With the beginning of the new year, adjustments to the European Commission’s merger control rules designed to ease reviews for mergers unlikely to affect competition came into force.
But sector-focused antitrust lawyers have played down implications…
With the beginning of the new year, adjustments to the European Commission’s merger control rules designed to ease reviews for mergers unlikely to affect competition came into force.
But sector-focused antitrust lawyers have played down implications of the relaxation for the telecoms industry.
The changes affect rules for so-called “simplified procedures” for mergers that fall within the scope of the European Union, but that are not expected to negatively affect competition.
Such deals are subject to less detailed scrutiny, and merging companies need to submit less data to the regulator and can use a shorter, less complicated notification form – the so-called “short form CO”.
Under rules in force since 1 January 2014, horizontal transactions can be notified under the simplified procedure if the merging parties have a joint market share of below 20%. The previous threshold was 15%. For vertical deals the threshold is increased from 25% to 30%.
Furthermore, for horizontal transactions where the merger only results in a marginal increase of market share of the bigger party, the EC might now accept a simplified notification as well. This is, however, at the discretion of the regulator.
The EC has also removed some of the data requirements from the short form CO.
Even though the EC expects the new rules to increase the number of transactions that will be reviewed under the simplified procedure, antitrust lawyers commented that the telecoms sector would hardly be impacted.
The new rules are “unfortunately unlikely to affect telecoms deals where the parties are present in the same country,” a competition lawyer commented by email.
Dominic Long of law firm Allen & Overy agreed, saying the EC reforms “are unlikely to have a major impact on the process of notifying telecoms deals in the EU or on the EU Commission’s review of such deals”.
But he noted that changes to the standard notification form now increase pressure on mobile operators to provide data on rates of customer switching where available, although it is still not formally required.
“The Commission would already expect parties to a telecoms merger to submit that type of data to the extent available,” he said “so the new guidance is not so much a change in position, more a clarification”.
The first lawyer noted that private equity and financial investors might be the main beneficiaries of the new rules, because they might more regularly escape standard notification requirements under the new regulation.
