On 23 July 2014, the EU Commission released a statement (here) that they had imposed a fine of €20 million on Marine Harvest for failing to notify the Commission of its acquisition of de facto sole control over Morpol ASA through the purchase of a 48.5% stake in the company. Morpol ASA is a listed company and the Commission found that by virtue of the acquisition Marine Harvest enjoyed a subtle majority at shareholders meetings because other shareholdings were widely dispersed.
Under the EU Merger Regulation, mergers and acquisitions with an “EU Dimension” must be notified to, and approved by, the Commission before they are implemented. An intentional or negligent breach of these so-called “standstill and notification obligations” exposes companies to the risk of fines of up to 10% of group turnover. A limited exception from the standstill and notification obligations exists for implementation of a public bid or a series of acquisitions of shares of a company listed on a public stock exchange. The exception did not apply in this case because the stake was acquired as a single bloc from the seller.
The Commission made reference to the 3 July 2014 CJEU decision of Electrabel (C-84/13P) – see original decision of the General Court (T-332/09) – in which a fine of €20 million was also applied to Electrabel for a similar breach of the standstill and notification obligations. The Commission indicated that the Marine Harvest fine has reinforced the CJEU decision and the fact that “Any infringement of [the notification and standstill obligations] is serious, since it undermines the very essence of EU merger control.” The Commission has sent a message in this case that companies should ‘know better’ than to ignore EU rules on merger control. In setting the amount of the fine, the Commission took into account that “Marine Harvest is a large company with previous experience and familiarity with EU merger control rules".
Taking into account the gravity and duration (here, nine months) of the infringement, along with mitigating factors (Marine Harvest had not exercised their voting rights), a fine of €20 million was seen as proportionate and adequate to ensure sufficient deterrence.
The Commission considered that the infringement was particularly serious in this case as the acquisition raised serious competition concerns and was only cleared subject to significant divestment conditions, including sale of the largest parts of Morpol’s salmon farming operations in Scotland.
The significant fine imposed on Marine Harvest sends a clear message to all companies that they must conduct a thorough merger control review ahead of making acquisitions, even of minority stakes and irrespective of whether the acquisition raises substantive competition issues.