UK: Greater EU-US Co-operation in Merger Investigations

The EU and US competition authorities have adopted a set of Best Practice Guidelines on Co-operation when reviewing mergers which require approval on both sides of the Atlantic. The Guidelines put in place a more structured basis for co-operation, building on current informal practices as well as on the EU-US 1991 Antitrust Co-operation Agreement.

The number of transactions which are subject to scrutiny on both sides of the Atlantic has increased over the last few years, and the controversial Commission decision in GE/Honeywell in particular, has prompted the authorities to formalise and align their procedural practices with a view to minimising the risk of divergent outcomes. The Guidelines focus in particular on the issues of timetable, collection and evaluation of evidence, communication between the authorities and remedies.

Timing

Merging companies will be offered the possibility of meeting at an early stage with the authorities to discuss timing issues. The aim will be to discuss ways to synchronise the timing of the US and EU investigations and topics addressed will typically include the appropriate times for filing, timeframes for the submission of documents or other information and, where appropriate, the prospect of a timing agreement in the US and/or a waiver from the obligation to notify within seven days of the conclusion of a binding agreement in the EU.

Collection and Evaluation of Evidence

The authorities agree to co-operate with one another throughout the investigation. They intend to share publicly available information, discuss their respective analyses at various stages of the investigation (such as market definitions, assessment of competitive effects, efficiencies) and exchange views on remedies and similar past investigations. They will also try to co-ordinate information or discovery requests to the merging parties and to third parties, to the extent this is permitted under their respective confidentiality obligations.

Companies are encouraged to execute waivers of confidentiality in order to allow a full exchange of information submitted during the course of the investigation, which should result in more informed decision making and help to avoid divergent analyses and outcomes.

The guidelines recognise that many of these decisions are within the discretion of the merging parties and stress that any party’s choice not to follow these recommendation will not in any way prejudice the conduct or outcome of the investigations.

Communication between the reviewing agencies

At the start of any investigation involving a transatlantic transaction, each of the relevant authorities will designate a contact person and establish a timetable for regular consultations. The Guidelines recognise that it may on certain occasions be appropriate for senior competition officials on both sides to meet and consult with each other.

Remedies

Parties to a transatlantic transaction will be encouraged to co-ordinate the timing and substance of their remedy proposals to the respective authorities, and the relevant authorities from their side will endeavour to ensure that remedies they accept do not impose inconsistent obligations on the merging parties.

© Herbert Smith 2002

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