An analysis of the anti-competitive effects emerging from the acquisition of non-controlling minority shareholdings : time to regulate?

Abstract

Merger Control is regarded as one of the most important pillars of the European Union, built upon the aims of making the internal market more efficient and effective, whilst enhancing consumer welfare. This work analyses economic theories which prove that the acquisition of noncontrolling minority shareholdings in a competitor may give rise to anti-competitive effects. The current, limited legal analysis of such anti-competitive effects is then analysed. In particular, the infrequent use of Articles 101 and 102 TFEU in this respect is evidence of their ineffectiveness. Due to the fact that non-controlling minority shareholdings fall short of exerting ‘decisive influence’, they are not reviewable under the Merger Regulation as sole-standing transactions, triggering an ‘enforcement gap’. This regime is further contrasted with the already-existing Member States’ laws having the competence to review such anti-competitive effects. Against this backdrop, the European Commission felt it was appropriate to further the workings of the Merger Regulation by proposing its extension to non-controlling minority shareholdings. The system proposed by the Commission is then discussed and evaluated in lieu of the principle of proportionality. This work shall analyse whether the proposed system is simply leading the way towards added administrative burdens, portraying the internal market less attractive for investors, or whether such an initiative is a long-awaited step in fine tuning the workings of the Merger Regulation.