On Thursday, 8 May, the European Commission launched a broad public consultation on the ongoing review of EU merger guidelines, according to a press release.
These guidelines “describe the framework that the Commission applies when assessing the competitive impact of mergers on markets. [...] The review will cover both the guidelines for the assessment of mergers between actual or potential competitors in the same relevant market (i.e., horizontal mergers guidelines [from] 2004) and those for the assessment of mergers between companies operating at different levels of the supply chain (i.e., non-horizontal merger guidelines [from] 2008).”
Since these two sets of guidelines [were introduced], “there have been several transformational changes in the economy, ranging from digitalisation and globalisation to decarbonisation, which can impact competitive dynamics in many markets. Many of those changes already surfaced in the enforcement practice of the Commission,” it indicates.
Twenty-odd years later, this review will enable the assessment framework for mergers to be updated in the light of these changes and new market realities and to reflect the practice and case law of the Court of Justice of the European Union.
On the same day, the European Commission also published a more targeted questionnaire, detailing the current challenges and the legal and economic parameters used to assess merger control in seven separate areas: competitiveness and resilience, market power, innovation, decarbonisation, digitalisation, efficiencies, and, finally, defence and labour considerations.
For aspects related, for example, to labour, the consultation document explains, “Mergers can significantly impede competition in labour markets by shifting the balance of power between employers and workers. A situation where a single or dominant employer controls the hiring of a group of potential employees is an example of a monopsony. Monopsonies in labour markets can lead to lower wages, higher unemployment, worse working conditions and also lower downstream output and higher prices.”
Therefore, the European Commission wants to know whether the current guidelines sufficiently take into account the impact of mergers on labour markets and workers.
For security and defence, the document points out, “While it is undisputed that monopolies and monopsonies generally lead to higher prices, lower quality and less innovation, some sectors of the EU’s military supply base are currently rather fragmented. It appears that national autonomy considerations and hardware requirements specific to Member States have so far been the key factors in preventing integration and consolidation in these segments of the industrial defence sector in the EU. [...] Moreover, merger rules may also prevent harmful market power in non-European inputs relevant for EU defence.”
Both consultations are open until 3 September.
Links to the targeted consultations and documents: https://aeur.eu/f/gpg and https://aeur.eu/f/gpf (Original version in French by Solenn Paulic)