the transaction would make tacit coordination between suppliers more likely.

As we discussed last year, the Commission has been developing its analysis of data issues in merger control. With Apple/Shazam, it now has the opportunity to do so in a Phase II review.113

Common ownership issues

Assessing common ownership issues in merger reviews has also been an emerging trend in 2017–2018. The theory of harm is that where institutional investors have an interest in multiple competing companies in the same market, they may have the incentive to reduce competition.

In Dow/DuPont, the Commission argued that the agrochemicals industry is characterised by a significant level of common shareholding, which is to be taken as an ‘element of context’ in the appreciation of any significant impediment to effective competition.114

Pointing to US research in this area, Commissioner Vestager stated in February 2018 that it is becoming ‘more common for the same investors to hold shares in different companies in the same industry’ and that ‘for those investors fierce competition might not seem so appealing’.115 The Commission will thus be looking into the frequency of common ownership in Europe and its effects on competition. It is possible that NCAs might follow the Commission’s example in this area.

Companies are thus advised to watch this space and take common ownership issues into account in the substantive analysis of their deals.

The authors would like to thank Aisling Hubbard (trainee solicitor, Herbert Smith Freehills LLP, Brussels) for her helpful research and input.


1 This article aims to provide an overview of the main EU merger control developments in 2017–2018 (and in particular in the period from June 2017 to May 2018). The contents of this article are for reference purposes only: they do not constitute legal advice and should not be relied upon as such. All views expressed are personal.

2 See JP Morgan, 2018 Global M&A Outlook, 'Navigating consolidation and disruption', available at, January 2018.

3 See GCR, 'EU merger control in 2016-2017: shifting account settings?', available at, 14 August 2017.

4 See DG Competition, Merger statistics (up to 30 April 2018), available at

5 Speech of Director-General for Competition Johannes Laitenberger, 'The many dividends of keeping markets open, fair and contestable', available at, 27 April 2017.

6 Case COMP/M.7962 ChemChina/Syngenta, Commission decision of 5 April 2017; and Case COMP/M.7932 Dow/DuPont, Commission decision of 27 March 2017.

7 Case COMP/M.7995 Deutsche Börse/London Stock Exchange Group, Commission decision of 29 March 2017; and Case COMP/M.7878 HeidelbergCement/Schwenk/Cemex Hungary/Cemex Croatia, Commission decision of 5 April 2017.

8 The deputy Director-General for mergers at DG Competition, Carles Esteva Mosso, has recently called for merging parties to conduct their own early competition assessment (in particular in a bidding context), referring to the example of Lufthansa which abandoned plans to buy Air Berlin’s insolvent subsidiary Niki due to competition concerns (see PaRR 'EC mergers chief says deal parties should increase early competition assessment', available at, 14 March 2018). It is thus clear that the Commission expects parties to factor potential competition concerns in their bidding strategies.

9 This case and others mentioned in the introduction are referenced in the sections below where we discuss them in more detail.

10 See, eg, speech of Director-General for Competition Johannes Laitenberger, 'EU competition law in innovation and digital markets: fairness and the consumer welfare perspective', available at, 10 October 2017.

11 These cases also provide an example of the ‘priority rule’: the Commission reviewed Dow/DuPont and ChemChina/Syngenta broadly in parallel, but because Dow notified its deal before ChemChina, the Commission reviewed Dow/DuPont based on a market situation in which ChemChina/Syngenta were not merged (and reviewed ChemChina/Syngenta on the basis that Dow/DuPont were merged).

12 Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, OJ L24, available at, 29 January 2004, pp 1–22.

13 See 'CJEU judgment on changes of control over non-full function joint ventures – Austria Asphalt'.

14 See 'Commission consultation on potential changes to EUMR thresholds and other issues'.

15 See 'Commission's proposal for screening foreign direct investments into the EU'.

16 See 'Merging parties' procedural obligations remain a top priority'.

17 Ibid.

18 Ibid.

19 Ibid.

20 See 'General Court annuls the Commission's conditional approval of the acquisition of Ziggo by Liberty Global on due process grounds (KPN v Commission)'.

