|Court||Court of Justice|
|Date of ruling||31 May 2018|
|Case name (short version)||Ernst & Young P/S v Konkurrenceradet|
|Key words||Reference for a preliminary ruling — Control of concentrations of undertakings — Regulation (EC) No 139/2004 — Article 7(1) — Implementation of a concentration prior to notification to the European Commission and declaration of compatibility with the common market — Prohibition — Scope — Concept of ‘concentration’ — Termination of a cooperation agreement with a third party by one of the merging undertakings|
|Basic context||This request for a preliminary ruling concerns the interpretation of Article 7(1) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (‘the EC Merger Regulation’) (OJ 2004 L 24, p. 1). The request has been made in the context of an action for annulment brought by Ernst & Young P/S before the Sø- og Handelsretten (Maritime and Commercial Court, Denmark) against a decision of the Konkurrencerådet (Competition Council, Denmark) by which it found that, first, Ernst & Young, Ernst & Young Europe LLP, Ernst & Young Godkendt Revisionsaktieselskab, Ernst & Young Global Limited and EYGS LLP (collectively, ‘the EY companies’) and, secondly, KPMG Statsautoriseret Revisionspartnerselskab, Komplementarselskabet af 1. januar 2009 Statsautoriseret Revisionsaktieselskab and KPMG Ejendomme Flintholm K/S (collectively, ‘the KPMG DK companies’) had infringed the prohibition of implementing a merger prior to its approval by the Competition Council (‘the standstill obligation’), in accordance with Paragraph 12c(5) of the Konkurrenceloven (Danish Law on competition).|
|Points arising – admissibility||–|
|Points arising – substance||The three questions posed of the Court are:
(1) What criteria are to be applied in assessing whether the conduct or actions of an undertaking are covered by the prohibition in Article 7(1) of Regulation No 139/2004 (the prohibition of implementation prior to approval), and does implementing action within the meaning of that provision presuppose that the action, wholly or in part, factually or legally, forms part of the actual change of control or merging of the continuing activities of the participating undertakings which — provided the quantitative thresholds are met — gives rise to the obligation of notification?
(2) Can the termination of a cooperation agreement, such as in the present case, which is announced under circumstances corresponding to those described [in the order for reference] constitute an implementing action covered by the prohibition in Article 7(1) of Regulation No 139/2004, and what criteria are then to be applied in making a decision?
(3) Does it make any difference in answering Question 2 whether the termination has actually given rise to market effects relevant to competition law?
(4) If the answer to Question 3 is in the affirmative, clarification is requested as to what criteria and what degree of probability should be applied in deciding [in the case in the main proceedings] whether the termination has given rise to such market effects, including the significance of the possibility that those effects could be attributed to other causes.
62 In the light of all the foregoing considerations, the answer to the first to third questions is that Article 7(1) of Regulation No 139/2004 must be interpreted as meaning that a concentration is implemented only by a transaction which, in whole or in part, in fact or in law, contributes to the change in control of the target undertaking. The termination of a cooperation agreement, in circumstances such as those in the main proceedings, which it is for the referring court to determine, may not be regarded as bringing about the implementation of a concentration, irrespective of whether that termination has produced market effects.
|Order||Article 7(1) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (‘the EC Merger Regulation’) must be interpreted as meaning that a concentration is implemented only by a transaction which, in whole or in part, in fact or in law, contributes to the change in control of the target undertaking. The termination of a cooperation agreement, in circumstances such as those in the main proceedings, which it is for the referring court to determine, may not be regarded as bringing about the implementation of a concentration, irrespective of whether that termination has produced market effects.|
|Case duration||18 months|
|Notes on academic writings||1 Idot, Laurence: Concurrence – concentrations et gun-jumping, Europe 2018 Juillet Comm. nº 7 p.30-31 (FR)
2.Von Graevenitz, Albrecht: EU-Fusionskontrollrecht: Zur Reichweite des Vollzugsverbots („gun jumping“) – Anmerkung von Rechtsanwalt Dr. Albrecht v. Graevenitz, Europäische Zeitschrift für Wirtschaftsrecht 2018 p.603-608 (DE)
3.Brunet, François ; Verney, Céline: Une première pierre à l’édifice prétorien de la définition de la notion de gun jumping: l’arrêt de la Cour de justice de l’Union européenne dans l’affaire Ernst & Young (c-633/16), Revue Lamy de la Concurrence : droit, économie, régulation 2018 nº 76 p.10-13 (FR)
4.Dohrn, Daniel ; Spangler, Simon: Reichweite des Vollzugsverbots, IWRZ – Zeitschrift für internationales Wirtschaftsrecht 2018 N°6 p.268 (DE)
Sign up for free Core Blog news!
- Calendar year 2017
- 2017-190 report - Samsung SID Co. Ltd and Samsung SDI (Malaysia) Bhd v European Commission
- 2017-314 Report - Akzo Nobel and Others v Commission
- 2017-520 Report - Toshiba Corporation v European Commission
- 2017-597 Report - Persidera SpA v Autorità per le Garanzie nelle Comunicazioni
- 2017-679 Report - LG Electronics v Commission
- DICE Director Justus Haucap: “Consumers Paying with Data” Is a Bad Analogy
- The first judgement of 2018: Hoffman-La Roche v AGCM (Case C- 179/16) – a remarkable case for its unremarkable implications
- Can consumers pay too much when they pay nothing? The Bundeskartellamt’s Facebook case
- The EU Commission’s Qualcomm decision – does it take two to tango?
If you are interested, please use our Newletter to stay informed about our upcoming conferences, workshops, trainings and current published journals in our core areas of EU competition, data protection, substances and environmental law, as well as exciting new projects in emerging technologies and digitalisation.