Significant Impediment to Effective Competition meaning

ARCHIVED – this archived practice note examines the European Commission’s method for evaluating innovation-based rivalry within merger reviews and records the state of play at publication (22 June 2018). It is no longer updated any more. Pursuant to the EU Merger Regulation, the Commission must evaluate the competitive impact of mergers, acquisitions and joint ventures (concentrations) that satisfy its jurisdictional thresholds. If the Commission harbours serious doubts as to whether a notified concentration would significantly hinder effective competition, it may launch an in-depth (phase II) inquiry and block the deal, unless the notifying party(ies) propose remedies that dispel its concerns. What amounts to a significant impediment to effective competition (SIEC) depends on the circumstances in practice. Although price effects are indeed the Commission’s usual focus for notified transactions in many assessments, recent rulings have turned the spotlight on its assessment of whether notified deals could suppress ‘innovation competition’ to a significant extent. The fullest account to date of the Commission’s appraisal of notified concentrations’ impact on innovation competition appears...

This Practice Note explains how the European Commission (the Commission) undertakes the substantive appraisal of mergers under the EU Merger Regulation (EUMR). Where a deal falls within the EUMR, the Commission must decide whether the concentration is compatible with the single market. Under the EUMR, any concentration that brings about a significant impediment to effective competition (SIEC) in the internal market, or a substantial part of it, in particular through the creation or strengthening of a dominant position, must be declared incompatible with the single market. By contrast, a concentration that does not lead to a SIEC in the internal market, or in a substantial part of it, must be cleared (ie deemed compatible with the single market). The SIEC test The SIEC test was introduced into EU competition law to close a gap identified by the European Courts when assessing the Commission’s attempts to address non‑coordinated effects in oligopolistic markets that at the same time did not trigger either single‑firm or collective dominance (which had originally limited...

Note—for guidance on whether notification thresholds in Switzerland and globally are triggered, see: Where to Notify. 1. Have there been any recent developments regarding the Swiss merger control regime and are any updates/developments expected in the coming year? Are there any other ‘hot’ merger control issues in Switzerland? On 24 November 2021, the Swiss Federal Council released a preliminary draft proposing a partial overhaul of the Cartel Act (ACart). These amendments aim to enhance the ACart’s effectiveness. Central to the package is the modernisation of Switzerland’s merger control framework. The update focuses on bringing Swiss practice in line with EU and global standards. Replacing the current dominance-plus test with the significant impediment to effective competition (SIEC) standard would align Swiss review practice with the EU and international approaches, reducing the threshold for authority to step in. Proposals on merger control envisage simplifying notification for cross-border mergers where markets span Switzerland and at least the EEA, and enabling deadline extensions in merger control proceedings. The package also foresees the...