‘Most decisions nowadays are issued following
leniency applications,’ says Peter Wytinck, European law
specialist in the Brussels office of Stibbe. ‘It was intro-
duced in the European Union in 1996 but it took a cou-
ple of years for clients to get “comfortable’”with the
process. Now, since 2008, there is also the possibility for
the Commission to go for a settlement procedure. This
means that on the one hand you can have leniency
(admitting certain facts but not infringement) and fol-
lowing this step, the commission can offer the parties
under investigation the opportunity to admit infringe-
ment of the law and get an additional 10% reduction in
the fine.’
It is not clear yet whether this new ‘settlement pro-
cedure’ will be a big phenomenon. In May 2010, the
first decision was awarded using this instrument in a
case involving 10 producers of memory chips following
settlement talks that began in 2009. Almunia stated
that going forward cases could possibly be handled in
less than six months.
‘There was a lot of skepticism as to whether or not
the process would work,’ explains Wytinck. ‘But so far,
three cases have been decided following the settlement
procedure. It is essentially a judgement call; in some
cases its clear that risks are higher admitting guilt but in
other cases there is little to lose.’
MERGER TRENDS
Of course the bread and butter work for firms on the
competition side remains transactional-related advice.
The good news is that mergers are back on the agenda,
following a 5% rise in merger notifications in 2010.
‘Acquisitional activity is starting to pick up,’ says Paul
Hughes, European competition counsel in the Brussels
office of Steptoe & Johnson. ‘There are two main reasons to merge in this climate: To consolidate and to
achieve economies in scale.’ Despite this clear concentration of market forces, 90% of mergers are getting
cleared in phase one. Hughes highlights the
Commission’s greater willingness to treat mergers from
a more complex economic standpoint as a major plus
for firms.
Another important trend going forward on the
merger side is the willingness of national competition
authorities to refer mergers to the EU for scrutiny. ‘The
relevant provision is the EU Merger Regulation’s Article
22 “upwards referral” procedure, which allows any EU
national competition authority to ask the European
Commission to review a transaction which is not notifi-
able to Brussels because the parties do not meet the EU
merger regulation thresholds,’ says Fiona Carlin, head
of Baker & McKenzie’s European & competition law
practice in Brussels.
Of course the bread and butter
work for firms on the competition
side remains transactional-related
advice. The good news is that
mergers are back on the agenda,
following a 5% rise in merger
notifications in 2010.
the Commission. This has recently occurred in the con-
sumer goods sector, giving rise to significant delays in
the transaction timetable as well as unexpected addi-
tional costs.’
So the message is one of preparation. Luckily, it
seems that the Commission is trying to make itself more
user-friendly under the leadership of Joaquín Almunia,
which bodes well for the future of competition regula-
tion in Europe.
Jean-François Bellis is the managing parter of competition heavyweight Van Bael & Bellis, which is well-known as the Brussels-based firm entrusted with representing Microsoft in its b899m appeal against the
Commission ruling that found it guilty of abusing its
dominant position. Bellis agrees that the Commission
seems to be finally striking the right commercial/political
balance. ‘The new commissioner, Joaquín Almunia,
seems to be more restrained and reasonable than former
commissioner Neelie Kroes,’ he says. ‘While not reducing fines, he is not pushing for increases in them either.
So I feel like there is less conflicting tension between the
US and EU approach to competition law now.’ ■
