Merger Regulation (EC) No 139/2004
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| Merger Regulation (EC) No 139/2004 | |
|---|---|
| Title | Merger Regulation (EC) No 139/2004 |
| Type | Regulation |
| Adopted | 2004 |
| Jurisdiction | European Union |
| Subject | Competition law; Merger control |
| Replaced | Council Regulation (EEC) No 4064/89 |
| Administered by | European Commission; DG Competition |
Merger Regulation (EC) No 139/2004 is a central European Union instrument for pre‑merger control that allocates competence to the European Commission to review concentrations with a Community dimension and to assess their compatibility with the internal market. It modernised the procedures of Council Regulation (EEC) No 4064/89 and interacts with national merger regimes such as those in Germany, France, United Kingdom, Italy and Spain. The Regulation balances market integration goals linked to the Single Market with competition safeguards promoted by institutions like the Court of Justice of the European Union and the European Parliament.
Background and Purpose
The Regulation superseded Council Regulation (EEC) No 4064/89 to address structural changes after the Maastricht Treaty, the expansion of the European Union and doctrinal developments from decisions of the European Court of Justice and the General Court. Its purpose echoes objectives in instruments such as the Treaty on European Union and the Treaty on the Functioning of the European Union to preserve effective competition in the internal market while providing legal certainty for transactions involving parties like Siemens, General Electric, Vodafone, and Anheuser‑Busch InBev.
Scope and Definitions
The Regulation defines "concentration" and "control" using concepts drawn from cases involving firms like Microsoft and Intel. Its jurisdictional thresholds use turnover criteria referencing undertakings headquartered in Member States including Germany, France, United Kingdom (pre‑Brexit), Netherlands, and Sweden. The text distinguishes full‑function joint ventures as concentrations, echoing legal tests seen in matters such as the GE/Honeywell case and doctrine from the Court of Justice of the European Union.
Notification and Jurisdictional Rules
Notification is mandatory where turnover thresholds are met, following procedures applied in cases like Facebook/WhatsApp and AB InBev/SABMiller. The Regulation contains rules on referral to national authorities and the Commission's competence to declare a case inadmissible under the Article 22 referral mechanism, used in disputes between the European Commission and authorities in Germany, France, and Belgium. Jurisdictional cooperation occurs with national bodies such as the Bundeskartellamt and the Autorité de la concurrence.
Substantive Assessment and Test for Control
Substantive assessment applies the substantial lessening of competition framework aligned with precedents involving Intel, Google/DoubleClick, and GE/Honeywell. The Commission evaluates unilateral and coordinated effects, matrixing market shares, entry barriers, and vertical issues exemplified by cases like Microsoft/Skype or Amazon/Whole Foods. The Regulation frames "dominance" analysis consistent with jurisprudence from the Court of Justice of the European Union and evidence standards familiar from work by the European Commission's DG Competition.
Procedure: Phases, Timetables and Remedies
The two‑phase procedure (Phase I and Phase II) codifies timelines and remedies, with Phase I clearance or referral and Phase II in‑depth investigations producing decisions as in Schneider/Legrand and UPS/TNT. Remedies include structural divestitures, behavioural commitments, and interim measures; notable remedies were imposed in matters such as Philip Morris/Altadis and Oracle/PeopleSoft, and negotiated with parties like Siemens and Alstom. The Regulation prescribes deadlines, suspension of implementation and rules for remedies monitoring that interface with national courts like the General Court.
Enforcement, Penalties and Case Law
Enforcement is principally by the European Commission with judicial review before the General Court and appeals to the Court of Justice of the European Union. Sanctions for failures to notify or to implement remedies have been levied in proceedings recalling rulings related to Airtours style precedents and fines upheld in cases adjudicated with participation by Member States such as Germany and France. Landmark case law interpreting the Regulation includes judgments affecting transactions by multinational groups like General Electric, Microsoft, and AB InBev.
Impact and Criticism
The Regulation has promoted legal certainty for cross‑border concentrations involving global players such as Apple, Google, Amazon, and Facebook, while critics from academic centres like London School of Economics and European University Institute note complexity, timing costs, and interaction issues with national regimes. Debates in forums including the European Parliament and among stakeholders in Brussels question effects on innovation, entry and consumer welfare, and propose reforms similar to those discussed after consolidations like Airbus/Boeing and Dow/DuPont.