INTERVIEW: MERGERS - GUIDELINES

Nadine Mouy (French Competition Authority): The new merger guidelines

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- One of the first questions that naturally arises is that of the legal scope of these RAGs, as explained in paragraphs 12 and 13, both vis-à-vis the CCLA and vis-à-vis the companies that will invoke it. Can you say a word about that?

- What are, in a synthetic way before returning to certain subjects in more detail, the major innovations or clarifications brought by the LoQs, both at the level of procedure and substantive analysis?

- After more than nine months of practice in merger control by the ADLC, can you tell us what are the most recurrent themes that the ADLC has had to deal with and how they have influenced the drafting of the RFPs?

- The establishment of a genuinely simplified procedure based on the European model is a major step forward, which will lighten the workload of both companies and the ADLC for transactions that do not raise competition concerns (paragraphs 163 to 171). Can you outline the main points? In retrospect, do you think that certain cases authorised since the creation of the ADLC could have benefited from it, and if so, what category of cases and in what proportion?

- The definition of retail trade and the examples of calculation of turnover thresholds in this sector (paragraphs 72 to 78) were the subject of many comments during the public consultation. What has been the consequence of the introduction of these thresholds for the ADLC (in terms of the number of files to be dealt with and the degree of complexity of these files) and what is your general feeling on this subject?

- For cases which would be below the French control thresholds (whatever the sector in question), is the possible use of Article 22 of Regulation 139/2004 and referral of the case to the Commission always an option or should the moderation of paragraph 135 be interpreted otherwise?

- The ADLC states in paragraph 119 that companies will be invited to notify if new issues arise in a transaction relating to its controllability. This seems to undermine the informal but very useful practice of ’comfort letters’, the main purpose of which is to avoid notification. How do you envisage the functioning of this system in the future and with what flexibility?

- The substantive review increasingly includes economic elements in both the analysis of unilateral and coordinated effects. Do you have any particular messages to convey on this subject? How, in practice, do you organize the follow-up of complex files with the teams of the CCRA’s chief economist?

- The analysis of vertical and conglomerate aspects of concentrations (paragraphs 391 et seq.) is an important part of the LoQs. Are these transactions transactions that you have had to deal with in particular over the last nine months? Does this indicate that the CCRA is going to be particularly strict in this respect?

- Can you present us with one of the major innovations of this text, which has no equivalent in Europe: the Economic Annex (Annex B, paragraphs 558 et seq.)? What is its content? What were the objectives pursued by the ADLC in developing this document?

- The passage on ancillary restraints is an important step forward for companies (paragraphs 484 to 487), particularly since the ADLC combines the powers of a priori and a posteriori control in the field of concentration and competition. Do you agree with this summary that the mechanism put in place by the ADLC, based on the European model, amounts in practice to a self-assessment by the parties of their agreements? Is the reference to an ex officio referral to the ADLC on non-ancillary restrictions, as mentioned in paragraph 487, not too harsh a message to companies? In such a case, how will the cooperation between the ADLC’s departments be conducted in practice?

- The CCLA has given prominence to the issue of "contribution to economic progress" in the RAG (paragraphs 488 to 511). What are, broadly speaking, the criteria of analysis used by the CCLA? Since March 2009, has the CCLA already taken this argument on board? Could other aspects (social, crisis, etc.) be taken into account?

- The GLs devote significant developments to behavioural commitments (paragraphs 549 et seq.). Can you summarize the CCLA’s policy on this subject? How will the implementation of such commitments be monitored? How will they relate to the structural commitments?

- The GLs approach the situation of firms in difficulty with pragmatism (Annex F, paragraphs 642 et seq.), which is very positive at a time when the effects of the economic crisis are still very much in evidence. Can you enlighten us on how the CCRA should proceed in such situations? The ADLC states that it has granted all the waivers to the suspension requirement requested in 2009 (see footnote 253 in paragraph 648). Does the ADLC intend to maintain this flexibility outside of any period of crisis? If the ADLC were to refuse such a request, would the reasons for the refusal be made explicit in the final decision?

- In conclusion, are there more political messages in these LOs? Conversely, what are the topics not intentionally addressed in the LoQs that await further development of the CCRA’s merger control practice?

Interview conducted by Me Anne WachsmannLinklaters, Paris.

Since March 2009 Head of the Merger Department of the Competition Authority 2001-2008 Deputy Reporter General Competition Council 1998-2001 Rapporteur Competition Council 1994-1998 Civil Administrator Forecasting Directorate, Ministry of the Economy INTERVIEW The Merger Control Guidelines (the "MGs") were published on Wednesday 16 December 2009 by the Competition Authority (the "ADLC") on its website. It is a major document for companies preparing an acquisition project and for their advice, which has already elicited many reactions. It is a substantial 165-page text which demonstrates the ADLC's desire to mark out as much as possible the ground for companies which have to submit to the French merger control regime. It is, of course, impossible to address all the subjects in such

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Authors

  • Regional Economic Service of the French Embassy (Finland)
  • Linklaters (Paris)

Quotation

Nadine Mouy, Anne Wachsmann, Nadine Mouy (French Competition Authority): The new merger guidelines, February 2010, Concurrences N° 1-2010, Art. N° 30181, pp. 7-12

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