21 See 'Commission announces best practice guidelines on requests for internal documents'.

22 See 'Continued focus on innovation'.

23 See 'Conglomerate cases'.

24 See 'Other Phase II cases'.

25 See 'Common ownership issues'.

26 See GCR, 'EU merger control in 2016-2017: shifting account settings?', available at, 14 August 2017.

27 See

28 C-248/16 Austria Asphalt, Judgment of the General Court of 27 September 2017, EU:C:2017:643.

29 Opinion of Advocate General Kokott in Case C-248/16 Austria Asphalt, EU:C:2017:322; see also GCR, 'EU merger control in 2016–2017: shifting account settings?', available at, 14 August 2017.

30 C-248/16 Austria Asphalt, Judgment of the General Court of 27 September 2017, paragraphs 21–28.

31 Ibid, paragraph 34.

32 Commission Consolidated Jurisdictional Notice under Regulation (EC) No. 139/2004 on the control of concentrations between undertakings, OJ C95, available at, 16 March 2008, pp 1–48.

33 We note in this regard that in her opinion AG Kokott found it 'extremely regrettable' that for such a crucial question two different Commission services adopted diametrically opposed interpretations. In particular, the Directorate General of Competition had provided non-binding guidance according to which the JV in the Austria Asphalt case did not constitute a concentration, whereas the Commission’s legal service had argued before the CJEU that the JV did constitute a concentration (see opinion of Advocate General Kokott, point 22).

34 Therefore, such JVs will not benefit from the 'one-stop-shop' regime of the EUMR.

35 For further information regarding the proposed changes, see GCR, 'EU merger control in 2016-2017: shifting account settings?', available at, 14 August 2017.

37 For instance, the Commission initially did not have jurisdiction to review the Facebook/WhatsApp deal, despite WhatsApp’s US$19 billion valuation and its 600 million customers, because WhatsApp’s turnover did not meet the EUMR thresholds. It only got to review this transaction following a referral as the deal was initially notified in three EU member states (see Case COMP/M.7217 Facebook/WhatsApp, Commission decision of 3 October 2014). Similar issues might arise if established players purchase highly valued biotech companies which own products under development that have not yet been marketed and therefore do not generate significant turnover.

38 Indeed, that was the case with the recent Apple/Shazam deal, which was initially notified to Austria, as it did not meet the EUMR thresholds, and was subsequently referred by the Austrian competition authority (joined by the authorities of other EEA Member States) to the Commission pursuant to article 22(1) EUMR. This case suggests that concerns about an enforcement gap which allows transactions with competitive significance to 'slip through the net' might be exaggerated as such transactions can ultimately be reviewed by the Commission without a legislative change (see Case COMP/M.8788 Apple/Shazam; the Commission opened an in-depth investigation on 23 April 2018).

39 Other EU member states are considering similar changes. For instance, in October 2017, the French Competition Authority (FCA) launched a public consultation one of the topics of which was the need to introduce a 'value of transaction' threshold (see FCA press release 'The Autorité de la concurrence has launched an initiative to modernise and simplify merger law' of 20 October 2017, available at Also, Denmark’s competition authority is assessing whether new value-based merger notification thresholds should be introduced and has discussed the proposed change with the Commission and within the European Competition Network (see PaRR 'Danish agency considers German, Austrian merger threshold change', available at, 14 March 2018).

40 DG Competition, Management Plan 2018, Ref. Ares(2018)344698, available at, 19 January 2018.

41 For instance, in the US the regularity and intensity of national security reviews by the Committee on Foreign Investment in the United States (CFIUS) have increased in recent years leading to a number of high profile prohibitions, such as the blocking of the acquisition by Broadcom, a Singapore-based chipmaker, of Qualcomm.

42 Under article 21(4) EUMR. This expressly recognises the protection of public security, plurality of the media and prudential rules as legitimate interests, but any other public interests must be communicated to the Commission and must be recognised by the Commission as compatible with the general principles of EU law before the member state can take any measures.

43 See, eg, Case COMP/M.7850 EDF/CGN/NNB Group of Companies, Commission decision of 10 March 2016; and Case COMP/M.8169 Verlinvest/CRC/JV, Commission decision of 9 September 2016. See also Concurrences, 'China/EU: The gradual evolution of the EU Commission’s merger control decisional practice towards SOEs amidst an increasingly protectionist world', No. 4-2017, Kyriakos Fountoukakos, Camille Puech.

