7 AGENCIES AND GENERAL COUNSEL: WHAT'S ON THEIR RADAR?

Friday 6 December 2019 - PARIS ATTENDEES

48 CORPORATIONS 18 ENFORCEMENT AGENCIES

Aéroports de Paris IBM Australian Competition Air France ICADE and Consumer Commission Air France - KLM Ingersoll Rand Autorité de la concurrence Air Liquide Ipsen Commercial Court of Angers Airbus Group ITW Commercial Court of Paris Alstom La Poste Competition Council Aperam LafargeHolcim of the Republic of Lithuania Avril Lexmark Conseil d'État beIN MEDEF DG COMP BNP Paribas Nexans BNP Paribas Personal DGCCRF Ominee Finance French general economic Orange Capgemini and financial inspectorate (CGEFI) Rexel Developpement Deutsche Bahn French Ministry for Europe Safran eBay and Foreign Affairs Saint Gobain EDF French National Research Agency (CNRS) SNCF Eiffage French prudential supervision Engie SNCF Mobilités and resolution authority (ACPR) EPEX SPOT Sony Semiconductor General Court of the European Union Solutions Essilor International High Audiovisual Council (CSA) STEF Facebook Suez Paris Court of Appeal French Association for Large Companies (AFEP) Thales Supervisory Agency for Private Investment in Telecommunications (Osiptel) General Electric Total GEODIS Uber UK Competition and Markets Authority Groupe Roullier Veolia US Federal Trade Commission

1 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE AGENCIES AND GENERAL COUNSEL: WHAT'S ON THEIR RADAR?

PROGRAMFriday 6 December 2019 - PARIS I 08.00 - 13.00

08.00 Registration & Breakfast 11.15 IN-HOUSE COUNSEL SHOWCASE 18 ENFORCEMENT AGENCIES SESSION: INDUSTRIAL POLICY 08.30 WELCOME & INTRODUCTORY CONSIDERATIONS IN MERGER REMARKS CONTROL Laurent FLOCHEL I Vice President, CRA International, Paris Pascal BELMIN I Head of EU Regulatory Affairs, Airbus Mélanie THILL-TAYARA I Partner, Dechert, Paris Group, Brussels Susan HINCHLIFFE I Global Executive Counsel 09.00 KILLER ACQUISITIONS: General Electric, London SHOULD THEY BE PREVENTED? Clara INGEN-HOUSZ I Chief Compliance Offi cer Head of Legal, Saint Gobain, Paris Svend ALBAEK I Adviser - CET, DG COMP, Brussels Carol XUEREF I Board director – Strategic committees Luís CAMPOS I Associate Director, Frontier Economics Eiffage / Ipsen, Paris Paris Moderators: Mélanie THILL-TAYARA I Partner, Dechert, Paris Etienne CHANTREL I Head of Mergers Unit, Autorité de la concurrence, Paris Michael WEINER I Partner, Dechert, New York François GARNIER I Executive Vice President & Group General Counsel, Ipsen, Paris 12.15 BREXIT AND ANTITRUST: THE WAY Elizabeth KRAUS I Deputy Director for International Antitrust, US FTC, Washington D.C. FORWARD WITHOUT THE UK AT THE TABLE? WHAT SHOULD COMPANIES Moderators: Mike COWIE I Partner, Dechert, Washington D.C. EXPECT? Clemens YORK I Partner, Dechert, Frankfurt Sir Jonathan FAULL I Chair of European Public Affairs Brunswick Group, Brussels

10.00 Coffee Break - www.yvesbuliard.fr Buliard Design : Yves Alec BURNSIDE I Partner, Dechert, Brussels 10.15 MERGER JUDICIAL REVIEW: 13.00 IS IT REALLY WORTH IT? Lunch Hanna ANTTILAINEN I Head of Unit - Mergers, DG COMP Brussels Eugène BUTTIGIEG I Judge, General Court of the European Union, Luxembourg Stéphane HOYNCK I Rapporteur public, Conseil d’Etat, Paris Greg MCCURDY I Director - Global Competition Law, Uber San Franscisco John MCINNES I Litigation Director, CMA, London Moderators: Laurence BARY I National Partner, Dechert, Paris Languages: English & French (Simultaneous translation) Hans-Jürgen MEYER-LINDEMANN I Partner, Dechert, Frankfurt * To be confi rmed

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 2 SYNTHESIS* WELCOME & INTRODUCTORY REMARKS

MÉLANIE THILL-TAYARA LAURENT FLOCHEL PARTNER, DECHERT VICE PRESIDENT, CRA INTERNATIONAL

MÉLANIE THILL-TAYARA The role of data as a competitive advantage was first addressed at the EU level in the Apple/Shazam case concerning the risk he past year has been rich in developments in the field of associated with Apple's access to Shazam users' data. Another mergers, giving rise to recurring debates amongst the challenge is how to assess the value of data without any turnover T community on issues such as killer acquisitions or associated to them. industrial policy. Another topic for debate is industrial policy, particularly since Data plays a key role in the digital economy by creating a the Siemens/Alstom case, which has revived long-standing competitive advantage and developing new products. The question debates. The idea proposed in the Franco-German manifesto of the value of the data depends on the "3 V": volume, variety of a right of evocation for the Council in the field of merger control and velocity. The higher these three criteria are, the more useful is most likely off the table now. This right exists in certain the data becomes. Moreover there is the question of data jurisdictions, but it is rarely used and would be hard to implement at the EU level. replicability and the difficulty to create value with the collected data. Germany intends to use its Presidency, from July 2020, to make There is a new approach of competition authorities to the role proposals in order for Europe to be better equipped to combat of data and the development of new theories of harm. Back industrial threats from China and the USA, especially in the Big in 2008, the Commission carried out a classic horizontal analysis Tech sector. The French Parliament or think tanks make proposals of the merger between Tom-Tom and Tele Atlas, without taking on the reform of EU competition rules. Some of them suggest into account the specificity of data as an input in their business. reintroducing a voluntary notification system, moving away from Google Maps was not considered a credible competitor! the relevant market as the basis for analysis but taking into

*Concurrences has drafted the present synthesis. The views and opinions expressed in this document do not necessarily represent those of the speakers’ institution or clients.

3 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 account potential competition, adapting the horizontal guidelines an auction to advertise on it organized by a system with the to take into account foreign subsidies as part of the analysis of characteristics of the Internet user concerned. Thus, it is the a merger, or adopting special rules for ultra-dominant platforms. quality of data that counts. Obtaining this data is easier for platforms having an ecosystem, which Google has done by LAURENT FLOCHEL developing additional services to retrieve accurate information In the digital, network externalities on platforms (two-sided about users (Search, Maps, Shopping...). markets) and social networks (mostly one-sided markets) are important. The specific issues of platforms must be taken into If digital operators were to be automatically invited to notify their account. When does a platform become big enough to lead to operations, the question of controllability criteria would arise. tipping? For platforms that seem free to use, it is hard to use We could lower the thresholds or introduce ex-post control (with the classical analysis of merger control. But they are necessarily the problem of dismantling after the transaction has been financed by something, hence the question of data use. completed). Another question is the value of the transaction, Data are particularly important for algorithms and advertising. applied in Germany without success. Algorithms raise the question the quantity of data needed for As for industrial policy, there is always the question of the competitors to survive. Search algorithms based on keywords used objective of competition policy. Economists argue it is preferable could in some circumstances not require a large amount of data. to have one instrument for one objective. This does not mean But for rarer researches, having a large size has a significant impact. no other objectives should be taken into account for a decision. Advertising raises the question of the quality of data. The digital However, they must be defended through other policies (e.g. world led to programmatic advertising: visiting a web page opens trade policy).

