Big data in merger control

Big data in merger control

The European Commission is seeking further views on procedural and jurisdictional aspects of the EU Merger Regulation.

The Commission invites comments following its proposals set out in its 2014 White Paper, including on the operation of the simplified procedure for dealing with non-problematic cases and the case referral procedure.

It is now also seeking views on whether the current turnover-based jurisdiction tests should be revised to take account of high value transactions involving the acquisition of companies that have not yet generated substantial turnover, such as in the pharmaceutical or digital sector.

Facebook’s $19 billion acquisition of WhatsApp is often cited as an example of the limitations of EU merger control over companies which have not yet generated substantial turnover.  The transaction did not need to be notified to the Commission as the EU merger control turnover thresholds were not met, although the Commission cleared it after the parties made a voluntary notification.

Two years on from the controversial 2014 White Paper the Commission does not appear to be progressing its proposals to extend EU merger control to the acquisition of a significant but non-controlling minority interest.  But it has shifted its focus to ensure that potentially problematic cases do not escape scrutiny because the turnover of the parties is too small. 

However, questions remain about whether the Commission has demonstrated that there is a compelling case for changing the current rules.  There are challenges in framing a test that will address any jurisdictional gap and concerns of spillover. Tests based on asset values or anticipated future sales or valuations are fraught with difficulty.

The Commission seeks responses to its consultation by 13 January 2017.

Source: Commission press release IP/16/3337 and Commission Consultation on Evaluation of procedural and jurisdictional aspects of EU merger control