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Distortions in the internal market caused by foreign subsidies in concentrations
When assessing whether a foreign subsidy in a concentration distorts the internal market within the meaning of Article 4 or 5, that assessment shall be limited to the concentration concerned. Only foreign subsidies granted in the three years prior to the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest shall be considered in the assessment.
Concentrations and notification thresholds
1. For the purposes of this Regulation, a concentration shall be deemed to arise where a change of control on a lasting basis results from either of the following: (a) the merger of two or more previously independent undertakings or parts of undertakings; (b) the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings. 2. The creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity shall constitute a concentration within the meaning of paragraph 1. 3. For the purposes of this Regulation, a notifiable concentration shall be deemed to arise where, in a concentration: (a) at least one of the merging undertakings, the acquired undertaking or the joint venture is established in the Union and generates an aggregate turnover in the Union of at least EUR 500 million; and (b) the following undertakings were granted combined aggregate financial contributions of more than EUR 50 million from third countries in the three years preceding the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest: (i) in the case of an acquisition, the acquirer or acquirers and the acquired undertaking; (ii) in the case of a merger, the merging undertakings; (iii) in the case of a joint venture, the undertakings creating a joint venture and the joint venture. 4. A concentration shall not be deemed to arise where: (a) credit institutions or other financial institutions or insurance companies, the normal activities of which include transactions and dealing in securities for their own account or for the account of others, hold on a temporary basis securities which they have acquired in an undertaking with a view to reselling them, provided that they do not exercise voting rights in respect of those securities with a view to determining the competitive conduct of that undertaking or provided that they exercise such voting rights only with a view to preparing the disposal of all or part of that undertaking or of its assets or the disposal of those securities and that any such disposal takes place within one year of the date of acquisition; (b) control is acquired by an office-holder according to the law of a Member State relating to liquidation, winding up, insolvency, cessation of payments, compositions or analogous proceedings; (c) the operations referred to in paragraph 1, point (b) are carried out by the financial holding undertakings as defined in Article 2, point 15 of Directive 2013/34/EU of the European Parliament and of the Council ( 21 ) provided that the voting rights in respect of the holding are exercised, in particular in relation to the appointment of members of the management and supervisory bodies of the undertakings in which they have holdings, only to maintain the full value of those investments and not to determine directly or indirectly the competitive conduct of those undertakings. The period of one year referred to in the first subparagraph, point (a) may be extended by the Commission on request where the institutions or companies concerned can show that the disposal was not reasonably possible within the period set. 5. Control shall be constituted by rights, contracts or any other means which, either separately or in combination and having regard to the considerations of fact or law involved, confer the possibility of exercising decisive influence on an undertaking, in particular by: (a) ownership or the right to use all or part of the assets of an undertaking; (b) rights or contracts which confer decisive influence on the composition, voting or decisions of the organs of an undertaking. 6. Control shall be acquired by persons or undertakings which: (a) are holders of the rights or entitled to rights under the contracts concerned; or (b) while not being holders of such rights or entitled to rights under such contracts, have the power to exercise the rights deriving therefrom.
Prior notification of concentrations
1. Notifiable concentrations shall be notified to the Commission prior to their implementation and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest. 2. The undertakings concerned may also notify the proposed concentration when they demonstrate to the Commission a good faith intention to conclude an agreement or, in the case of a public bid, where they have publicly announced their intention to make such a bid, provided that the intended agreement or bid would result in a notifiable concentration under paragraph 1. 3. A concentration which consists in a merger within the meaning of Article 20(1), point (a) or in the acquisition of joint control within the meaning of Article 20(1), point (b) shall be notified jointly by the parties to the merger or by those acquiring joint control as the case may be. In all other cases, the notification shall be made by the person or undertaking acquiring control of the whole or parts of one or more undertakings. 4. Where the undertakings concerned fail to meet their obligation to notify, the Commission may review a notifiable concentration in accordance with this Regulation by requesting the notification of that concentration. In that case the Commission shall not be bound by the time limits referred to in Article 24(1) and (4). 5. The Commission may request the prior notification of any concentration which is not a notifiable concentration within the meaning of Article 20 at any time prior to its implementation where the Commission suspects that foreign subsidies may have been granted to the undertakings concerned in the three years prior to the concentration. Such concentration shall be deemed to be a notifiable concentration for the purposes of this Regulation.
