BIBLIOGRAPHY: HOEG Dorte, Hart Studies in Competition Law, vol. 5, Hart Publishing, 2013, 288 p.

European Merger Remedies. Law and Policy, Dorte HOEG

Dorte Hoeg

Dorte Hoeg has recently obtained her Doctor of Philosophy from King’s College London, based on a thesis on EU merger remedies. Her book seeks to identify and examine the most important aspects of merger remedies developed by the European Commission within the framework of Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings over the past 20 years. The author explains that the policy of the Commission to remedy mergers used to be virtually unregulated and characterized by an ad hoc approach, yet that it is now “arguably the most guided and regulated area in merger control enforcement” (p. 1).

It is explained that the merging parties propose, in response to competition concerns raised by the Commission after an initial investigation, amendments to their notified concentration and, if the latter are deemed acceptable, the Commission renders them enforceable while enforcing them as conditions and obligations when approving the merger.

The readers learn that the art of remedies consists in striking the right balance between the preservation of competition through adequate remedies and the retention of the overall commercial and financial incentives, as well as benefits that facilitated the merger.

The analysis is structured in accordance with a typical remedies lifecycle: the negotiation, submission, assessment, adoption, implementation and enforcement of remedies. It is argued that the current sophistication and complexity of enforcement may, in some instances, risk weakening and undermining some of the enforcement successes accomplished, if the Commission does not consider further improvements or adjustments to its current remedies regime.

The first chapter is an introduction to the Commission’s past and present policy, providing a chronological overview of the latter’s remedies framework over the past two decades. It explains how the policy of the Commission has gone through three main phases, which are: learning, acceleration, and consolidation.

The second chapter sets out an analysis of the substantive and procedural provisions governing the Commission’s remedies policy. It is explained that there is a consensus amongst competition authorities that they should consider remedies only if a threat to competition can be identified. It is only once the Commission has clearly identified and communicated its competition concerns to the parties that they can address them by proposing commitments. The author comments that while the responsibilities when proposing, submitting and accepting remedies have become significantly more clear-cut, formalized and consistent in recent years, the fact remains that the negotiation process and the tactics involved are of such a nature that, in reality, the Commission “informally indicate[s] to the parties what is broadly needed in order to secure a conditional clearance decision and then it is up to the parties to consider whether they wish to propose remedies along those lines” (pp. 39-40). The third chapter sets out the essential features of divesture remedies, on the basis of the Commission’s guidelines and decisional practice, with references to the findings in the Commission’s Remedies Study and other reviews. Dorte Hoeg writes that it is undisputable that the viability of the assets to be divested constitutes a key component to a successful remedy. However, there is allegedly a fine balance between ensuring viability and potentially over-fixing the competition concerns by, for example, adding and separating such assets early in the proceedings before the resources and needs potential purchasers are established.

The fourth chapter examines the main post-decision features and modalities when the remedies are being implemented. Traditional implementation issues are dealt with, such as interim preservation, hold-separate provisions and the appointment and tasks of trustees. The chapter also highlights newer and slightly more controversial issues such as re-selling restrictions on the purchaser and re-acquisition prohibitions on the merging parties. As the foreseen and actual time period used by the parties in order to implement their remedies are not made publicly available by the Commission, it is allegedly difficult to make general statements about the duration of divesture periods. However, it is submitted that, based on the data in the Commission’s Remedies Study, it must be assumed that divestures are generally implemented within the standard duration of around 6 months, taking into account the sector in question and the modalities of the remedies. According to the author, third parties are best advised to concentrate on arguing their case before the Commission during the market test in the administrative proceedings rather than in subsequent judicial review. It is also, allegedly, fair to say that “sanctions for breach of remedies are confined to a theoretical possibility rather than a genuine policy” (p. 179). As for the lengthy proceedings before the General Court, they make it “difficult, if not impossible, to unwind already implemented remedies as assets and personnel are likely to be fully integrated at the time of a Court ruling and, moreover, the market conditions may have changed” (p. 185). That explains why there are relatively few merger cases before the General Court of the EU.

The fifth and final chapter reviews a number of critical issues in the Commission’s past and present remedies policy and practice. The aim of that chapter is to critically discuss and verify whether the existing shortcomings are of such a nature and extent that they may risk diminishing or even undermining some of the accomplished successes as well as to evaluate these shortcomings in the context of the overall objectives of the Commission’s remedies enforcement. The author thinks that there are valid reasons for arguing that the Commission should be mindful of and possibly reconsider some of its existing priorities: for example whether the need for speed and standardization comes at too high a cost and possibly to the detriment of other important considerations, such as proportionality, due process and impartiality. It is submitted that the Commission would benefit from “taking a step back to reconsider whether the evolution in merger transactions and accompanying remedies practice in recent years justifies a change of some of its existing priorities in order to safeguard and maintain the best possible remedies proceedings the benefit of all parties involved” (pp. 212-213).

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Quotation

Athanase Popov, European Merger Remedies. Law and Policy, Dorte HOEG, September 2014, Concurrences Review N° 3-2014, Art. N° 67998, pp. 243-249

Editor Hart Publishing

Date 1 January 2014

Number of pages 288

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