IIC (2016) 47:595–616 DOI 10.1007/s40319-016-0490-9 ARTICLE

Mind the Gap? An Analysis from a German Competition Law Perspective of the European Commission’s Proposal to Review Non-Controlling Minority Shareholdings Under European Merger Control Law Anja Balitzki . Rhiannon Pugh Published online: 14 July 2016  Max Planck Institute for Innovation and Competition, Munich 2016

Abstract The following article analyses the European Commission’s proposal to bring acquisitions of non-controlling minority shareholdings under its jurisdiction. As a consequence, the European Commission would have the power to decide types of cases and to block mergers, which are generally not subject to merger control law in the majority of the Member States of the European Union. Additionally, this could lead to tension with regulatory systems in EU Member States, which review non-controlling minority shareholdings already, and to additional burden for companies. In contrast to many other articles about this topic, it examines in detail the opinions submitted in response to the European Commission’s public consultation with regard to the proposed requirement for notification (‘‘competitively significant link’’), the form of the notification and the timing for such notifications. Many stakeholders have criticised the European Commission’s proposal, inter alia by stating that these acquisitions could be caught by the prohibition of anti-competitive agreements under Art. 101 Treaty on the Functioning of the European Union. The authors use German merger control law as a proxy to prove the existence and the extent of the enforcement gap referred to by the European Commission. The German Federal Cartel Office and the German courts have considered acquisitions of non-controlling minority shareholdings, in which the acquirer gained a ‘‘competitively significant influence’’ over the target, to have anti-competitive effects. However, the importance of the enforcement gap seems to be limited in practice.

A. Balitzki (&) Dr.; Associate Hengeler Mueller, Du¨sseldorf, Germany e-mail: [email protected] R. Pugh Associate (Solicitor in England and Wales) Hengeler Mueller, Du¨sseldorf, Germany e-mail: [email protected]

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Keywords Minority shareholdings
Enforcement gap
White Paper
European and German merger control

1 Introduction In 2013, the European Commission (‘‘Commission’’) proposed amendments to the European merger control system, primarily dealing (1) with the extension of the scope of European merger control to the acquisition of non-controlling minority shareholdings, which are currently only subject to review in the European Union under the relevant national merger control laws of Austria, Germany and the United Kingdom1 and (2) with the reform of the case referral system between the Commission and the Member States of the European Union. In a public consultation from 20 June to 12 September 2013, stakeholders had the opportunity to submit comments on the proposals. The Commission reviewed those comments and published the White Paper ‘‘Towards more effective EU merger control’’ (the ‘‘White Paper’’), a Commission Staff Working Document and an Impact Assessment on 9 July 2014.2 Third parties were subsequently able to submit comments on the amended proposals described in the White Paper and in the accompanying documents. The final date for submission of comments was 3 October 2014. In March 2015, the Commission published the replies to the latest public consultation received from 20 public authorities, 22 registered organisations and 46 non-registered organisations on its website.3 The following article describes the Commission’s proposals regarding the review of non-controlling minority shareholdings and analyses some of the responses to these proposals that were received during the most recent public consultation (Sect. 2).4 A large challenge lies in the difference between the Commission’s proposed system and the current merger control systems of the EU Member States. The Commission proposes introducing a possibility to review and block mergers, which the huge majority of the EU Member States does not have. Additionally, tensions with the merger control systems of the few jurisdictions, which deal with the acquisition of non-controlling minority shareholdings, could easily arise in the future. It is questionable whether the EU Member States will agree with the creation of additional regulatory powers at the EU level. Many stakeholders expressed the view that the Commission’s 1

Such acquisitions are also subject to review under the merger control regimes of a number of jurisdictions outside the European Union, including Australia, Brazil, Canada, Japan, New Zealand, Norway and the United States.

2

http://ec.europa.eu/competition/consultations/2014_merger_control/index_en.html (as of 22 June 2016).

3

Ibid.

4

This article considers the replies from the public authorities and registered organisations. Account has not been taken of the replies received from the non-registered organisations and the response from the Polish Office for Competition and Consumer Protection (in the Polish language).

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jurisdiction should not be extended. Nevertheless, they submitted substantive comments on various aspects of the Commission’s proposal. In its White Paper, the Commission argues that the uses of the existing European competition rules on restrictive agreements and the abuse of a dominant position are ‘‘limited’’ in intervening against anti-competitive acquisitions of minority shareholdings.5 However, many of the replies to the recent public consultation state that the anticompetitive effects related to the acquisition of a non-controlling minority shareholding can in fact be dealt with under existing competition law provisions. Consequently, many stakeholders consider that there is no need to extend the scope of the EU Merger Regulation (‘‘EUMR’’)6 to cover acquisitions of noncontrolling minority shareholdings. Owing to the wide range of diverging views on this topic, this article examines whether an ‘‘enforcement gap’’ does in fact exist. As one of the few jurisdictions where acquisitions of non-controlling minority shareholdings are subject to merger control review, relevant cases concerning non-controlling minority shareholdings that have been considered to be problematic by the German Federal Cartel Office and the German courts provide a useful proxy for the types of anti-competitive effects that could potentially arise from such acquisitions at the EU level (Sect. 3). The article concludes with the finding that the Commission is correct in having identified a ‘‘gap’’ in its current regulatory powers but that the extent of this lacuna does not necessarily justify the Commission’s proposed reforms (Sect. 4).

2 The White Paper: Commission Proposal and Stakeholder Criticism 2.1 Commission’s Concerns: Theories of Harm The Commission emphasizes in the White Paper that the acquisition of a noncontrolling minority shareholding currently does not fall under the jurisdiction of the Commission, although such acquisitions might harm competition.7 The Commission describes different scenarios in which competition concerns could arise: –

– – – –

Non-coordinated anti-competitive effects resulting from the shareholder’s ability and incentive to raise its own prices unilaterally or restrict its own output in order to internalise the increase in the target’s profits. Limitation of the competitive strategies available to the target. Exercise of influence over the outcome of special resolutions (e.g. on investments, capital increase, scope of business, mergers and acquisitions). Coordination of anti-competitive effects in order to achieve supra-competitive profits. Input foreclosure.8

5

White Paper, para. 39 et seq.

6

Council Regulation (EC) 139/2004 (OJ 2004 L24 1, 29.1.2004).

7

White Paper, para. 26 et seq.

8

White Paper, para. 29 et seq.

