4TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE MARKETS, REMEDIES AND SURVIVAL: CUTTING EDGE ISSUES IN GLOBAL MERGER CONTROL 2 December 2016 I Paris ATTENDEES 54 CORPORATIONS 10 ENFORCEMENT AGENCIES Air Liquide IBM Autorité de la concurrence Airbus Group Imerys Amundi ING Bundeskartellamt Ingen Apple Chilean Ministry of Economy Arkema Ipsen Competition and Markets Authority Atos La Poste LCL Banque Privée Avril DGCCRF Lefebvre Sarrut Axa Malakoff Mederic European Commission, DG COMP BNP Paribas Microsoft Bolloré Transports Federal Trade Commission MSD et Logistiques Newell Brands Fiscalía nacional económica Cargill Onxeo CIT Group International Competition Network Orange Computer & Communications Industry Association Paristransporter OECD Pierre Fabre Médicament Control Risks Qualcomm Danone Rothschild Global Advisory EDF SNCF Mobilités ENGIE Suez EPPA Tarkett Essilor Thales Eutelsat Total General Electric Trigano Groupe Lagardère Unilever Groupe Seche Veolia Groupe Suez Vivescia Groupon Voyages-sncf.com 1 4TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE 2 DECEMBER 2016 - PARIS PROGRAM 08.00 Registration & Breakfast 10 ENFORCEMENT AGENCIES 10.15 REMEDIES: CAN YOU DISARM THE 08.30 WELCOME & INTRODUCTORY REMARKS HARM? DIVESTITURES, UP-FRONT BUYERS… Mélanie THILL-TAYARA I Partner, Dechert, Paris Josep CARPI-BADIA I Head of Merger Case Support & Policy Unit, Michael L. WEINER | Partner, Dechert, New York DG COMP, Brussels Andreas BARDONG I Rapporteur, Financial services division, 08.45 OPENING KEYNOTE SPEECH Bundeskartellamt, Bonn Isabelle DE SILVA I Chairperson, Autorité de la concurrence, Paris Sheldon MILLS I Senior Director of Mergers, Competition and Markets Authority, London Jeremie SNEESSENS I Partner, McKinsey & Company, Brussels 09.15 ON-LINE MARKET MERGERS: VIEWS FROM BOTH SIDES Antoni VASSILEFF I Partner, Advolis, Brussels OF THE ATLANTIC Hans Jürgen MEYER-LINDEMANN I Partner, Dechert, Frankfurt/Brussels Liz KRAUS I Deputy Director for International Antitrust, Federal Trade Commission, Washington, D.C. Moderators: Paul T. DENIS | Partner, Dechert, Washington D.C. Andreas BARDONG I Rapporteur, Financial services division, Bundeskartellamt, Bonn 11.15 Coffee Break Sheldon MILLS I Senior Director of Mergers, Competition and Markets Authority, London 11.30 IN-HOUSE COUNSELS SHOWCASE François GARNIER I Executive Vice-President General SESSION: HOW WAS YOUR MERGER Counsel, Ipsen, Paris EXPERIENCE? MULTIPLE FILINGS, Moderator: Michael L. WEINER | Partner, Dechert, New York GUN JUMPING, SUBTANTIAL ISSUES... Alexander LUNSHOF I Chief Legal Officer, Essilor, Paris Susan HINCHLIFFE I Global Executive Counsel – Competition Law & Policy, General Electric, London Anne-Sophie POIRIER I Head of Legal – Mergers & Acquisitions, Atos, Paris Gabriel LLUCH I General Counsel Antitrust, Orange, Paris Moderator: Mélanie THILL-TAYARA | Partner, Dechert, Paris 12.30 CLOSING KEYNOTE SPEECH: MERGERS IN THE BREXIT ERA William E. KOVACIC I Non-Executive Director, Competition and Markets Authority, London 13.00 Lunch 4TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE 2 DECEMBER 2016 - PARIS 2 WELCOME REMARKS MÉLANIE THILL-TAYARA élanie THILL-TAYARA introduced the conference to identify what it called an “enforcement gap”. This evolution led focussing on two major aspects of global merger control to a global reflexion, initiated in 2014 with the Commission’s White M which have recently been in the spotlight, both in Europe Paper and which is still on-going, on the necessity to revamp the and in the United States. European merger control thresholds in order to review mergers Firstly, new trends emerge with the development of the digital which, although they do not meet the current thresholds, may economy and online markets, which have an effect on competition nonetheless have a significant impact on European markets. dynamics in a given market. The impact of online markets has Ms. Thill-Tayara finally insisted on the growing importance of notably been taken into account by the French Competition remedies, which have become more frequently used to secure Authority in its recent decision, whereby it considered, Fnac/Darty clearance of a transaction. They are also a challenge for companies for the first time in France, that online sales and classic brick when it comes to ensuring and monitoring their effective and mortar sales belong to the same product market. implementation. It is therefore highly recommended that they Secondly, some recent mergers, notably in the digital economy are well prepared, with, as the case maybe, the early involvement or pharmaceutical sectors, have led the European Commission of consultants and economists. 