Competition: EU Merger Working Group publishes report on merger information requirements in EU Member States

On 4 May 2016, the EU Merger Working Group ("MWG") published a report, including comparison tables, on information requirements for national merger notifications in the EU Member States and Norway. The report provides some basic knowledge on MWG members' information requirements for initial merger notification and also aims to provide context for the type of review procedure, flexibility mechanisms and tools for obtaining supplementary information once the notification is completed before national competition authorities. The detailed tables that are annexed to the report enable merging parties to obtain a quick overview of what information is required in each jurisdiction in the context of a merger that meets the respective national thresholds.

The report finds that in most Member States, mergers are subject to formalized procedures that are usually based on notification requirements and the use of standard forms that have been developed at national level. However, the content and structure of the standard forms is often, at least to a certain extent, similar to the Commission's notification forms. The report does, however, note that the German merger control system differs from others, as the information requirements are very limited.

The report also states that most European competition authorities request merging parties to provide the same categories of information, with a view to ensuring that the transaction's likely impact on competition is properly assessed. However, when individual information requirements are examined in detail, differences do exist, and there are a number of country-specific requirements. Moreover, national forms include slightly diverging wordings, divergences in relevant time frames and varying levels of detail.

Consequently, it could be argued in principle that significant differences in the applicable information requirements could entail additional administrative burdens for merging parties notifying cross-border transactions in multiple jurisdictions. However, the tables annexed to the report are intended to partially alleviate such burdens, inasmuch they enable merging parties to save research and transaction costs. Source: EU Merger Working Group Report: Information requirements for merger notification

Competition (Finland): Finnish Competition and Consumer Authority publishes study on competition in transportation insurance market On 4 May 2016, the Finnish Competition and Consumer Authority ("FCCA") published a study that analyzes competition in the transportation insurance market ("Study"). The purpose of the Study was to analyze whether competition is effective in the market for statutory and voluntary insurance offered to transportation companies. The FCCA collected input by sending out a survey to 4,000 companies operating in the transportation sector. The FCCA received 377 answers, of which 372 answers were further analyzed. The FCCA found that insurance companies often sell their policies as packages and that this could limit costumer choice. The vast majority of respondents answered that they had purchased their statutory motor liability insurance and voluntary motor vehicle insurance from the same insurance company. According to respondents, the reductions in insurance costs and savings in time and effort had motivated them to purchase their insurance policies from the same insurance company. Further, the FCCA found that transportation companies are generally reluctant to switch insurance companies, even though this could create significant cost savings. Among respondents, three out of four had requested and compared insurance offers of different insurance companies at some point. However, the Study revealed that only 40 percent of respondents had done this at least once every three years. Furthermore, the comparison process did not necessarily result in switching insurance companies. According to the Study, more than 70 percent of respondents did not switch companies after comparing offers. The FCCA did not identify any actual barriers to competition in the insurance market. However, the FCCA announced that it will continue to monitor the market, as the results suggest that the market could work more efficiently. Source: Finnish Competition and Consumer Authority Press Release 4/5/2016 (in English) and Study on competition in transportation insurance market (in Finnish)

Competition (Finland): Finnish Competition and Consumer Authority closes investigation into cooperation agreement between distribution companies Posti and Suomen Suoramainonta Ltd On 11 May 2016, the Finnish Competition and Consumer Authority ("FCCA") announced that it had closed its investigation regarding a cooperation agreement between postal service company Posti Ltd ("Posti") and a direct mail company Suomen Suoramainonta Ltd ("Suomen Suoramainonta"), since the companies that were investigated agreed to end the cooperative practice. The investigation was originally initiated by a complaint made by the Finnish Newspapers Association. Posti, a subsidiary of the State-owned Posti Group, and Suomen Suoramainonta are competitors in the market of magazine and advertisement distribution, where they both hold substantial market shares. The cooperation agreement was concluded within the Finnish Direct Marketing Association ("FDMA"). Posti and Suomen Suoramainonta are both members of the FDMA and had participated in drafting the cooperation agreement labelled as "rules of play of unaddressed mail". Pursuant to the rules, distributors refrain from delivering unaddressed mail to households that have attached a "no advertising" label to their mailboxes. The Finnish Consumer Protection Act forbids the delivery of unaddressed advertising to households that carry such a label but the ban does not cover other types of unaddressed mail. The agreement lead to consumers who had forbidden the delivery of unaddressed advertising not receiving unaddressed newspapers and magazines. The initial assessment of the FCCA found that Posti and Suomen Suoramarkkinointi had agreed to limit competition between the two companies in the market of unaddressed mail distribution. The FCCA held that the practice may have had an adverse effect on the competition between journalistic newspapers and magazines as well as on the advertising sales of print media. During the investigation, the FDMA announced that it will no longer apply the rules of play of unaddressed mail. Similarly, Posti and Suomen Suoramarkkinointi announced they will no longer comply with the rules of play and in the future, they will make all decisions regarding the delivery of unaddressed mail independently. Source: Finnish Competition and Consumer Authority Press Release 11/5/2016 (in Finnish)

