Reasons for approval or prohibition of a proposed merger
In assessing proposed mergers, the Commission considers whether they can be expected to significantly impede effective competition in the EU. If they do not, they are approved unconditionally. If they do, and no commitments suitable to remove the impediment are proposed by the merging firms, problematic mergers must be prohibited to protect businesses and consumers from higher prices or a more limited choice of goods or services. Proposed mergers may be prohibited, for example, if the merging parties are major competitors or if the merger would otherwise significantly weaken effective competition in the market, in particular by creating or strengthening a dominant player.
Conditional approvals
Most problematic mergers are nevertheless approved, with specific conditions. In the course of the merger review process, companies have the opportunity to propose and negotiate solutions with the European Commission. Therefore, even if the European Commission finds that a proposed merger could distort competition, the parties may commit to taking action to try to correct this likely effect. They may commit, for example, to sell part of the combined business or to license technology to another market player. If the European Commission is satisfied that the commitments would maintain or restore competition in the market, thereby protecting consumer interests, it gives conditional clearance for the merger to go ahead. It then monitors whether the merging companies fulfil their commitments and may intervene if they do not.