44 See Commission Press Release IP/17/3183 of 14 September 2017, available at See also Competition Policy International (CPI), 'Merger control and the public interest: European spotlight on foreign direct investment and national security', available at, Kyriakos Fountoukakos, Molly Herron, December 2017; and HSF legal briefing 'EU proposals for the screening of foreign direct investments', available at, 19 September 2017.

45 See Proposal for a Regulation of the European Parliament and of the Council establishing a framework for screening of foreign direct investments into the European Union, COM(2017) 487 final, 2017/0224 (COD), available at, 13 September 2017. See also the accompanying Commission Staff Working Document (SWD(2017) 297 final), available at, 13 September 2017.

46 It has been reported that the legislative process may be delayed as a result of the objections of some member states to the Commission’s decision to 'exceptionally' not conduct an impact assessment in relation to the proposals (see MLex Insight 'EU foreign-investment screening plan might face delay over impact concerns', available at, 25 October 2017).

47 It is also noted that on 17 October 2017 the UK government published its long-awaited Green Paper 'National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control' for consultation. The Green Paper and the outcome of the consultation are available at Also, France is planning to expand its rules on national security screening of foreign investments to cover more sectors, including artificial intelligence and companies in the digital industry (see French Ministry of Economy Press Release 'Extension du décret de 2014: mieux protéger les entreprises stratégiques françaises' of 19 February 2018, available at; at the time of writing, the draft bill has not been finalised).

48 Case COMP/M.7993 Altice/PT Portugal (article 14.2 proc.); see Commission Press Release IP/17/1368 of 18 May 2017, available at

49 Case COMP/M.7499 Altice/PT Portugal, Commission decision of 20 April 2015.

50 Pursuant to article 4(1) EUMR, concentrations with an EU dimension must be notified to the Commission prior to their implementation; and pursuant to article 7(1) EUMR, such concentrations must not be implemented until they have been approved by the Commission.

51 However, the Commission’s decision had no impact on its April 2015 approval of the transaction.

52 See, eg, HSF e-bulletin 'Risks of non-compliance with EU merger control rules: EU Commission fines Marine Harvest €20 million' of 23 July 2014, available at; and HSF e-bulletin 'Risks of breach of EU merger control filing requirements: EU Court of Justice upholds €20 million fine imposed on Electrabel' of 3 July 2014, available at

53 In May 2017, the Commission imposed a fine of €110 million on Facebook for providing incorrect and misleading information to the Commission during its review of Facebook’s acquisition of WhatsApp.

54 See HSF Legal Briefing, 'Altice fined €124.5 million for gun-jumping conduct', available at€1245-million-for-gun-jumping-conduct, 3 May 2018.

55 See Altice press release 'Altice N.V. Will File an Appeal Against The European Commission’s Decision', available at, 24 April 2018.

56 See HSF e-bulletin 'The Altice case: a costly warning not to engage in gun-jumping before receiving merger control clearance' of 10 November 2016, available at

57 See Case COMP/M.8006 Canon/Toshiba Medical Systems Corporation, Commission decision of 19 September 2016; Case COMP/M.8179 Canon/Toshiba Medical Systems Corporation (article 14.2 proc.); and Commission Press Release IP/17/1924 of 6 July 2017, available at

58 The Ministry of Commerce in China has fined Canon approximately US$44,000 for completing the same deal before seeking competition clearance in the country. Also, the Fair Trade Commission in Japan approved the transaction but sent Canon a warning that a merger filing is required before any part of the deal is implemented (see MLex Comment 'Canon, Toshiba novel deal structure merits EU attention', available at, 6 March 2017).

59 Case T-704/14 Marine Harvest v Commission, Judgment of the General Court of 26 October 2017, EU:T:2017:753.

60 Pursuant to article 7(2) EUMR, the acquisition of control from various sellers through a public bid, or a series of transactions in securities, can be implemented prior to clearance. However, this applies only if the transaction is notified to the Commission without delay, and if the acquirer does not exercise the respective voting rights.

61 Case COMP/M.6850 Marine Harvest/Morpol, Commission decision of 30 September 2013.

62 Case COMP/M.7184 Marine Harvest/Morpol (article 14.2 proc.), Commission decision of 23 July 2014.

63 Case T-704/14 Marine Harvest v Commission, Judgment of the General Court of 26 October 2017, EU:T:2017:753, paragraph 109.

