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Peter Lang GmbH, Frankfurt am Main, 2005
Visiting lecturer at the Pázmány Péter Catholic University, Faculty of Law and Political Sciences, Ph.D. student
This book [The Reform of the Merger Regulation, as an Example for a European Norm-setting Policy] written by Kyrill Farbmann deals with a very real topic and tries to expose the underlying considerations behind the new and old rules of Merger Regulation (Council Regulation 139/2004/EC – Merger Regulation).
The titles of the specific sections suggest very interesting thoughts: (i) Merger control and competition policy; (ii) The history of Merger Regulation, as an example for European norm-setting; (iii) Much noise about nothing or the institutional reform of European merger control; (iv) Procedure; (v) Powers of inspections and sanctions – Draconian rules; (vi) The new way of dealing with ancillary restraints – should one wake a sleeping dog?; (vii) Grey clouds on a blue sky – Protection against a decision of the Commission; (viii) Quo vadi rules of competence in the Merger Regulation; (ix) Common market or a substantial part of it; (x) Substantial impediment of effective competition, in particular by utilising a dominant position.
The author tries to be very critical in his approach. According to Farbmann the history of European merger control was determined by compromises between financial and political considerations, many advances were a result of struggles on the allocation of the spheres of influence between Member states and the Commission, and many of the reforms were only marginal or small and were only accepted to substantiate earlier mistakes and to delay solutions.
Repeatedly stressed by the author, is the opinion that it would be necessary to create a European competition authority that is independent from the European Commission, and that it would be extremely useful to have a control body that has the trust of the academic and business community and could be used as an objective control on the decisions of that competition authority. This is underlined especially by the fact that there is a lack of separation of powers and that the Commission has very strong powers in the field of inspections and sanctions.
It is also suggested by Farbmann that the European courts should have special chambers to deal with competition law cases, since the present judicial review process is a lengthy procedure and, in the case of mergers, it is not securing a satisfactory remedy. This is very important, he suggests, to prevent the Commission deciding cases only on the basis of assessment criteria which supports its view while not considering all other possible arguments.
The author also argues that not only was the goal to harmonise US and European merger control law and procedure not achieved, but that inter-European harmonisation is also missing. At present, there are three substantive tests for evaluation of mergers in Europe. It was not even necessary to change the dominance test to a new SIEC-test. According to the preamble of the Merger Regulation, the new test was designed to create the possibility for using Merger Regulation in the so-called unilateral effects cases. The author disagrees with the changes to the substantive test, since to have a more sustained economic analysis is not a question of the discussed substantive tests, but an issue of how the Commission carries out its evaluation. The dominance test is also able to deal with unilateral effects cases and efficiency defences. For the sake of argument, one can also state that the situations, where unilateral effects or efficiency arguments are the central issues of the case, are so rare that they do not demand a change in the substantive test.
As already mentioned, Kyrill Farbmann adopts a very critical and theoretical view. This is, on the one hand, very useful in criticising existing legislation and proposing new solutions – as the author did in his book, but, on the other hand, it is not always practical if someone has to implement these proposals. Some of the proposals are: to set up a European competition authority, to harmonise the substantive tests of the Member states, to improve the working conditions of the Commission, etc. But these ideas are lacking – at least partly – the actual support of the Member states and political leaders. Of course, many of the problems are not solved with the new Merger Regulation, since – like most of the important European legislative acts – this is also a result of compromises. But this is why it would have been also very interesting to see how the process of legislation has worked (behind the scenes) and why there must have been compromises. In the reviewer’s opinion, such an analysis could have been included according to the title of the book.
It is also necessary to address some of the weaknesses of the book. One very important issue is that the title of the book does not accurately reflect its content. One would expect to read about how the European Union is adopting legislative norms like the Merger Regulation. It would be very interesting to see a detailed and critical analysis of the norm-setting policy and process. But unfortunately the book is not really dealing with these questions. Apart from this the author does discuss every important issue of the substantive and procedural questions of Merger Regulation.
The reader gains the feeling that there is very little important English literature on the topic, but – of course – this is not true. Kyrill Farbmann has elaborated on most of the relevant books from German academics, but there is very little foreign literature. To sum up, if someone would like to see what many German academics think about the new Merger Regulation the book is very useful. The only part where foreign literature is used extensively is that dealing with competition policy.
Sometimes the arguments would have been more convincing if the author had referred to original texts of legislative acts – or to amendments of it – instead of citing some commentators (e.g. when he refers to the amendments of the ECSC). This is of course a technical issue and does not reduce the value of his conclusions, but the book would be more persuasive.
One can see that the book is a result of a long research process and for the most part, it is very up-to-date, but there are also some disturbing mistakes. For example, the author speaks of 20 commissioners.
Altogether the book is a very good summary of the German academic literature on the topic and the author is also expressing his own opinion, but he is very heavily influenced by the German thinkers. I would recommend the book to anyone who wants to get a better picture about the present status of Merger Regulation and the practice of the European Commission, but would not recommend it as a text-book or for those who are looking for a very comprehensive and detailed analysis of Merger Regulation. The book is also very useful for those readers who wish to read about new proposals to improve the existing practice of the European Commission with regard to merger control.