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 4 PANEL 1 KILLER ACQUISITION: SHOULD THEY BE PREVENTED?

CLEMENS YORK development costs were small, both of them would bring the new product on the market. But there is a range in the middle he idea of killer acquisitions originally arose in respect of where the acquirer will stop the product while the entrepreneur pharmaceutical markets, but the antitrust debate now would have brought it on the market. The acquirer may be willing heavily focuses on acquisitions in digital markets. The key T to buy such a product in order to pay off the entrepreneur to stay concern is that potentially anti-competitive mergers are not being out of the market. That is a killer acquisition. adequately captured, either because the target’s revenues are too low or because the current substantive test does not sufficiently The article showed that around 6% of acquisitions in the take into account the dynamics on platform or winner- pharmaceutical sector are killer acquisitions. takes-all markets. The authors stressed that killer acquisitions only occur if there is A key question is what kind of impact transactions involving large a horizontal overlap: the entrepreneur’s project must overlap with players in the pharmaceutical and tech sectors have on the the acquirer’s existing product. However, the mere buying up of incentives of new players to innovate. While some may say that small technological companies that produce potentially the prospect of being bought by an incumbent is a key driver for complementary elements to the acquirer’s own production is not innovation and investment, others claim that start-ups may be necessarily a killer acquisition. inclined to stay clear of so-called kill-zones around large platform providers. MIKE COWIE In life sciences in the US, we have Food and Drug Administration SVEND ALBAEK with multiple phases. In Phase I, in the early stage, the likelihood The term “killer acquisition” has been so successful that it is now of getting to the finished line is less than 25%. In Phase II, it is used in a broader sense than what the original article was about. under 40%. In Phase III, it is over 50%. The FTC has taken the The latter contained an empirical study of the pharmaceutical view that that is an overlap: if an acquirer buys a firm with a Phase sector. The authors carried out a painstaking data collection in III product, it is recognition that competition is sufficiently likely. order to follow pharmaceutical projects from the initiation of the This is a reasonable approach and it provides certainty to product through the various stages. They compared it with data the industry. on acquisitions, and they built a theoretical model: if the acquirer already has a product in his portfolio, the new product that comes ELIZABETH KRAUS in will take away some of the sales. The existing company gains The article identified additional conditions under which killer less in selling this new product than the entrepreneur. If the acquisitions seemed more prevalent. First, there is a greater

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1 Clemens York Partner, Dechert, Frankfurt 5 François Garnier Executive Vice President & Group General Counsel, 2 Svend Albaek Adviser - CET, DG COMP, Ipsen, Paris Brussels KILLER ACQUISITION: 6  Associate Director, Luís Campos 3 Mike Cowie Partner, Dechert, Frontier Economics Paris Washington D.C. 7 Etienne Chantrel Head of Mergers Unit, SHOULD THEY BE PREVENTED? 4 Elizabeth Kraus, Deputy Director Autorité de la concurrence, Paris for International Antitrust, US FTC, Washington D.C.

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probability of such acquisitions occurring in concentrated markets. Our existing tools are flexible and provide an analytical foundation Conversely, we could think that when there is existing and future that allows us to intervene even in the highly dynamic digital market competition there may be reduced incentives for killer sector, including under theories related to the loss of future acquisition. The authors also found that such acquisitions bunched competition and innovation. Examples include the FTC’s recent below US merger thresholds. However, the agencies can investigate CDK/Auto-Mate case, involving nascent competitors, and matters transactions below the thresholds and consummated transactions. involving potential competition in future markets, e.g., in the pharmaceutical sector and exemplified by ourNielsen/Arbitron Despite ex-post inefficiencies of killer acquisitions, the authors case. However, challenges remain. These cases can be difficult found that the overall effect on social welfare is ambiguous: they to prove under pre-merger rules. We need an evidentiary and may also create ex-ante innovation incentives for the creation of economic basis to determine whether the entity being acquired new drug products. is likely, in a reasonable time horizon, to be a competitor. However, When transposing the concept of killer acquisitions to the digital some start-ups rely on less formal communications, with limited sector, the conditions do not always align well. Rather than directly availability of strategic plans. Moreover, estimating the likelihood competing services, the transactions may involve complementary of consumer benefit and potential entry and repositioning, products or services that potentially could evolve into direct particularly in dynamic markets, is a challenge. Another challenge competitors. In the digital context, the killer acquisitions terminology is how, under our merger standard, we can address the potential harm, for example to innovation, which derives from a series of has been used to raise concerns with transactions in which both small transactions. the acquiring and acquired entities post-transaction have grown. Normally, this would be considered pro-competitive, yet in a Before we make major changes to our merger standards, we world of network effects and the potential for tipping, concerns also need to consider potential unintended consequences on can be raised. innovation and consumers. For example, the article’s point on

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 6 the reduction of potential exit strategies for start-ups and the party, a probability that is higher than that of other companies related loss of longer term innovation incentives. As these issues not being acquired. This situation is similar to that described in are debated, in the US we have been looking to our broader the Dow/Dupont case, where the Commission was concerned toolbox, for example, Section II, our monopolisation standard, that the R&D of the merging parties was such that that there was to address concerns of anticompetitive acquisitions of nascent a greater chance of them becoming strong competitors for competitors by larger firms. This provides an interesting analogy future products. to our merger rules, given Section II’s reduced causation standard. We have to prove dominance and to determine whether the The second key feature is the dynamics of competition on the acquisition is reasonably capable of contributing significantly to market. We need to consider the impact of the merger (and alleged the defendant’s monopoly power unless outweighed by theory of harm) on the behaviour of rivals firms. For example, procompetitive justifications. blocking the merger may reduce the market incentive to innovate, The FTC has also incorporated these issues in its recent hearing as innovation becomes more risky if start-ups no longer have the initiative, and is now preparing several projects related to today’s outside option of being purchased by an incumbent. Such an discussion. This includes drafting guidance on how existing acquisition reduces the innovative efforts of the target; it also antitrust rules might apply to the conduct of technology platforms. increases the probability of success of the investments in innovation by rivals and provides an additional incentive for innovation. Similarly, FRANÇOIS GARNIER lowering the thresholds for merger review may be counterproductive The 6% of killer acquisitions mentioned in the article are not a if companies respond by increasing acquisitions below this lower high proportion. The pharmaceutical business model is innovation threshold, before the target has been able to innovate (e.g. and products. Since a products’ life is limited, the whole game By acquiring the firm so as to have access to high skilled employees). revolves around creating new products. The solution is to either Ex-post analysis, too, might ex-ante give platforms less incentives make them, or buy them. For the majority of deals, companies to invest in the target, if they fear that the success of the target is try to replace products that are going to disappear. The probability more likely to prompt a review. of success is an important factor of investment. Moreover, today it is not enough to have a safe and efficient product: we must The last feature is the efficiency rationale behind these acquisitions: be able to market it. evidence suggests that the acquisition of small firms by large ones is more likely to lead to efficiencies, and in particular in the Going after an acquisition to kill a product means dedicating a digital sector by giving those small firms access to a large network. lot of investment and resources to kill a product that has already cost a lot. Firms can be tempted to acquire a competitor just to ETIENNE CHANTREL eliminate that competition, for example in case of overlaps of two products with the same level of maturity. But these cases The article raised two interesting (eventually conflicting) points: are very rare. the benching of acquisitions that fall just below the thresholds (which for the enforcer is already suspicious), and the fact that On both sides of the Atlantic, regulators have the tools to anticipate the authors don’t claim that those killer acquisitions have a competition and assess potential merger approvals by looking detrimental effect on general welfare. at the activities of the firms concerned. Many types of acquisitions have an impact on the market but LUÍS CAMPOS are not caught. On the substance, our tools and concepts have There is a consensus that killer acquisition is not the right term a wide flexibility. The main problem is defining the cases that to use. In digital, the concerns have arisen when the target need to be controlled. Following its public consultations flourishes, the suggestion being that it would have become a of 2017 and 2018, the French Competition Authority stressed strong competitor. that the best tool would be to introduce ex-post control. This The assessment of these types of mergers must consider three could be achieved through the creation of a merger intelligence key features. The first is the uncertainty around the innovation unit, asking a set of systematic companies to inform the authorities brought by the target. Firstly, there is a high probability that the of all their acquisitions...There would also be a window to assess product of the target will be overlapping with the one of the the merger after it has been completed, like in the UK and Sweden. acquirer. We have the tools to address that (e.g. pipeline analysis. Secondly, there is a low probability of such an overlapping Finally, the French Competition Authority would need to enact occurring in the future. Here, the analysis needs to recognise the guidelines on the targeted transactions. Those could be the competitive constraints from similarly low probability overlaps original killer acquisitions, transactions where the sector is still from products developed by rivals. Thirdly, there are the cases small enough that the turnover threshold is not met, and the that are in-between: the target has a material probability of practices of building or showing up dominance with developing a product that will compete strongly with the merging small acquisitions.

