Martin André Dittmer Rebecca Fink Joensen October 6 2022 Danish Competition and Consumer Authority refers transaction to Commission Gorrissen Federspiel | Competition & Antitrust - Denmark Martin André Dittmer, Rebecca Fink Joensen Competition & Antitrust IntroductionFactsBackgroundDecisionCommentIntroductionOn 27 July 2022, the European Commission (the Commission) announced that it will examine the proposed acquisition of Inmarsat by Viasat. The Danish Competition and Consumer Authority (DCCA) joined the Spanish request for referral together with 11 other national competition authorities under article 22 of the EU Merger Regulation. This is the second time the DCCA has referred a transaction to the Commission. The first time, the DCCA made the referral itself, so this is the first time the DCCA have joined a request for referral.FactsUS-based Viasat and UK-based Inmarsat both operate satellite networks and provide satellite communication.The proposed transaction does not meet the thresholds for mandatory notification set out in the EU Merger Regulation. Accordingly, it was not notified to the Commission. However, the transaction did meet the national market threshold in Spain, where it was notified. The Spanish national competition authorities referred the proposed transaction to the Commission pursuant to article 22 of the EU Merger Regulation.BackgroundUnder article 22(1), member states can request the Commission to examine a merger that does not have an EU dimension but affects trade within the single market and threatens to significantly affect competition within the territory of the member states making the request. Other countries of the European Economic Area can join the original referral request. The DCCA joined the Spanish request together with 11 other national competition authorities. It is rare for so many national competition authorities to join a request for referral. The prior record was 10 in the acquisition of Kustomer by Meta.Denmark has only once before made a referral to the Commission under article 22. The merger was between Mastercard and Nets and was above the national turnover thresholds. The DCCA came to the conclusion that "the merger may affect markets in a number of other EU member states".The national turnover thresholds are outlined in part 4 of the Danish Competition Act, which states as follows:Merger control in Denmark applies to mergers where:the aggregate annual turnover in Denmark of all undertakings involved is more than DKK 900 million and the aggregate annual turnover in Denmark of each of at least two of the undertakings concerned is more than DKK 100 million;the aggregate annual turnover in Denmark of at least one of the undertakings involved is more than DKK 3.8 billion and the aggregate annual worldwide turnover of at least one of the other undertakings concerned is more than DKK 3.8 billion; orthe Danish Business Authority in accordance with the Act on electronic communications networks and services has referred a merger between two or more commercial providers of electronic communications networks in Denmark to the Competition and Consumer Authority.DecisionThe Commission announced that it considers the Inmarsat/Viasat transaction to meet the article 22 criteria and that the Commission is best placed to examine the potential cross-border effects of the transaction. It has now asked Viasat to notify the transaction to the Commission. Completion is subject to the standstill obligation.CommentIn March 2021, the Commission published a guidance paper outlining a new approach to article 22 referrals. Historically, this provision was meant to deal with transactions relevant to member states that had no merger control regimes. Under the new approach to referrals under article 22, the Commission now actively encourages member states to refer cases, even if they are below national thresholds.Parties to a transaction should consider the relevance of a risk of an article 22 referral for their transaction. This is especially relevant if the deal involves start-ups, innovators, or companies with significant competitive potential in the pharma or tech sectors, but the policy applies to all sectors.Executive Vice President Margrethe Vestager recently said that the Commission will publish further guidance in the form of a Q&A document on its intended use of article 22. She also encouraged merging parties to approach the Commission for guidance on whether a transaction is a candidate for a referral and stated that the Commission is willing to give such an assessment.How the DCCA will use the referral mechanism under article 22 will be followed closely. The joined request for referral of the Inmarsat/Viasat transaction indicates that the DCCA will start to use it more, in accordance with the Commission's encouragement.For further information on this topic please contact Martin André Dittmer or Rebecca Fink Joensen at Gorrissen Federspiel by telephone (+45 33 41 41 41) or email ([email protected] or [email protected]). The Gorrissen Federspiel website can be accessed at www.gorrissenfederspiel.com.