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The Commission believes that such harm currently does not fall within its jurisdiction (see Sect. 3 below) and argues in the White Paper that this ‘‘enforcement gap’’ must be closed. 2.2 Proposed Framework: Targeted Transparency System In its 2013 consultation, the Commission proposed three systems for dealing with the acquisition of minority shareholdings: a mandatory notification system, a voluntary self-assessment system and a targeted transparency system. After review of the public comments to the initial consultation, the Commission explicitly favours the transparency system in the recent White Paper.9 Under this system, the parties would be required to submit an information notice if the transaction creates a ‘‘competitively significant link’’. The parties would have to examine themselves whether or not their deal will result in such a link. 2.2.1 Requirement for Notification: Competitively Significant Link The Commission proposes that a competitively significant link will exist between the parties, if the following two cumulative conditions are fulfilled: –

The acquirer and the target are active on the same markets/in the same sector (horizontal overlap) or the acquirer and the target are active on vertically related markets (vertical relationship)10; and

–

The shareholding is around 20% or the shareholding is between 5% and around 20%, provided that additional factors exist (e.g. the acquirer gains a right to a ‘‘de-facto’’ blocking minority, a seat on the board of directors or access to commercially sensitive information).11

The responses to the recent public consultation12 indicate that stakeholders want clearer guidance about these proposals. This has also been realized by the Commission in its summary of replies to the public consultation.13 Many regard a description of the parties’ activities in the same sector as too broad and vague for the 9

The majority of the registered organisations who submitted comments on the 2014 public consultation favour a voluntary self-assessment system. However, the Austrian Federal Chamber of Labour and the Austrian Federal Competition Authority, the German Federal Cartel Office and the German Federal Ministry for Economic Affairs and Energy prefer the introduction of a mandatory notification system. This desire reflects their domestic notification systems in the case of non-controlling minority shareholdings. According to Montag and Wilks, a clear cut procedure is preferable and to that end, notification should be mandatory or voluntary (Montag and Wilks 2015, p. 90).

10

White Paper, para. 46.

11

White Paper, para. 47.

12

Not all of the respondents to the most recent public consultation commented on every aspect of the Commission’s proposal. This article analyses the responses of those that made explicit reference to and expressed a clear opinion on the relevant issues. References to the comments should not be considered to be an exhaustive enumeration. 13

Summary of replies of 16 March 2015, para. 13 et seqq.

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purposes of classifying the transaction as relevant or not.14 The registered authorities in particular are also overwhelmingly opposed to the notion of providing market share data to the Commission in this context, with only one suggesting that basic market share data could be provided in order to help explain why a competitively significant link exists.15 The discussion of the appropriate level of shareholding also indicates that most respondents would favour higher shareholding thresholds for a competitively significant link.16 The Commission even comes to the conclusion that the majority of the private stakeholders find the thresholds too low or too vague.17 Moreover, the majority of the stakeholders demand that more clarity is needed about the ‘‘additional factors’’.18 As an initial step, the Commission will therefore need to provide further substantive guidance about the extent of its jurisdiction over such transactions, if its proposals are to be effective. In particular, the difference between the right to a ‘‘defacto’’ blocking minority and negative joint control remains unclear. The concept of additional factors referred to in the White Paper appears to be guided by German merger control (see Sect. 3.1.2 below). It remains to be seen whether the Commission will consider the German practice with regard to further aspects of its proposal in any future guidance. 2.2.2 Form of Notification: Information Notice The Commission is keen to avoid any unnecessary and disproportionate administrative burden on companies, national competition authorities and indeed the Commission itself, arising from the proposed reforms.19 Consequently, it suggests that parties should submit an information notice about anticipated acquisitions of non-controlling minority shareholdings rather than the full or short merger forms used to notify transactions currently falling under the jurisdiction of the EUMR. The Commission envisages that the information notice would contain a description of the parties, their turnover, the structure of the transaction, the level 14 See for example American Chamber of Commerce to the European Union (AmCham EU), Association Franc¸aise d’Etude de la Concurrence, BUSINESSEUROPE, French Association of Large Companies (AFEP), and MEDEF (Business Confederation); see also Opinion of the European Economic Social Committee (‘‘EESC’’) on the White Paper – Towards more effective EU merger control (OJ 2015 C230, 14.7.2015) under 1.5 and 5.2: clarification is needed concerning the concept of a competitor, the parameters for the concept of a vertically-related company, the definition of a significant link and whether the SIEC test should be considered for the overall activities of the corporate group operating in different economic sectors. 15

Independent Music Companies Association (IMPALA).

16

See for example American Chamber of Commerce to the European Union (AmCham EU), Association Franc¸aise d’Etude de la Concurrence, CCI Paris Ile-de-France, The Law Society of England and Wales and Siemens. 17

Summary of replies of 16 March 2015, para. 21.

18

See for example Austrian Federal Competition Authority, Bulgarian Commission on Protection of Competition, Bundesverband der Deutschen Industrie (BDI), BUSINESSEUROPE, Danish Competition and Consumer Authority, Japan Business Council in Europe (JBCE), Siemens and UniCredit. 19

White Paper, para. 42.

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of the shareholding to be acquired and any rights attached to it and limited market share information.20 A full notification will only be required if the Commission decides that further investigation is warranted.21 The extent of detail required in the information notice has been a topic of heated debate in the responses to the most recent public consultation. Whilst public authorities focus on avoiding an additional administrative burden for the national regulators, companies and other registered organisations emphasise the need to guarantee legal certainty (alongside the inevitable need for reduced costs and minimal administrative burden for companies).22 As noted by many of the respondents, such legal certainty unfortunately appears to be lacking in the White Paper, in particular with regard to the meaning of the ‘‘some limited market share information’’ that parties will need to provide.23 It is not clear whether the Commission envisages that acquirers of non-controlling minority shareholdings will have to conduct an in-depth analysis of the relevant markets on which the target is active, thereby relying on past Commission decisional practice (as is the case in the current full and short form merger notifications) and provide market share information on that basis. Interestingly, none of the public authorities are outrightly in favour of requiring parties to define the relevant markets.24 However, several are unclear as to how the Commission intends to analyse the relevant competitive landscape without relying on its normal market definition practices. Conversely, two public authorities are expressly opposed to the notion of defining relevant markets. One argues that parties may notify acquisitions ‘‘just in case’’ if they are bound by market definition.25 The other considers that details about the broad ‘‘sector’’ in which the undertakings are active would be sufficient.26 As regards the provision of market share data in the 20 White Paper, para. 49; Montag and Wilks (2015), p. 90, question the benefit of the information notice, as the requested information would not differ significantly from the Short Form CO. However, based on the Commission’s proposals, it is possible that the information notice will be substantially less burdensome if a pre-notification phase is not envisaged. Moreover, several aspects which constitute part of the Short Form CO have not been included in the proposal, for example, the value of the transaction, market shares and contact details of the three largest competitors, research and development activities, main innovations in the last three years, cooperative effects of a joint venture (if applicable) and supporting documentation. The submission of presentations, which analyse the transaction or the affected markets, can be especially burdensome and time-consuming for the parties (see Sec. 5.3 of the Short Form CO and Sec. 5.4 of the Form CO). 21

White Paper, para. 49.

22

Interestingly, the EESC also emphasises in its opinion that the broad scope of amendments in the White Paper should not conflict with its aim of maintaining the right balance between the public interest in closing a loophole and the corporate interest in keeping administrative costs low (Opinion of EESC under 1.2 and 3.4; OJ 2015 C230, 14.7.2015). In addition, the EESC suggests considering social repercussions, for example, employment issues and the benefits arising from any new merger control provisions (Opinion of EESC under 1.4, 3.4 and 3.7; OJ 2015 C230, 14.7.2015). 23

White Paper, para. 49.

