Mind the Gap? An Analysis from a German Competition Law Perspective of the European Commission's Proposal to Review Non-Controlling Minority Shareholdings Under European Merger Control Law

The following article analyses the European Commission's proposal to bring acquisitions of non-controlling minority shareholdings under its jurisdiction. As a consequence, the European Commission would have the power to decide types of cases and to block mergers, which are generally not subject to merger control law in the majority of the Member States of the European Union. Additionally, this could lead to tension with regulatory systems in EU Member States, which review non-controlling minority shareholdings already, and to additional burden for companies. In contrast to many other articles about this topic, it examines in detail the opinions submitted in response to the European Commission's public consultation with regard to the proposed requirement for notification ("competitively significant link''), the form of the notification and the timing for such notifications. Many stakeholders have criticised the European Commission's proposal, inter alia by stating that these acquisitions could be caught by the prohibition of anti-competitive agreements under Art. 101 Treaty on the Functioning of the European Union. The authors use German merger control law as a proxy to prove the existence and the extent of the enforcement gap referred to by the European Commission. The German Federal Cartel Office and the German courts have considered acquisitions of non-controlling minority shareholdings, in which the acquirer gained a "competitively significant influence'' over the target, to have anti-competitive effects. However, the importance of the enforcement gap seems to be limited in practice.