The Competition Law Observatory (CLO)

Morten P. Broberg, Broberg on the European Commission’s Jurisdiction to Scrutinise Mergers, 4th edition, (Kluwer Law International, Alphen aan den Rjin, 2013), hardback, 506 pp., Price: €145, ISBN: 978-90-411-3339-7.

The EU merger control regime is essential in protecting consumer welfare by preventing market structures that could lead to unjustified price increases or reduction of choice, quality or innovation. It thus continues to be a key tool for keeping the Internal Market open and competitive. This is even more so in times of economic and financial crisis. Merger control by the European Commission applies to transactions exceeding the significant turnover thresholds set up in Regulation 139/2004 on the control of concentrations between undertakings (the “Merger Regulation”) and which have an impact on the market beyond the national borders of a particular Member State. Such mergers are reviewed exclusively at EU level in application of a ‘one-stop shop’ system. Of paramount importance in this regime is the calculation of the EU dimension which defines the Commission’s jurisdiction under the Merger Regulation.

The Merger Regulation’s notion of Union dimension is the topic of Broberg on the European Commission’s Jurisdiction to Scrutinise Mergers. Now in its fourth edition, Broberg’s book is arguably the leading text on the subject. The new edition has been generously updated, with particular attention to the Commission’s Consolidated Jurisdictional Notice of 16 April 2008, which replaced the various previous Commission notices dealing with jurisdiction, the effects of the Lisbon Treaty, and new perspectives on ‘undertakings concerned’, ‘groups’, and the notion of control.

The book contains 9 chapters and an annex reprinting the 2004 Merger Regulation, its implementing Commission regulations, as well as key Commission notices. After an introductory Chapter 1, the definition of the concept of “undertaking concerned” is dealt with in Chapter 2. As Broberg rightly reminds the reader, the definition of the undertaking concerned is important because the Union dimension is based on the turnover of the undertakings concerned. Interestingly, Broberg provides an analysis of the issue which does not merely rehearse the Commission’s Consolidated Jurisdictional Notice which provides a case by case definition of the concept. He instead starts from the general definition of “undertaking concerned” and then examines its different aspects and its applicability to all concentrations. Needless to say, this Chapter is fundamental as it discusses the different ways a concentration may take place.

Chapter 3 deals with the “group”, another term which plays a pivotal role in the calculation of the turnover. Indeed, the Union dimension is not based only on the turnover of the individual undertaking concerned but also takes into acount the turnover of the whole group to which the undertaking concerned belongs. In this respect, Broberg focuses the discussion on two aspects: the notion of control (one of the central elements of the EU Merger Control regime) and the identification of which undertakings must be included in the group.

In Chapter 4 Broberg examines the main elements concerning the calculation of turnover, such as what accounts must be used or what activities shall be included. Chapter 5 deals with geographic allocation of turnover. In fact, the majority of the thresholds set out in the Merger Regulation require that the turnover be allocated to the territory of the Union or one or more Member States. It is therefore crucial to understand what sale of (tangible or service) products is and how it is allocated geographically. The following chapter examines the specific rules to used to establish the Merger Regulation’s scope over companies in the financial sector.

In Chapter 7 Broberg examines the delimitation of jurisdiction under the Agreement on the European Economic Area with regard to the control of concentrations. The possibility to choose a specific forum is discussed in Chapter 8. As the Author notes, lawyers often prefer to notify a concentration to the Commission rather than to notify to one or more Member States, although the present reviewer believes that the preference is the opposite, especially when the concentration can be notified to only one Member State. Very interesting is the part relating to the tools and ability to influence this specific issue, as the discussion is based on answers given by lawyers to a questionnaire prepared by Broberg himself.

In the final ninth Chapter, Broberg discusses the turnover thresholds’ suitability as a means for defining the “real Union dimension”. This concept is defined by Broberg “as matters falling within the Treaties. Since the Union is founded upon the principle of attributed powers, the Union’s ambit cannot be wider than the scope of the Treaties” (p. 239). His analysis concludes that current turnover thresholds may catch transactions falling outside the scope of the Treaty, and that the Merger Regulation’s definition of Union dimension differs from real Union dimension. Suggestions to improve the definition of Union dimension are provided in the last part of the Chapter.

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. These changes do not really affect Broberg’s book.

Broberg’s work is highly recommended. Being written by only one author, the book maintains a consistent level of discussion and analysis through all the Chapters. Clearly written, it is a valuable work not only for lawyers, in house counsel and officials of antitrust authorities, but also for academics for the level of research and analysis.

Reviewed March 2014 by
Riccardo Sciaudone
Co-founder and Editor-in-chief

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