64 Ibid, paragraph 229.

65 This principle precludes an undertaking from being found liable or proceedings being brought against it afresh on the grounds of anticompetitive conduct for which it has been penalised or declared not liable by an earlier decision that can no longer be challenged.

66 Ibid, paragraphs 342–344.

67 Case C-633/16 Ernst & Young, Judgment of the Court of Justice of 31 May 2018, EU:C:2018:371. See also HSF e-bulletin 'CJEU guidance on gun-jumping: does the measure contribute to a change of control over one of the merging companies?' of 1 June 2018, available at

68 Opinion of Advocate General Wahl in Case C-633/16 Ernst & Young, EU:C:2018:23.

69 Ibid, point 78. The AG considered further that none of the criteria suggested by the DCCA are relevant for determining the scope of the standstill obligation (ibid, points 47–57).

70 Case C-633/16 Ernst & Young, Judgment of the Court of Justice of 31 May 2018, EU:C:2018:371, paragraph 59.

71 Ibid, paragraphs 49–50.

72 Ibid, paragraphs 60–62.

73 Case COMP/M.8228 Facebook/WhatsApp (article 14.1 proc.), Commission decision of 17 May 2017. See our 2016/2017 article, GCR, 'EU merger control in 2016-2017: shifting account settings?', available at, 14 August 2017.

74 See Commission Press Release IP/17/1924 of 6 July 2017, available at; Case COMP/M.8181 Merck/Sigma-Aldrich (article 14.1) and Case COMP/M.8436 General Electric Company/LM Wind Power Holding (article 14.1 proc.).

75 According to the Commission, the missing information had consequences not only for its assessment of GE’s acquisition of LM Wind but also for the assessment of Siemens’ acquisition of Gamesa (Case COMP/M.8134 Siemens/Gamesa, Commission decision of 13 March 2017) (a separate transaction in the wind turbine market investigated by the Commission at the same time). The Commission further notes in its press release that GE withdrew its original notification of the merger with LM Wind and re-notified the same transaction, and that the second notification included the information on the future project which was missing from the original one.

76 Case M.7000 Liberty Global/Ziggo, Commission decision of 10 October 2014.

77 Case T-394/15 KPN v Commission, EU:T:2017:756.

78 Ibid, paragraph 60.

79 Ibid, paragraph 64.

80 Ibid, paragraph 71.

81 Commission Press Release IP/18/3984 of 30 May 2018, available at

82 We note that in March 2017, the GC annulled the Commission’s prohibition decision against the proposed acquisition of TNT Express by UPS on due process grounds; see GCR, 'EU merger control in 2016–2017: shifting account settings?', available at, 14 August 2017.

83 For instance, in Bayer/Monsanto, the Commission reviewed 2.7 million internal documents as part of its in-depth investigation (see Commission Press Release IP/18/2282 of 21 March 2018, available at

84 For instance, in Case COMP/M.8306 Qualcomm/NPX Semiconductors, the Commission 'stopped the clock' for a total period of 4.5 months.

85 Speech of Commissioner Vestager, 'Fairness and competition', available at, 25 January 2018.

86 Speech of Director-General for Competition Johannes Laitenberger, 'Enforcing EU competition law in a time of change', available at, 1 March 2018.

87 See MLex Insight 'Guidelines on EU requests for merger info coming "relatively soon", Vestager says', available at, 13 April 2018.

88 See GCR, 'EU merger control in 2016–2017: shifting account settings?', available at, 14 August 2017.

89 Dow/DuPont is also an example of competition authorities around the globe coordinating remedies: the global divestments accepted by the Commission were taken into account by various other authorities, including Brazil, India and Mexico.

90 Case COMP/M.8401 J&J/Actelion, Commission decision of 9 June 2017.

91 Specifically, it agreed to limit its shareholding to below 10 per cent (or up to 16 per cent provided that it is not the largest shareholder) and not to nominate any board member.

92 Case COMP/M.8523 BD/Bard, Commission decision of 18 October 2017.

93 Case COMP/M.8084 Bayer/Monsanto, Commission decision of 21 March 2018 (not yet public); see Commission Press Release IP/18/2282 of 21 March 2018, available at

94 The divestment also includes Bayer activities that do not compete with Monsanto in Europe but are important globally, namely soybeans and wheat.

