New developments in Merger Review: a policy of change

1
New developments in Merger Review a policy of
change?

• Prof. Jean Paul van Marissing
• Howrey (Amsterdam)

2
EU competition policy reformed more
economic-based approach

• Anti-competitive agreements lt 30 market share
• Abuse of dominance compatible mainstream
  economics
• State aid refine economic approach

3
Merger Regulation ? EC

• Mario Monti A radical reform (2002)
• Chief Economist someone with very sound
  knowledge of industrial economics
• New Regulation significantly impede effective
  competition (2004)
• New Merger Guidelines (2004)
• Recent statement Neelie Kroes sound economic
  analysis

4
Merger Regulation ? ECJ

• Tetra Laval (after Airtours and Schneider)
• Support decision with convincing evidence
• factually accurate, reliable and consistent
• Airtours
• Schneider

5
Example Oracle / People Soft

• Only 3 suppliers (Orcl, PS and SAP)
• After Oral Hearing need for broader factual
  basis
• More info on bid data requested
• Other vendors e.g. Lawson, IFS, Intentia and QAD
• Won bids for large and complex enterprises
• Analyzing hundreds of bids
• Straight clearance after Phase II

6
Consequences

• EC investigations more rigorous (con)
• More burdensome on parties (con)
• More factually-based arguments (pro)
• Opportunity to counter initial impressions or
  concerns (pro)

7
Efficiencies

• Counteract potential harmful effects
• Benefit consumers, be merger-specific and
  verifiable (cumulative)
• ? Upon parties to provide information and
  demonstrates that conditions (A and B) are met

8
How?

• Internal documents used by management
• Statements to shareholders and financial markets
• Pre-merger external experts studies

9
Three second phase investigations

• COMP/M.2495 Haniel / Fels cleared
  (unconditional)
• COMP/M.2568 Haniel / Ytong cleared subject to
  divestiture
• COMP/M.2650 Haniel / Cementbouw cleared after
  termination joint venture
• Summer 2002
• Different outcome today?