May 2021 Competition Currents: UK and EU
Mergers: UK, Germany, and Australia
On April 20, 2021, the UK Competition and Markets Authority, the German Bundeskartellamt and the Australian Competition and Consumer Commission issued a joint statement on merger control to highlight the need for rigorous and effective merger enforcement on a global basis. It is addressed to businesses, advisers, courts, and governments. The statement was prompted by high levels of concentration across certain markets in the UK, Germany, and Australia; an increase in the number of merger reviews involving dynamic and fast-paced markets; and political pressure to relax merger control where markets have been weakened, including by the pandemic.
Two key related messages emerge from the statement. First, competition authorities and courts must ensure that merger control consistently prevents firms from using M&A to gain market power, even in weakened markets, because it is difficult to reverse the loss of competition and the long-term negative consequences for businesses and end consumers. Second, the statement reinforces the regulatory preference for structural, divestment remedies to maintain competition where a transaction is viewed as only partially anti-competitive. Behavioral remedies continue to be seen as potentially market-distorting and casting an undue burden on competition authorities and firms as they frequently require extensive post-merger monitoring of the merged business.
AG Bobek delivers his opinion on preliminary reference criteria.
On April 15, 2021, Advocate General Michal Bobek delivered his opinion in the Consorzio Italiano Management e Catania Multiservizi case (C-561/19), affirming that the Court of Justice of the European Union (CJEU) should revisit the CILFIT criteria on the duty of national courts of last instance to request a preliminary ruling. AG Bobek focuses his opinion on the boundaries of the duty to refer, arguing that the intervention of the Grand Chamber is necessary in order to revise the current relevant case law, namely the “CILFIT criteria”. More specifically, AG Bobek proposes that the Court uphold that national courts of last instance have a duty to refer a case for a preliminary ruling on the interpretation of EU law, provided that three cumulative requirements are met: (i) the case raises a general issue of interpretation of EU law; (ii) the EU law may be reasonably interpreted in more than one way; (iii) the way in which it has to be interpreted cannot be inferred from the existing case law of the Court or from a single, sufficiently clear judgment of the Court.
The case originates from a procedure before the Italian Council of State, where the parties asked the Council to refer a request for preliminary ruling because, in their view, the national rules infringed Directive 2004/17/EC. The Council of State referred two questions to the Court of Justice, which delivered its judgment on April 19, 2018. The parties, however, considered that the Court had not taken a position on certain aspects of the requests and asked the Supreme Administrative Court to refer other questions for a preliminary ruling. Therefore, the Council of State asked to the Court whether TFEU article 267(3) should be interpreted to mean that a national court of last instance is required, in principle, to make a reference for a preliminary ruling on a question concerning the interpretation of EU law.