The jurisdictional aspects of Regulation 4064/89 on the control of concentrations between undertakings

Abstract

One of the main tasks of the European Community is to assimilate commercial activities in and between its twelve Member States to commercial activities within a single state. The creation of such a common market involves several critical elements, including the removal of internal tariffs, the creation of a common external tariff, and the elimination of non-tariff barriers to the free movement of goods and services. The European Community Treaty eliminated all internal tariffs and vested power to set common external tariffs in the Commission. In order to eliminate non-tariff barriers, such as divergent quality standards, the European Community has enacted numerous directives and regulations. In addition to these necessary elements for perfecting the common market, the Community's 1992 internal single market programme contained another significant feature: adoption of a merger control system intended to strengthen EC competition policy and to promote the Commission's antitrust enforcement programme. This was achieved by the enactment of the EEC Regulation on the Control of Concentrations between Undertakings.' The Merger Regulation is a new legal instrument, primarily based on Article 235 of the EC Treaty' and thus creates new substantive rules for the evaluation and control of concentrations, which go beyond those provided for in Articles 85 and 86 of the EC Treaty dealing with competition in general. The Regulation need not be approved or implemented by national legislation and is directly applicable in all the EU Member States. It-applies to EU as well as to non-EU companies, and it also extends to all countries of EFTA3 (European Free Trade Association) since the entry into force of the Agreement on a European Economic Area on 1 January 1994, which Agreement has been concluded between the EU and EFTA countries. However, since the accession of Austria, Sweden and Finland to the EU on 1 January 1995, this agreement is now of more limited importance. The new Regulation comes in against a background of increasing merger activity in the EU and beyond. Although mergers very often lead to beneficial results, such as economies of scale, the Regulation in its Recital 5 recognises the need for merger control in order to ensure that the formation of mergers "does not give rise to lasting damage to competition".