This presentation by Richard WHISH, Professor of Law, King's College London, was made during the discussion “The Suspensory Effects of Merger Notifications and Gun Jumping” held at the 130th meeting of the OECD Competition Committee on 27 November 2018. More papers and presentations on the topic can be found out at oe.cd/gjc.

1. Professor Richard Whish
OECD, 27 November 2018

2. TERMINOLOGY
 DISTINGUISH ‘PROCEDURAL’ AND
‘SUBSTANTIVE’ GUN-JUMPING
 PROCEDURAL GUN-JUMPING REFERS TO A
FAILURE TO NOTIFY A MERGER
 SUBSTANTIVE GUN-JUMPING INVOLVES
SOME ELEMENT OF IMPLEMENTATION OF A
MERGER PRIOR TO CLEARANCE FROM THE
RELEVANT COMPETITION AUTHORITY
Richard WhishOECD 2

3. RELEVANT PROVISIONS OF EU LAW
 ARTICLE 4 EUMR: ‘CONCENTRATIONS …
SHALL BE NOTIFIED TO THE COMMISSION
PRIOR TO THEIR IMPLEMENTATION …’
 ARTICLE 7 EUMR: ‘A CONCENTRATION …
SHALL NOT BE IMPLEMENTED EITHER
BEFORE ITS NOTIFICATION OR UNTIL IT HAS
BEEN DECLARED COMPATIBLE WITH THE
COMMON MARKET …’
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4. RELEVANT PROVISIONS OF EU LAW
 ARTICLE 14(2) EUMR: THE COMMISSION
MAY IMPOSE FINES FOR
 (A) FAILURE TO NOTIFY A CONCENTRATION
CONTRARY TO ARTICLE 4 AND
 (B) IMPLEMENTATION OF A CONCENTRATION
CONTRARY TO ARTICLE 7
 IN ALTICE/PT PORTUGAL THERE WERE
TWO FINES OF €62.5 MILLION, ONE FOR
INFRINGING ARTICLE 14(2)(A) AND ONE FOR
INFRINGING ARTICLE 14(2)(B)
Richard WhishOECD 4

5. RELEVANT PROVISIONS OF EU LAW
 ARTICLE 101 TFEU PROHIBITS AGREEMENTS
AND CONCERTED PRACTICES THAT HAVE AS
THEIR OBJECT OR EFFECT THE RESTRICTION
OF COMPETITION
 ARTICLE 23 REGULATION 1/2003: THE
COMMISSION MAY IMPOSE FINES FOR
INFRINGING ARTICLE 101 TFEU
 ARTICLE 21(1) EUMR:‘THIS REGULATION
ALONE SHALL APPLY TO CONCENTRATIONS…’
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6. RELEVANT PROVISIONS OF US LAW
 SECTION 7A CLAYTON ACT/HART-SCOTT-
RODINO ANTITRUST IMPROVEMENTS ACT: A
VIOLATION OF THE STANDSTILL OBLIGATION
OCCURS WHERE A BUYER EFFECTIVELY
GAINS BENEFICIAL OWNERSHIP OF THE
SELLER PRIOR TO OR CLOSE TO THE
TRANSACTION
 SECTION 1 SHERMAN ACT 1890 PROHIBITS
CONTRACTS IN RESTRAINT OF TRADE
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7. RECENT EU CASES
 CASE C-633/16 ERNST & YOUNG P/S V
KONKURRENCERÅDET, 31 MAY 2018
 THE CASE IS ACTUALLY ON A POINT OF DANISH
LAW WHICH MIRRORS ARTICLE 7(1) EUMR
 THIS IS THE FIRST CASE AT THE COURT OF
JUSTICE ON THIS TOPIC
 KPMG DK/EY AGREED A MERGER 18 NOVEMBER
2013; NOTIFIED TO THE DANISH COMPETITION
AUTHORITY 13 DECEMBER 2013; CLEARED 28
MAY 2014 SUBJECT TO COMMITMENTS
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8. RECENT EU CASES
 ERNST & YOUNG
 KPMG DK WAS A MEMBER OF THE KPMG
INTERNATIONAL COOPERATIVE PURSUANT TO A
COOPERATION AGREEMENT OF 15 FEBRUARY
2010
 KPMG DK ANNOUNCED ON 18 NOVEMBER 2013
(THE DAY OF THE MERGER AGREEMENT) THAT
IT WAS TERMINATING THE COOPERATION
AGREEMENT WITH EFFECT FROM 30 SEPTEMBER
2014
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9. RECENT EU CASES
 ERNST & YOUNG
 ON 17 DECEMBER 2014 THE COMPETITION
COUNCIL DECIDED THAT THERE HAD BEEN AN
INFRINGEMENT OF THE STANDSTILL OBLIGATION
 THE MARITIME AND COMMERCIAL COURT ASKED
THE COURT OF JUSTICE WHETHER THE
TERMINATION OF THE COOPERATION
AGREEMENT INVOLVED A BREACH OF THE
STANDSTILL OBLIGATION
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10. RECENT EU CASES
 ERNST & YOUNG
 ARTICLE 7(1) PROVIDES THAT A
CONCENTRATION MUST NOT BE ‘IMPLEMENTED’
PRIOR TO NOTIFICATION AND CLEARANCE (PARA
37)
 ARTICLE 7(1) DOES NOT ITSELF EXPLAIN WHAT
IS MEANT BY IMPLMENTATION (PARA 38)
 SO THIS MUST BE DETERMINED BY REFERENCE
TO PURPOSE OF THE RULE AND THE GENERAL
SCHEME OF THE EUMR (PARA 40)
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11. RECENT EU CASES
 ERNST & YOUNG
 THE PURPOSE OF ARTICLE 7(1) IS TO PREVENT
IMPLMENTATION OF A CONCENTRATION PRIOR
TO NOTIFICATION/CLEARANCE, MEANING A
LASTING CHANGE OF CONTROL
 TRANSACTIONS WHICH ARE NOT NECESSARY TO
ACHIEVE A CHANGE OF CONTROL ARE NOT
CAUGHT BY ARTICLE 7(1)
 THE FACT THAT THEY MAY HAVE EFFECTS DOES
NOT MEAN THAT ARTICLE 7(1) IS ENGAGED
(PARA 50)A LASTING CHANGE IN CONTROL
Richard WhishOECD 11

