Accommodating minority shareholdings within the European Union Merger Control regime: advocating a more cooperative way forward

Davison, Leigh M.

Abstract

The paper focuses upon a neglected area of EU merger control, the acquisition of minority shareholdings that have the potential to cause competitive harm at the European Union level, and which therefore should be vetted under EU law. Using economic theory and actual cases vetted by European Regulators, the paper demonstrates an EU regulatory enforcement gap in respect of the aforesaid minority shareholdings. The Commission’s recent proposal to end this gap, the so-called targeted transparency system, is then critically explored, revealing that the proposed system suffers from the same problem as the EU merger control regime in respect of mergers with a potential community competition concern: neither can guarantee that nearly all the said mergers and minority shareholdings cases would be vetted under EU law. Therefore, an alternative more cooperative approach, which guarantees that virtually all such cases would come under EU law, is put forward. The more cooperative approach concerning mergers is discussed first, as the approach toward minority shareholdings is an extension of it, establishing an integrated approach. The paper demonstrates how this approach would guarantee that virtually all mergers with a potential Community competition concern would come under EU law, leading to a number of positives: the near elimination of the misallocation problem and associated issues, in addition to streamlining the operation of the said architecture. Thereafter, the paper reveals how the more cooperative approach ensures that virtually all minority shareholdings with a potential to cause competitive harm at the EU level would be vetted under EU law, not only ending this enforcement gap but also leading to an architecture that is more streamlined than would be the case if the Commission’s proposal became law. It is, of course, recognised that the more cooperative approach does not address the minority shareholdings’ enforcement gap that exists at the national level, excluding the three member states which already have this vetting capability.

Citation

Davison, L. M. (2017). Accommodating minority shareholdings within the European Union Merger Control regime: advocating a more cooperative way forward. Liverpool Law Review, 38(3), 259-286. https://doi.org/10.1007/s10991-017-9201-y

• Journal Article Type: Article
• Acceptance Date: May 22, 2017
• Online Publication Date: Jun 2, 2017
• Publication Date: 2017-10
• Deposit Date: Jun 1, 2017
• Publicly Available Date: Sep 2, 2017
• Journal: Liverpool law review
• Print ISSN: 0144-932X
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• Volume: 38
• Issue: 3
• Pages: 259-286
• DOI: https://doi.org/10.1007/s10991-017-9201-y
• Keywords: European Union Law; Minority shareholdings; EU merger control; Architecture of separate jurisdictional zones; Targeted transparency system; More cooperative approach
• Public URL: https://hull-repository.worktribe.com/output/451869
• Publisher URL: https://link.springer.com/article/10.1007%2Fs10991-017-9201-y
• Additional Information: This is a copy of an open access article published in: Liverpool law review, 2017, v.38, issue 3.
• Contract Date: Sep 2, 2017