7 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 PANEL 2 MERGER JUDICIAL REVIEW: IS IT REALLY WORTH IT?

LAURENCE BARY cases (e.g. competition, dumping, State aid…). As for the judges, for now they adjudicate all cases and every 3 years the composition n the US, agencies must go before the courts to block a deal. In the EU, competition agencies are empowered to block a of chambers changes. If a judge becomes specialized in competition I deal provided that their decision is subject to judicial review. in those 3 years, he might then need to specialize in something This raises an important question: is our system effective else. In addition, judges have a 6-year mandate and are nominated and sufficient? by the Member States regardless of their specialisation. Since the entry into force of the EU Merger Regulation, only 50 out When it comes to annulment on procedural grounds, judges do of more than 6,000 Commission merger decisions have been not find it easier to annul on such grounds. It depends on the challenged before the Court. 12 decisions have been annulled, procedural issues involved: a question of a lack of reasoning will and today there are on average 5 appeals per year before the affect the review by the judges and possibility for the parties to Court. Moreover, while the merger review before the agencies is present their case properly. Here, annulment is the only option. subject to strict rules regarding the time frame of the process As for the rights of defence, judges always examine if the procedural and deadlines, judicial review can take years. irregularity had consequences for the applicant during the administrative procedure (an example of that being the UPS case). EUGÈNE BUTTIGIEG The length of the proceedings is important. The proceedings are JOHN MCINNES lengthy because the cases are factually and legally complex. A significant benefit of the UK regime is the speed with which The written procedure is long, with two rounds of written pleadings, appeals are heard by the tribunal. This is helped by flexibility of especially if there are also intervening parties and confidentiality the tribunal’s rules. A merger challenge could take as little issues involved. In the past, the General Court was also overloaded as 3 or 4 months, and it is possible to bring a challenge during with cases, especially between 2007 and 2013. an investigation. These cases can be dealt with even more quickly. On average, 10 merger cases are pending every year before the A recent case involving two leading supermarkets, which challenged Court. The average length of proceeding is 39 months. This could a deadline in the investigation process, was dealt with within days. be reduced through more use of the expedited procedure, which The CMA’s experience is that the tribunal is more willing to on average brings down the duration to 10 months. The Court can, of its own motion, opt for the expedited procedure. Intervening intervene on procedural grounds, which reflects the nature of the parties can push for this procedure in two ways: they can mention judicial review process for mergers. A decision can be challenged their wish for such a procedure in their written statement, or, if only on the grounds of procedural fairness, illegality or irrationality. they act in support of the Commission as the defendant, they In assessing the rationality of the CMA’s decisions, the courts might ask it to make the request. grant a wide margin of appreciation to the CMA, especially since in merger control the assessment is forward-looking and involves As for the question of a need of specialisation of some judges expert judgment. of the General Court in competition matters, this is not likely to happen any time soon. The treaties envisage the possibility of HANNA ANTTILAINEN specialised courts, and up to 2016 there was one (the Civil Service Under the Merger Regulation, if a merger is annulled and has to Tribunal). However, the EU decided in 2015, as a solution to the be reassessed by the Commission, the latter must do so in the backlog of the General Court, to suppress this court and consolidate the two-tiers system: the reform doubled the number of judges light of the market conditions that are prevalent at the time of and increased the number of chambers the reassessment. The Commission needs to do fact-finding again, full-blown analysis, which implies a long duration. The novelty is that General Court has decided from October 2019 to have a certain specialisation in the chambers. Out When a clearance decision is annulled, the consequences for of 10 chambers, 6 are specialized on trademarks and 4 on staff the parties are important: they have consumed the merger, and cases. Other types of litigation, including mergers, are still must re-notify it in order to continue to be merged. The Commission addressed by all chambers. However, if this experiment works tries to proceed as quickly as it can, but it has to do the procedure well, the specialisation could be deepened in the future and some fully again. If market circumstances have substantially changed, chambers could be specialised in the more complex economic so can the second decision of the Commission.

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1 Laurence Bary National Partner, Dechert, Paris

2 Eugène Buttigieg Judge, General Court of the European Union, Luxembourg

3 Hanna Anttilainen Head of Unit Mergers, DG COMP, Brussels

4 John McInnes Litigation Director, CMA, London

5 Stéphane Hoynck Rapporteur public, Conseil d’Etat, Paris

5 6 6 Greg McCurdy Director Global Competition Law, Uber, San Franscisco

As for annulments on purely procedural grounds, the Court may case should be on criticizing the decision and not on trying to be too strict on procedure. Each case has its specific circumstances, re-make the merger application. which must be taken into account. Parties are usually well informed As for the considerations of industrial policy, French law provides and can use the procedural rules strategically: the Commission the possibility of evocation of the Minister. It has been used only is not necessarily the only one breaching rules. This binary once and has not been brought to court. Regarding decisions approach should be nuanced, especially since an annulment for procedural aspects always has consequences for the companies. made by the Authority, based on the Phase II test, the yardstick The Commission also becomes more careful, which makes the for review should be based of Phase II criteria, not industrial procedure longer. Is it really what parties want? policy objectives.

STÉPHANE HOYNCK GREG MCCURDY In France, most of the recent merger cases before the courts Antitrust has spread around the world and now almost every were about gun jumping or non-fulfilment of commitments. country has an agency, though many of these are very young. However, reflection on the distinction between substance and Uber has grown and evolved rapidly. It operates in procedure has developed since 2018 outside merger judicial nearly 70 countries, but has sold businesses in Russia, China, review with the Eden case law: a party asking for an annulment and South East Asia. Uber is currently acquiring Careem in the can prioritise between the grounds based on procedure and Middle East and Pakistan. Uber’s deals have been the first Phase those based on substance. Judges must answer the latter first. II case for several agencies. The prospects for judicial review are uncertain in some jurisdictions. The Conseil d’État has full review on the Authority’s decisions. However, the purpose of the courts is not to re-assess the facts. Singapore is among the most developed jurisdictions, and its There is often a temptation of the parties to ask the court to make Competition Appeal Board conducts de novo review including a new assessment of the merger itself and not to review the on substantial and evidentiary issues (e.g. market definition or merger decision. Moreover, economic expertise brought to the access to the file).

