Which remedial actions should be taken to counteract the anti-competitive effects of cross-border merger? Now that merger enforcement has become increasingly more cross-border, this question has become key for competition authorities in their decision-making process.
Conflicts can arise at all stages of the remedy process; from the decision on which remedy to impose (e.g. an agency may consider that it has not the power to order and enforce a remedy involving assets outside its jurisdiction) to its monitoring for compliance (e.g. an agency may not have the legal tools to require the information it needs to monitor the implementation and compliance with the remedy if the information is located outside its jurisdiction).
Conflicts can also arise if remedies are changed or reviewed after the transaction has been approved by all reviewing jurisdictions. In this case, the potential modification of remedies in one jurisdiction can result in inconsistencies with remedies applied in another jurisdiction, especially if there is no need to review the remedies previously agreed in this other jurisdiction.
Competition delegates discussed Remedies in cross-border merger cases at their meeting in October 2013. The topic has already been discussed several times during OECD competition meetings but this time it will be seen as a follow-up discussion further to the approval by the Competition Committee of the implementation of the 2005 OECD Council Recommendation on Merger Review.
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DOWNLOADS - MEETING DOCUMENTS
Full set of meeting documents (pdf) including: executive summary with key findings, background note, 13 country contributions and a detailed summary of the discussion.
Definition of Transaction for Merger Control Review (2013)
Impact Evaluation of Merger Decisions (2011)
Economic Evidence in Merger Analysis (2011)
Remedies in Merger Cases (2011)
Cross-Border Merger Control (2011)
Private Remedies (2007)
Remedies and Sanctions in Abuse of Dominance Cases (2006)
Key findings from the discussion include:
• Cross-border mergers raise specific challenges for competition authorities reviewing the transaction in multiple jurisdictions. This type of transaction may require a high degree of co-ordination and co-operation between the reviewing authorities in order to ensure that the outcome is consistent or at least identical.
• Co-operation in remedies is more efficient: (i) if the merging parties allow the agencies to engage in effective communication early on in the review process by granting confidentiality waivers in appropriate cases, and (ii) if the timing of the different national merger reviews is aligned as much as possible.
• The degree to which competition authorities need to co-operate may vary according to the circumstances. When multiple jurisdictions are involved, close collaboration may only be required between those agencies whose jurisdiction is most directly affected by the merger.
• Designing appropriate remedies with long-term effects can be difficult. Markets affected by the remedy can evolve, therefore remedies may need to be revised after a certain period of time to take into account any contingency or change of circumstances. If this occurs, it is very important to co-ordinate any amendment with the other agencies originally involved in the review of the merger, since the changes may have an effect on their remedies too.