The European Commission and national competition authorities monitor market structures through merger control. In addition to the general merger control rules under national laws and the European Merger Regulation, sector-specific tests also exist for some sectors such as telecommunications and energy.
Generic merger control
If the undertakings concerned in a merger, acquisition or creation of a joint venture reach certain turnover thresholds, they must notify the transaction to the relevant competition authority before its implementation. In the Netherlands, a notification obligation to the ACM exists if the aggregated worldwide turnover of the undertakings concerned exceeds € 150 million, of which at least two undertakings achieve at least € 30 million of their turnover in the Netherlands. For larger transactions, with an aggregated worldwide turnover exceeding € 2.5 billion, a transaction may be notifiable to the European Commission.
If a transaction has been notified, parties are obliged to await approval from the relevant authority; they may not implement the transaction without a formal approval decision. The authority will assess whether there will be sufficient competition in the market post-transaction. An in-depth investigation may be launched and remedies may be necessary. Only in exceptional cases will the transaction be banned altogether.
The competition lawyers of bureau Brandeis have extensive experience in complex (second phase) merger cases before the ACM and the European Commission. They assist the notifying undertakings in order to get swift clearance for their a transaction, but sometimes also advise affected (third) parties in market investigations and remedy consultations.
In some cases also transactions that do not reach the turnover thresholds can be reviewed by the ACM or European Commission. This can be the case in the event of an acquisition by a dominant undertaking or in the case of a referral by the national competition authority to the European Commission (so-called article 22-referrals).
Failure to report a notifiable transaction and/or implementing it without approval (gun-jumping) is subject to heavy fines. Hence, merger control generally requires a careful analysis of the applicable merger thresholds (see also our blog on this subject). When in doubt, always contact one of our specialists.
In addition to the general merger control regime, the Act on security screening of investments, mergers and acquisitions (in Dutch: Wet Veiligheidstoets investeringen, fusies en overnames, Vifo Act) entered into force on 1 June 2023. The Vifo Act introduces a notification obligation for the acquisition of and investments in vital providers, providers of sensitive technology and managers of business campuses. These for example include heat suppliers, Schiphol Airport, the Port of Rotterdam and providers of military or dual use goods.
Acquisition activities must be reported in advance to the Bureau for Verification of Investments (in Dutch: Bureau Toetsing Investeringen, BTI), part of the Ministry of Economic Affairs and Climate. If the Minister identifies risks to national security or related interests, it can impose mitigating measures or, as a last resort, ban the acquisition altogether.
The notifying undertakings are required to await approval. Failure to report and the pre-emptive implementation of the transaction is again subject to high penalties. Read more about the Vifo Act in this blog.
Do you have questions about the merger control rules and/or the Vifo Act? Please contact one of our specialists below.