Should Merger Control Be Repatriated To The UK?

 
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Since 2012, the Government has been conducting an audit of EU powers (or "competences" to use the jargon) with a view to seeking whether their repatriation to the UK in appropriate cases. In a recent consultation, it has got round to asking interested parties on about the current division of regulatory responsibilities between Brussels and London in relation to merger control.

There are good reasons to question this division that the consultation does not mention, let above address; indeed, there are even good reasons for seeking repatriation of powers as part of the UK's attempt to renegotiate the terms of the UK's membership.

It will be recalled that prior to the adoption of the specific EC merger control regulation in 1990, the EU had no merger control powers save for those provided for in relation to iron and steel products. At that time, few Member States had any merger controls laws of their own. At the time this was perceived as detrimental to the single market goal as it enabled local national monopolies to develop.

In 1990, there was also concern that such national merger control laws that actually existed could be misused for nationalistic or protectionist purposes to prevent takeovers of national champions by "foreign" EU companies. The prohibition of the acquisition of British Sugar by Ferruzzi SPA appeared to give some credence to a concern for which an objective transnational regime based in Brussels might provide a solution.

The third justification for merger control at EU level was that mergers having an impact on a large number of states could be prohibited by one Member State but permitted in others. Such an outcome was considered to be unacceptable for reasons of consistency (a somewhat weak justification since competitive impact can vary between Member States). There was also an aspiration articulated mostly by multi-national companies that an EU merger control law would create some kind of "one-stop shop" for filing merger clearance applications and thus reduce compliance costs.

In the event in order to accommodate Member States, concerns about loss of control over mergers that had an impact on national markets, the jurisdictional boundaries were set in such a way as to allow Member States to exercise their own controls in respect of mergers where most of the turnover of the companies concerned took place in one and the same Member State. Moreover, where there was a particular impact on local markets, Member States...

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