EC delays move for tighter merger control

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The Independent Online
THE EUROPEAN Commission has postponed a bid for more power to vet mergers because of opposition from member states.

Having decided not to seek lower thresholds for considering mergers, the EC will instead ask member states to reconsider the issue before the end of 1996. At present, the EC reviews mergers where the firms' combined global turnover is ecu5bn ( pounds 3.8bn) or more and where each company generates sales above ecu250m in the EC.

The drive to lower the thresholds, proposed by Sir Leon Brittan, former commissioner for competition policy, was opposed by Britain, Germany and France. His successor, Karel van Miert, said yesterday: 'Business is in favour, but a significant number of states are not.'

However, the Commission has proposed to member states other changes to the operation of its Merger Regulation without formally amending it and is looking for transparency in procedures, so that commitments to remedy competition problems by firms are published before decisions are taken.

It will also issue guidance notices on technical and legal aspects of the procedures, which should help to clear up the uncertainty over how the Commission reaches decisions.

New proposals on joint ventures will also be presented by the end of this year. These would clarify one of the greyest areas of competition policy. The Commission said yesterday that 'substantially reduced notifications' would be accepted for some minor joint ventures.

The Commission also said that it saw some holes in the EC's system of supervision for financial services as a result of the collapse of the Bank of Credit and Commerce International.

Proposals for change include more guarantees of transparency in financial institutions, locating head offices and registered offices in the same country, and widening the list of organisations with which confidential information could be shared.

The Commission has already made other proposals for changes to directives, including deposit guarantee schemes.