Calculation of turnover
1. Aggregate turnover shall comprise the amounts derived by the undertakings concerned in the preceding financial year from the sale of products and the provision of services falling within the undertakings’ ordinary activities after deduction of sales rebates and of value added tax and other taxes directly related to turnover. The aggregate turnover of an undertaking concerned shall not include the sale of products or the provision of services between any of the undertakings referred to in paragraph 4. Turnover in the Union shall comprise products sold and services provided to undertakings or consumers in the Union. 2. By way of derogation from paragraph 1, where the concentration consists of the acquisition of parts, whether or not constituted as legal entities, of one or more undertakings, only the turnover relating to the parts which are the object of the concentration shall be taken into account with regard to the seller or sellers. However, two or more transactions within the meaning of the first subparagraph of this paragraph which take place within a two-year period between the same persons or undertakings shall be treated as one and the same concentration arising on the date of the latest transaction. 3. The following shall be used instead of turnover: (a) for credit institutions and other financial institutions, the sum of the following income items as defined in Council Directive 86/635/EEC ( 22 ) , after deduction of value added tax and other taxes directly related to those items, where appropriate: (i) interest income and similar income; (ii) income from securities: — income from shares and other variable yield securities, — income from participating interests, — income from shares in affiliated undertakings; (iii) commissions receivable; (iv) net profit on financial operations; (v) other operating income; (b) for insurance undertakings, the value of gross premiums written which comprises all amounts received and receivable in respect of insurance contracts issued by or on behalf of the insurance undertakings, including also outgoing reinsurance premiums, and after the deduction of taxes and parafiscal contributions or levies charged by reference to the amounts of individual premiums or the total volume of premiums. For the purposes of point (a), for a credit institution or financial institution the turnover in the Union shall comprise the income items, as defined in that point, which are received by the branch or division of that institution established in the Union. For the purpose of point (b), for an insurance undertaking, the turnover in the Union shall comprise gross premiums received from Union residents. 4. Without prejudice to paragraph 2, the aggregate turnover of an undertaking concerned shall be calculated by adding together the respective turnovers of: (a) the undertaking concerned; (b) the undertakings in which the undertaking concerned, directly or indirectly: (i) owns more than half the capital or business assets, (ii) has the power to exercise more than half the voting rights, (iii) has the power to appoint more than half the members of the supervisory board, the administrative board or bodies legally representing those undertakings, or (iv) has the right to manage the affairs of those undertakings; (c) the undertakings which have in the undertaking concerned any of the rights or powers referred to in point (b); (d) the undertakings in which an undertaking as referred to in point (c) has any of the rights or powers referred to in point (b); (e) the undertakings in which two or more undertakings as referred to in points (a) to (d) jointly have any of the rights or powers referred to in point (b). 5. Where undertakings concerned jointly have the rights or powers listed in paragraph 4, point (b), in calculating the aggregate turnover of the undertakings concerned: (a) account shall be taken of the turnover resulting from the sale of products and the provision of services between the joint undertaking and any third undertakings, and this turnover shall be apportioned equally amongst the undertakings concerned; (b) no account shall be taken of the turnover resulting from the sale of products or the provision of services between the joint undertaking and each of the undertakings concerned or any other undertaking connected with any one of them, as set out in paragraph 4, points (b) to (e).
Aggregation of financial contributions
The aggregate financial contribution to an undertaking concerned shall be calculated by adding together the respective financial contributions provided by third countries to all undertakings referred to in Article 22(2) and Article 22(4), points (a) to (e).
Suspension of concentrations and time limits
1. A notifiable concentration shall not be implemented before its notification. In addition: (a) where the Commission receives a complete notification, the concentration shall not be implemented for a period of 25 working days after that receipt; (b) where the Commission initiates an in-depth investigation no later than 25 working days after receipt of the complete notification, the concentration shall not be implemented for a period of 90 working days after the opening of the in-depth investigation. That period shall be extended by 15 working days where the undertakings concerned offer commitments pursuant to Article 7 with a view to remedying the distortion in the internal market; (c) where the Commission has adopted a decision under Article 25(3), point (a) or (b), the concentration may be implemented thereafter. The period of time referred to in points (a) and (b) shall begin on the working day following that of the receipt of the complete notification or of the adoption of the relevant Commission decision. 2. Paragraph 1 shall not prevent the implementation of a public bid or of a series of transactions in securities including those convertible into other securities admitted to trading on a market such as a stock exchange, by which control is acquired from various sellers, provided that: (a) the concentration is notified to the Commission pursuant to Article 21 without delay; and (b) the acquirer does not exercise the voting rights attached to the securities in question or does so only to maintain the full value of its investments based on a derogation granted by the Commission under paragraph 3 of this Article. 3. The Commission may, upon request, grant a derogation from the obligations laid down in paragraphs 1 or 2. A request to grant a derogation shall state the grounds for such request. In deciding on the request, the Commission shall take into account in particular the effects of the suspension on one or more of the undertakings concerned by the concentration or on a third party and the risk of a distortion in the internal market posed by the concentration. Such a derogation may be made subject to certain conditions and obligations in order to ensure that there is no distortion in the internal market. A derogation may be applied for and granted at any time, either before notification or after the transaction. 4. The time limits provided for in paragraph 1, point (b) of this Article shall be extended if the undertakings concerned make a request to that effect not later than 15 working days after the opening of the in-depth investigation pursuant to Article 10. The undertakings concerned may make only one such request. The time limits provided for in paragraph 1, point (b) of this Article may be extended at any time following the opening of the in-depth investigation, by the Commission with the agreement of the undertakings concerned. The total duration of any extension or extensions pursuant to this paragraph shall not exceed 20 working days. 5. The Commission may, exceptionally, suspend the time limits provided for in paragraph 1 where the undertakings have not supplied the complete information which it has required under Article 13 or have refused to submit to an inspection ordered by decision pursuant to Article 14. 6. The Commission may adopt a decision pursuant to Article 25(3) without being bound by the time limits referred to in paragraphs 1 and 4 of this Article, where: (a) it finds that a concentration has been implemented in breach of the commitments attached to a decision taken under Article 25(3), point (a); or (b) a decision has been revoked pursuant to Article 25(1). 7. Any transaction carried out in breach of paragraph 1 shall be considered valid only after a decision pursuant to Article 25(3) has been adopted. 8. This Article shall have no effect on the validity of transactions in securities including those convertible into other securities admitted to trading on a market such as a stock exchange, unless the buyer and seller were aware or ought to have been aware that the transaction was carried out in breach of paragraph 1.