9 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 PANEL 3 IN-HOUSE COUNSEL SHOWCASE SESSION: INDUSTRIAL POLICY CONSIDERATIONS IN MERGER CONTROL

MÉLANIE THILL-TAYARA consumer welfare standard, conventionally considered as focused on effects on price and output. For years, however, he debate about industrial policy considerations in the field of merger control is going on in different jurisdictions, the mainstream approach to the consumer welfare test has T with contradictory views emerging between EU also considered effects on innovation as part of the antitrust Member States. test. Some argue that this standard is broad enough to include not only innovation issues, but also wages, environmental and In some jurisdictions, public considerations are either part of the sustainability issues. However, one question is how to properly competition analysis of a transaction, or can be taken into account weigh them against more traditional concerns. to counterbalance possible anticompetitive effects. Regarding the screening of foreign direct investments, the Finally, if consumer welfare is not the appropriate standard, should new regulation provides for a consistent application between be we looking at a total welfare standard, or another method the merger control regulation and this new piece of of evaluation? EU legislation. CAROL XUEREF MICHAEL WEINER Industrial policies can be compatible with competition policy and In the US, industrial policy and the idea of a national champion enforcement, if for example structural reform is the joint objective. is not part of the discussion on antitrust enforcement. To the In today’s world, technology, globalisation and protectionism are contrary, some Presidential election candidates advocate for more prevalent. There should not be a deviation from competition the breaking up of Big Tech companies. Industrial policy does policy as the fundamental model, but see how it can be improved enter into the US foreign direct investment policy, however. by introducing industrial policy in order to remove market The relevant question discussed in the US is the on appropriate imperfections, improve innovation and reallocate towards growth standard for antitrust analysis. Traditionally it has been the and scaling up.

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1 Mélanie THILL-TAYARA Partner, PASCAL BELMIN the pressure of political discontent around Dechert, Paris the world. The European Council shares the same position 2 Michael WEINER Partner, Dechert, New York as France and Germany regarding the There is currently a move towards more interaction between EU industrial and transversality. This obligation to start taking a 2 Carol XUEREF Board director Strategic committees Eiffage / Ipsen, Paris competition policies. In December 2018, it broader view with respect to any transaction stressed that the EU needs to adapt to today’s takes place within companies. That requires 3 Pascal BELMIN Head of EU Regulatory Affairs, Airbus Group, Brussels challenges, develop a strong industrial policy explaining to the board, when approaching a and ensure consistency across the Commission potential transaction, that there will be a 4 Clara INGEN-HOUSZ Chief Compliance competition law analysis. Officer Head of Legal, Saint-Gobain, Paris with it. That must be worked upon in a transversal and consistent manner. Decisions 5 Susan HINCHLIFFE Global Executive SUSAN HINCHLIFFE Counsel General Electric, London are taken by a college of commissioners and From the perspective of the user, there is an not by DG COMP alone. The new Commission’s important lack of clarity. Many agencies already structure is reflecting that: President U. Von take account of industrial policies, which make der Leyen insists on a “geopolitical things even more complex. Commission”. M. Vestager’s portfolio is not a purely competition one: it integrates digital As for industrial policy, countries must be and long-term industrial strategy. careful what they wish for. Today the debate focuses on the creation of national champions, CLARA INGEN-HOUSZ but in a decade the industrial policy might be completely different. Putting against one another industrial and competition policies is a very European way Bilateral discussion – Brexit and antitrust: The of describing the issues. It is a recent debate way forward without the UK at the table? What to some extent, with issues emerging under should companies expect?

11 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 1 Alec BURNSIDE Partner, Dechert, Brussels

2 Sir Jonathan FAULL Chair of European Public Affairs Brunswick Group, Brussels

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BILATERAL DISCUSSION – BREXIT AND ANTITRUST: THE WAY FORWARD WITHOUT THE UK AT THE TABLE? WHAT SHOULD COMPANIES EXPECT?

ALEC BURNSIDE If the Withdrawal Agreement contains more than provisions on tariffs and goods, on the EU’s side the ratification process will require the approval ritish membership will end automatically at the expiry of the of national parliaments and, in the case of Belgium, the regional parliaments Art 50 process, even if no Withdrawal Agreement has been as well. Something as complex as a fully-fledged new relationship is B concluded. The present end date for that process is 31 January 2020. unlikely to be achieved within a few months. What is possible is a quick The proposed Agreement needs to be approved by the UK Parliament and the European Parliament. It would for antitrust purposes de facto EU-competence only tariff agreement, but it would not solve questions retain the UK as an EU member until the end of a transitional period, until on crucial economic aspects. the end of 2020, and sets out rules for jurisdiction over cases that are As for the debate on the future of competition policy and the role of pending at that moment. In the absence of a Withdrawal Agreement, the industrial policy, there has been a rather significant British influence. The EU UK would leave at the end of January 2020 without any such explicit Merger Regulation was a compromise between the various national views. rules, meaning that one has to work from first principles. The CMA has Its words can be interpreted in different ways, depending on the policy been active in counselling the antitrust community in this context. priorities of the moment. What will the EU be like without the UK? How There is also a proposed Political Declaration regarding a longer term distinctive was the voice of the UK, and how will its absence from future trading relationship. One key element to retaining open access between discussions affect the EU? the EU and the UK is the guarantee of a certain level playing field. However, As for State aid, it is part of competition policy but has even more legitimately as in many other fields, Prime Minister Johnson seems to favour freedom recourse to other policy considerations. There is a clear possibility that for the UK to diverge, including in relation to state aid control and the rules will differ between the UK and the EU. There will probably be public procurement. discussion mechanisms without a common legal and judicial system.

SIR JONATHAN FAULL The EU has taken the position of asking the British first to decide what Concerning the upcoming general elections in the UK, there is uncertainty they want. However, they are still struggling to build a position. The debate on who will form the next Government, especially in the case of a is going to be even more complex when each Member State has to reflect hung Parliament. on its future relationship with post-Brexit UK.

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 12 PRESS REPORTS

MERGER JUDICIAL REVIEW: IS IT REALLY WORTH IT?

INTERVIEW WITH EUGÈNE BUTTIGIEG (JUDGE, GENERAL COURT OF THE EUROPEAN UNION) BY LAURENCE BARY (NATIONAL PARTNER, DECHERT)*

> Concurrences Review

ow many appeals against merger control by the parties, be they of a legal, economic or on the Commission a certain degree of discretion, decisions does the General Court review technical nature. especially with respect to assessments of an each year? How has the trend evolved in economic nature, and that the courts must take H Parties may in support of their arguments produce the past ten years? And how do you explain that account of that margin of discretion when reviewing as evidence the opinions or reports of specialists evolution, if any? the Commission’s assessments. or economists and the Court may, during the hearing, The General Court receives an average of five examine these experts (Statute, Article 32). This is However, the Court specified that this margin of applications a year challenging Commission merger helpful to enable the judges to understand better discretion with regard to economic matters does decisions. In the past ten years, there were years the facts of the case and the technical and not mean that the Union Courts must refrain from when the Court received from one to three applica- economic context. reviewing the Commission’s interpretation of infor- tions annually and other years when it received up mation of an economic nature. But, where necessary, the Court may itself appoint to seven or eight applications annually but no an independent expert. The Statute in particular trend can be perceived as the numbers According to the Tetra Laval formula, their task is Article 25 empowers the Court of Justice to ‘at any have been fluctuating. threefold: they must check whether the evidence time entrust any individual, body, authority, committee relied on is factually accurate, reliable and consistent, Likewise, every year as an average, the General or other organisation it chooses with the task of whether all relevant facts have been collected and Court delivers judgment in five merger cases though giving an expert opinion’ and likewise the General whether this evidence is sufficiently robust to there were years when up to seven or eight cases Court’s Rules of Procedure (Articles 91 and 96) substantiate the legal conclusions which the were completed and other years when only one enable the Court to commission an expert’s report. administration draws from it. This was recently case or none were completed. This would then be served on the parties, and their reiterated in another merger case, Case T-370/17 KPN representatives and the judges may put questions BV (para 60). Again, no particular trend can be identified as the to the expert. length of proceedings varies according to the So this so-called ‘manifest error test’ does not imply So the facility already exists and the Court has at complexity of the case. Over the past ten years, the that the Union Courts should limit the intensity of times had recourse to it but I would say that as General Court has had an average of nine to ten their review; it simply implies that these Courts cases become more technically and economically merger cases pending before it every year. cannot substitute their own views to those of complex there may be scope for more frequent the administration. recourse to the aid of such independent expertise. Given the increasing level of complexity of merger Recent judgments show that in applying this analysis today, do you feel that courts are well As regards complex economic assessments, is standard the General Court has subjected the equipped to handle the judicial review of these the current standard sufficient or do you feel that Commission’s findings, even those involving complex decisions? Should judges be able to rely on the General Court should be able to exert more economic assessments, to rigorous scrutiny. It has independent experts – be they specialists of a control over the Commission’s findings – including to be admitted, though, that in comparison with the sector or economists, for instance – to support for example on the nature and scope of the review of cartel and abuse of dominance decisions them in their decision-making process, in particular commitments accepted by the Commission? penalising past conduct, in merger cases, where in highly technical areas? The current standard is the one set in Case C-12/03P the assessment is prospective and not retrospective In the exercise of its judicial review, the General Tetra Laval at para 39 where the Court of Justice and sanction-based, the burden and standard of Court considers carefully all the arguments submitted held that Article 2 of Regulation 139/2004 confers proof facing the Commission may be lower.

