EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
Fines for Failure to Notify or Suspend Under Article 14 (2) of the EUMR, the Commis - sion may fine parties up to 10% of their aggre - gate worldwide turnover for “gun-jumping” if they fail to notify a transaction or if they imple - ment a transaction before receiving clearance. The Commission has become increasingly will - ing to impose large fines for gun-jumping and other procedural violations, with the following examples. • In July 2023, it imposed the largest fine to date (EUR432 million, corresponding to 10% of aggregate worldwide turnover) on Illu - mina for an especially blatant violation of the standstill obligation in relation to its acquisi - tion of GRAIL (however, this fine has since been annulled by the Court of Justice – see 2.1 Notification ). • Previously, the largest gun-jumping fine was EUR124.5 million, imposed on Altice for implementing its acquisition of PT Portugal before notifying the transaction (this fine was reduced by the Court of Justice to EUR115.5 million on appeal). • Other recent gun-jumping fines range between EUR20 million and EUR30 million, including EUR28 million on Canon/Toshiba Medical Systems Corporation in 2019; EUR20 million on Marine Harvest/Marpol in 2014; and EUR20 million on Electrabel/Compagnie The EUMR only applies to “concentrations” – ie, mergers, acquisitions of control and certain ”full-function” joint ventures (JVs). As a rule of thumb, in order for a transaction to be consid - ered a concentration, there should be a change in the nature of control of an undertaking (see 2.4 Definition of “Control” ). How this change Nationale du Rhône in 2009. 2.3 Types of Transactions
in control is brought about (whether through a purchase of assets or shares, or by other means) is immaterial. Purely internal restructurings or reorganisations that do not lead to a change of control do not qualify as concentrations within the meaning of the EUMR. 2.4 Definition of “Control” The EUMR defines “control” as rights, contracts or other means which, together or separately, confer the possibility of exercising decisive influ - ence over an undertaking. Such control may be held solely (ie, by one undertaking) or jointly (by two or more undertakings). The acquisition of control, including through changes in the nature of control (eg, from sole to joint, or vice versa), will generally constitute a concentration under the EUMR. Sole Control The classic example of an acquisition of sole control is where Company A acquires 100% of Company C. However, sole control can also arise where Company A acquires less than 100% of Company C, provided that A’s stake in C allows A to determine, on its own, the key stra- tegic commercial decisions of C. This might be the case, for example, where all such decisions are to be taken by a simple majority vote of C’s board of directors and A is entitled to appoint the majority of the directors of C’s board. The above are examples of “positive” sole con - trol (where A is able to take strategic commercial decisions relating to C on its own). Sole control can also be ”negative”. This is where A does not have the power to take strategic commercial decisions relating to C on its own but is the only shareholder of C with the power to veto such decisions.
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