Procedural rules applicable to the preliminary review and the in-depth investigation of notified concentrations
1. Articles 10, 11(1), (3) and (4), Articles 12 to 16 and 18 shall apply to notified concentrations. 2. The Commission may initiate an in-depth investigation under Article 10(3) no later than 25 working days after receipt of the complete notification. 3. After the in-depth investigation, the Commission shall adopt an implementing act in the form of one of the following decisions: (a) a decision with commitments pursuant to Article 11(3); (b) a no objection decision pursuant to Article 11(4); or (c) a decision prohibiting a concentration, where the Commission finds that a foreign subsidy distorts the internal market pursuant to Articles 4 to 6. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 48(2). 4. Decisions pursuant to paragraph 3 shall be adopted within 90 working days after the opening of the in-depth investigation, extended as the case may be pursuant to Article 24(1), point (b), and paragraphs (4) and (5). If the Commission does not adopt a decision within that time limit, the undertakings concerned shall be allowed to implement the concentration. 5. In any request for information to an undertaking, the Commission shall specify whether time limits will be suspended pursuant to Article 24(5), in the event the undertaking fails to provide complete information in the prescribed time limit. 6. The Commission may, where it finds that a concentration notifiable under Article 21(1) or notified upon request of the Commission under Article 21(5) has already been implemented and that foreign subsidies in that concentration distort the internal market pursuant to Articles 4, 5 and 6, adopt one of the following measures: (a) require the undertakings concerned to dissolve the concentration, in particular through the dissolution of the merger or the disposal of all the shares or assets acquired, to restore the situation prevailing prior to the implementation of the concentration; or, where that restoration is not possible through dissolution of the concentration, any other measure appropriate to achieve such restoration as far as possible; (b) order any other appropriate measure to ensure that the undertakings concerned dissolve the concentration or take other restorative measures as required in its decision. The Commission may impose the measures referred to in points (a) and (b) of this paragraph either in a decision pursuant to paragraph 3, point (c), of this Article or by separate decision. The Commission may adopt, by means of an implementing act in the form of a decision, any of the measures referred to in points (a) or (b) of this paragraph where it finds that a concentration has been implemented in breach of a decision taken pursuant to paragraph (3), point (a), of this Article which has found that, in the absence of the commitments, the concentration would fulfil the criterion laid down in paragraph 3, point (c) of this Article. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 48(2). 7. The Commission may also adopt an implementing act in the form of a decision ordering interim measures referred to in Article 12 where: (a) a concentration has been implemented in breach of Article 21; (b) a concentration has been implemented in breach of a decision with commitments under paragraph 3, point (a) of this Article. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 48(2).
Fines and periodic penalty payments applicable to concentrations
1. The Commission may impose fines or periodic penalty payments as set out in Article 17. 2. The Commission may, by decision, also impose fines upon undertakings concerned not exceeding 1 % of their aggregate turnover in the preceding financial year where those undertakings, intentionally or negligently, supply incorrect or misleading information in a notification pursuant to Article 21 or supplement thereto. 3. The Commission may, by decision, also impose fines upon undertakings concerned not exceeding 10 % of their aggregate turnover in the preceding financial year where those undertakings, intentionally or negligently: (a) fail to notify a notifiable concentration in accordance with Article 21 prior to its implementation, unless they are expressly authorised to do so by Article 24; (b) implement a notified concentration in breach of Article 24; (c) implement a notified concentration prohibited in accordance with Article 25(3), point (c); (d) circumvented or attempted to circumvent the notification requirements, as referred to in Article 39(1).
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