Brussels,

EU Competition Policy

Mergers

Mergers can bring significant benefits to the economy, such as enabling companies to develop new products efficiently and reduce production or distribution costs. This efficiency can benefit consumers through higher-quality goods or services. However, some mergers reduce competition, creating or strengthening dominant players, which may lead to higher prices, less choice, and reduced innovation.

The EU Merger Control Policy aims to balance these dynamics, welcoming mergers that do not impede competition while preventing those that harm consumers or businesses.

Key Points

  1. Benefits and Risks of Mergers
    • Positive outcomes: Innovation, cost efficiency, and better products.
    • Negative outcomes: Harm to competition, higher prices, and fewer choices.
  2. EU-Level Examination
    • Mergers involving companies active across several EU Member States with significant turnover are reviewed by the European Commission under a "one-stop-shop" approach, streamlining the clearance process.
  3. Application of EU Merger Rules
    • EU rules apply globally if the companies involved do business in the EU and exceed specified turnover thresholds.
    • Below these thresholds, national competition authorities may review mergers under local rules.
    • The Commission can also review mergers referred by national competition authorities under Article 22 of the EU Merger Regulation.
  4. Approval or Prohibition
    • Mergers are approved unconditionally if they do not harm competition.
    • Problematic mergers may be prohibited unless the merging firms propose commitments to address competition concerns.
  5. Conditional Approvals
    • The Commission often grants conditional approvals if companies commit to remedies, such as selling parts of their business or licensing technology to competitors.
    • These commitments are monitored to ensure compliance, with potential interventions if obligations are not met.

Additional Resources
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