Merger Remedies Update

“Recent Developments in EU and US Merger Remedies,” co-authored by James Halverson and Kenneth Ewing, was featured in Practical Law’s Global Competition Handbook 2004/05.

The recent reform of the European Council's Merger Regulation (Council Regulation 4064/89/EEC) (ECMR) has continued the trend towards increased convergence of US and EU merger review standards. The reforms did not alter the Commission’s substantive policy on merger remedies, but they did incorporate deadline changes that affect timing and strategy for negotiating remedies.

Substantive policies on remedies of both US and EU authorities have not changed significantly during the past year. On both sides of the Atlantic, enforcement in merger cases is motivated by the desire to preserve or restore competition in the relevant market. Faced with similar issues, the enforcement authorities’ substantive approach continues to converge. Narrowly tailored mechanisms, such as crown jewel provisions, up-front buyers, and hold-separate arrangements, are now found in both US and EU merger remedies.

This chapter summarizes the US and EU authorities’ approaches to merger remedies by looking in turn at the following:

• Divestiture in the United States,
• Disgorgement in the United States,
• Merger reform in the European Union,
• The Commission’s Notice on Remedies, and
• The Commission’s Best Practice Guidelines for Divestiture Commitments.

This article was first published in the Global Counsel Competition Law Handbook 2004/05 and is reproduced with the permission of the publisher, Practical Law Company. Read the full article.