24

This is only implicitly indicated in the summary of replies of 16 March 2015 by the Commission (para. 29). 25

Belgian Competition Authority.

26

French Competition Authority.

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information notice, the only public authority27 that referred to this issue explicitly states that the suggested approach would not be advisable as market share data without a robust analysis of the market could be uninformative or misleading. In contrast, three28 of the registered organisations explicitly state that the relevant markets should in fact be defined, favouring this approach over a description of the broad sector of activity. One29 registered organisation views strict market definition as undesirable, arguing that acquirers of non-controlling minority shareholdings do not normally have sufficient information about the target’s market position and do not usually research the different plausible definitions of the relevant markets affected by the acquisition. It is clear that a delicate balance is needed between sufficient legal certainty, potentially through reliance on Commission precedents, and proportionate (legal) costs for companies in preparing such an information notice. With regard to transactions in which there is a a horizontal overlap or vertical relationship between the acquirer and the target, the acquirer will normally have a good insight into the target’s market position. Thus, the information required by the Commission should not present a problem. This may, however, not be the case for transactions involving mere financial investments, for example by private equity firms. In any case, the introduction of merger control regulation for acquisitions of non-controlling minority shareholdings will only make sense if the Commission will be able to make an initial assessment of the transaction based on the information notice.

2.2.3 Timing of Review: Waiting and Prescription Periods The Commission is not only considering introducing an alternative to the format of the current merger control notification. It also suggests an alternative review timetable for acquisitions of non-controlling minority shareholdings, which could have severe repercussions on the timing of the closing of transactions. Unsurprisingly, these proposals have also been met with mixed sentiments in the most recent public consultation. The Commission proposes a waiting period of 15 working days after submission of the notice before the parties may implement the transaction.30 The Commission argues that this duration would be in line with the deadline under Art. 9 EUMR for a Member State to make a referral request following a full merger notification. It considers that such a system would ensure that transactions which are referred to Member States are not yet implemented and can be handled by the Member States under their normal procedure, as they might foresee a standstill obligation and not be equipped to deal with consummated transactions. More generally, the Commission considers that the referral system should ensure that the existing level of 27

UK Competition & Markets Authority.

28

Independent Music Companies Association (IMPALA), MEDEF (Business Confederation) and UniCredit. 29

Competition Law Committee of the City of London Law Society (CLLS).

30

White Paper, para. 50.

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protection provided by the national merger regimes already capturing noncontrolling minority shareholdings will be maintained.31 There is a clear difference in opinion amongst stakeholders with regard to the appropriateness of such a standstill obligation in relation to acquisitions of noncontrolling minority shareholdings at the European level. The majority of registered organisations do not support a waiting period, fearing that it will result in too much legal uncertainty for businesses. Conversely, the majority of public authorities are clearly in favour.32 The aim of the Commission’s proposal is, after all, intended to ensure that the current national review of non-controlling minority shareholdings and the existing referral system will remain unharmed. Only the two UK authorities,33 which participated in the public consultation and are not familiar with a suspensory merger control regime, are opposed. Amongst those in favour of a waiting period, there are differing views as to whether 15 working days is an appropriate length. The three registered organisations in favour of a waiting period34 appear satisfied with this suggested duration. Of those public authorities in favour of a waiting period, none consider that the relevant timeframe should be reduced. However, two public authorities suggest that the review period should in fact be longer. The Austrian Federal Competition Authority and Austrian Federal Ministry for Science, Research and Economic Affairs favour a longer review timeframe in line with the four week period under Austrian national merger control law. A waiting period of longer than 15 working days would be more in line with the 25 working day duration of the current Phase I review under the EUMR. However, a standstill obligation of longer than 15 working days for acquisitions of noncontrolling minority shareholdings, which could be less complex and unproblematic in comparison to the types of transactions currently subject to the Commission’s scrutiny, may be viewed, particularly by companies, as disproportionate. If the Commission concludes that a detailed investigation is needed for a particular transaction (e.g. in cases in which a company with a strong market position acquires shares in a competitor), the general review periods will apply. Furthermore, the Commission proposes examining the acquisition of a noncontrolling minority shareholding even after the expiration of the waiting period and (potentially) the closing of a transaction. According to the Commission, such a ‘‘prescription’’ period could last four to six months so that market participants have enough time to raise complaints after the Commission has published a notice of the transaction.35

31

Ibid.

32

It is interesting to note that the Commission has not stressed this point in its summary of replies of 16 March 2015, para. 32 et seq. 33 The Department for Business Innovation & Skills of the UK Government and UK Competition & Markets Authority. 34 Association of the Italian Joint Stock Companies, Independent Music Companies Association (IMPALA) and MEDEF (Business Confederation). 35

White Paper, para. 51.

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This suggestion has likewise been met with a divergence of opinion between public authorities and registered organisations. More public authorities commented that they were in favour of this proposal than those who were explicitly opposed. However, the majority of registered organisations are unsurpringly against the notion of such post-closing review. Interestingly, none of the public authorities or registered organisations in favour of the proposal consider that a prescription period should be any longer than four to six months but almost all think that it should be shortened in order to ensure legal certainty for businesses, with suggestions ranging from one to four months. Although national authorities are likely to welcome the increased chances that problematic transactions will not slip through the net and escape the Commission’s review, fears that such a review could result in excessive levels of uncertainty for companies appear to be justified, especially regarding the proposal for a prescription period. 3 Non-Controlling Minority Shareholdings: An Enforcement Gap? The Commission and numerous stakeholders also have diverging views as to whether there is a need to extend the scope of the EUMR to encompass acquisitions of non-controlling minority shareholdings at all. Some stakeholders do not support the view that there is a regulatory gap by making a reference to the Commission’s jurisdiction regarding the prohibition of anti-competitive behavior under Art. 101 Treaty on the Functioning of the European Union (‘‘TFEU’’).36 It is questionable whether this is indeed the case or whether stakeholders want to avoid the widening of the Commission’s powers and potential tensions with their own regulatory systems by referring to the possibilities the Commission already has at hand. The Commission notes in its White Paper that the EUMR currently only applies to ‘‘concentrations’’, i.e. acquisitions of control by one or more person(s) or undertaking(s) over one or more other undertakings or part of an undertaking (Art. 3(1) EUMR).37 Therefore, the Commission currently only takes pre-existing minority shareholdings into account in the context of a notified merger where the Commission is competent to analyse a separate acquisition of control.38 In cases where there is no separate acquisition of control or where an acquisition of a minority shareholding itself does not lead to an acquisition of control, the Commission does not currently have jurisdiction under the EUMR.39 It argues that such acquisitions of non-controlling minority shareholdings may, however, still harm competition (see Sect. 2.1 above). Aside from reviewing acquisitions under the EUMR, the Commission also has the power to investigate anti-competitive behaviour under Art. 101 (agreements, 36

OJ C 326 (26.10.2012).

