At the EU level, Commission staff have adapted to working from home but are aware of the challenges in dealing with tight timeframes presented by merger notifications (including securing meaningful input from industry participants which may be affected by a transaction).  The Commission has therefore issued an appeal to request parties to delay merger filings as much as possible.  Other authorities have indicated that review timeframes may be extended.

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In recent months we have seen a number of horizontal mergers being scrutinized under national and EU merger rules. Since the fall-out from the Siemens/Alstom merger refusal, we have also seen a number of ministers from member states, including Poland, France and Germany, call for increased tolerance and indeed support for the emergence of so-called ‘national champions’. Recently in March there have been calls for companies to ‘reshore’ operations which they had outsourced to other countries – including not only third countries but also other member states. Targets included Peugeot and Renault and there have been calls for the European Commission to provide support for such moves.

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Introduction

On 25 July 2018, Advocate General (AG) Kokott issued a non-binding Opinion in case C-265/17 P, Commission v United Parcel Service, advising the Court of Justice of the EU (CJEU) to dismiss the Commission’s appeal against the judgement of the General Court (GC) that annulled the Commission’s decision to block the proposed acquisition of TNT by UPS.

UPS notified the proposed acquisition of TNT for approximately EUR 5 billion on 15 June 2012. More than six months later, on 30 January 2013 the Commission blocked the proposed merger based on concerns that it would lead to a significant impediment of effective competition (SIEC) on the market for international intra-EEA express deliveries for small packages in 15 Member States.

On 7 March 2017 the GC issued a favourable judgement for UPS (case T-194/13, United Parcel Service v Commission). The Court found that the Commission breached UPS’s rights of defence by relying on the latest version of an economic analysis which was not shared with the merging parties before the merger was blocked. The Commission appealed the GC’s judgement on 16 May 2017.

In the meantime, TNT was acquired by FedEx for EUR 4 billion, in January 2016, in a deal that received unconditional approval by the Commission. While UPS may have lost the chance to consolidate its express deliveries business with TNT, AG Kokott’s favourable Opinion will arguably boosts UPS’s chances to win an action for damages for EUR 1.7 billion against the Commission filed by UPS in February 2018 (case T-834/17, United Parcel Service v Commission).

AG Kokott’s Opinion, which is largely in line with the GC’s judgment, provides an important reminder – especially to the Commission – that the rights of defence should be upheld without excuses, including in merger control proceedings.


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Following an inquiry in July 2017, the House of Lords’ European Union Committee published on February 2, 2018, a report titled – ‘Brexit: competition and State aid’ – on the future of the UK’s competition law regime after Brexit.

The House of Lords report provides a detailed account of the most pressing issues that the UK’s competition law regime is facing ahead of Brexit. It also shows the high levels of uncertainty that businesses operating between the EU and the UK face.

This uncertainty suggests that businesses should – at least for now – adopt a cautious approach, for example, when formulating their distribution and acquisition strategies in the UK.

Whatever the statutory changes to the UK’s competition law regime after Brexit are, EU law will still remain an important factor to consider when taking business decisions, especially because of the geographical proximity and close trading relationships between the UK and the EU. This means that going forward businesses need to have guidance.

Steptoe has years of experience in successfully advising businesses on their strategic decisions in the EU and the UK. Our experienced lawyers can help your business to successfully navigate the demands and potential opportunities of Brexit. 
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