Clearance phase II (merger)


Institution Definition

Phase II is an in-depth analysis of the merger’s effects on competition and requires more time. It is opened when the case cannot be resolved in Phase I, i.e. when the Commission has concerns that the transaction could restrict competition in the internal market. A phase II investigation typically involves more extensive information gathering, including companies’ internal documents, extensive economic data, more detailed questionnaires to market participants, and/or site visits. In phase II the Commission also analyses claimed efficiencies which the companies could achieve when merged together. If the positive effects of such efficiencies for consumers would outweigh the mergers’ negative effects, the merger can be cleared. In order to be taken into account, efficiencies must fulfil strict conditions and it is for the merging companies to prove that they are met. First, the claimed efficiencies must be verifiable (such as that the Commission can be reasonably certain that they will materialise and be substantial enough). Second, the efficiencies must be merger specific (i.e. they cannot be achieved by other means than by a merger). Third, the efficiencies must be likely passed-on to consumers, and not only recapped by the merging companies alone. The Commission updates the companies regularly about the process. If, after such a market investigation, the Commission concludes that the planned merger will likely impede competition, it sends a statement of objections (SO) to the notifying parties, informing them of the Commission’s preliminary conclusions. Parties then have the right to respond to the SO in writing within a certain period. They have the right to consult the Commission’s case file and to request an oral hearing which is conducted independently by the competition Hearing Officer. © European Commission

See also Clearance phase I (merger)

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