EU Unveils New Merger Control Rules

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 January 2004

The European Council of Ministers on Tuesday gave its final approval to a new merger control law, set to come into force in May of this year.

The legislation, which was unanimously approved by the Competitiveness Council in November 2003, forms part of a comprehensive package of reforms designed to improve the European Union's already well-respected merger control regime.

The Merger Regulation was first adopted in 1989 and took effect on 21 December 1990. It created a one-stop shop where companies apply for regulatory clearance for mergers and acquisitions above certain worldwide and European turnover thresholds.

According to the EC, the new Regulation introduces some flexibility into the investigation timeframes while retaining the much praised predictability, reinforces the "one-stop shop" concept, and clarifies that the Commission has the power to investigate all types of harmful scenarios in a merger, from dominance by a single firm to the effects stemming from a situation of oligopoly that might harm the interests of European consumers.

Speaking following the approval of the legislation by the Council of Ministers, Competition Commissioner, Mario Monti explained that:

"The new law will equip the European Union with a modern, more flexible and efficient legislation to cater for the interests of 450 million consumers from 1st of May this year."

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