* The views and opinions expressed in this document do not necessarily represent those of the authors’ institution or clients.

13 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 INTERVIEW WITH ETIENNE CHANTREL (HEAD OF MERGERS UNIT, AUTORITÉ DE LA CONCURRENCE) BY MÉLANIE THILL-TAYARA (PARTNER, DECHERT)*

> Concurrences Review

he French Competition Authority is consid- can think of a company consolidating its dominant regard. We can also profit from international examples. ering the introduction of an ex-post control position with a string of small acquisition. Even it is After all, in the US an operation can be challenged T regime in France – on the model of what possible sometimes to use antitrust tools to control “ex-post”, with no time-limit, under the Clayton Act, exists in Sweden, for instance – in order to be able that type of behaviour, those tools are lengthy and and it does not appear to have stifled innovation to catch so-called killer acquisitions, in particular merger control would be swifter and more efficient. too much. in the digital sector. Isn’t there a risk that innovation A third type of operations one can think of consists may be stifled as a result, as the actual objective in acquisitions in a niche market, for example a local The prohibition of the Alstom/Siemens merger has of most start-up owners is to sell their company niche market or a small sectoral niche, that falls triggered a larger reflection in Europe about the to a major player? May such a reform not signifi- below our current thresholds and yet can have a aims of competition policy. Should merger control cantly increase the workload of the FCA – in big impact on some markets. take other objectives than protecting competition particular to identify the cases that would require into account? What should such objective be: an ex-post analysis – for an uncertain outcome? Once we’ve established that there is a loophole that needs to be closed, the question is how to close it. protecting employment such as in William Saurin There are many operations that impact the markets or industrial policy in creating a national or Euro- Any reform has its costs, and our preferred solution, and that we don’t control because of our current pean champion, other? establishing an “ex-post” regime in France in turnover-based thresholds. This is not in itself addition to the existing mandatory “ex-ante” one, I am a firm believer that we need to have one tool necessarily a problem: it is normal not to control is not without potential problems. We consider for one objective. Competition policy is effective everything (no net is perfect) and there is always a nonetheless that there are ways to alleviate these because it is impartial, neutral and technical. As soon trade-off between controlling too many operations, potential concerns and that the benefits to the public as you ask agencies to weigh public interest concerns, to the risk of imposing an unnecessary burden on interest far outweigh the costs. The nice point about whatever they are, against their usual objective of companies and agencies, and controlling too few. an “ex-post” regime is that it is a very targeted defending competition, their decision becomes less But we consider, and many regulators, academics solution, that targets only operations that pose a predictable and less neutral, since you ask them to and business representatives agree with that finding, problem because they challenge the competitive compare concerns of a very different nature. that current trends and evolutions in the economy dynamic of the market. It could be combined, as is have increased the proportion of significant opera- the case in Norway and as has been proposed for French law includes a provision for an intervention tions that are not controlled and that this justifies a the UK in the Furman report, with an obligation for by the minister for the economy. If you read carefully, change in our merger control regime. a small list of systemic companies to inform the it is nicely designed in the sense that it allows competition policy to care purely about competition. Everybody has in mind “killer acquisitions”, especially Autorité of all acquisitions. If other objectives need to be taken into account, in the digital sector. Indeed, there is an Intense policy Of course, there are potential drawbacks in terms another entity, the minister for the economy, has to of start-up buy-outs by certain players, particularly of legal uncertainty or lesser immediate financial do it. He can do it only on grounds other than major digital groups, and a strong suspicion that benefits for some startups founders, but there are competition, as explicitly stated in the law. This some companies (e.g. digital or pharmaceutical ways to design the system to minimize those, for works as long as ministerial intervention remains companies) aim to capture the innovation of a example with a rather short timeframe when it could exceptional, as has been the case so far, with only potential competitor to extinguish this competition. be possible to evoke a case. We have conducted one intervention in 10 years. This constitutes a threat to the competitive dynamics two public consultations on the matter, of markets, innovation and growth. But there are in 2017 and 2018, and many technical suggestions As for industrial policy, this is a revival of a very old other types of operations that are problematic! One have been made by various stakeholders in that debate: is merger control too strict? Is it a handicap

* The views and opinions expressed in this document do not necessarily represent those of the authors’ institution or clients.

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 14 for industrial policy in a globalized world? It is striking trade policy than for competition policy, and I fully Springer, which owns, in particular, the online property by the way that Europe revives this age-old debate agree with that conclusion. portal Seloger.com, notified the Autorité de la at a time when the US debate whether or not their concurrence of its plan to acquire the French company merger control has been too lax, with a suspicion Merger control is increasingly technical. In digital Concept Multimédia, which itself publishes the portal that is has and that this has hindered productivity sectors, in particular, it has become very difficult "logic-immo.com" and the property advertising to accurately predict the effects of a concentration. in the US. magazines “Logic-Immo” and “Lux Résidence”. How is the French Competition Authority adapting The way this debate is usually framed in France, to these new challenges? Do you think the FCA The Autorité had to, for the first time, issue a people take for granted that we need national (or should have the possibility to rely on independent decision on a merger involving two online platforms. European) champions as an answer to global experts (specialists of a specific sector for instance) To do so, it had to take into account network cross- competition. But this is not a given! The business to support its decision-making process? effects and took an interest in the importance of literature, and innovation economics, have debated Our concepts are sound and flexible enough to take data in this transaction. We based our review on a for years the relationship between size and produc- into account the effects of new business models broad consultation of all of the professionals in the tivity, and between competition, productivity and and developments. On a practical ground, though, sector (portals, estate agents, and trade associations), innovation. Even though there is no definite answer it is certain that we need to be even more forward- on the analysis of numerous internal documents to that question, it is at least certain that bigger is looking and to take better account of technological and, for the first time, on the results of an online not necessarily better, and that many big mergers developments. This is why the Autorité has been a questionnaire conducted by the Autorité on more produce no synergies and fail, even from the point driving force in studying new developments, parti- than 30,000 estate agencies. Based on our exami- of view of the firms that merge. Big companies are cularly in the digital sector, with sectoral inquiries, nation, we considered that the transaction, which not necessarily more innovative and productive, and e.g. on online advertising, big data or recently on admittedly reinforces SeLoger market share, will not markets and countries with less competition tend algorithms (a joint work with our colleagues at to be less competitive. the BKA). significantly harm competition. Even if we admit that we have a problem with In merger control per se, our recent case “Se Loger/ In this decision, we have to update our usual tools, international competition, is competition policy the Logic Immo” is a nice example of how we constantly building on theoretical work that has been conducted right tool? A recent report by the Conseil d’analyse try to adapt to ever more complex and technical over the last few years to better analyze these économique concluded that it is more a matter for cases. On 24 July 2017, the German group Axel digital companies.

