EU Merger Control and Remedies: The Price of Getting the Deal Cleared
30 July 2007Bloomberg European Business Law Journal, Vol. 1, Q2, Issue 2, 2007
While the transactions which are prohibited by the European Commission (the Commission) on antitrust grounds such as GE Honeywell grab the newspaper headlines, those transactions where the parties have to offer a remedy receive far less public attention. Yet of the transactions which the Commission considered problematic from an antitrust perspective, the vast majority resulted in clearances subject to remedies, as opposed to an outright prohibition. Since the adoption of the EC Merger control Regulation in 1989, 219 transactions which were considered to raise serious antitrust concerns were cleared further to remedies proposed by the parties. Only nineteen transactions have been prohibited by the Commission and in many of these prohibition cases, the parties proposed remedies. However, these remedies were allegedly insufficient to remove the competition concerns identified by the Commission, or were offered too late in the proceedings.
In transactions which raise antitrust concerns, business people need to understand the general principles governing the Commission's policy on remedies under EC Merger Control since the remedy may often represent the 'price' at which the transaction will be approved. Control of timing is of the essence since remedies must be offered within strict time limits and companies should therefore identify sufficiently early in the notification process (where possible, even prior to formal notification) whether and which remedies will likely be considered necessary to obtain approval of their transaction.