37

White Paper, para. 24.

38

See for example, Commission, 13 July 2005, Case No. M.3653 – Siemens/VA Tech concerning unilateral effects and Commission, 13 March 2009, Case No. M.5406 – IPIC/MAN Ferrostaal considering foreclosure effects.

39

White Paper, para. 25.

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decisions and concerted practices which may restrict competition) and Art. 102 (abuse of a dominant position) TFEU. Many stakeholders responding to the most recent public consultation argue that the anti-competitive effects arising from the acquisition of a minority shareholding can in fact be examined under the existing competition law provisions, i.e. Arts. 101 and 102 TFEU.40 Indeed, only three41 respondents to the recent consultation were convinced that the Commission could not deal with such effects under these provisions. Many of those arguing that the Commission does have jurisdiction under the relevant antitrust provisions rely on the findings of the European Court of Justice (‘‘ECJ’’) from 1987 when it held in the Philip Morris case that acquisitions of minority shareholdings can constitute an infringement of Art. 101 TFEU, stating: [a]lthough the acquisition by one company of an equity interest in a competitor does not in itself constitute conduct restricting competition, such an acquisition may nevertheless serve as an instrument for influencing the commercial conduct of the companies in question so as to restrict or distort competition on the market on which they carry on business.42 Interestingly, the Commission itself noted over a decade ago in its Green Paper concerning the review of the predecessor to the current EUMR43 that: only a limited number of [acquisitions of non-controlling minority shareholdings] would be liable to raise competition concerns that could not be satisfactorily addressed under Articles [101 and 102 TFEU]. Under this assumption it would appear disproportionate to subject all acquisitions of minority shareholdings to the ex ante control of the Merger Regulation. At the same time it appears doubtful whether an appropriate definition could be established capable of identifying those instances where minority shareholdings […] would warrant such treatment. Considering the above, it is noteworthy that the Commission has not applied Arts. 101 and 102 TFEU to minority shareholdings recently.44 Indeed, the Commission states in its recent White Paper that the uses of these provisions in the case of acquisitions of non-controlling minority shareholdings are limited.45 Therefore, despite its original doubts regarding ex ante review over a decade ago and recent negative feedback to its initial proposals two years ago, the Commission has continued to push ahead with its plans for extending the EUMR, convinced that the existing regime is not adequate for tackling potential harm to competition and 40

For a critical view on the existence of a sufficient enforcement gap see Levy (2013).

41

Finnish Competition and Consumer Authority, Independent Music Companies Association (IMPALA) and UK Competition & Markets Authority; see also Montag and Wilks (2015), p. 82 et seq. 42

Joined Cases C-142/84 and C-156/84 British American Tobacco Company Ltd v. Commission, EU:C:1987, 490, para. 37.

43 Green Paper on the Review of Council Regulation (EEC) No 4064/89, COM(2001) 745 final (not published in the Official Journal). 44

Levy (2013), p. 726 (the author concludes that this is contrary to the Commission’s desire for reform).

45

White Paper, para. 39.

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consumers. It considers that the theories of harm discussed above are similar to those arising from acquisitions of control (i.e. horizontal, non-coordinated and vertical effects) and that such transactions should consequently be subject to its review under the EUMR. The current proposals do, however, not contradict the Commission’s declaration in its Green Paper that ex ante review is not an appropriate means for tackling the potential issue with non-controlling minority shareholdings. Instead, as discussed above, the Commission is now proposing a separate targeted transparency system for such acquisitions, which complements the current merger control regime. The following analyses the extent to which the Commission is correct in believing that there is a gap in its current jurisdiction, with reference to relevant decisions of the German Federal Cartel Office and the German courts. The focus of this article lies on the applicability of Art. 101 TFEU to acquisitions of noncontrolling minority shareholdings, as this is the legislative tool that has drawn the most attention from stakeholders in the most recent consultation.46 3.1 Alternative Regulation: Art. 101 TFEU Article 101 TFEU prohibits ‘‘all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market’’. The Commission is therefore required to conduct a two-step analysis when determining whether there is a breach of Art. 101 TFEU. 3.1.1 First Step: Agreements Between Undertakings, Decisions by Associations of Undertakings and Concerted Practices The concept of an ‘‘agreement’’ under Art. 101 TFEU has been interpreted broadly by the European courts, which have defined it as ‘‘a concurrence of wills between at least two parties, the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties’ intention’’.47 Such practices are consequently distinguishable from unilateral action adopted by one company alone.48 A concerted practice has been described by the courts as a ‘‘catch-all’’ device intended to prevent suspected infringements from going unpunished, in the absence of proof of a common intention between the parties.49 Such practices have been defined as ‘‘a form of coordination between undertakings which, without having 46 It is noted for the sake of completeness that the applicability of Art. 102 TFEU is limited in these circumstances as the Commission would need to prove that the acquirer of a non-controlling minority stake in another company holds a dominant position and that the acquisition of such a stake would result in an abuse of its dominance (White Paper, para. 40). 47

Case T-41/96 Bayer AG v. Commission, EU:T:2000, 242, para. 69.

48

Case T-325/01 DaimlerChrysler AG v. Commission, EU:T:2005, 322, para. 84.

49

Case C-49/92 P Commission v. Anic Partecipazioni SpA, EU:C:1999, 356, para. 103.

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reached the stage where an agreement properly so-called has been concluded, knowingly substitutes practical cooperation between them for the risks of competition’’.50 The courts have noted, however, that there is no need specifically to characterise behaviour as either an agreement or a concerted practice. The definitions of both are intended to catch all forms of collusion that have the same nature but which are only distinguishable from one another by their intensity and the forms in which they manifest themselves.51 The Commission itself notes in the White Paper that it is not clear whether the acquisition of a non-controlling minority shareholding would constitute an ‘‘agreement’’.52 It also queries whether an ‘‘agreement’’ is created in the case of multiple acquisitions of shares via a stock exchange or in the case of articles of association, which it notes are generally intended to determine the corporate governance of the company and the relationship between it and its shareholders.53 The authors consider that an agreement could be identified relatively easily in the case of acquisitions of non-controlling minority shareholdings in non-listed companies. Such acquisitions tend to be governed by a range of different forms of agreement, for example, a share purchase agreement and a shareholder agreement, setting out the rights of the non-controlling shareholder and the extent of its influence over the target. In such circumstances, it is likely that the Commission would be able to prove a concurrence of wills between the parties as they would have to have reached an appropriate level of agreement pre-signing, for such a deal to proceed at all. The Commission may, however, have more difficulty in identifying an agreement or concerted practice in the case of an acquisition of a minority shareholding in a listed company via a stock exchange. The answer to this question is, however, of limited relevance to the current analysis. More important is whether such an acquisition could result in a restriction of competition. Even if there is no agreement/concerted practice (meaning that such deals would not fall under Art. 101 TFEU) and yet such acquisitions could lead to a restriction of competition, the Commission would indeed be correct in having flagged a ‘‘gap’’ that could potentially be regulated. 3.1.2 Second Step: Object or Effect to Prevent, Restrict or Distort Competition within the Internal Market – The German Proxy Some forms of agreements and concerted practices are anti-competitive simply based on their object. In GlaxoSmithKline Services Unlimited v. Commission54 the ECJ held that in order to determine whether an agreement constituted a restriction by object, regard had to be had to the context of its provisions, the objectives it 50

Case C-48/69 ICI v. Commission, EU:C:1972, 70, para. 64.

