EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
2. Jurisdiction 2.1 Notification
1.3 Enforcement Authorities The Commission has exclusive jurisdiction within the European Economic Area (EEA) to review concentra - tions with an EU dimension (ie, those satisfying the EU thresholds). The EEA consists of the 27 EU member states plus three European Free Trade Association (EFTA) countries: Iceland, Liechtenstein and Norway. The Directorate General for Competition (“DG Comp”), under the leadership of the current Competition Com - missioner Teresa Ribera, administers the merger con - trol process. The Commission operates according to a “one-stop shop” principle. Concentrations with an EU dimension must be notified to the Commission and need not be notified to any of the EEA national competition author - ities (NCAs), even if national notification thresholds are met. NCAs cannot review or apply their competition rules to a concentration that has been notified to the Commission. Under certain circumstances, the Commission will accept exclusive jurisdiction over cases that do not meet the EU thresholds, upon referral by one or more EU member states or upon request of the parties, or it will agree to transfer its jurisdiction back to one or more member states (see 2.1 Notification ). Exceptions The Commission’s exclusive jurisdiction over concen - trations with an EU dimension is subject to several limited exceptions regarding: • the “legitimate interests” of member states in public security, media plurality, prudential rules or other exceptional interests under Article 21 (4) of the EUMR; • the national security interests of member states relating to the production and/or trade in certain goods intended for exclusively military purposes under Article 346 of the Treaty on the Functioning of the European Union (TFEU); and • certain products for which jurisdiction does not extend over the EFTA states under Protocol 2 of the EEA Agreement.
Parties must notify any concentration with an EU dimension (see 2.5 Jurisdictional Thresholds ) to the Commission and receive clearance before it can be implemented. The EUMR contains several referral mechanisms that allow transactions that do not meet the EU thresholds to be referred to the Commission for review and that allow deals meeting the EU thresholds to be referred Where a transaction does not meet the EUMR thresh - olds but requires notification in at least three member states, the notifying parties may make a “reasoned submission” to the Commission, requesting that it review the transaction, rather than the member state NCAs. If the NCAs do not object, this reduces the noti - fication burden by allowing the transaction to benefit from the EU’s one-stop shop principle. Historically, fewer than 2% of such referral requests have been rejected. By the member states (Article 22 EUMR) One or more member state NCAs may request that the Commission takes jurisdiction over a transaction that does not meet the EUMR thresholds if such transac - tion: • affects trade between member states; and • threatens to significantly affect competition within the territory of the requesting member state(s). In practice, fewer than 8% of such referral requests have been rejected. to the member state NCAs. Referral to the Commission By the parties (Article 4 (5) EUMR) In early 2021, the Commission took the position that a member state NCA does not need to have jurisdiction over the transaction in order to refer it to the Commis - sion. This opened the door for deals that did not meet the notification thresholds in any member state to be referred to the Commission for review. However, the Commission’s first decision to accept a referral under this policy, in the Illumina / GRAIL transaction – which
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