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THE NEW EU REMEDIES POLICY

THE NEW EU REMEDIES POLICY. Michael Rowe. THE NEW EU REMEDIES POLICY. With the benefit of hindsight… the importance on the Merger Remedies Study in shaping the new remedies policy is universally recognised

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THE NEW EU REMEDIES POLICY

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  1. THE NEW EU REMEDIES POLICY Michael Rowe

  2. THE NEW EU REMEDIES POLICY • With the benefit of hindsight… • the importance on the Merger Remedies Study in shaping the new remedies policy is universally recognised • but if a review of the past better informs policy going forward, isn’t the logical place to start ex post facto review of the validity of past decisions? • an explicit commitment by the Commission to the type of review mooted in the Lear report would be welcome

  3. THE NEW EU REMEDIES POLICY • The dangers of over-divestment • parties are incentivised by the new policy to err on the side of caution in formulating remedies • strict time-limits, especially in Phase I, allow limited opportunity for precise tailoring of remedies • in these circumstances, Commission should be sensitive to the dangers of over-divestment • loss of competition using assets that would otherwise be acquired • diminution of efficiencies and lost synergies • integration difficulties for divestee

  4. THE NEW EU REMEDIES POLICY • Are there limits to convergence of policy with other agencies? • Commission insists on undertakings to address issues that are worldwide in scope, independently of the actions of other agencies • ‘Twas not always thus –Halliburton/Dresser (1998) • In practice, the Commission has proven flexible and pragmatic on timing, but there is scope for more transparency and greater convergence

  5. THE NEW EU REMEDIES POLICY • Trustees – an endangered species? • Remedies Study is emphatic on the importance of monitoring trustees in ensuring the effectiveness of remedies • But the strictness of the Commission’s requirements in relation to capability and resources, conflicts of interest and remuneration operate severely to limit the available pool • Commission could take steps to enhance the prospects for new entry into this concentrated market by: • Taking a more flexible approach on conflicts of interest and remuneration • Increasing transparency and consistency

  6. THE NEW EU REMEDIES POLICY • Form RM - a risk of repetitive strain injury? • Parties could not have keener incentives to provide the Commission with the information necessary to judge the suitability of the remedy • Irrespective of the policy on waivers, a Form changes the balance of the relationship between the Commission and the parties • A set of indicative guidelines would better respect the need for flexibility and the timing constraints inherent in the process

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