51

Case C-49/92 P Commission v. Anic Partecipazioni SpA, EU:C:1999, 356, para. 131.

52

White Paper, para. 40.

53

Ibid.

54

Joined cases C-501/06 P, C-513/06 P, C-515/06 P and C-519/06 P GlaxoSmithKline Services Unlimited v. Commission, EU:C:2009, 610.

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seeks to attain and the economic and legal context of which it forms part.55 With regard to the assessment of whether a concerted practice constitutes an object infringement, the Court has held that it is sufficient that such a practice has the ‘‘potential’’ to have a negative impact on competition.56 It noted that the effects of a concerted practice would only be relevant to the level of a fine or award of damages. If an agreement or concerted practice does not fall into the category of an object infringement, it is necessary to examine whether it would have a restrictive effect. Account should be taken of the actual conditions in which an agreement functions, in particular the economic context in which the parties operate, the products or services covered by the agreement and the actual structure of the market concerned.57 An analysis of anti-competitive effects of non-controlling minority shareholdings is already conducted under German merger control law. Such acquisitions are subject to merger control review by the German Federal Cartel Office under the German Act against Restraints of Competition (‘‘GWB’’). They can fall under the jurisdiction of the Federal Cartel Office if they constitute a concentration under Sec. 37(1)(3)(b) GWB or Sec. 37(1)(4) GWB. Section 37(1)(3)(b) GWB governs acquisitions of ‘‘shares in [a target] if the shares, either separately or in combination with other shares already held by the [acquirer], reach b) 25 percent…of the capital or the voting rights of the [target]’’. Section 37(1)(4) GWB governs ‘‘any…combination of undertakings enabling one or several undertakings to exercise directly or indirectly a competitively significant influence on a [target]’’.58 The exercise of a competitively significant influence under Sec. 37(1)(4) GWB is subsidiary to the other forms of concentration under German merger control law. Thus, if an acquisition of control under Sec. 37(1)(2) GWB exists, Sec. 37(1)(4) GWB will not be applicable.59 In practice, the acquisition of shares under 25% is a typical case under Sec. 37(1)(4) GWB.60 The notification requirement under Sec. 37(1)(4) GWB is criticised in legal literature. The provision is seen as vague and hard to interpret and therefore as leading to legal uncertainty for companies.61 Some authors argue that the burden on companies of assessing whether a filing is required is disproportionate to the limited

55

Ibid., para. 58.

56

Case C-8/08 T-Mobile, EU:C:2009, 343, para. 31.

57

Joined cases T-374/94, T-375/94, T-384/94 and T-388/94 European Night Services, EU:T:1998, 198, para. 136.

58

The article has a focus on the concentration under Sec. 37(1)(4) GWB, as the ‘‘additional factors’’ proposed by the Commission seem to be inspired by this provision. Even if this is not the case, decisional practice under Sec. 37(1)(4) GWB could potentially be used by the Commission in order to clarify or apply the requirement of a ‘‘competitively significant link’’. 59

Bach (2015), Sec. 37, para. 103; Riesenkampff and Lehr (2009), Sec. 37, para. 26.

60

Rittner et al. (2014), para. 1471.

61

Bach (2015), Sec. 37, paras. 104 and 105; Kuhn (2011), p. 278; Schwarz (2005), p. 2125; Thomas (2014), Sec. 37, para. 302; for an opposing view see Zigelski (2009), p. 1263, who argues that decisional practice provides relatively clear guidance and that the provision is not onerous for companies.

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anti-competitive effects which could result from acquisitions of minority shareholdings.62 It is crucial to draw a precise distinction between (1) the form of the concentration and (2) the competitive assessment of a concentration under German merger control law. The ‘‘combination of undertakings enabling one or several undertakings to exercise directly or indirectly a competitively significant influence’’ under Sec. 37(1)(4) GWB constitutes a special form of concentration, which can capture minority shareholdings under German law.63 However, such a competitively significant influence does not automatically lead to anti-competitive effects (e.g. the creation or strengthening of a dominant position), which could justify the prohibition of a transaction. Nevertheless, the assessment of the form of concentration under Sec. 37(1)(4) GWB already contains elements of a substantive competitive assessment, as a competitive relevance must be established.64 Thus, in establishing a concentration under Sec. 37(1)(4) GWB, one has to examine two distinct elements, namely (1) influence under company law and (2) competitive significance. In practice, it can be left open whether influence exists, if a competitive significance can be negated. This is usually the case where there is neither a horizontal overlap nor a vertical relationship between the acquirer and the target.65 The element of influence is considered to be a ‘‘catch-all clause’’ and therefore difficult to assess. Generally, the case-law concerning Sec. 37(1)(4) GWB can be used as a proxy for the proposed review of non-controlling minority shareholdings under EU law. The decisional practice of the Federal Cartel Office in previous cases falling within the jurisdiction of Sec. 37(1)(4) GWB supports the claims of the Commission in its White Paper that acquisitions of minority shareholdings can lead to a significant influence on the target and potentially can result in anti-competitive effects. The analysis conducted by the Federal Cartel Office and the German courts of a number of acquisitions of minority shareholdings are synonymous with some theories of harm purported by the Commission, in particular concerning (1) a limitation of the target’s competitive strategy and (2) an acquirer’s ability to exercise influence over the outcome of special resolutions. Firstly, the Federal Cartel Office has held that acquisitions of minority shareholdings can result in a significant influence and a limitation of a target’s competitive strategy by an acquirer. The German Federal Supreme Court has in turn 62

See for example, Bechtold and Bosch (2015), Sec. 37, para. 36.

63

It is not surprising that the notification requirement proposed in the White Paper, i.e. the competitively significant link, resembles some factors which play a role in the German case-law concerning Sec. 37(1)(4) GWB. 64

Emmerich (2014), p. 415; Kuhn (2011), p. 264.

65

See for example Federal Supreme Court, 21 November 2000, Case No. KVR 16/99, 2001 NJW-RR 762; Federal Cartel Office, 27 Febraury 2008, B5-198/07, para. 45 – A-TEC Industries/Norddeutsche Affinerie; see Bechtold and Bosch, Sec. 37, para. 43 and Schu¨tz (2014), Sec. 37, para. 79 for the importance of a horizontal overlap or vertical relationship; conglomerate transactions should not fall under the provision: Bechtold and Bosch, Sec. 37, para. 43 (based on wording and legislator’s motives); Thomas (2014), Sec. 37, para. 345; for an opposing view, but also only in exceptional circumstances see Monopolkommission (1991/1992), p. 253, para. 536; Kallfaß (2014), Sec. 37, para. 57; Kuhn (2011), p. 264 et seq.

