Thresholds of Merger Notification : The Challenge of Digital Markets, the Turnover Lottery, and the Question of Re-interpreting Rules

The thresholds of merger control are one of the most important filters in competition law: If a transaction needs to be notified, the powerful tool of merger control may be applied. If not, the transaction usually goes completely unchecked. Despite this importance, merger control thresholds had rarely been in the spotlight. That has changed: In the digital era, merger control thresholds are under scrutiny because powerful digital companies undertook their “Shopping Tours” without significant interference by competition agencies. Facebook/WhatsApp is the most prominent case. The lack of meaningful merger control prompted criticism and the call for a reform of turnover-based merger control thresholds. The EU’s new reading of Article 22 of the Merger Control Regulation and cases like Towercast raise the question of how far we are willing to alter existing rules to accommodate changes.In part 1 of this contribution, I will explain the problem of setting merger control thresholds. In part 2, I will discuss difficulties of the turnover-based notification system – merger control is based on the “turnover lottery”. In part 3, I point out that digital cases are difficult to capture under the existing turnover rules because of the specificities of business models in the digital world. In part 4, I present the new ideas and rules for merger notification in Europe that are a reaction to the problem of capturing mergers involving digital gatekeepers. In part 5, I assess these changes, and in particular point to the problems of flexibilising the filter