On November 25, 2020, after an in-depth investigation, the FCO approved the acquisition by Mann Mobilia Beteiligungs GmbH (part of the XXXLutz Group) of 50% of the shares in Möbel Management Holding GmbH & Co. KG and Roller GmbH & Co. KG (part of the Tessner Group), subject to the divestiture of 23 furniture outlets.[1] The FCO’s clearance only relates to the sales side of the transaction, i.e., the relationship between furniture retailers and consumers, whereas on November 30, 2020, the European Commission unconditionally cleared the transaction with respect to the procurement side, i.e., the relationship between furniture retailers and manufacturers.[2]
CMA Proposes New Procedural and Substantive Merger Guidance
On 6 November, the CMA published new draft guidance on jurisdiction and procedure in UK merger cases (Draft J&P Guidance) and on the CMA’s mergers intelligence function. On 17 November, it published new draft guidance on the substantive assessment of mergers in the UK (Draft Substantive Guidance). The draft sets of Guidance incorporate developments in the case law, reflect the evolution of the CMA’s policies and procedures, and take account of changes in the legal framework concerning public interest mergers. Together, they confirm the CMA’s expansive approach to asserting jurisdiction and reinforce a more interventionist and less formalistic approach to assessing mergers, especially in digital markets, that has been evident in the run-up to Brexit.
FCO Allows Join Marketing of Advertising Space in Newspapers
On October 27, 2020, the FCO decided that it had no objections to the planned joint venture and cooperation between the German newspaper publishers Süddeutsche Zeitung GmbH (“SZ”) and Frankfurter Allgemeine Zeitung GmbH (“FAZ”) relating to the joint commercialization of their national advertising inventory.[1] Under German law, and in contrast to EU law, potential coordination effects between the parent companies are not already assessed as part of the merger control process relating to the creation of the joint venture, but are reviewed separately under the restrictive practices provisions of the ARC.[2]
CMA’s Standstill Enforcement Under the Spotlight
On 15 October 2020, the Competition and Markets Authority (CMA) revoked a £300,000 penalty it had imposed on JD Sports Fashion plc for breach of an interim enforcement order (IEO) issued in connection with JD Sports’ completed acquisition of Footasylum plc. The penalty was withdrawn “[i]n light of issues raised on appeal.” This is the first time that a CMA procedural fine has been revoked or overturned on appeal. On 19 and 20 October 2020, the Competition Appeal Tribunal (CAT) heard Facebook’s appeal against the CMA’s refusal to grant a derogation from an IEO issued in connection with Facebook’s completed acquisition of GIPHY, Inc. This article considers potential implications of these cases for future UK mergers.
HeidelbergCement & Schwenk Zement v. Commission: The General Court Provides Jurisdictional Clarity Where a Joint Venture Acts as the Acquirer
On October 5, 2020, the General Court dismissed an action for annulment by HeidelbergCement and Schwenk Zement (the “parent companies”) against the Commission’s April 2017 decision,[1] which prohibited their acquisition of Cemex’s Croatian and Hungarian subsidiaries through Duna-Dráva Cement (“DDC”), a full-function JV (“JV”) equally owned and controlled by the parent companies. [2]
The French Competition Authority Reserves the Right To Refer to the European Commission Transactions That Do Not Reach the National Notification Threshold
On September 15, 2020, Margaret Vestager announced that the European Commission would, as of mid-2021, accept referrals from national competition authorities for transactions that do not reach any national notification thresholds under Article 22 of Council Regulation (EC) No 139/2004 (“Article 22”).[1] This provision enables a national competition authority to request that the European Commission examine a transaction that does not meet the European Union notification thresholds, but would affect trade between Member States and threaten to significantly affect competition.
The ICA Fines Several Gas Operators at National Level for Failure To Notify a Concentration
On September 15, 2020, the ICA imposed total fines of approximately €150,000 on Acea S.p.A. (“Acea”), Mediterranea Energia Soc. Cons. a r.l. (“Mediterranea”) and Alma C.I.S. S.r.l. (“Alma” and, together with Acea and Mediterranea, the “Parties”)[1] for failure to notify their acquisition of joint control over Pescara Distribuzione Gas S.r.l. (“Pescara Distribuzione”)[2] before implementing the transaction, in violation of Article 16(1) of Italian Law No. 287/90.[3]
A Step Forward in the Journey ‘Towards More Effective EU Merger Control’?
On September 11, 2020, Commissioner Vestager during a speech at a conference[1] for the 30th anniversary of the EU Merger Regulation (“EUMR”),[2] outlined her vision on merger control policy for the upcoming years.[3] In anticipation of the Commission’s long awaited report on its 2016 consultation on the evaluation of procedural and jurisdictional aspects of EU merger control, Commissioner Vestager shed some light on the Commission’s position on (i) notification thresholds; (ii) the simplification of merger filing and review processes; and (iii) its reflections on the substance of merger review in certain sectors.
JD Sports Fashion plc v Competition and Markets Authority
On 1 September 2020, JD Sports Fashion and Pentland Group Limited filed an appeal against a CMA decision of 29 July 2020 to impose a penalty of £300,000 on the parties for failing to comply with the requirements of the CMA’s initial enforcement order issued in the context of the completed acquisition by JD Sports of Footasylum plc.
First Merger Control Prohibition Decision Issued by the French Competition Authority
On August 28, 2020, the FCA prohibited for the first time a proposed transaction following an in-depth Phase 2 review.[1] The FCA concluded that Soditroy and the E. Leclerc’s proposed acquisition of joint control over a Géant Casino hypermarket around the city of Troyes raised serious competition concerns.