3 4TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE 2 DECEMBER 2016 - PARIS KEYNOTE SPEECH ISABELLE DE SILVA sabelle DE SILVA first stated that her main priority for merger control was that the strongest competition came from the online economy is to be reactive and to adapt to a global economy. and not from brick and mortar competitors. It had been rejected in I The changes brought by the rise of the online economy has led many an earlier case but here econometrics and other studies of consumer enforcers to be creative in their procedure and decision making. She behaviour revealed that consumer services are very close in brick and reminded that the French NCA intervenes only when necessary and mortar and online shops. The challenge was then to develop a new shows restraint in dealing with the cases where it does intervene. Remedies way to appreciate market share on a local market taking into account are required in only 4% of the overall cases handled by the Authority. the market share of online sales. The impact was decisive and the 40% of all mergers are handled within the framework of simplified result was that Fnac had to divert only six shops. This approach might notification, i.e. in less than three weeks, to avoid unnecessary delays. be used again in relation to other markets. Ms. de Silva then explained more precisely how the French NCA The President of the French Competition Authority also discussed adapts to market changes by presenting the recent Fnac/Darty case. the issue of remedies, stressing the need to be pragmatic and adapt The problem in that instance was that on many local markets the remedies to the situation of the market. Divestitures are preferred combined market shares of the parties exceeded 50%. Fnac’s argument because they are clear-cut, final and easy to monitor. However sometimes the Authority has to be inventive and behavioural commitments are the only solution. The issue of compliance is also central, as is most clearly illustrated by gun jumping cases. The Authority sometimes has to intervene to ensure that everybody follow the rules, as this year in the Altice/SFR case. The fine was very high for several reasons: it was a very large merger for the sector, many distinct actions were parts of the gun jumping, all happened during the standstill period and Altice behaved in the same way in two separate but simultaneous merger cases. More generally, commitments have to be adapted on a wider time basis. For instance, a consultation was launched to see if it was necessary to impose for five more years the commitments issued when theCanal Plus merger was cleared, or adapt them to a changing market. Finally, Ms. de Silva insisted on the international dimension of mergers. It means complexity for companies that are confronted to different procedures, delays and, in the worst cases, conflicting decisions. Enforcers try to avoid that, but as regard to substance the same rules do not apply everywhere, thus creating an unavoidable risk of inconsistent remedies. The ICN provides much help to the dialogue and to invent common approaches to remedies and makes merger enforcement more homogeneous. Things are moving in the right direction as solutions have been found to avoid discrepancies at the procedural and substantive levels. Very often firms have a better view of what is required in every Member State so their point of view is important and valuable. In any event, solutions can only be found through dialogue with European counterparts, ICN and, on daily basis, with lawyers representing companies. 4TH ANNUAL GLOBAL MERGER CONTROL CONFERENCE 2 DECEMBER 2016 - PARIS 4 PANEL 1 ON-LINE MARKET MERGERS: VIEWS FROM BOTH SIDES OF THE ATLANTIC ichael L. WEINER introduced the panel explaining prefer the old way. The facts should be taken into consideration the difficulty of defining online markets. They are for each case. If competition from online businesses is real, M usually opposed to brick and mortar sales but the the merging companies’ business plan and documents most common business model now is a combination of should reveal how it affects one’s own business. If there is online and brick and mortar sales. That is why today a threat, it should be reflected in their strategy. geographical markets are more complex. In a way, online Andreas BARDONG agreed that a one size fits all approach markets are even more localised because online vendors does not work for online markets. Some online platforms know how to locate people and take that into account. offer additional functionality when compared to off-line Mr. Weiner stated that market power may be very ephemeral products, for example online real estate portals. A merger on online markets, as competition is only one click away. between two major platforms in Germany (Immowelt.de It means market entry costs can be very low. However, they and Immonet.de) was cleared. In this case, the issue was can be very high too when access to data is essential but not so much, whether real estate classified ads in the printed difficult. Furthermore, online markets imply a transparency press were in the same market as online classifieds. More which can enhance competition but also help collusion. important was whether competition between online platforms They may facilitate agreements by humans on a mechanism was significantly reduced. Substantial network effects in to adapt prices, but even more worrying are computer-based this two-sided market meant that the merged entity would price-adapting mechanisms that can have terrible effects be in a better position to challenge the market leader.