The European Commission has recently published a revised version of its Notice on Remedies under the EC Merger Regulation (the Notice). Remedies are solutions offered by parties to a merger, with a view to eliminating competition concerns and securing Commission approval of a transaction.
Explaining the reasons for the move, the Commission said it was keen to ensure that competition concerns are dealt with more effectively and to clarify to companies involved in mergers how best to address competition concerns. The revised Notice replaces a remedies notice adopted in 2001 and reflects the Commission's current thinking on remedies in light of recent experience. In terms of process, a new "Form RM" is now required to be completed and submitted to the Commission setting out remedy proposals.
The new Notice contains more detail in respect of proposing an "up-front buyer" as a means of satisfying the Commission that a business will be effectively divested to a suitable purchaser. It also stresses that "structural" remedies, such as a commitment to sell a business unit, are generally preferable to "behavioural" commitments, as the former tend to provide a lasting solution to identified competition concerns. Structural remedies also have the advantage, according to the guidelines, of avoiding the need for long-term monitoring by the Commission, or by a trustee appointed on its behalf. Going forward, the guidelines state that behavioural remedies will "only exceptionally be accepted".
Insofar as other aspects are concerned, the revised Notice makes clear that:
- It is the parties to the proposed merger who are responsible for putting forward remedies;
- It is the responsibility of the parties to provide all information that the Commission will need to assess their remedies proposals;
- The proposed remedies must be capable of effective implementation within a short time span; and
- The parties must demonstrate to the Commission's satisfaction that their proposed remedies are "sufficiently workable and lasting" so as to ensure that there will be no significant impediment to competition.
Finally, the revised Notice takes into account the possibility for the Commission to extend deadlines so as to discuss and assess the issue of remedies.