Minority Power – EU Merger Control and the acquisition of Minority Shareholdings

Summary:

Effective and efficient competition policy requires appropriate and well-designed tools to tackle all sources of harm to competition and, ultimately, consumers. Currently, the Merger Regulation only applies to “acquisitions of control" and does not cover acquisitions of non-controlling minority shareholdings. According to economic research, however, the purchase of a non-controlling minority shareholding can also harm competition. This is corroborated by the day-to-day experience of competition authorities within and outside the EU.

In 2013, DG Competition launched a public consultation to uncover a possible "enforcement gap" concerning minority shareholdings, and to find solutions for any problems. In response to the comments received, the Commission has now presented concrete proposals in the Commission White Paper, published in July 2014. This proposal intends to make EU merger control more comprehensive by addressing potential harm to competition resulting from the acquisition of non-controlling minority shareholdings. At the same time, undue burdens for businesses should be avoided. This can be achieved by only targeting transactions that are prima facie problematic from a competition point of view. In addition, the proposed review system will be lighter than currently foreseen under the Merger Regulation for full mergers. The consultation period for submitting comments on the proposal ran until 3 October 2014.

This policy brief outlines how the acquisition of a non-controlling minority shareholding can harm competition and explains the White Paper's proposal for a "targeted transparency system" which will allow the European Commission to review acquisitions capable of raising competition problems.

Further information:

The Competition Policy Briefs are occasional papers by staff of the Competition Directorate-General of the European Commission about policy issues and key cases.

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