GLOBAL ANTITRUST HOT TOPICS
EU, US AND GLOBAL PERSPECTIVES
Interview with Carles Esteva-Mosso (DG COMP)
Carles Esteva-Mosso (DG COMP) has been interviewed by Georg Berrisch (Baker Botts) in anticipation of the 4th edition of the Global Antitrust Hot Topics Conference, to be held in Brussels the 8 September 2016. They will participate in the panel "Transatlantic Investigations: Divergence, Convergence, or Somewhere in Between?".
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Georg Berrisch: Traditionally, the merger control process before the EU Commission was submission driven (Form CO; responses to RFIs etc.) whereas in the US it was document driven. Both approaches impose different burdens on the parties. However, in many recent cases, the Commission has requested that the parties, in addition to the Form CO and the responses to RFIs, submit a large number of internal documents (which often are different from those submitted to the US authorities) and detailed indices of these documents. It thus seems that in the EU the parties are getting the worse of both worlds. Where do you think this is heading to and what, if anything, can be done to ease the burden on the parties?
Carles Esteva-Mosso: Internal documents are a key source for assessing the impact of a transaction. We wouldn't do our job properly if we were to ignore them when analysing complex merger cases. It is true that modern software tools help us to review more documents than in the past within our short investigation periods, so we can get now a more profound understanding on the way business operate. Large requests for internal documents are, however, limited to a handful of complex cases per year. And, in any case, DG Competition is committed to remain proportionate in its requests for internal documents; case teams are typically open to suggestions from the parties on how to target the right custodians and time period as well as to refine search terms, so that the final request is as targeted as possible.
Georg Berrisch: In complex mergers involving remedies in the form of divestitures of global business, it is important that the timing of the EU and the US investigation is aligned. How can this best be achieved?
Carles Esteva-Mosso: Timing alignment in the remedies phase presupposes timing alignment in the investigation phase. Much is in the hands of the parties here. Achieving alignment usually starts in pre-notification. At that stage, parties can facilitate alignment by allowing EU and US authorities to exchange information and by being forthcoming with information, so the authorities can identify the key issues early on. The parties can also facilitate alignment through the timing of their notification. This does not necessarily mean that the notifications have to be simultaneous, but rather that the timing is aligned so as to allow for meaningful communication at key decision-making stages of the investigation.
Once the transaction is notified, DG Competition's case teams find themselves in the straightjacket of the time periods set by the Merger Regulation. At that point, it becomes harder to adjust the timetable, although in Phase II the parties can still move the deadline by up to twenty working days. We certainly encourage timing alignment and will assist the parties as much as possible to achieve it. This positive attitude towards timing alignment is also reflected in the International Competition Network's practical guide on international enforcement cooperation, which was issued in 2015 and to which the Commission contributed as co-chair of the working group drafting the guide. That guide discusses several tips and tools to achieve timing alignment, not only in a bilateral co-operation context, but also in a multilateral one.
Georg Berrisch: One of the differences between the US and the EU merger control is that, in the US, decisions by the DOJ or the FTC not to challenge a merger are not subject to judicial review, whereas, in the EU, a third can challenge Commission decisions to approve a merger. To what extent does this explain differences in the approach of the EU and US authorities?
Carles Esteva-Mosso: I do not think there are nowadays major differences between the EU and the US in the substantive framework to assess mergers. There are numerous procedural divergences, though, and you point out to an important one. Actually, the vast majority – more than 90% - of our decisions are unconditional clearance decisions. Most of these clearance decisions - around three out of four in 2015 – are dealt with under a simplified procedure, where only a short-form decision is published. But in the remaining cases, a full-fledged and motivated decision has to be written. This, first, provides transparency to the parties and third parties on how their concerns have been dealt with. If they feel we got it wrong, they can challenge us before the court. The fact that judicial review is available both to parties that may consider Commission's decisions as too strict and to third parties that may consider them as too lenient, provides the right incentives for a balanced merger control policy. More generally, by publishing these decisions, we give guidance on how the Commission defines relevant markets and assesses the competitive impact of mergers, which increases legal certainty.
This 4th edition of the Global Antitrust Hot Topics half-day conference is organized by Concurrences Review in partnership with Baker Botts. Concurrences cultivates scholarship and discussion on antitrust issues through publications, books and conferences. Concurrences Review is supervised by an editorial board and a steering committee to ensure independence, objectivity and academic excellence. See photos, videos and synthesis of last year edition here.
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