12. RECENT EU CASES
 ERNST & YOUNG
 ACTIONS THAT DO NOT AMOUNT TO
CONCENTRATIONS MAY LEAD TO COORDINATION
IN BREACH OF ARTICLE 101 TFEU (PARA 57)
 IT FOLLOWS THAT ARTICLE 7(1) EUMR SHOULD
NOT BE UNDULY EXTENDED, AS THAT WOULD
HAVE THE EFFECT OF LIMITING THE SCOPE OF
APPLICATION OF ARTICLE 101 TFEU (PARA 58)
 THE DANISH AUTHORITY SUBSEQUENTLY HELD
THERE WAS NO INFRINGEMENT: STATEMENT OF 7
SEPTEMBER 2018
Richard WhishOECD 12

13. RECENT EU CASES
 ALTICE/PT PORTUGAL, 24 APRIL 2018
 COMMISSION DECISION IMPOSING TWO FINES,
EACH OF €62.5 MILLION, FOR INFRINGING
ARTICLE 4(1) AND ARTICLE 7(1) EUMR
 ON APPEAL TO THE GENERAL COURT CASE
T-425/18, NOT YET DECIDED
 SHARE PURCHASE AGREEMENT 9 DECEMBER
2014: ALTICE TO ACQUIRE PT
 NOTIFICATION 25 FEBRUARY 2015; CLEARED
SUBJECT TO COMMITMENTS 20 APRIL 2015
Richard WhishOECD 13

14. RECENT EU CASES
 ALTICE
 BREACH OF ARTICLE 7(1): PARAS 58-484
 THE TRANSACTION AGREEMENT CONTAINED VETO
RIGHTS THAT WENT BEYOND WHAT WAS NECESSARY
TO PRESERVE THE VALUE OF THE TARGET’S BUSINESS
 AND ALTICE EXERCISED INFLUENCE OVER THE
TARGET
 EXCHANGES OF INFORMATION CONTRIBUTED TO
THAT INFLUENCE
 BREACH OF ARTICLE 4(1): PARAS 485-491
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15. RECENT EU CASES
 ALTICE
 THE COMMISSION SAYS THAT IT RECOGNISES
THAT IT IS STANDARD TO HAVE CLAUSES IN
AGREEMENTS TO PRESERVE THE VALUE OF THE
BUSINESS TO BE TRANSFERRED (PARA 50)
 BUT IN THIS CASE IT NOTES THAT THE
EXCHANGES OF INFORMATION TOOK PLACE
WITHOUT ANY SAFEGUARDS SUCH AS
CONFIDENTIALITY AGREEMENTS, NON-
DISCLOSURE AGREEMENTS OR ‘CLEAN-TEAM’
ARRANGEMENTS
Richard WhishOECD 15

16. CONCLUSIONS
 IT IS IMPORTANT TO STUDY THE SPECIFIC
PROVISIONS OF EACH LEGAL SYSTEM: DO
OTHER SYSTEMS HAVE THE EQUIVALENT OF
ARTICLE 21(1) EUMR?
 ERNST & YOUNG IS CLEAR THAT ACTIONS
THAT DO NOT THEMSELVES CONTRIBUTE TO
THE ACQUISITION OF CONTROL CAN
INFRINGE ARTICLE 101 TFEU
 NOTE: DIFFERENT PROCEDURES AND FINES
FOR EUMR AND ARTICLE 101 TFEU
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17. CONCLUSIONS
 IS THE COMMISSION’S APPROACH IN ALTICE
CONSISTENT WITH THE COURT OF JUSTICE’S
IN ERNST & YOUNG? THE GENERAL COURT
WILL HAVE TO DECIDE
 WATCH OUT FOR THE COMMISSION’S
DECISION ON ‘WAREHOUSING’ IN CANON,
COMMISSION PRESS RELEASE OF 6 JULY
2017: IS WAREHOUSING ‘IMPLEMENTATION’?
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18. THANK YOU FOR YOUR ATTENTION!
Richard WhishOECD 18