Merger control

The Authority and the European Commission have competence to investigate mergers between companies that meet certain turnover thresholds.

Companies combining forces can expand markets and bring benefits to the economy, for example through development of new products and greater efficiency. However, some mergers may reduce competition in a market, usually by creating or strengthening a dominant player. That is likely to harm consumers through higher prices, reduced choice or less innovation.

The examination at European level of mergers going beyond the national borders of any one Member State allows companies trading in different EEA States to obtain a single clearance for their mergers (“one-stop-shop”).

The rules apply no matter where in the world the merging companies are based. That is the case because even mergers between companies based outside the EEA may affect markets in the EEA if the companies do business in the EEA.

Notification

If the annual turnover of the combined merging firms or businesses exceeds specified thresholds in terms of global and European sales, a proposed merger or concentration must be notified to the Commission or to the Authority. The thresholds are set out in the EC Merger Regulation and Article 57 of the EEA Agreement. Failure to notify can result in fines being imposed.

The EEA Agreement provides for a division of jurisdiction between the Authority and the Commission. When the turnover thresholds are met with respect to the Community the Commission has sole competence to decide on the concentration which is then said to have a “Community dimension”. Only concentrations with an “EFTA dimension” are dealt with by the Authority.

The rules on jurisdiction are such that the Commission in practice handles all cases. To date, no concentrations with an "EFTA dimension" have been notified to the Authority. Where the Commission handles cases as a consequence of its competence under the EEA Agreement, the Authority and the competition authorities of the EFTA States are involved in the proceedings.

Below the relevant turnover thresholds, the national competition authorities in the EEA States may be competent to review mergers, depending on the legislation in force in each State.

Referral process

The Authority and the Commission may examine mergers referred to them from the national competition authorities of the EEA States. That may occur on the basis of a request by the merging companies or by a national competition authority. For example, where a merger is capable of being reviewed under the national competition laws of at least three EC Member States and at least one EFTA State, the parties can request, prior to notification, that the concentration be examined by the Commission for the whole EEA.

Under certain circumstances, the Commission may also refer a case to the national competition authority of an EFTA State. Such referrals go through the Authority, which has a co-ordinating role. Once a case has been referred to a national competition authority of an EFTA State, the Authority is not involved in the national proceedings in that State.

Relevant links




Other EEA Institutions


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