The Competition Law Observatory (CLO)

Götz Drauz and Christopher Jones (editors), Mergers and Acquisitions, 2nd edition, (Claeys & Casteels, Deventer, 2012), hardback, two volumes, 1595 pp., Price: €375, ISBN: 9789077644188.

Mergers and acquisitions are common events in the business life of a company. Indeed, they are methods chosen by companies to enhance their viability and profitability. In some cases, they represent an alternative to change the course of a business, a good way for a firm to exit the industry, or the opportunity to capitalise on initial investments. In any event, some mergers and acquisition may reduce competition in a market, usually by creating or strengthening a dominant player. Inspired by the US mandatory pre-merger competition regime adopted in 1976 with the Hart-Scott-Rodino Act, the EU law of merger control, introduced in the European competition law system by Regulation No 4064/89 and more recently replaced by Regulation No 139/2004, aims at making sure that such reorganisations do not impede competition and hence are capable of increasing the competitiveness of European industry, improving the conditions of growth and raising the standard of living in the EU. The ultimate goal of examining proposed mergers is therefore to prevent harmful effects on competition.

Interestingly, the EU merger law has established itself, in just over two decades, as one of the most dynamic areas of EU competition law, exerting considerable influence on the business strategy and choices of firms as well as on EU Member States’ merger control systems. Published by Claeys & Casteels Law Publishers within the prestigious EU Competition Law series, the book under review, edited by Götz Drauz and Christopher Jones, stands apart from other books dealing with this specific area of EU competition law as a 'one-stop' reference point providing comprehensive, thorough and authoritative guidance to competition practitioners and in-house counsel on EU merger control law.

Since the first edition of the book in 2006, there have been changes in the legislation, the Commission has developed and refined its application of Regulation No 139/2004 and important decisions have been adopted by the Court of Justice of the European Union. For instance, in 2008 the following were adopted: Regulation No 1033/2008 amending Regulation (EC) No 802/2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings; Guidelines on the assessment of non-horizontal mergers; Commission notice on remedies; Commission consolidated jurisdictional notice. These new instruments, not to mention the case law elaborated by the Court of Justice and the General Court of the European Union, are already a very good reason to release a new edition of the book.

The book, comprising two volumes, contains 1247 pages of content. The first volume comprises seven parts. In Part 1, written by Götz Drauz, who has served as the head of the Commission’s Directorate (the so-called Merger Task Force) in charge (within the Directorate-General for Competition, until December 2003) of mergers, provides an introduction to EU merger law. Part 2, written by Johannes Lübking and Daniel Dittert, deals with some of the key aspects of the EU merger control system, such as the concept and types of concentrations, the treatment of joint ventures, the calculation of turnover and the rules regarding the referral of cases. In Part 3, on the definition of the relevant product and geographic market, Joachim Lücking and Stepahn Simon begin their analysis by rightly reminding the reader that “market definition is not an end in itself but rather an indirect means of determining the presence of market power or the likelihood it will be exerted post transaction” (p. 165). Part 4 is a crucial (and long) part of the book under review, as it focuses on the substantive assessment of mergers. Indeed, merger analysis “consists in assessing the effects that a merger is likely to produce on the competitive conditions in a given market” (p. 262). Rather short (21 pages) and descriptive is instead Part 5 on ancillary restraints. In Part 6 Ulrich von Koppenfels provides a thorough analysis of procedural aspects. Indeed, the procedure plays an important role in the EU merger control system, and, as one might imagine, a great deal of attention and analysis is given to Phase I and Phase II proceedings. Some 150 pages are dedicated, in Part 7, to remedies. The discussion is based on the Remedies notice adopted by the Commission in 2008, but reference is also made to the practice developed by the Commission under the previous notice.

The second volume contains three parts and all the annexes. Part 8 offers a sector-oriented analysis of the EU merger control system. Sectors covered include: financial services; telecommunications and media; electricity and gas; transport. Part 9, written by Giuseppe Conte, focuses on the review of the EU merger control system before the EU courts. The discussion refers to all recent cases decided by the EU courts up to and including 2011. However, the reader should be reminded that the chronological list of General Court and Court of Justice judgments is “frozen” at the time of the publication of the first edition of the book and, therefore, does not list cases decided after 2006. The final and short Part 10 is focused on the international dimension of the EU merger law. Issues related to the geographic scope of Regulation No 139/2004 and the bilateral and multilateral cooperation agreements in place are discussed. Some 300 pages of annexes complete the second volume. Future editions may consider reducing the number of pages used for the annexes by reducing the generously large font used.

The reader should be aware that at the time of writing this review, some legislative changes have occurred. The Commission has adopted Regulation No 1269/2013 and Commission Notice on a simplified procedure for treatment of certain concentrations to simplify its procedures for reviewing concentrations under Regulation No 139/2004. In particular, the Commission has revised two texts the Notice on simplified procedures and the merger implementing regulation. In parallel, the Commission has also updated its model texts for divestiture commitments. This means that a few of the discussions in the book are outdated.

In the light of these recent changes, is the book under review worth purchasing? The answer is, without any shadow of a doubt, “yes”. The innovations are limited and do not diminish the many merits of the book. Because the vast majority of the authors (editors included) work or have worked (as members of the Directorate-General for Competition or as members of the Legal Service) at the European Commission and deal with this area of EU law, the comments offer well-informed and first-hand information and expertise. They expertly navigate previous cases and legislation and then pilot through the current interpretation and application of Regulation No 139/2004. The discussion maintains a practical but always authoritative approach, explaining how rules and procedures are interpreted and applied by the Commission. In conclusion, the book is a must-have for those involved in this field of competition law.

Reviewed December 2013 by
Riccardo Sciaudone
Co-founder and Editor-in-chief

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