KILLER ACQUISITIONS: SHOULD THEY BE PREVENTED?

INTERVIEW WITH CAROL XUEREF (EIFFAGE / IPSEN) BY MÉLANIE THILL-TAYARA (PARTNER, DECHERT)*

> Concurrences Review

here is currently a strong call for the Euro- This is not a new debate; amongst others there recovery and industrial policy has reduced such pean Commission to take into account, have been research papers in the 1990s, Mrs Kroes’ growth rates (at least if one looks at Japan in the when reviewing a merger, industrial policy T statements in 2006 around global champions and past with its targeting of certain industries through concerns in its decisions. Yet, in Member States of course more recent moves by a number of that have a mechanism allowing the Government protection, tax breaks and loans). That being said, countries involving foreign investment control, to override a competition authority’s decision (e.g. the traditional discussion of competition policy vs screening and national security considerations in France or Germany), such mechanism has in fact industrial policy is now more difficult in today’s world the context of trade tensions. only rarely been used, suggesting that a few as technology, globalisation and protectionism are transactions actually benefit (or suffer as the case Industrial and competition policies are usually seen vying for attention and support. may be) from a change. With this in mind, is the as contradictory or conflicting opposites, although current debate worth adapting European merger Nevertheless, it would not be a wise move to deviate control rules or should objectivity, impartiality and under certain circumstances and depending on from competition as the fundamental model; legal certainty continue to prevail? Is there a middle content they are compatible (for example if structural path that could be found to satisfy all the interests reform is the joint objective). Historically competition competition policy is politically independent and at stake? policy has been behind rapid economic growth or applies without discrimination to all.

* The views and opinions expressed in this document do not necessarily represent those of the authors’ institution or clients.

15 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 Industrial policy can be efficient when there is a or higher prices. An alternative criterion is take into account the consumer privacy and choice, market failure or when used to foster innovation total welfare. personal data protection vs. anticompetitive effects and applied to targeted industries. Competition of the control of personal data by dominant The difference between total and consumer welfare policy can select industries that grow by allocating platforms as well as switching costs. Reforms of is basically the producer’s profits. Total welfare may resources efficiently (higher productivity, higher privacy and competition policy could also be increase in a situation where consumer welfare rewards if no market failure). Where there is little considered in light of the link between market decreases if the profits of a producer increase more growth, competition policy is vital. It can however share and the control of data. than the decrease in consumer welfare. This surplus be improved by intelligent industrial policy taking in the digitalised economy is very different from into account globalisation enforced changes. You are a board member of two prestigious that in past traditional economies and as a result, companies. Are the consequences of a contem- Can there be a middle ground on the basis of I do not think that consumer welfare can be the plated acquisition or merger on jobs, environment, interaction between competition policy and only standard for competition enforcement in the sustainability etc. A concern at board level when industrial policy without causing a contradiction or digitalised economy. reviewing the potential of an operation? If yes, how conflict? The answer is probably yes,if there is the A report on competition policy for the digital era is it assessed? If no, do you think the recent aim of introducing industrial policies which can presented on 4th April analysed possible changes developments in the aftermath of the Alstom/ remove those market imperfections which tend to to competition law in order to ensure innovation in Siemens case would change their approach? impose constraints on investments in innovation favour of consumers as a result of the ways in and growth and which also encourage reallocation Obviously each operation is different (dimension, which markets now function in the digital era and towards new growth enhancing activities. Put activity) and a board will reach its decision depen- economy. Currently, market abuse is easier inter another way, if markets are inherently competitive, ding on the strategic importance of the operation alia because of extreme returns to scale (the big state or regional industrial policy can be more under consideration. However, as a general rule players get bigger be they from the US or China); and subject to the confidentiality and constraints effective if it provides assistance to enter and scale network externalities (a better service is no longer in sharing information under competition law, a up markets. A middle ground could also be that enough) and the role of data as an essential board will indeed normally want to understand the where industrial policies are not selective and contribution to online services. In the age of deal, look at the global outcome of due diligence, specific to a particular company, but sector wide, platforms, consumer welfare needs to be re-thought have the possibility to propose a project reorgani- sustainable and without discrimination. Market as harm to users cannot be accurately measured sation, and discuss upfront concerns about all forces and competitive process should continue and potentially abusive strategies of dominant topics (including, but not limited to, jobs, environ- to determine leadership. platforms to reduce competitive pressure can be ment, sustainability) before approving the operation put in place or maintained even if there are no As already indicated, with globalisation, we are and authorising the company to go before enfor- clearly established consumer benefits. Further, currently facing industrial policies of other jurisdic- cement agencies with the aim of obtaining tran- market definition is currently the approach for tions towards specific firms that compete worldwide saction security for the deal. Purchasers (and as competition law; consideration should be given to and such policies can distort competition. Certain a result, boards) are generally increasingly counterbalancing this by theories of harm and authors such as Bruegel suggest that a form of requesting deal security. In practice, that means middle path could consist of, for example, deve- anti-competitive strategies as well as specific obligations on data sharing, access and restricted that all risks, their various facettes and the relevant loping an EU platform to react against distortionary importance thereof are presented and discussed subsidies, state aids etc. Open dialogue resulting MFN clauses. « Killer acquisitions » are not currently caught by merger control thresholds and as a result at board level by the management during the in specific binding agreements to balance the process of authorisation management before benefits/obligations theorem and in particular with consumers are not benefitting from the competitive potential of young innovative companies. proceeding with an acquisition or merger. In parti- a view to regulating market entry by sectors or cular, a structured board will look (inter alia) into companies benefiting from jurisdictional subsidies Faced with these challenges, there is a dichotomy the following topics: could be pursued complemented by the ability to between what people are beginning to express put on the table well defined concerns with they want and what the competition framework - ability to give a « go/no go » in light of the information exchanges on known cases of state can currently provide. Technological development proposals being presented and the ability to remedy aid. Others say that (intra EU) the EU Competiti- has changed the nature of markets and business through contractually protective clauses in the case veness Council could have input on merger policy models and these new realities and challenges of a « go »; and an Advisory Committee in Merger Control need to be taken into account by competition law - ability to integrate an acquisition or merger; could provide input on industrial competitiveness and different tools and in particular with regard to when considering merger enforcement. Other the weight of consumer welfare as a standard. - acceptability of customary target practices even topics such as screening of inward investment and Certain scholars, such as Khan, notes that the in light of geographical location and related risks reciprocity in relation to public procurement rules consumer welfare approach fails to detect anti- - reputational risks could be considered. In any event, what the market competitive harm in the digital economy and and companies require is consistency and predic- suggests that authorities should adopt a process- No company or board wants a long and costly tability. Changes setting up a middle path should based approach to platforms which would focus process that can fall through, nor the reputational not give rise to additional burdensome processes on entry barriers, conflicts of interest, gatekeepers, risk involved with the outcome of such considera- to traditional competition based reviews. the use and control of data and the dynamics of tions. The likelihood of being able to execute bargaining power. Svend Albaek suggests that seamlessly an operation with limited risks (should In a speech given on 4 September 2019, predatory pricing practices (an ongoing strategic it have to be aborted or is brought into the spotlight Margrethe Vestager, Vice President and element of dominant platforms to grow their as a result of repeated difficulties) should be part Commissioner in charge of competition, markets) are not properly covered by consumer of a board’s strategic control. Certain companies recalled that competition law aims at welfare. As a result, in the short to medium term, will have a standard practice of closing down an protecting consumers. In a fast-moving and prices decrease until competition disappears. Price apparently strategic acquisition/merger (if there are increasingly digitalised economy, where the decreases look like a consumer benefit and, thus, non-compliant or risk prone practices) before European Union is caught between the US are not often scrutinised. Under the consumer bringing it to the board. This is particularly true in and China, is consumer welfare still (i) the welfare standard it is difficult to carry out price the case of a merger or joint venture. only and (ii) the right standard for competition analyses of platforms due to rapid price fluctuations law enforcement? and personalised pricing put easily in place with Consumer welfare is the difference between what the use of algorithms, not to mention that in many consumers would have been willing to pay. From cases services are used for « free » (against the an antitrust perspective, it consists in measuring use of personal data). Criteria retained under benefits or harm to consumers in the form of lower consumer welfare could be changed in order to

