Most merger control regimes, including in the EU, are both mandatory and suspensory. This means that mergers must first be notified to the relevant competition authority and approved, before they can be implemented. A violation of these requirements is often referred to as “gun-jumping.” Until recently, the European Commission (Commission) has pursued very few gun-jumping cases. The Commission’s recent actions, however, and tough talk by EU Competition Commissioner Vestager demonstrate that the Commission is becoming increasingly intolerant of gun-jumping, as well as other procedural breaches. The Commission’s increasingly stringent approach to gun-jumping was most recently demonstrated by its €28 million fine imposed on Canon for partially implementing its acquisition of Toshiba Medical Systems Corporation (TMSC) before notification and approval. A year earlier, the Commission set a new global record with its €124.5 million fine on Altice for early implementation of its acquisition of PT Portugal. With Commissioner Vestager’s unusual appointment to a second term as Competition Commissioner, this trend is highly likely to continue. This article discusses the types of conduct that may lead to a finding of gun-jumping and the Commission’s and national competition authorities’ (NCAs’) enforcement history in this area. In conclusion, this article offers some practical guidance on avoiding gun-jumping issues in future transactions.
Read more
