Interview with Jose Maria Carpi Badia (Global Merger Control Conference - Paris, 2 December 2016)
Friday, December 2, 2016 from 8:30 AM to 1:00 PM (CET)
4th Edition of the Global Merger Control Conference
MARKETS, REMEDIES AND SURVIVAL:
CUTTING EDGE ISSUES IN GLOBAL MERGER CONTROL
Interview with Jose Maria Carpi Badia (DG COMP)
Jose Maria Carpi Badia (DG COMP) has been interviewed by Paul Denis (Dechert)in anticipation of the 4th edition of the Global Merger Control Conference, to be held in Paris the 2 Decembre 2016. They will participate in the panel "Remedies: Can You Disarm the Harm? Divestitures, Up-front Buyers…".
To see the full program, please visit the event website.
How important are remedies issues to the Commission’s merger enforcement program?
Most mergers that raise competition concerns are not prohibited but cleared with remedies. This year, for instance, until the end of October, we have issued 20 decisions clearing mergers with remedies and only one prohibition decision. Remedies are therefore the most frequently used tool to make sure a merger doesn't harm consumers. It is therefore crucial that the remedies we accept are effective and truly remove the merger's harm.
What are the principal issues facing the Commission in whether to accept a particular remedy?
Most of our remedies involve a divestment, that is, a structural remedy for the anti-competitive impact of the merger. But we need to be confident that the business that is divested includes everything it needs to be viable and competitive. All too often, parties initially propose a patchwork of assets and contracts, whereas in principle a stand-alone business needs to be divested. A too minimalist approach by the parties is generally counter-productive, because the proposal will not be accepted and instead it will take away valuable time of the merger review process. This, in turn, reduces the chance that a solution can still be found within the merger regulation's strict deadlines.
Another issue is whether there will be a suitable buyer. If there are doubts about that, an upfront buyer clause will be necessary. This will prevent parties from closing their deal until they have found a buyer that is approved by the Commission.
Merger remedies have been in the spotlight in the U.S. The remedies in Hertz/Dollar Thrifty and Albertsons/Safeway did not work out as the Federal Trade Commission had planned. Large transactions like Tokyo Electron and Halliburton/Baker Hughes were abandoned by the parties when remedy talks with the Department of Justice foundered. Has that U.S. experience had an effect on the Commission’s consideration of remedies?
We cooperate closely with our U.S. counterparts, including on remedies, and we learn from each other's experience. Halliburton/Baker Hughes is a good example of such cooperation. This exchange of experiences takes place with many other agencies. Just recently, in April 2016, the International Competition Network issued a Remedies Guide, setting out the principles of good remedies design and implementation. The fact that so many agencies are able to reach a consensus on the most important aspects of remedies shows that there is a lot of mutual learning and a genuine effort to develop a consistent approach to remedies.
The theme of this fourth annual Global Merger Control conference focuses on the recent proliferation of merger control regulation and enforcers. Such a proliferation leads to the inevitable question of whether, in this new regulatory environment, mergers and acquisitions have been made subject to undue obstacles. Indeed, of more that 200 sovereign states in the world, some 125 now apply merger control rules to transactions meeting thresholds of various intensity. This event is organized by Concurrences Review, with the support of Dechert, McKinsey & Company and Advolis.
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