* The views and opinions expressed in this document do not necessarily represent those of the authors’ institution or clients.

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 16 FRENCH AGENCY LOOKS TO SWEDISH EX-POST SYSTEM IN NEW MERGER CONTROL REGIME

JACOB PARRY > PaRR, 6 December 2019

weden’s ex-post system for merger control However, Chantrel said that idea behind the changes (MIC) which allows it to examine the market and is a good model for France’s future regime, to the merger review system is to not rely on ex-post detect transactions that were not notified. S an official from the French agency said in reviews, and to only allow for such reviews in certain Paris today (6 December). circumstances where necessary. As the UK has a voluntary merger control regime, the CMA’s MIC has dedicated staff responsible for A system of ex-post notification which allows up to He said that the French authority looked to Sweden’s monitoring non-notified merger activity and liaising two years for the agency to examine a merger is a system after examining multiple different regimes, with other competition authorities. The mergers “good starting point” for the French government’s from Germany’s and Austria’s lowered thresholds reconsideration of its merger control rules, said to Norway’s obligation on ‘systematic companies’ intelligence staff review different sources of infor- Etienne Chantrel, head of the mergers unit at the to notify sub-threshold transactions. mation on mergers and present potential candidates Autorité de la Concurrence, speaking at Concur- for the review committee, which meets weekly and rences’ Global Merger Control Conference. “In our view it is the best because it does not add is chaired by a Director of Mergers who oversees too many cases. It gives us a safety net of what Sweden’s two-year cut-off for ex-post reviews of the CMA’s merger intelligence function. A Phase I needs to be controlled,” said Chantrel. mergers is a “good starting point” for the French review is opened in relevant merger situations. government’s retooling of its merger control system, He noted that Hungary, Latvia and Lithuania also said Chantrel. Flagging that his views were personal, have ex-post review systems. “I’d say its worth having a small unit to scrutinise Chantrel emphasised that these matters “need to transactions, like the MIC,” said Chantrel. be discussed at the political level”. “We think there are many types of acquisitions – not just in pharmaceuticals – that have an impact on Chantrel said that the system would also rely on Chantrel said that Sweden’s system, which allows the market that our thresholds and the EU’s do not complaints, while acknowledging the need to take up to two years for the agency to review a merger catch,” said Chantrel. them sometimes “with a grain of salt”, as the agency after completion, was a good balance between the UK regime of four months – after consummation in Chantrel said that the Autorité could also benefit already receives complaints on sub-threshold the case of a non-notified merger – and the US’s from a system similar to the Competition and Markets transactions and as complainants have a strong absence of a cut-off date. Authority’s (CMA) Merger Intelligence Committee understanding of the market.

GC JUSTICE SAYS CHAMBER SPECIALISATION FOR COMPETITION CASES POSSIBLE

JACOB PARRY > PaRR, 6 December 2019

he EU General Court (GC) could see some and four of which specialise in cases involving civil The EP and Council decided in 2015 that in order of its ten chambers specialise in competition service cases. The chambers that specialise in these to clear the backlog of cases before the GC, it was T and state aid cases as it has done for cases types of cases can also hear other types of cases. best to “consolidate and beef up” the GC as opposed involving trademarks and the civil service, a GC to creating more courts. Prior to its abolition in 2016, judge said in Paris today (6 December). Buttigieg said that extending the system to have the CST was the first court of instance in a three-tier chambers specialised in competition could be done system whereby parties could appeal on to the GC The GC’s system of specialised chambers for “if the experiment works” for the current set of and then the European Court of Justice. Buttigieg trademark and civil service cases could one day be specialised chambers. noted that such a system was envisaged by the trea- extended to competition cases, said Eugene ties. Buttigieg, judge at the GC, speaking at Concurrences’ The trend within the EU is towards specialised Global Merger Control Conference. chambers within the GC and not to add a separate Buttigieg said that one obstacle to specialisation is tribunal, like the UK’s Competition Appeal Tribunal that rotation of justices amongst the GC’s chambers “Maybe we will have chambers specialised in more (CAT), said Buttigieg. He noted that the European every three years which would limit how long a economically complex cases, such as state aid, Parliament (EP) and Council of the EU have moved specialised judge could serve. competition and dumping,” said Buttigieg, flagging away from the system of specialised tribunals in that his remarks were his personal views. Moreover, as judges are appointed for six-year terms, recent years since they agreed to double the number and by nationality rather than specialisation, this The current GC is composed of ten chambers – six of GC judges and dissolved the Civil Service Tribunal could present additional challenges to implementing of which specialise in cases involving trademarks (CST) in 2016. a such a specialist system, said Buttigieg.

17 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 FTC FACES LACK OF COMMUNICATIONS, CONSUMER BENEFIT CHALLENGES IN ASSESSING DIGITAL MERGERS

JACOB PARRY > PaRR, 6 December 2019

he US Federal Trade Commission (FTC) communications and strategic documents in the The FTC’s existing set of tools for examining such has the basic set of tools that it needs same way as traditional companies, said Elizabeth concentrations is strong and flexible, however, to assess digital sector transactions but noted Kraus. T Kraus, deputy director for international antitrust faces challenges in assessing consumer benefits Kraus said that when it comes to determining and attaining required evidence, an agency at the FTC at a Concurrences’ Global Mergers whether or not the target company is likely to be official said in Paris today (6 December). Conference in Paris. a horizontal competitor on some feasible timeline, The FTC faces challenges in assessing concen- important evidence can be “tricky to come by”. Kraus said that a second challenge comes in trations amongst digital sector companies, in She said that the lack of documentation – startups particular when it examines acquisitions of nascent estimating the consumer benefit, which can be might not keep traditional documents like strategic competitors, as start-ups often do not retain particularly challenging in dynamic markets. plans – made it challenging to find such evidence.

