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Local nexus and jurisdictional thresholds in merger control from the EU perspective - DG COMP - June 2016 OECD discussion

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This presentation by DG Comp was made during a roundtable discussion on Jurisdictional nexus in merger control regimes held at the 123rd meeting of the Working Party No. 3 on Co-operation and Enforcement on 15 June 2014. More papers, presentations and contributions from delegations on the topic can be found out at www.oecd.org/daf/competition/jurisdictional-nexus-in-merger-control-regimes.htm

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Local nexus and jurisdictional thresholds in merger control from the EU perspective - DG COMP - June 2016 OECD discussion

  1. 1. Presentation at June 2016 meeting of the OECD Working Party No. 3 on Co-operation and Enforcement Local nexus and jurisdictional thresholds in merger control from the EU perspective
  2. 2. Jurisdictional thresholds of the EUMR Article 1(2) EUMR • Combined aggregate worldwide ("WW") turnover ("TO") of all undertakings concerned > EUR 5 billion • The aggregate EU-wide TO of each of at least two of the undertakings concerned > EUR 250 million • Unless each of the undertakings concerned achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State ("2/3 rule"). Article 1(3) EUMR • Combined aggregate WW TO of all undertakings concerned > EUR 2.5 billion • In each of at least 3 Member States ("MS"), the combined aggregate TO of all undertakings concerned > EUR 100 million • In each of at least 3 of those MS, the combined aggregate TO of each of at least two of the undertakings concerned > EUR 25 million • The aggregate EU-wide TO of each of at least two of the undertakings concerned > EUR 100 million • Unless 2/3 rule fulfilled.
  3. 3. Extra EEA Joint Ventures (JVs) (1/2) Parent 1 Parent 2 JV
  4. 4. Extra EEA Joint Ventures (JVs) (2/2) ─ Current solution: simplified procedure under Article 5(a) of the Commission Simplified Notice Reduced pre-notification contacts Short Form CO with reduced information requirements compared to the standard Form CO No market investigation Decision without detailed reasoning ─ Proposal of the 2014 White Paper Towards more effective EU merger control: Exclude the creation of joint ventures that will operate outside the European Economic Area (EEA) and have no impact on European markets from the scope of the EUMR
  5. 5. Local nexus and the principle of subsidiarity in the EU context ─ Specific features of EU as supranational organisation ─ Principles of subsidiarity and proportionality: EUMR shall apply to significant structural changes, the impact of which go beyond the national borders of any one Member State "One-stop shop" system for such transactions EU merger control shall not go beyond what is necessary to prevent distortions of competition in the internal market ─ How is this achieved? 2/3 rule Referral system
  6. 6. 2/3 rule ─ If turnover thresholds set in Article 1 (2), (3) EUMR are met, a concentration has Union dimension, unless each of the undertakings concerned achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State. ─ Recent example: proposed acquisition of EE by BT affecting UK telecoms markets, which the UK Competition and Markets Authority reviewed in 2015 ─ Statistics (2009 Report on the functioning of the EUMR from the Commission to the Council): 126 cases fell under the 2/3 rule over the reference period 2001 – 2008 Corresponds to 0.5% of total number of cases reviewed by National Competition Authorities
  7. 7. Referral system From Member States to the EU • Pre-notification at the request of the parties (Article 4(5) EUMR) • Post-notification at the request of Member States (Article 22 EUMR) From the EU to Member States • Pre-notification at the request of the parties (Article 4(4) EUMR) • Post-notification at the request of Member States (Article 9 EUMR)
  8. 8. Statistics on referrals
  9. 9. Thank you!

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