Consultation on best practices for cooperation among EU national competition authorities

The European Commission has made public a set of draft best practices aimed at fostering and facilitating information sharing between national competition authorities (”NCAs”) within the European Union, for mergers that are not subject to EU merger control but require clearance in several Member States.

The Commission is seeking the opinion of interested parties on draft best practices drawn up by the recently set up Merger Working Group, composed of the Commission and EU national competition authorities. The best practices are intended to foster and facilitate information sharing between national competition authorities in the EU when they are engaged in the review of the same merger or acquisition that does not qualify for the one-stop shop review by the Commission at EU level, but needs approval in several national jurisdictions. Information that might be usefully shared would include important developments relating to the timing of the review process, the substantive assessment and, where applicable, remedies.

Mergers where cooperation is likely to be beneficial include those which have the potential to affect competition in more than one Member State, or where remedies need to be designed in more than one Member State. The best practices do not therefore envisage cooperation in all multijurisdictional cases. NCAs will decide on a case-by-case basis whether a well targeted cooperation could enhance the review process.

The success of cooperation will depend to a great extent on the goodwill and cooperation of the merging parties, who have an important role to play. Cooperation is in the interest of merging parties and NCAs alike, as it can increase the overall efficiency, transparency and effectiveness of the merger review process. It will be particularly effective where the merging parties permit the NCAs to exchange confidential information. The timing of notifications is also an important area where merging parties can facilitate cooperation between NCAs.

The Merger Working Group was established in Brussels in January 2010. It consists of representatives of the European Commission and the NCAs of the European Union together with observers from the competition authorities of the European Economic Area. The Group’s aim is to foster increased cooperation and convergence of merger control in the EU. The Working Group is chaired by the Commission, with Ireland and Germany as current joint vice chairs.

The EU’s 20-year-old Merger Regulation created a one-stop-shop for the regulatory review of mergers and acquisitions above certain turnover thresholds. Last year, the Commission reviewed 274 mergers, still down from a peak of 402 in 2007 as the economic and financial situation slowed down the M&A activity. The same year at least 240 transactions fell outside the Commission’s exclusive competence and needed to be notified with two or more NCAs. Celebrating the anniversary of Merger Regulation Joaquín Almunia, Commission Vice President in charge of Competition Policy, said last month that EU merger control was one of the EU’s success stories, while noting the important role played by the national competition authorities.

However VP Almunia also acknowledged that companies call for more cooperation among national competition authorities and more convergence in their approach to merger control.

In light of the submissions, the Working Group will review the proposals with a view to publishing a final version in the autumn of 2011.

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