EC MERGER DECISION COURT CHALLENGES LAST MORE THAN THREE YEARS – GC JUDGE

JACOB PARRY > PaRR, 11 December 2019

he average length of a challenge to a decisions, and in some years this figure can be seven months, as in the case of the challenge European Commission (EC) merger as low as one. The new challenges join a backlog to the EC’s decision in 2004 to prohibit the T control decision before the EU General of cases yet to be reviewed and cases that are proposed acquisition of Gás de Portugal (GDP) Court (GC) is little more than three years currently under review, he noted. The GC has on by Energias de Portugal (EDP) and ENI. (39 months), according to figures shared by a average nine or 10 pending merger cases at GC judge. different stages of proceedings, said Buttigieg. This procedure can also take as long as 21 months, like in the case of Impala’s action The duration of challenges has fallen in recent Buttigieg said that proceedings before the GC for annulment against an EC decision, also years, compared with the period are lengthy because they are factually and legally from 2004, to allow a merger between Bertels- from 2007 to 2013, thanks to a greater use of complex cases that can require up to two rounds mann AG and Sony. the expedited procedure, said GC judge Eugène of proceedings. He noted that requests from Buttigieg, in remarks at a Concurrences Global intervening parties and disputes over the confi- The expedited procedure has been used around Merger Control Conference in Paris last week. dentiality of information can delay proceedings, a dozen times, said Buttigieg. a trend also flagged this week by GC president Buttigieg said that the length of proceedings All decisions and procedural conduct of the EC Marc van der Woude, as reported. continues to be a challenge and that the GC are subject to review by the GC and ultimately seeks to reduce the time it takes to process The expedited procedure, which abbreviates the by the European Court of Justice (ECJ). merger control cases. written process, can shorten proceedings The companies or other parties demonstrating Buttigieg said that the GC receives around five significantly down to 10 months, said Buttigieg. an interest can appeal an EC merger decision applications per year challenging EC merger He noted that the process can be as fast as within two months of its publication.

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 18 SINGAPORE APPEAL BOARD TO MULL UBER CHALLENGE OF CCCS MERGER DECISION NEXT APRIL

JACOB PARRY, FRENY PATEL > PaRR, 16 December 2019

ingapore’s Competition Appeal Board confidential information from responses and McCurdy said that Uber’s market share would (CAB) will hear Uber Technologies’ feedback from third parties. be lower if street-hailing cabs were included in appeal against a merger decision next the market definition. S McCurdy said the CAB disagreed and granted April, the global ride hailing giant’s director of Uber access to the documents. Uber is competition law said in Paris recently Former CCCS Chief Executive Han Li Toh appealing the CCCS’ merger decision on (6 December). explained that the authority did not take into procedural and substantive grounds related to account street hailing cabs since ride-hailing The Singaporean authority imposed an constraints on the merging parties, he said. cabs cannot pick passengers up from the street SGD 13,001,702 (USD 9.52m) fine on Grab The US e-hailing giant is challenging the CCCS unless they have pre-booked through the app. and Uber in September 2018 after concluding decision on procedural grounds related to how that the companies’ Southeast Asia-related Speaking at a conference earlier this year, Toh the investigation was handled, and such deal led to a substantial lessening of competi- information and evidence gathering by the said that there needs to be a “reasonable fleet tion in the provision of ride-hailing platform CCCS has never previously been challenged, size to reduce wait time” if new players were services in the city-state. a person familiar with the issue told PaRR. to succeed, commenting on the existence of Additional to the financial penalties, the regulator The CCCS declined to comment in relation to barriers to entry and expansion in the market. asked the companies to lessen the impact of the withheld documents and the grounds “Driver acquisition and not data was the critical the transaction on drivers and riders, and to of appeal. piece in the Uber/Grab deal,” he said. open up the market and level the playing field McCurdy said that the CAB is expected to for new players. Second, the CCCS’ failure to engage the parties review how to apply the voluntary merger regime in discussions on commitments was a breach On 20 October 2018, Uber Singapore Techno- when parties make a good faith assessment of of the parties’ legitimate expectations, according logy Pte Ltd filed an appeal against the what the market is and its impact on compe- to Uber’s challenge. Uber said that the autho- Competition and Consumer Commission of tition. rity refused to accept voluntary commitments Singapore’s (CCCS) decision, asking the CAB The CCCS’ reliance on the fact that parties did offered by merger parties, though these were to set it aside, as reported. In 2018 when Uber not formally notify the transaction prior to substantially similar to its directions. sold its Southeast Asian business to regional completion, in support of their refusal to accept rival Grab in consideration of a 27.5% stake in commitments, is entirely misplaced, Uber stated Third, Uber claims that the CCCS based its the latter, a number of ASEAN competition in the notice, adding that it amounts to an error decision on evidence withheld from the parties, authorities including CCCS raised concerns of law given that the Competition Act allows which Uber alleged is a breach of the rules of that the deal would result in substantial lesse- merger parties to offer commitments post- natural justice. ning of competition. closing. Fourth, Uber claims the CCCS erred in The oral hearing will take place in April 2020, The CCCS declined to comment, saying as the finding intentional or negligent infringement. Uber’s Greg McCurdy said during a Concur- appeal proceedings are still ongoing, “we are rences merger forum in the French capital. And fifth, it erred in calculating the financial of the view that it is not proper for CCCS (which penalty, claims Uber, alleging this was based He said that the year and half interim between is a party to the appeal proceedings) to answer on an incorrect application of the notion of the decision and the hearing resulted from Uber the questions posed or provide comments on turnover figure as it claims the CCCS failed originally being denied access to file. the alleged issues raised by Uber at this point”. to take into account incentives and other Uber had asked the CAB to order the CCCS Uber challenges CCCS on five grounds contra revenue incurred, and the fact that to disclose certain documents used by the Uber had not made a profit since it entered In the notice of appeal, seen by PaRR, Uber authority in coming to its decision which it Singapore in 2013. Since inception till last has listed five grounds for appeal. First, the required to prepare its appeal. CCCS erred in finding the transaction lessened year when it sold its Southeast Asian The documents included a study of the street- competition considering Uber had given thoughts business to Grab, Uber incurred a total loss hailing and ride-hailing trips, data provided by to exit the market and new players including of USD 700m across the Southeast Asian the Land Transport Authority on trips and Go-Jek had indicated plans to enter the market, market because of the incentives and redacted statistics of Private Hire Car Driver's especially given the narrow market definition promotions offered to drivers and riders, Vocational Licence (PDVL) holders and the which did not include street-hailing cabs. according to the challenge.

19 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 VIDEOS

During the conference some of the speakers summarised their speeches in short videos. These can be watched at concurrences.com (Conferences > 6 December 2019).

Pascal BELMIN Alec BURNSIDE Eugène BUTTIGIEG Head of EU Regulatory Affairs Partner Judge, General Court of the European Union Airbus Group, Brussels Dechert, Brussels CJEU, Luxembourg

Luís CAMPOS Mike COWIE Sir Jonathan FAULL Associate Director Partner Chair of European Public Affairs Frontier Economics Paris Dechert, Washington D.C. Brunswick Group, Brussels

François GARNIER Susan HINCHLIFFE Stéphane HOYNCK Executive Vice President & Group General Global Executive Counsel Rapporteur public Counsel, Ipsen, Paris General Electric, London Conseil d’Etat, Paris

Clara INGEN-HOUSZ John MCINNES Clemens YORK Chief Compliance Officer Litigation Director Partner Head of Legal, Saint Gobain, Paris CMA, London Dechert, Frankfurt

7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019 20 TESTIMONIALS

Excellent conference, with a broad set of very hot topics, relevant and complementary angles and lively debates. “ PASCAL BELMIN, Head of EU Regulatory Affairs, Airbus Group

Because this coincides with the OECD competition law meetings, this event attracts leaders from multiple competition enforcement agencies. “ MIKE COWIE, Partner, Dechert

Cutting edge policy issues and contemporary practice concerns were addressed with depth and from differing and opposing points of view by quality speakers. A great opportunity to stay abreast of issues for future planning and advice. “

PATRICK NOONAN, Founder, PJNoonan - Former Secretary General, Nexans

21 7TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE - PARIS, 6 DECEMBER 2019

Concurrences REVUE DES DROITS DE LA CONCURRENCE | COMPETITION LAW REVIEW

Gun Jumping in Merger Control A Jurisdictional Guide

Catriona Hatton - Yves Comtois - Andrea Hamilton International Bar Association, Mergers Working Group of the Antitrust Section

Foreword by Richard Whish

www.concurrences.com [email protected]