95 It should be noted that on 11 April 2018, the Commission approved Bayer’s request to make two modifications to the commitments offered to the Commission to address competition concerns arising in other jurisdictions (see Case COMP/M.8084 Bayer/Monsanto, Commission decision of 11 April 2018).

96 Case COMP/M.8851 BASF/Bayer Divestment Business, Commission decision of 30 April 2018 (not yet public); see Commission Press Release IP/18/3622 of 30 April 2018, available at

97 Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, OJ C 31, available at, 5 February 2004, pp 5–18.

98 Ibid, paragraph 8.

99 See, eg, Competition Merger Brief, Issue 2/2017, available at, July 2017.

100 See Giulio Federico, Gregor Langus and Tommaso Valletti, 'Horizontal Mergers and Product Innovation', available at, February 2018.

101 The report reviews the existing literature, and proposes a rigorous analytical and methodological framework which can be used to evaluate cases; see Peter Ormosi, Anna Rita Bennato, Steve Davies and Franco Mariuzzo (Centre for Competition Policy, University of East Anglia), Final report for 'Feasibility study on the microeconomic impact of enforcement of competition policies on innovation', available at (this report was commissioned by DG Competition but reflects the views of the authors and is not endorsed by DG Competition).

102 Case COMP/M.8306 Qualcomm/NXP Semiconductors, Commission decision of 18 January 2018.

103 NXP agreed to transfer these patents to a third party, which would be bound to grant worldwide royalty-free licences to these patents for three years.

104 Case COMP/M.8394 Essilor/Luxottica, Commission decision of 1 March 2018 (not yet public); see Commission Press Release IP/18/1442 of 1 March 2018, available at

105 In particular, it did not issue a SO. The Commission noted in its press release that it cooperated closely with other competition agencies, including in particular the US Federal Trade Commission, as well as the competition authorities of Australia, Brazil, Canada, Chile, China, Israel, New Zealand, Singapore, South Africa and Turkey.

106 The Commission also considered and dismissed concerns about the potential elimination of emerging competition on the basis that Luxottica’s limited activities in lenses and Essilor’s limited activities in eyewear were unlikely to play an important role for competition in the foreseeable future.

107 See Case COMP/M.2220 General Electric/Honeywell, Commission decision of 3 July 2001 and Case T-210/01 General Electric v Commission, Judgment of the General Court of 14 December 2005, EU:T:2005:456.

108 See Case COMP/M.2416 Tetra Laval/Sidel, Commission decision of 13 January 2003 and Case T-5/02 Tetra Laval v Commission, Judgment of the General Court of 25 October 2002, EU:T:2002:264 (upheld by the CJEU in Case C-12/03 P Commission v Tetra Laval).

109 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings, OJ C 265, available at, 18 October 2008, pp 6–25.

110 Case COMP/M.7822 Dentsply/Sirona, Commission decision of 25 February 2016; Case COMP/M.7873 Worldline/Equens/Paysquare, Commission decision of 20 April 2016; Case COMP/M.8124 Microsoft/LinkedIn, Commission decision of 6 December 2016; Case COMP/M.8314 Broadcom/Brocade, Commission decision of 12 May 2017. An earlier Phase I conditional clearance is Case COMP/M.5984 Intel/McAfee, Commission decision of 26 January 2011.

111 See PaRR 'EC focus on bundling in merger reviews a ‘coincidence’ – Vestager', available at, 26 September 2017.

112 Case COMP/M.8547 Celanese/Blackstone/JV (case withdrawn on 19 March 2018).

113 For a summary of the Commission’s approach to data, see GCR, 'EU merger control in 2016-2017: shifting account settings?', available at, 14 August 2017.

114 See in particular Annex 5 to the Commission decision in Dow/DuPont, which assesses the effects of common shareholding on market shares and concentration measures. The Annex provides that 17 shareholders collectively own around 21 per cent of BASF, Bayer and Syngenta, and around 29–36 per cent of Dow, DuPont and Monsanto.

115 Speech of Commissioner Vestager 'Competition in changing times', available at, 16 February 2018. For an academic article on the topic, see José Azar, Martin C. Schmalz and Isabel Tecu, 'Anticompetitive Effects of Common Ownership', Journal of Finance, 73(4), 10 May 2018, available at

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