Merger control: Commission prohibits Hutchinson's proposed acquisition of Telefónica UK On 11 May 2016, the Commission prohibited the proposed acquisition of Teléfonica UK's mobile network operator O2 by its rival Hutchinson due to strong competition concerns raised in the United Kingdom mobile market. The proposed merger would have combined the second largest mobile network operator, Teléfonica's O2, with Hutchinson's mobile network operator, Three, which is the latest market entrant and considered as an important driver of competition on the market, and created an entity with a market share of more than 40%. The remaining mobile network operator competitors in the UK are BT's Everything Everywhere ("EE") and Vodafone. EE and Three have combined their networks as Mobile Broadband Limited ("MBNL"), and similarly Vodafone and O2 combined their networks to set up Beacon. This allows the companies to share the costs of rolling out their networks but they continue to compete with each other for retail customers. In addition, the four mobile network operators also offer network access to several mobile "virtual" operators, which provide mobile services to customers without own networks. The Commission identified serious competition concerns due to the fact that the merger would create a new market leader and subsequently remove an important competitor, leaving only two mobile network operators to challenge the merged entity, which would lead to higher prices and reduced choice and quality for consumers. In addition, the Commission was concerned that the transaction would hamper the development of the entire UK mobile network infrastructure, since the merger entity would have been part of both network sharing agreements, MBNL and Beacon. Thus, the merged entity would have had a full overview of the network plans of both remaining competitors, Vodafone and EE. Finally, the Commission was concerned that the transaction would affect the ability of mobile virtual operators to compete, due to the reduced number of mobile network operators effectively willing to host virtual operators, resulting in a weaker negotiating position for the virtual operators to obtain favorable wholesale access terms. In order to address the Commission's concerns regarding loss of competition, Hutchinson proposed a set of measures to strengthen the development of existing mobile virtual operators and to support the entry of new ones. To enable this, Hutchinson proposed network access to one or two virtual operators, to divest O2's stake in Tesco Mobile joint venture and to offer a wholesale agreement for a share of its network capacity to Tesco Mobile and Virgin Media. The Commission found that the mobile virtual operators would still have been commercially and technically dependent on the merged entity. In order to address the Commission's concerns regarding the UK network sharing agreements, Hutchinson offered certain behavioral remedies that would have enabled it to keep the merged entity's stakes in the said network sharing agreements. The Commission deemed these difficult to implement and monitor effectively. As regards the Commission's concerns relating to the transactions effect on mobile virtual operators, Hutchinson offered a set of behavioral measures aimed at granting mobile virtual operators' access to 4G and future technologies. However, the Commission considered this remedy commercially unattractive and difficult to implement effectively. The Commission concluded that the proposed remedies would not have been able to prevent the likely negative impact on prices, quality of service and network innovation in the UK mobile sector as a result of the transaction. Consequently, the Commission decided to prohibit the proposed transaction. Source: Commission Press Release 11/5/2016

In addition, kindly note the following merger control decisions by the Commission which are published on the website of the Commission’s Directorate-General for Competition:

  • Commission approves acquisition of tyre manufacturer ČGS by rival Trelleborg