Interesting(?) development on jurisdictional issues in EU and Hungarian merger control

About three weeks ago the Hungarian Metropolitan Tribunal obliged the Hungarian Competition Authority (Gazdasági Versenyhivatal (GVH)) to re-evaluate a merger decision. The interesting part comes here: the GVH decided that it has no jurisdiction since the concentration meets the EU thresholds in the Merger Regulation. Therefore it has terminated the procedure. The parties turned to the Metropolitan Tribunal and argued that the concentration is not a full-function joint venture so the European Commission has no jurisdiction, but according to Hungarian national rules it must be notified to the GVH.

The GVH turned to the European Commission whether the concentration has a Community dimension or not (the GVH thinks according to the order of the court that it has), and the court used this opportunity to oblige the authority to re-initiate the procedure, stay it and wait for the answer of the European Commission.

The funny(?) part of the situation is that non full-function joint ventures don't have to be notified in Hungary to the GVH or in the EU to the European Commission. If it is a full-function joint venture than the GVH is by law not allowed to re-initiate the procedure, since the merger regulation prevents it from doing so (lack of jurisdiction - exclusive jurisdiction). If it is not a full-function joint venture, than the GVH shall not start according to the competition act a merger procedure and reconsider the situation, since it is not a concentration under Hungarian law. But in this case it must start a procedure according to Article 11 of the Hungarian Competition Act (or even under Article 101 TFEU). I can not see how this might be good for the clients of the law firm which asked the Metropolitan Court to order the GVH to re-examine the concentration. (I also wonder why the undertakings used the merger notification form to notify a transaction which is not a concentration according to them...)

Here is the original judgement.

Here is a draft translation by me.

Where is the Commission’s website?

Written by Szilágyi Pál.

I was trying to confirm my registration to the conference organised by the European Commission, but the website is gone. Anonymous might be behind this? Update: It’s back again. (23:57) Update: It might have been a hacker attack... See.

The Economics of EC Competition Law

Written by Szilágyi Pál.

I am sitting at the book introduction of the Hungarian translation of the book by Simon Bishop and Mike Walker. Congratulations to the translators, the GVH and of course the authors.

Why is competition law one of the most prosperous subjects in academia?

Written by Szilágyi Pál.

... because you can become a prime minister. Mario Monti the freshly elected prime minister of Italy is the former European Commissioner responsible for competition policy. His short bio from Wikipedia can be read here. (By the way, Wikipedia needs donations to be free and alive. See here.) His carreer is probably closer to academia than to anything else. Good prospects ... but mixing competition ideas with politics is not a good and popular idea. (I am not involved in politics apart from being a competition law teaching academic who is also a voter.)

Why the question of minority shareholdings is important

Written by Szilágyi Pál.

Recently a small group of swiss researchers conducted a study and came to the conclusion that 147 large multinationals "rule the world" and these undertakings, the core of multinationals, "can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers." They find that "transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions." They are basically connected to each other for example by cross-ownership structures, etc. This does not reach the level of control in term of competition policy, but it is not difficult to see how such a structure of firms might reduce incentives to compete on the multi-product markets where they are active.

The study itself refers to the fact that "mutual ownership relations among firms within the same sector can, in some cases, jeopardize market competition".

Well done. The floor is now for policy makers to find out how to deal with minority shareholdings in a consitent manner.

Follow-on on the sports law conference - updates

Written by Szilágyi Pál.

On Thursday and Friday we had a great conference on sport and law. The first day was dealing with competition law issues and I can say - confirmed by all the participants to whom I have spoken to - the conference was very interesting and a great success. Apart from the general approach the conference was really going into details of the relevant problems and everyone is excited about the judgement of the European Court of Justice next week in the joined cases C-403/08. Football Association Premier League and Others v QC Leisure and Others and C-429/08. Karen Murphy v Media Protection Services Ltd.