Browsing by Author "Leedo, Liis"

Merger control in the European Union is governed by the EC Merger Regulation No 139/2004 (the EUMR), which sets out jurisdictional thresholds that the merging companies need to exceed for the transaction to be reportable. The current EUMR relies on thresholds that are based on the annual turnover of the merging parties. These turnover-based thresholds, which were as a political compromise, provide a straightforward way of determining which mergers need to be notified to the Commission. However, developments in the digital economy have facilitated a trend, especially in the technology markets, where companies acquire innovative start-ups, to either take over their valuable assets or restrict competition and their position on the market. These acquired start-ups generally produce minimal turnover but have a large user base and valuable data sets. Thus, these aforementioned mergers do not fall under the Union dimension, due to the currently applicable high turnover-based thresholds. This study assesses if turnover-based thresholds are effective enough to tackle mergers occurring in the digital economy and whether there is a need to introduce additional thresholds to complement the currently applicable thresholds. In addition, the study researches what principles should be followed when introducing new thresholds and what are the possible new alternative thresholds that the Commission could introduce. This is a legal dogmatic study, which also includes come comparative elements. It contains seven chapters, each one addressing and examining certain aspects of the research questions. Chapter 1 introduces the subject matter, objectives and rationales for the carrying out of this study. Chapter 2 gives an overview of the framework of merger control, Chapter 3 discusses whether the existing EU merger control threshold criteria are inadequate of the digital era. Chapter 4 gives an overview of different thresholds used in seven jurisdictions, Chapter 5 compares the possible alternative thresholds with three normative benchmarks and gives recommendations for introducing new threshold criteria in the EU. Chapter 6 concludes and answers the research questions and gives suggestions for further research. The study found that that the currently applicable high turnover-based thresholds set out in the EUMR are not sufficient enough to capture mergers in the digital economy. In addition, considering the needs of the digital economy, especially the fact that the number of transactions taking place in the technology markets is rapidly increasing, the Commission should introduce in addition to the turnover-based thresholds alternative thresholds, especially in technology markets, to predict the potential anti-competitive outcomes of mergers, which are not suitable to be thoroughly assessed solely based on the turnover figures of the parties. Additionally, the study suggests that new alternative threshold criterion, based on transaction value, could be introduced to the EUMR. This threshold would be able fill the gap in the EUMR, so that the Commission could investigate notable transactions in the digital economy which are likely to produce competitive harm but currently lack the turnover to fall within the EU’s jurisdiction.