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confirmed that it is sufficient that the acquirer has a possibility under company law of influencing the target and that such influence does not have to relate to the overall competitive potential of the target, but could be limited to competitive potential which could be used to fulfill the acquirer’s competitive aims.66 Such a competitively significant influence could be assumed if one could expect that the majority shareholder would take account of the acquirer’s ideas or give the acquirer a degree of freedom, even if this were only the case where the majority shareholder’s own interests were not compromised.67 On this basis, the Federal Cartel Office has held that a number of acquisitions of minority shareholdings of varying degree could result in a limitation of the target’s competitive strategy. For example, the Federal Cartel Office has prohibited two acquisitions of shareholdings slightly below 25% on these grounds.68 The Federal Supreme Court upheld the Federal Cartel Office’s prohibition decision69 in the ASV/Stilke case70 involving an acquisition of a 24% share by an acquirer that had an existing business relationship with the majority shareholder71 and information rights beyond those granted under German corporate law (i.e. under the German Limited Liability Companies Act (GmbHG)).72 There was a vertical relationship between the acquirer and the target.73 The Federal Supreme Court concluded that it could be assumed that the majority shareholder would take account of the acquirer’s strategies and ideas, as long as these would not be economically unsuccessful.74 It was not regarded as decisive whether the acquirer could enforce his interests on a legal or factual basis, but the mere possibility of a competitively significant influence was important.75 The acquisition of a slightly higher, 24.8%, shareholding in the Post/trans-oflex case was prohibited76 on similar grounds where the acquirer was able to designate two of the six shareholder members of the supervisory board,77 thereby having the possibility of influencing the decision-making process and market 66 See for example, Federal Supreme Court, 21 December 2004, Case No. KVR 26/03, 2005 WM 664, p. 665 – Post/trans-o-flex. 67

Ibid.

68

Federal Cartel Office, 27 February 2008, Case No. B5-198/07, para. 27 et seq. – A-TEC Industries/ Norddeutsche Affinerie; the Federal Supreme Court has upheld a prohibition decision of the Federal Cartel Office (Federal Supreme Court, 21 December 2004, Case No. KVR 26/03, 2005 WM 664, p. 666 – Post/trans-o-flex). 69

Federal Cartel Office, 3 January 1997, Case No. B6-108/96, 1997 NJWE-WettbR, 67–72 – ASV/ Stilke.

70 Federal Supreme Court, 21 November 2000, Case No. KVR 16/99, 2001 NJW-RR, 762–765 – ASV/Stilke. 71

Ibid., p. 762.

72

Ibid., p. 765.

73

The acquirer published and sold newspapers and magazines and the target was active in the press retail business. 74

Ibid., p.762.

75

Ibid., p.764.

76

Federal Supreme Court, 21 December 2004 Case No. KVR 26/03, 2005 WM, 664 – Post/trans-o-flex.

77

Overall, the supervisory board consisted of 12 members.

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behavior of the target. The Federal Supreme Court held that such influence would have exceeded the possibilities of a typical minority shareholder by far and was reinforced by the acquirer’s superior market and industry knowledge.78 The parties were considered to be at least potential competitors, as the acquirer was a logistics company and the target provided transportation services for business customers in Germany. The Federal Cartel Office has also prohibited the acquisition of a slightly lower shareholding of 17.5% in the Mainova/Aschaffenburger case. The acquirer was active in energy supply (for electricity, gas, water and heating). The authority held that the acquirer would not merely have had a financial interest in the target but its aim would have been cooperation and long-term strategic partnership through economic synergies, joint sales guarantee (Absatzsicherung) and the joint supply of bundled customers. The relatively low shareholding was not decisive but the acquirer would have been represented on the supervisory board, would have received pre-emptive rights and could have prevented any participation by other shareholders.79 In that case, the acquirer and target were partly active on upstream and downstream markets.80 Thus, the authority held that it could be assumed that the companies would no longer have acted independently on the market. This analysis was confirmed on appeal by the Du¨sseldorf Court of Appeal.81 The Federal Cartel Office has also prohibited acquisitions of far lower shareholdings. It has confirmed in the Bonner Zeitungsdruckerei case that acquisitions of competitively significant influence resulting from low shareholdings can give rise to anti-competitive effects,82 but its analysis was not confirmed on appeal. In that case, the Federal Cartel Office blocked the acquisition of a c.9% shareholding by virtue of which the acquirer would have gained a direct participation in a competitor and, thus, not only a financial, but also an entrepreneurial interest.83 The companies manufactured and published daily newspapers. Although the parties had agreed on an advisory board (Beirat), which would have been required to agree to special and competition matters without the acquirer, the target would not have been prevented from appointing a representative of the acquirer to the advisory board. The Federal Cartel Office believed that this would have been advantageous for both parties owing to the acquirer’s market knowledge.84 Thus, it could not have been assumed that the target would have insulated the acquirer from all competitively relevant information.85 The Federal Cartel Office regarded an actual probability as sufficient for the existence of 78 Federal Supreme Court, 21 December 2004, Case No. KVR 26/03, 2005 WM 664, p. 665 – Post/transo-flex. 79

Federal Cartel Office, 22 July 2004, Case No. B8-27/04, para. 20 – Mainova/Aschaffenburger.

80

Ibid., para. 21.

81

Du¨sseldorf Court of Appeal, 23 November 2005, Case No. VI-2 Kart 14/04 (V), paras. 16 – Mainova/ Aschaffenburger. 82

Federal Cartel Office, 8 September 2004, Case No. B6-27/04, p. 23 – Bonner Zeitungsdruckerei.

83

Ibid., p. 19.

84

Ibid., p. 24.

85

Ibid., p. 25 et seq.

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potential influence.86 The availability of defensive measures by the acquirer with a disciplinary effect if the target had not acted in its interest was also regarded as relevant.87 The Du¨sseldorf Court of Appeal held, however, that the acquisition did not fall under Sec. 37(1)(4) GWB. The court emphasised that there was not a single provision in the agreement which would confer the possibility of influencing the decision-making process of the target on a long-term basis.88 The acquirer would not have been represented on advisory boards and would not have gained special competitively relevant information.89 The court ruled that it was not mandatory that the acquirer would have to agree with the sale of shares to a third party as such decisions would not have to be made unanimously.90 The former and future business relations and subsequent related interests alone were not sufficient to conclude that the majority shareholder would consider the interests of the minority shareholder.91 Secondly, the Federal Cartel Office has argued that acquisitions of noncontrolling minority shareholdings below 25% can grant acquirers rights equivalent to those of shareholders with holdings of 25% – and by implication influence over special resolutions. The authority has held that even if a shareholder acquires less than 25% of the shares in a target, but so-called ‘‘plus factors’’ are present, these could lead to a position equivalent to that of a 25% shareholder, for example through a de facto blocking minority based on a low attendance rate and a fragmented shareholder structure.92 For example, as discussed above in the Post/trans-o-flex case, the acquirer would have been granted influence far exceeding that of a typical minority shareholder and would have had an influence on capital increases similar to that of a 25% shareholder.93 Equally, in the case of Asklepios Kliniken/Rho¨n-Klinikum, the Federal Cartel Office cleared the acquisition of a c.10% shareholding with conditions, holding that the acquirer would have gained a long-term blocking minority in the target, as the quorum for a blocking minority had been decreased from 25% to 10% of the represented capital based on the articles of association.94 The parties were competitors on several markets, as they were both active in the field of hospitals and medical centers. 86

Ibid., p. 26.

