Breaking news re merger control

𝐁𝐫𝐞𝐚𝐤𝐢𝐧𝐠 𝐧𝐞𝐰𝐬 🚨 𝐈𝐥𝐥𝐮𝐦𝐢𝐧𝐚/𝐆𝐫𝐚𝐢𝐥: 𝐚 𝐠𝐨𝐨𝐝 𝐝𝐚𝐲 𝐟𝐨𝐫 𝐥𝐞𝐠𝐚𝐥 𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 𝐢𝐧 𝐄𝐔 𝐦𝐞𝐫𝐠𝐞𝐫 𝐜𝐨𝐧𝐭𝐫𝐨𝐥!

The Court of Justice says that the European Commission ("EC") has no power to review transactions at request of Member States that cannot review the transaction themselves under their national merger control regime.

The General Court had incorrectly allowed national competition authorities to refer mergers to the EC, even if these did not have a European dimension or meet national thresholds for review, based on 𝐀𝐫𝐭𝐢𝐜𝐥𝐞 𝟐𝟐 𝐨𝐟 𝐭𝐡𝐞 𝐄𝐔 𝐌𝐞𝐫𝐠𝐞𝐫 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧.

The rationale behind the EC’s revised approach to Article 22, was to enable the EC to review acquisitions whereby at least one of the parties’ turnover does not reflect its actual or future competitive potential and thus falls below the merger control thresholds. Illumina’s planned acquisition of Grail was the first transaction referred to the EC under the revised policy.

After the Court of Justice’s judgement, 𝐬𝐮𝐜𝐡 𝐫𝐞𝐟𝐞𝐫𝐫𝐚𝐥𝐬 𝐰𝐢𝐥𝐥 𝐧𝐨 𝐥𝐨𝐧𝐠𝐞𝐫 𝐛𝐞 𝐩𝐨𝐬𝐬𝐢𝐛𝐥𝐞. Moreover, as regards Illumina and Grail specifically, this judgment is likely going to result in the annulment of their gun jumping fine. Ongoing similar reviews (e.g. Brasserie Nationale / Boissons Heinz) will moreover need to be stopped due to having no valid legal basis.

Despite today’s judgment, the EC’s revised approach has had its impact in practice as it resulted in the abandonment of several transactions, such as Illumina/Grail, EEX/Nasdaq Power and Qualcomm/Autotalks. It remains to be seen whether the companies involved will try to seek redress from the EC for its regulatory overreach ...

𝐖𝐢𝐭𝐡 𝐢𝐭𝐬 𝐣𝐮𝐝𝐠𝐞𝐦𝐞𝐧𝐭, 𝐭𝐡𝐞 𝐂𝐨𝐮𝐫𝐭:
✔️ ruled that the Merger Regulation does not provide a "corrective mechanism" for reviewing all mergers with significant effects on EU competition.
✔️ emphasised that the thresholds for notifying and reviewing transactions are crucial for ensuring legal certainty and predictability for companies.
✔️ stressed that companies must be able to determine easily whether their transactions require notification, which authority will review them, and what procedural requirements apply.

Companies should however be mindful that an increasing number of national authorities have obtained (or are likely to obtain in the near future) the authority to “call in” transactions that do not meet the national thresholds.

𝐌𝐨𝐫𝐞 𝐢𝐧𝐟𝐨?
🖹 Read the judgement https://lnkd.in/e9XYpZkZ
🖹 Read our ITP on the judgement of the General Court https://lnkd.in/er3rmebt

𝐐𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬?
👉 Feel free to contact your usual contact person at contrast.