Council Regulation (EC) No 139/2004
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| Council Regulation (EC) No 139/2004 | |
|---|---|
| Title | Council Regulation (EC) No 139/2004 |
| Type | Regulation |
| Adopted | 2004 |
| Instituted by | Council of the European Union |
| Official journal | Official Journal of the European Union |
| Status | In force |
Council Regulation (EC) No 139/2004
Council Regulation (EC) No 139/2004 is a foundational European Union instrument on the control of concentrations between undertakings that established the modern EU merger control regime and procedures for review by the European Commission (European Union), drawing on precedents from the Treaty on European Union and the Treaty establishing the European Community. The regulation harmonizes merger notification and substantive assessment across European Community member states and interfaces with decisions of the Court of Justice of the European Union, the General Court (European Union), and national competition authorities such as the Bundeskartellamt and the Autorità Garante della Concorrenza e del Mercato. It shapes transactions involving multinational firms including matters affecting companies from United States, Japan, China, United Kingdom, France, Germany, Italy, Spain, Netherlands, Sweden, and others.
Background and Legal Context
The regulation emerged from a lineage of instruments including the Merger Regulation 4064/89, the jurisprudence of the Court of Justice of the European Union in cases like Tetra Laval BV v Commission and General Electric/Honeywell controversies involving the European Commission (European Union), and policy debates in the European Council and the European Parliament. It reflects principles articulated in the Treaty on the Functioning of the European Union and operationalizes the internal market objective overseen by institutions such as the European Commission Directorate-General for Competition and is informed by enforcement models used by authorities like the Federal Trade Commission and the United States Department of Justice Antitrust Division. The regulation coexists with international frameworks including the Organisation for Economic Co-operation and Development guidance and bilateral arrangements with the Competition and Markets Authority.
Scope and Objectives
The regulation applies to concentrations meeting turnover thresholds derived from transnational commerce involving entities from jurisdictions such as Belgium, Poland, Austria, Greece, Portugal, Ireland, Czech Republic, Hungary, Romania, Bulgaria, and beyond. Its objectives include preserving effective competition in markets affected by transactions among operators like Microsoft Corporation, Bayer AG, Google LLC, Apple Inc., Amazon (company), Facebook, Siemens AG, General Electric Company, and to protect consumer welfare and competitive structure recognized by bodies like the Council of the European Union and the European Commission (European Union). The regulation sets the legal basis for pre-notification and referral mechanisms that concern cross-border concentrations involving multinational groups including Toyota Motor Corporation and Volkswagen Group.
Notification and Review Procedures
Under the regulation, parties notify the European Commission (European Union), specifically the European Commission Directorate-General for Competition, when turnover thresholds are met, following procedures influenced by practices at the Bundeskartellamt and the Autorité de la concurrence (France). The two-phase review process—Phase I and Phase II—parallels procedures in jurisdictions such as the United States Federal Trade Commission and the Competition and Markets Authority, with case examples including investigations of Bayer/Monsanto, Altice/Telefónica, Glencore/Xstrata, and Anheuser-Busch InBev/SABMiller. Time limits, jurisdictional referrals under Articles akin to those considered by the Court of Justice of the European Union, and procedural rights for parties and third parties reflect standards discussed in proceedings before the General Court (European Union).
Substantive Assessment: Market Definition and Competition Analysis
The substantive test centers on whether a concentration significantly impedes effective competition, in particular through the creation or strengthening of a dominant position, drawing on analytical frameworks used by the European Commission Directorate-General for Competition, case law such as United Brands v Commission, and economic evidence comparable to studies used by the Organisation for Economic Co-operation and Development. Market definition techniques include SSNIP-type analysis applied to markets for products and services from firms like Pfizer, Novartis, Shell plc, BP plc, Vodafone Group, and Deutsche Telekom AG. The assessment examines unilateral effects, coordinated effects, barriers to entry, vertical effects, conglomerate overlaps, and efficiencies claimed by parties (as in Nestlé or Procter & Gamble contexts), with input from third parties including trade associations, competitors, and consumer organizations such as Consumers International.
Remedies, Commitments, and Enforcement
When a concentration raises competition concerns, the European Commission (European Union) may adopt remedies or accept commitments—structural divestitures or behavioral undertakings—similar to interventions seen in mergers involving T-Mobile, Sprint Corporation, Vodafone Group, Altice NV, and GE. Remedies are enforced through decisions subject to review by the General Court (European Union) and appeals to the Court of Justice of the European Union, and cooperation mechanisms with national agencies like the Autorità Garante della Concorrenza e del Mercato and the Bundeskartellamt support monitoring. Non-compliance can trigger fines and interim measures in line with precedents from the European Commission Directorate-General for Competition and rulings in high-profile cases.
Amendments, Case Law, and Practical Impact
Since adoption, the regulation has been clarified by amendments, guidance documents, and extensive case law including judgments by the General Court (European Union) and the Court of Justice of the European Union in matters such as Tetra Laval BV v Commission and other landmark decisions involving E.ON, Gaz de France, Gazprom, and Microsoft Corporation. The regulation's interaction with merger control regimes in jurisdictions like the United States, China, and the United Kingdom has influenced multijurisdictional deal planning for corporations such as BASF SE, Dow Chemical Company, Airbus, Boeing, and LVMH. Its practical impact includes shaping transactional structuring, pre-notification remedies, and the evolution of international cooperation among competition authorities exemplified by networks like the International Competition Network.