Legislative framework

As outlined in the previous Review of the EU, Council Regulation No. 1/2003 implements the rules on competition laid down by Articles 101 and 102 of the Treaty on the Functioning of the European Union.²⁴⁰ Article 101 prohibits anti-competitive agreements between undertakings that "may affect trade between Member States"²⁴¹, except for those beneficial, on balance, to economic efficiency and consumers. Article 102 prohibits, as incompatible with the internal market, the abuse of a dominant position, without exception.

Article 101 does not apply to agreements of minor importance (de minimis) where the aggregate market share of the undertakings is small (for example, less than 10% for competitors, or 15% for non-competitors). Also, it does not apply to agreements or practices in the insurance sector, and the motor vehicle business. Furthermore, block exemptions apply automatically in case of certain restrictive agreements, both vertical and horizontal, if they tend to improve economic efficiency. For block exemptions to apply to a given agreement, the parties' combined market shares must be below a level (depending on the type of block exemption) at which it can be assumed that the parties do not have market power. Moreover, in order to benefit from block exemption, an agreement must not contain "hardcore restrictions" of competition such as price fixing, output limitation or market sharing. Where an agreement falling under a block exemption restricts competition, the Commission and/or the competition authorities of member States may withdraw the benefits of these exemptions. The Commission did not withdraw these benefits during the Review period (2009-2011).

The main regulation governing merger control at the EU level is Council Regulation No. 139/2004, 20 January 2004 (the Merger Regulation), implemented by Commission Regulation No. 802/2004, 7 April 2004. Under the Merger Regulation, all concentrations with a "Community dimension" are subject to exclusive review by the European Commission prior to their implementation. These are mergers where the parties have a combined worldwide turnover of €5 billion and each party has a Community-wide turnover of €250 million. Mergers with a combined worldwide turnover of €2.5 billion are also examined by the Commission if: (i) the parties' combined turnover exceeds €100 million in at least three EU member States; (ii) each party has a turnover of €25 million in the same three EU member States; and (iii) the individual Community-wide turnover of each party exceeds €100 million. If these thresholds are not met, mergers may be subject to review under national laws of the member States.

The aim of the Merger Regulation is to examine whether a concentration would significantly impede effective competition, notably through the creation or strengthening of a dominant position. In such cases, the concentration is prohibited, or conditionally approved if the parties provide remedies to fix the identified problem. All other mergers must be unconditionally approved. In accordance with the stand-still obligation, no merger can be consummated unless approved by the Commission. Most mergers are approved within the initial (first phase) period, without the need for an in-depth (second phase) investigation. In 2010, there were 274 merger notifications to the Commission (up from 259 in 2009), of which 253 were unconditionally approved in the first phase, 14 were conditionally approved in the first phase, 3 were approved after a second-phase investigation, and 4 were withdrawn.²⁴² No merger was prohibited.