Protectionist Threats Against Cross-Border Mergers: Unexplored Avenues to Strengthen the Effectiveness of Article 21 ECMR

30 Pages Posted: 5 Feb 2009  

Damien M. B. Gerard

University of Louvain - CeDIE

Date Written: June 1, 2008

Abstract

In recent months, the European Commission has faced a surge in protectionist moves by Member States designed to protect national companies from foreign acquirers. To resist those attempts, it has relied on a relatively peculiar yet theoretically powerful tool: Article 21 of the EC Merger Regulation (ECMR). That provision allows the Commission to vet State measures against the "general principles and other provisions of Community law" and to act swiftly against Member States, in a way compatible with the requirements of business life. This article undertakes a systematic analysis of the handful cases in which the Commission has formally resorted to Article 21 ECMR to date, including the Endesa saga, and shares insights at the Commission's conduct of its inquiries into State measures interfering with concentrations of a Community dimension. Hence, it attempts to summarize the law on Article 21 ECMR as its stands today. Eventually, it concludes that the Commission's enforcement record has been rather mixed so far. Still, it considers that Article 21 ECMR carries unexploited potential, which can be derived from the procedural features built into that provision and from an observed evolution in the Commission's view as to the type of State measures falling within its scope. In turn, the article presents in details those avenues likely to strengthen the effectiveness of Article 21 ECMR, notably by means of various analogies with the law on state aids and a combined application of Article 21 ECMR and the principle of effectiveness to a hypothetical takeover case.

Keywords: Merger control, Article 21, ECMR, internal market, non-competition concerns, protectionism

Suggested Citation

Gerard, Damien M. B., Protectionist Threats Against Cross-Border Mergers: Unexplored Avenues to Strengthen the Effectiveness of Article 21 ECMR (June 1, 2008). Common Market Law Review, Vol. 45, No. 4, 2008. Available at SSRN: https://ssrn.com/abstract=1338023

Damien M. B. Gerard (Contact Author)

University of Louvain - CeDIE ( email )

Place Montesquieu, 2
Louvain-la-Neuve, 1348
Belgium

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