Introduction

Gun-jumping has been in the spotlight this year both at the European level and in the UK. At the EU level, first there was DG Competition’s record fining of Altice of € 124.5m (here) and then the Court of Justice of the EU (“CJEU”) ruled on the scope of the EU law standstill obligation in its EY/KPMG Denmark preliminary ruling (here). Now the Competition and Markets Authority (“CMA”) has fined Electro Rent Corporation (“Electro Rent”) £100,000 for breaching the UK standstill obligation. Although there are particular features of this example which mean that the scenario is far from the norm, it does provide a reminder that standstill obligations can arise even under the UK’s voluntary regime and sends a warning of the additional complexity that may arise post-Brexit.

Continue Reading Jumping the gun: the CMA’s approach to breaches of the standstill obligation

Introduction

In a recent blog post where we reflected on DG Competition fining Altice a record € 124.5m for gun-jumping, we already anticipated the Ernst & Young P/S v Konkurrenceradet judgment where, for the first time, the Court of Justice of the EU (CJEU) provides guidance on the scope of the standstill obligation under the EU merger control regime. That judgment was handed down on 31 May. According to the CJEU, the “gun-jumping” prohibition only covers actions contributing to a change of control of the target undertaking. Because KPMG DK’s pre-clearance termination of its cooperation agreement with KPMG international did not contribute to Ernst & Young (EY) acquiring control over KPMG DK, EY and KPMG DK did not infringe the gun-jumping prohibition. This marks a welcome line in the sand finally indicating a limitation on the gun-jumping prohibition for merging companies.

Continue Reading Jumping the gun: some clarification from the Court of Justice

Last month’s Commission decision to impose a fine of €124.5 million on Altice for gun jumping is a stark reminder of the need to establish processes to ensure against conduct that can be characterized by the merger control authorities as violating the “hold-separate” obligation of the EU Merger Regulation (“EUMR”). That obligation prohibits parties to transactions that are subject to the EUMR from prematurely coordinating their activities or receiving the benefits of ownership—i.e., “jumping the gun.” (Altice has announced that it will appeal the Commission’s decision).

Continue Reading Higher Fines for Gun Jumping in Mergers – The European Commission’s Continued Emphasis on Procedural Merger Compliance