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Referrals of Merger Control Cases to the European Commission: Too Much Flexibility to the Detriment of Companies?

23 June 2011
Mayer Brown Legal Update

Jens Peter Schmidt
Isabel Simon

European merger control law (Article 22 EUMR) provides that EU Member States can refer a merger that initially had been notified to EU Member States to the European Commission in Brussels. The provision is part of a sophisticated referral system that aims to ensure that the best-placed authority is investigating a transaction.

Article 22 EUMR provides the possibility for Member States to have the Commission examine potentially anticompetitive effects of a merger. The provision was initially introduced because some Member States did not have national merger control regimes. Nowadays, all Member States, with the exception of Luxembourg, have a merger control system, so one could expect that the number of referrals would decline. In actuality, however, Article 22 EUMR referrals are actually increasing. From 1990 until 2003, there were only seven referrals. Since 2004, seventeen cases have been referred to the Commission.1 In particular, the German Federal Cartel Office and the British OFT make the most of the option to refer merger cases to the Commission.2

Requirements of Article 22 EUMR


Referral requests have to be made within 15 working days after a merger has been notified to a national competition authority or, if no notification is required, the merger otherwise has been made known to the Member State concerned. If no notification to a national authority is required, the 15-day period starts when the Member State has obtained sufficient information to make a preliminary assessment as to the existence of the criteria for making a referral request.3


Article 22(1) EUMR provides two substantive requirements pursuant to which mergers are eligible for a referral. First, the mergers must affect trade between Member States. This includes all transactions that are able to exert an appreciable impact on trade, and applies to almost any (cross-border) deal of a certain size. Second, a concentration must have a significant effect on competition. This is the case if, according to a preliminary analysis of the national authority, there is a real risk that the transaction may have a significant adverse impact on competition.4 The referring Member State is required to provide sufficient prima facie evidence in this respect. Both criteria are fairly easily met. So far, the Commission has never denied a referral request on the grounds that one of these requirements has not been fulfilled.


In the Commission’s view, referrals of concentrations that are already notified to national authorities should normally be limited to those cases (i) that appear to present a real risk of negative effects on competition and trade between Member States and (ii) where it appears that they would be best addressed at the EU level. The Commission has identified two categories where this would normally be the case.5

  • Mergers that give rise to serious competition concerns in one or more markets that are wider than national in geographic scope, or where some of the potentially affected markets are wider than national, and where the main economic impact of the concentration is connected to such markets.
  • Mergers that give rise to serious competition concerns in a series of national or narrower-than-national markets located in a number of Member States, in circumstances where coherent treatment of the case (regarding possible remedies, but also, in appropriate cases, the investigative efforts as such) is considered desirable, and where the main economic impact of the con-centration is connected to such markets.

In practice, most referral cases fall under the first category, e.g., because EEA-wide markets are affected. As to the second category, the Commission accepts referrals if a transaction threatens to negatively impact several Member States. In all cases, the Commission will also take into account whether it is important to ensure a consistent application of remedies.6 Even though the test of appropriate-ness limits the number of cases that are suitable for an Article 22 EUMR referral, it still leaves a large margin of discretion for Member States.

Scope of Investigation

The general rule is that once the Commission has accepted a referral request, it investigates the case on behalf of the referring Member States. Ideally, this would lead to one investigation by the Commission as opposed to several investigations by different authorities.

However, every competition authority makes its own decision on whether to refer a case. Thus, Article 22 EUMR allows partial refer-rals. For instance, in the case ABF/GBI Business, the Netherlands, France and Portugal joined a referral request by Spain, whereas Germany undertook its own investigation.7 Two authorities, the Commission and the German Federal Cartel Office, cleared the mer-ger subject to certain conditions. Because the affected markets were national, the decisions did not interfere with each other, as the Commission only investigated the transaction on behalf of the referring Member States, and the investigation was limited to the effect of the merger in the referring Member States.

If markets are wider than national, e.g., if an EEA-wide market is affected, the Commission will also investigate the effects of the transaction in the territory of Member States that have not referred the case.8 In the case GEES/Unison,9 worldwide markets were affected. The merger was jointly referred to the Commission by the British, German, French, Italian, Spanish, Austrian and Greek authorities. It also had been filed in Portugal and Ireland, which did not join the referral. Consequently, the Commission investigated the case for the whole territory of the EEA, while additional investigations took place in Portugal and Ireland.

Another effect of Article 22 EUMR is that the Commission can investigate mergers for countries where the transaction did not have to be notified in the first place. While it is debatable whether a referral request can only be made by countries in which a transaction has to be notified initially, it is undisputed that any other Member State can join other Member State’s request, independent of whether the transaction is subject to a national investigation. Thus, the Commission investigates a merger on behalf of an authority that initially was not competent to investigate the case.

Consequences for Undertakings

Article 22 EUMR referrals are burdensome for the parties to a transaction. They lead to significant time delays and added costs. Normally, the national notifications are insufficient for the Commission to investigate the deal, so the Commission will ask for a full notification after it has accepted a referral. Given the Commission’s practice to only accept formal notifications after an informal pre-notification period, the date of notification is not easy to predict. A referral can easily lead to a delay of one to two months from the first notification to a national authority and the actual notification to the Commission.

In multi-jurisdictional filings, in order to avoid surprises, it is sensible to consider pre-notification conversations with national au-thorities, especially with authorities that are known to be inclined to refer cases. If it becomes clear that a case is likely to be referred, parties could also consider to request a referral from Member States to the Commission pursuant to Article 4(5) EUMR, thus avoiding multiple national notifications.

  1. This includes referrals up to April 2011.
  2. See Staff Working Paper accompanying the Communication from the Commission to the Council: Report on the Functioning of Regulation No. 139/2004, COM (2009) 281 final, para 135, according to which the UK requested four and joined two referrals, and Germany requested three and joined four referrals in the years 2004 to 2008.
  3. Referral Notice, para 50, reference 43.
  4. Referral Notice, para 44.
  5. Referral Notice para 45.
  6. COMP/M.5828—Procter & Gamble/Sara Lee Air Care, SG-Greffe (2010) D/4825, K (2010) 2245, decisions of 31 March 2010, para 16; COMP/M.5675—Syngenta/Negocio Semillas Girasol Monsanto, decision of 12 November 2009, para 22.
  7. See COMP/M.4980—ABF/GBI assets, SG-Greffe (2007) D/207815, decision of 13 December 2007.
  8. Referral Notice, para 50.
  9. COMP/M.2738—Gees/Unison, SG (2002) D/229436, decision of 17 April 2004.

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