EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
Market Testing and Consultation The Commission will “market-test” proposed rem - edies with market participants to ensure that they will resolve the competitive concerns at issue (see 7.2 Contacting Third Parties ). The Commission will also consult with member state NCAs and (where relevant) the EFTA Surveillance Authority. If the competitive concern at issue affects markets broader than the EEA or requires a global remedy (such as the divestment of a worldwide busi - ness), the Commission will typically also co-ordinate with other competition authorities. The Commission may be reluctant to accept global remedies that may not be accepted by other authorities. 5.5 Conditions and Timing for Divestitures According to the Remedies Notice, the parties may be allowed to close their transaction immediately after receiving the Commission’s conditional clearance decision. In such cases, the parties would typically have a set deadline (eg, six months from the Commis - sion’s approval decision) within which to conclude a binding agreement to sell the divestment business to a suitable purchaser. If no such purchaser is found, a divestiture trustee will have a mandate to sell the business to a suitable purchaser at no minimum cost. The parties would then have a further period (eg, three months) after the Commission approves the purchas - er to complete the sale of the divestment business. In cases where it may be more difficult to identify a suitable purchaser, the Commission may require the parties not to close the main transaction until they have entered into an agreement with a suitable pur - chaser approved by the Commission (an “upfront buy - er” remedy). Less commonly, the parties may name a specific purchaser, with whom they have already entered into an agreement, in their original commit - ment proposal (a “fix-it-first” remedy). In that case, the buyer is approved in the Commission’s decision clearing the main transaction (without the need for a separate approval process) and the Commission will take the buyer’s assets/capabilities into account when evaluating the sufficiency of the remedy.
In any case, between the time that the Commission accepts a divestment commitment and the close of the sale to the approved purchaser, the divestment must be held separate and ring-fenced from the par - ties’ other operations. The parties must appoint a monitoring trustee, who monitors the parties’ compli - ance with the commitments, evaluates the suitability of any potential purchasers and advises the Commis - sion accordingly. Failure to Comply With Commitments If the parties fail to comply with a condition of clear - ance (eg, by failing to divest or by re-acquiring the divestment business), the Commission’s clearance decision automatically becomes void. If the parties breach an obligation (ie, a step implementing the rem - edy, such as appointing a trustee), the Commission has the discretion to revoke its clearance decision. The Commission may also fine the parties up to 10% of their annual turnover and/or issue periodic penalty payments for failing to comply with commitments. 5.6 Issuance of Decisions The Commission will notify its decision to the parties and to the member states, and may also issue a press release providing a basic summary of its conclusions. The Commission will publish a non-confidential ver - sion of any Phase II decision in the EU’s Official Jour - nal and on its website, often after a delay of several months. The Commission provides non-confidential copies of all its merger decisions on its website. 5.7 Prohibitions and Remedies for Foreign-to- Foreign Transactions The Commission adopts the same review process regardless of the nationality of the parties to a trans - action, including with regard to prohibitions and rem - edies. It has required remedies in numerous transac - tions involving non-European parties, and has also blocked such transactions.
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