87

Ibid., p. 28.

88

Du¨sseldorf Court of Appeal, 6 July 2005, Case No. VI-Kart 26/04 (V), para. 21 – Bonner Zeitungsdruckerei.

89

Ibid., paras. 24.

90

Ibid., para. 30.

91

Ibid., para. 32.

92

Federal Cartel Office, 27 February 2008, Case No. B5-198/07, para. 27 et seq. – A-TEC Industries/ Norddeutsche Affinerie. 93 Federal Supreme Court, 21 December 2004, Case No. KVR 26/03, 2005 WM 664, p. 666 – Post/transo-flex. 94 Federal Cartel Office, 12 March 2013, Case No. B3-132/12, para. 49 – Asklepios Kliniken/Rho¨nKlinikum.

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3.2 Applicability at EU Level: The Appropriateness of the Commission Proposals On the basis of the experience of the German Federal Cartel Office in the cases described above, acquisitions of non-controlling minority shareholdings (of varying magnitude) can lead to a significant influence on the target and potentially give rise to anti-competitive effects. It is obvious that a shareholding under 25% does not automatically confer a competitively significant influence: additional factors must be present. The existence of a horizontal overlap or a vertical relationship between the acquirer and the target plays an essential role in this regard. Whilst each case has to be considered on an individual basis, the reasons mentioned in the German case-law support a number of the theories of harm suggested by the Commission in its White Paper. Therefore, in the event that the Commission were unable to identify an agreement or concerted practice (e.g. in the case of share acquisitions via a stock exchange) and the acquisition would consequently not fall under Art. 101 TFEU, there could still be negative effects on competition that would not be regulated under current European competition law (which are caught under some national regimes like Germany).95 The Commission is consequently correct in highlighting an ‘‘enforcement gap’’ that may exist in some circumstances if merger control rules would not be applicable. The decisive question is whether it is also necessary to close such a gap. Even if the Commission were able to identify an agreement or concerted practice (e.g. in the case of an acquisition of a non-controlling shareholding in a non-listed target), the authors argue that it would still be more appropriate to analyse such transactions under amended merger control provisions rather than under Art. 101 TFEU (despite the fact that the latter provision could apply). The Commission’s analysis under Art. 101 TFEU focuses on past behaviour and the verification of the extent of other forms of harm (e.g. price-fixing, customer/market allocation, limitations on sales/output, minimum resale prices). In contrast, the ex-ante nature of merger control law means that it analyses the future market situation compared against the current competitive landscape (i.e. the counterfactual).96 An analysis of an acquisition of a non-controlling minority shareholding is similarly forwardlooking and the theories of harm identified by the Commission in the White Paper (see Sect. 2.1 above) are textbook examples of the types of competitive harm that merger control law seeks to avoid. Indeed, the authors note that the effects of acquisitions of non-controlling minority shareholdings described by the ECJ in the Philip Morris case (which is relied upon by those arguing that such acquisitions fall under Art. 101 TFEU (see

95

For completeness, the same would apply if the requirements of Art. 102 TFEU were not fulfilled.

96

The ECJ has held in its judgment in case C-12/03 Commission v. Tetra Laval BV, EU:C:2005, 87 at para. 42: ‘‘A prospective analysis of the kind necessary in merger control must be carried out with great care since it does not entail the examination of past events – for which often many items of evidence are available which make it possible to understand the causes – or of current events, but rather a prediction of events which are more or less likely to occur in future if a decision prohibiting the planned concentration or laying down the conditions for it is not adopted’’.

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Sect. 3 above)) are uncannily similar to those reviewed under the existing merger control regime: the investing company obtains legal or de facto control of the commercial conduct of the other company [i.e. a concentration] or […] the agreement provides for commercial cooperation between the companies or creates a structure likely to be used for such cooperation [i.e. coordinated effects].97 Notably, at the time of the ECJ’s ruling, the Commission was in search of a basis on which to analyse the potentially anti-competitive effects of transactions and introduced the predecessor of the EUMR for these purposes two years later. It is widely recognized that the Philip Morris case was a turning point in the Commission’s attempts to gain approval for its merger control regime.98 It consequently seems counterintuitive to argue that, instead of extending the scope of the existing merger control regime, the Commission can rely today on the premise of an out-dated case that was effectively the forerunner of that regime. It is also noteworthy that the Commission’s attempts to regulate such acquisitions under extended merger control laws is more in tune with calls for procedural and cost efficiency at the European level. Regardless of whether or not one believes that the length of merger control review suggested by the Commission should be shorter or longer (see Sect. 2.2.3 above), the timeframes proposed are clearly considerably shorter than those involved in a review under the antitrust provisions of the TFEU. It is however debatable whether the number of potentially relevant acquisitions of non-controlling minority shareholdings is adequate to justify any kind of reform in the current times of austerity. According to the most recent Activity Report (Ta¨tigkeitsbericht) of the Federal Cartel Office, a total of 2279 transactions were notified to the authority in 2013 and 2014.99 Of those cases, 61 transactions were notified as acquisitions of non-controlling minority shareholdings100 and 46 transactions were notified on the basis that they resulted in a significant competitive influence under Sec. 37(1)(4) GWB.101 Therefore, less than 4.7% of all transactions notified in Germany in that period constituted acquisitions of non-controlling minority shareholdings. Only one transaction which was notified under Sec. 37(1)(4) GWB in 2012 was reviewed in Phase II proceedings during this period and was cleared subject to conditions.102 If these statistics are again used as a proxy for the number of cases that could potentially fall under the Commission’s jurisdiction (if they were to occur at the European level), it is doubtful whether a full-blown reform of the merger control regime is proportionate. Such a reform 97

Joined Cases C-142/84 and C-156/84 British American Tobacco Company Ltd v. Commission, EU:C:1987, 133, para. 38.

98

See for example, Goyder et al. (2009), p. 389; Lo¨ffler (2001), Vorbemerkungen, para. 10.

99

Activity Report 2013/2014, p. 16.

100

In 2013: 31 cases and in 2014: 30 cases (Activity Report 2013/2014, p. 135).

101

In 2013: 23 cases and in 2014: 23 cases; none of these cases has been reviewed in Phase II (Activity Report 2013/2014, p. 20 and p. 135). 102 Federal Cartel Office, 12 March 2013, Case No. B3-132/12, para. 49 – Asklepios Kliniken/Rho¨nKlinikum.

