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Academic Articles Awards > Mergers

The EC’s increasing reliance on internal documents under the EU Merger Regulation: issues and implications

Nicholas Levy and Vassilena Karadakova, 39 E.C.L.R., Issue 1,2018

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The EU has an administrative system of merger control in which the European Commission (EC) conducts wide-ranging investigations and renders detailed decisions following the expiry of the strict deadlines mandated in the EU Merger Regulation (EUMR).1 Those deadlines are triggered by the submission of a lengthy notification document (Form CO) that describes the markets on which the merging parties operate, assesses actual and potential horizontal, vertical, and conglomerate effects, and is supported by market share and other data. In recent years, the EC has increasingly supplemented these features of EU merger control with extensive and burdensome documentary requests of the kind that have for many years characterised merger control in the US. In contrast to the EU, in the US merging parties need complete only a fairly basic notification form to start the process and, should they wish to challenge a transaction, the US agencies must file suit in court, triggering a judicial review system with important procedural safeguards.
The evolution in the EC’s reliance on pre-existing documentary evidence, including ordinary course-of-business documents generated by merging parties and third parties (together, “internal documents”), has been gradual, rather than the result of a sudden or announced change in policy. The cumulative effects of this evolution have nevertheless been profound. This article considers the practical and legal implications of the EC’s increasing reliance on internal documents and explains why, in the view of the authors, it would be appropriate and timely for the EC to formalise its practice in an effort to render it more transparent, systematic, and consistent. Specifically, we recommend that the EC adopt guidelines that enable merging companies and their advisers to understand and anticipate the circumstances in which internal documents will be requested and the types of documents that will be required. We also recommend that the EC take account of the implications of extensive document requests for both the scope and detail of Form CO and the EUMR’s mandated review deadlines. Finally, we recommend that the EC establish mechanisms to protect merging parties’ rights and ensure that the reliance placed on internal documents is fair, balanced, and objective.

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