On the 11th September 2020, Commissioner Margrethe Vestager held a speech at the International Bar Association 24thannual competition conference, discussing the future of EU merger control.
At present, 16 years have passed since the entering in force of EU Merger Regulation (Council Regulation n. 139/2014) and the prospects for a reform are undoubtedly more consolidated than in the past, although, as the Commissioner pointed out, changes “won’t happen overnight”.
One of the merger control aspects that has been at the centre of numerous debates for a reform is the threshold mechanism, which is based on companies’ turnovers. According to this mechanism, a merger must be filed if certain thresholds, set out at Article 1 of Regulation n. 139/2004, are met. Nowadays, a company’s turnover does not fully reflect its importance on a given market. That is the case of start-ups which are usually characterized by a low turnover but also by a high potential commercial value due to the quantity of data and other owned assets. As consequence, thresholds are not met, and mergers are not filed to the Commission for its assessment.
The very first question that requires an answer in these circumstances is the following: is there a real gap in EU enforcement and merger control? If the answer is yes, new mechanisms are required in order to fill that gap. A proposal consisted in introducing a supplementary threshold based on the value of the transaction, following the steps of Austria and Germany. The European Authority rather seems to suggest enforcing the referral mechanism between the Commission itself and the national authorities. More specifically, according to the Commissioner, the intention is to accept “referrals from national competition authorities that are worth reviewing at the EU level – whether or not those authorities had the power to review the case themselves”. This way, the gap could be filled by implementing and enforcing a mechanism which is already part of the actual merger control, without introducing new threshold rules that are extremely difficult to set out with clarity, such as the ones based on the value of the merger.
According to the Commissioner, new merger guidelines won’t be drafted immediately but only when the prospects for reform are clearer.
You can read the speech from the following link: https://ec.europa.eu/commission/commissioners/2019-2024/vestager/announcements/future-eu-merger-control_en