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would change the current regulatory relationship between the EU Member States and the Commission and this would also have implications for companies active in Europe. First, tensions could arise in relation to the Member States, in which acquisitions of minority shareholdings are taken into account under merger control law. Such Member States will be eager to avoid a situation in which transactions, which they would normally review and which could be blocked under national merger control law, slip away. Divergent decisions could arise on the European and national level. Secondly, EU Member States without the possibility of reviewing the acquisition of non-controlling minority shareholdings could consider an alignment of their systems with the European one. In any case, companies would have to adapt their behavior to the regulatory changes in relation to specific types of noncontrolling minority acquisitions.

4 Conclusion The analysis of the comments on the public consultation shows two important results. Firstly, the opinions on the extension of the Commission’s jurisdiction are very diverse. While some stakeholders support the idea that the Commission should review the acquisition of non-controlling minority shareholdings in specific cases, the majority reject the proposal. Generally, registered organisations are much more critical of the proposal than public authorities. This is not surprising as the main administrative burden will lie on the companies conducting business in Europe. Secondly, several aspects of the Commission’s proposal remain unclear and would have to be clarified further. Hotly discussed topics among the stakeholders include the additional factors necessary to classify a shareholding between 5 and 20% as a competitively significant link and the need to provide detailed market share information. It would indeed be essential for the Commission to provide more guidance on these issues before any changes to the current merger control system could be implemented effectively. However, it should also be noted that the Commission has not yet presented a final proposal on these aspects. As regards the question of whether a reform is required at all, the Commission is correct in its assessment that the anti-competitive effects of some acquisitions of non-controlling minority shareholdings are not regulated under the current merger control law provisions (i.e. if a transaction does not involve a ‘‘concentration’’) or under Art. 101 TFEU (i.e. owing to a lack of agreement or concerted practice). Based on German decisional practice such acquisitions can, however, have anticompetitive effects. This is usually the case if the acquirer and the target are competitors or are active on vertically-related markets. The Commission seems to follow this approach with the introduction of the requirement of a ‘‘competitively significant link’’. It appears though that the number of such cases that could potentially be notifiable under the new regime would be de minimis in nature and would consequently not necessarily justify the Commission’s proposed reforms. Indeed, the European Commissioner for Competition, Margrethe Vestager, herself mentioned in a speech at the meeting of the Studienvereinigung Kartellrecht in

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Brussels on 12 March 2015 that the balance between the concerns that the acquisition of non-controlling minority shareholdings raised and the procedural burden of the proposal in the White Paper might not be the right one and that further examination will be required.103 It is, however, noteworthy that the Commission does not appear to have given up all hope on the chances of reform. On 13 May 2015, it published a tender notice concerning a support study for its proposals. The aim of the study is to assist the Commission in gathering information on the competition law enforcement system in selected countries (both Member States and countries outside the EU) which already have a system in place for the review of the acquisition of non-controlling minority shareholdings. The study will also help the Commission gather more information on the rights typically attached to minority shareholdings in selected EU and non-EU countries in order for it to assess if a certain level of shareholding and the distinction between passive and active minority shareholdings could be used as a way of defining its jurisdiction more narrowly and clearly in future proposals. The Commission intends to feed the results of the study into the decision-making on any follow-up to the White Paper and might ultimately use it to improve the design of a possible reformed merger control system. The contract was awarded in November 2015. It therefore still remains to be seen whether the Commission’s proposals have been derailed by the feedback to the White Paper or whether the regulator will mind the gap and leap aboard the train to reform.

References Bach A (2015) Sec. 37. In: Montag F, Sa¨cker FJ (eds) Mu¨nchener Kommentar zum Kartellrecht, 2nd edn. C.H. Beck, Munich Bechtold R, Bosch W (2015) Sec. 37. In: Bechtold R, Bosch W (eds) GWB (Kartellgesetz) 8th edn. C.H. Beck, Munich Emmerich V (2014) Kartellrecht. Ein Studienbuch, 13th edn. C.H. Beck, Munich European Commission (2014) White Paper ‘‘Towards more effective EU merger control’’. http://ec. europa.eu/competition/consultations/2014_merger_control/index_en.html. Accessed 19 Oct 2015 Federal Cartel Office (2015) Activity Report 2013/2014. http://www.bundeskartellamt.de/SharedDocs/ Publikation/DE/Taetigkeitsberichte/Bundeskartellamt%20-%20T%C3%A4tigkeitsbericht%202014. pdf?__blob=publicationFile&v=2. Accessed 19 Oct 2015 Goyder DG, Goyder J, Albors-Llorens A (2009) EC Competition Law, 5th edn. Oxford University Press, Oxford Kallfaß G (2014) Sec. 37. In: Langen E, Bunte H-J (eds) Kartellrecht, 12th edn. Luchterhand, Neuwied Kuhn T (2011) Der Erwerb wettbewerblich erheblichen Einflusses in der Deutschen Zusammenschlusskontrolle—Kein Modell fu¨r Europa. ZweR 3:258–284 Levy N (2013) EU Merger Control and non-controlling minority shareholdings: the case against change. ECJ 9:721–753 Lo¨ffler HF (2001) Kommentar zur europa¨ischen Fusionskontrollverordnung. Luchterhand, Neuwied Monopolkommission (1991/1992) Wettbewerbspolitik oder Industriepolitik, Hauptgutachten IX, Nomos, Baden-Baden

103 http://ec.europa.eu/commission/2014-2019/vestager/announcements/thoughts-merger-reform-andmarket-definition_en (as of 22 June 2016).

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Montag F, Wilks M (2015) EU merger review of the acquisition of non-controlling minority shareholdings: where to now? ZWeR 2:69–92 Riesenkampff A, Lehr S (2009) Sec. 37. In: Loewenheim U, Meessen KM, Riesenkampff A (eds) Kartellrecht, 2nd edn. C.H. Beck, Munich Rittner F, Dreher M, Kulka M (2014) Wettbewerbs- und Kartellrecht. Eine systematische Darstellung des deutschen und europa¨ischen Rechts, 8th edn, C.F. Mu¨ller, Heidelberg Schu¨tz J (2014) Sec. 37. In: Busche J, Ro¨hling A (eds) Ko¨lner Kommentar zum Kartellrecht. Carl Heymanns Verlag, Cologne Schwarz M (2005) Zusammenschlussverbot Deutsche Post/trans-o-flex—wettbewerblich erheblicher Einfluss auf potenziellen zuku¨nftigen Wettbewerber. NJW 30:2124–2126 Thomas S (2014) Sec. 37. In: Immenga U, Mestma¨cker E-J (eds), Wettbewerbsrecht, 2nd vol., 5th edn. C.H. Beck, Munich Zigelski S (2009) Der wettbewerblich erhebliche Einfluss wird 20 – Ein Blick auf die Anwendungspraxis des Bundeskartellamtes und der Gerichte. WuW 12:1261–1270

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