On May 3, 2021, the European Commission fined life science company Sigma-Aldrich € 7.5 million for providing incorrect or misleading information during the Commission’s 2015 review of Merck’s acquisition of the company. The fine marks another step in an increasingly stringent approach to enforcing the procedural rules that apply during the Commission’s merger control process.
On June 15, 2015, following a Phase I investigation, the Commission conditionally approved Merck’s acquisition of Sigma Aldrich, subject to the divestiture of certain Sigma-Aldrich assets to a third-party purchaser. This remedy would address the competition concerns the Commission identified in markets for specific laboratory chemicals.
During the divestment process in 2016, a third- party informed the Commission that Sigma- Aldrich had excluded from the scope of the remedy an important innovation project (“iCap”), which was closely linked to the divested business. In response, the Commission issued a Statement of Objections (“SO”) to both Merck and Sigma- Aldrich in 2017. The SO alleged that Sigma had intentionally—and Merck, negligently—provided incorrect information during the merger review in breach of their procedural obligations under the Merger Regulation.
The SO identified three separate instances where the parties had provided misleading information and established a distinct infringement for each instance of misleading information. The Commission claimed the infringements were intended to ensure that the technology of the innovation project would not be transferred to Honeywell, the approved purchaser of the divestment business. Following oral hearings in June 2020, the Commission dropped its charges against Merck, ultimately fining only Sigma- Aldrich in this decision.
As a practical matter, however, Merck will nevertheless indirectly bear the financial burden of the fine since Sigma-Aldrich is now a wholly owned subsidiary. This highlights how the sanctions for providing misleading information can lead to a situation where the buyer ultimately ends up financially responsible for actions by the seller during the merger review process.
The Commission may impose fines up to 1% of the aggregate global turnover of a company that intentionally or negligently supplies incorrect or misleading information. In setting the fine, the Commission will take into account the nature, gravity, and duration of the infringement.
Here, the Commission considered that the three infringements were serious in nature and particularly grave because (i) correct information is crucial for a well-functioning merger control system; (ii) the undisclosed innovation project was clearly related to the divestment business; and (iii) because the project was confidential, the only source of information was from Sigma-Aldrich itself.
The Commission appears to have fined each infringement separately, as it did in Facebook/ Whatsapp in 2017. While the Commission clarified that the approval of the transaction will remain unaffected by the procedural infringement, the Commission considered a fine was still appropriate since the obligation to provide correct information applies regardless of whether the information has an impact on the ultimate outcome of the merger assessment.
As the Commission’s merger-review process requires businesses to provide a significant and increasing amount of information, validating the accuracy of the statements made can be burdensome. But the risk of fines and the potential damage to companies’ credibility highlight the importance of carefully validating the information provided.
 For instance, in 2017, the Commission imposed a € 110 million fine on Facebook for providing misleading information as part of the notification and in response to an RFI during the Commission’s review of Facebook/Whatsapp. Two years later, in 2019, General Electric was fined € 52 million for similar alleged infringements during the investigation of its planned acquisition of Danish wind turbine blade manufacturer LM Wind Power Holdings. To date, none of these cases have involved the Commission revoking a clearance decision due to the misleading information provided.
 Commission Implementing Regulation No 1269/2013 of 5 December 2013 amending Regulation No 802/2004 implementing Council Regulation No 139/2004 on the control of concentrations between undertakings, OJ L 336 (“Implementing Regulation”); Moreover, recital 5 of the Implementing Regulation states: “It is for the notifying parties to make a full and honest disclosure to the Commission of the facts and circumstances which are relevant for taking a decision on the notified concentration.”
 Ibid. Article 14(4) EUMR.
 Commission Press Release IP/21/2181, “Mergers: Commission fines Sigma-Aldrich € 7.5 million for providing misleading information during Merck takeover investigation,” May 3, 2021.
 Facebook/Whatsapp (Case COMP/M.8228), Commission decision of May 17, 2017. The Commission imposed a € 110 million total fine on Facebook, sanctioning two separate infringements with a € 55 million fine each.