The Merger Regulation as it stands only applies to transactions resulting in a lasting change of control. Economic theory and the Commission's experience suggest that non-controlling minority shareholdings may also in certain instances cause anticompetitive harm. The financial incentives and the influence on the target resulting from such minority stakes can raise competition concerns based on the same theories of harm as pursued under merger rules, namely unilateral or coordinated effects or input foreclosure. Unlike other competition authorities both inside and outside the EU (such as Germany, the United Kingdom, or the United States) the Commission currently has no opportunity to address such concerns where they are caused only by the acquisition of minority participations.
The European Commission is looking forward to review and potentially revise its rules for reviewing minority share acquisitions under EU competition law. The European Commission is considering amending the EUMR to allow it to review certain acquisitions of non‐controlling minority shareholdings. Under the current EUMR regime, the Commission can only review the acquisition of a minority shareholding and possibly prohibit it ex ante where it confers control.
Control means the possibility of exercising decisive influence on an undertaking on the basis of rights, contracts or any other means (Article 3(2) EUMR). Hence, the acquisition of a minority shareholding does not fall under the scope of the EUMR and under the Commission’s jurisdiction unless it enables the minority shareholder to determine the strategic commercial behavior of the target. While in some instances competition problems caused by non-controlling minority participations might be tackled by the antitrust rules of Article 101 or 102 TFEU, these provisions would not seem to deal with all cases in which non-controlling minority shareholdings may cause competitive harm. In particular Article 101 only applies where there is an agreement between the parties which could be qualified as having the effect of restricting competition.
Table of Contents
1 INTRODUCTION
2 THE TREATMENT OF MINORITY OF PARTICIPATIONS IN COMPETITORS UNDER PRESENT EU COMPETITION LAW
2.1 The Treatment of Minority Shareholdings under the EUMR
2.1.1 Only Controlling Minority Shareholdings are subject to review under EUMR
2.1.2 The Acquisition of Non-Controlling Minority Shareholdings Falls outside EUMR
2.1.3 Review of Existing Non-Controlling Minority Shareholdings under the EUMR
2.2 The Treatment of Minority Shareholdings under EU Antitrust Law
2.2.1 Article 101 TFEU
2.2.2 Article 102 TFEU
2.2.3 Observations
3 THE TREATMENT OF MINORITY PARTICIPATIONS IN OTHER EU MEMBER STATESNATIONAL REGIMES I.E. GERMANY, AUSTRIA AND U.K.
4 IMPORT ON NON-CONTROLLING MINORITY SHAREHOLDINGS (“STRUCTURAL LINKS”) ON COMPETITION: AN ECONOMIC APPROACH
4.1 Unilateral effects
4.2 Coordinated effects
4.3. Deterring potential entry
5 PROPOSED CHANGES TO RULES ON MINORITY SHAREHOLDINGS BY EUROPEAN COMMISSION
6 MAJOR CONCERNS
7 CONCLUSION
8 BIBLIOGRAPHY
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