EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
mission prohibited on 6 September 2022 – was annulled by the Court of Justice on 3 September 2024. The Court of Justice judgment ruled that the Commission is not empowered to accept jurisdiction to review a concentration where the transaction does not meet EU notification thresholds and in respect of which the referring member state(s) does not have jurisdiction – ie, the national merger control thresholds are not met. Since the Court of Justice judgment, the Com - mission has accepted an Article 22 referral from Italy that does not meet the EU or Italian jurisdic - tional thresholds. The concentration was instead “called-in” by the Italian competition authority, using its new powers to request notification of below-threshold concentrations. Several other member states have adopted such ”call-in” powers for below-threshold concentrations, which may well result in Article 22 referrals that the Commission is empowered to accept. This will enable the Commission to review below- threshold concentrations involving companies with limited turnover that nonetheless play a significant competitive role on the market, such as so-called “killer acquisitions”, whereby larger companies seek to eliminate small but promis - ing companies as a source of actual or potential competition. Such killer acquisitions are often identified in the digital and pharmaceutical sec - tors, where valuable targets can have little, if any, turnover, although they can occur in any industry. Referral to the Member States By the parties (Article 4 (4) EUMR) Before notifying a transaction with an EU dimen - sion to the Commission, the parties may make a “reasoned submission” to the Commission requesting a full or partial referral of the trans - action to a member state NCA. The parties’
submission must demonstrate that the concen - tration may significantly affect competition in a market within a member state that presents all the characteristics of a distinct market and should therefore be examined by that member state’s NCA. Only one Article 4 (4) request has ever been rejected. By the member states (Article 9 EUMR) A member state may request a full or partial referral from the Commission. To do so, the member state must inform the Commission within 15 days of receipt of a copy of the EU notification that the transaction threatens to sig - nificantly affect competition in a market within that member state that has all the characteristics of a distinct market (in which case, the Commis - sion will decide whether to refer the case) or that the transaction affects competition in a market within that member state which moreover does not constitute a substantial part of the internal market (in which case, the Commission must refer the case). Historically, the Commission has rejected just over 11% of Article 9 requests. 2.2 Failure to Notify The EUMR imposes both a notification and a standstill obligation: • notification obligation – Article 4 (1) of the EUMR requires parties to notify any concen - tration with an EU dimension before imple - mentation; and • standstill obligation – Article 7 of the EUMR requires parties to wait to implement any concentration with an EU dimension until the transaction is notified to and cleared by the Commission (see 2.12 Requirement for Clearance Before Implementation ).
189 CHAMBERS.COM
Powered by FlippingBook