Thursday, May 1, 2008
Posted by D. Daniel Sokol
Michael Harker of the Univeristy of East Anglia - Norwich Law School writes on Cross-Border Mergers in the EU: The Commission v. the Member States in the most recent issue of the European Competition Journal.
ABSTRACT: This paper reviews and analyses cases where the Commission has taken action against Member States where the latter have either acted contrary to the exclusivity principle under the EC merger control regime, or have maintained in place ex ante measures with the purpose of seeking to control or deter cross-border investment in key strategic industries. Subject to very limited circumstances, such measures are contrary to the free movement of capital provisions of the EC Treaty. Nevertheless, on several notable occasions, Member States have been willing to use such powers, seemingly judging the political costs of standing by and permitting the merger to outweigh the (future) costs associated with infringement proceedings before the ECJ. In so doing, Member States have been able to modify transactions significantly and even frustrate them. Such cases pose serious problems for the stability of the EC merger regime, and have implications for the possibilities of expanding Community competence in this area.