Resume: Article 22 of the EU Merger Regulation allows EU member states to ask the Commission to examine a concentration not meeting the EU thresholds. Especially in the light of the Commission’s recent switch to expansive interpretation and use of the said Article 22, its importance increases and practical controversies arise.
I. Introduction 
After relatively calmer times, an increasing number of issues within European merger control regime are being put to light. Scholars (and politicians) discuss the concept of national champions, especially after the (ultimately blocked) Siemens / Alstom transaction.[] Effectiveness of turnover thresholds for notification and the alternative in value-based criteria are considered.[] There have also been quite a lot high-profile gun jumping cases.[]
There is another up-to-date merger control issue, which is also linked to another timely topic, digital platforms treatment. It is an issue of application of Art. 22 EU Merger Regulation (EUMR), i.e. the so-called ‘Dutch clause’. This paper presents an overall overview of particular issues of application of Art. 22 EUMR.
With a bit of poetry, the Dutch clause resembles a story of Sleeping Beauty. In the past, it was mostly asleep, only invoked in few cases in which its application – retrospectively looking – was not really controversial. However, it seems that the European Commission believes that it is about the time to wake it up.
II. Art. 22 EUMR structure
Art. 22(1) EUMR is worded as follows:
One or more Member States may request the Commission to examine any concentration as defined in Article 3 that does not have a Community dimension within the meaning of Article 1 but affects trade between Member States and threatens to significantly affect competition within the territory of the Member State or States making the request.
Such a request shall be made at most within 15 working days of the date on which the concentration was notified, or if no notification is required, otherwise made known to the Member State concerned.
The Commission has a discretion in its decision whether to take over the assessment of the concentration. If this happens, the concentration may no longer be examined before the national authorities of those member states which have requested the Commission to take over. The provision is nicknamed the ‘Dutch clause’ because it was inserted in the previous merger regulation no. 4064/89 at the request of the Netherlands.
An interpretation of Art. 22 EUMR raises a number of practically relevant questions.
The first group of issues relates to the interpretation of conditions of its application. Art. 22 EUMR requires three conditions to be applied. First, the concentration must be a concentration within the meaning of Art. 3 of the EUMR, but must not have a community dimension. Secondly, Art. 22 EUMR introduces a special jurisdictional criterion in the form of the need to affect trade between member states. The third condition for application is the threat of a significant impediment to competition in the requesting member state.
Secondly, Art. 22 EUMR may, in certain cases, question the effectiveness of the regime by denying the one-stop-shop principle.
Finally, and perhaps most importantly, the question is whether the Commission may be asked by the national authorities to examine the concentration, which, however, would not need to be notified in any member state. This is also the situation at the current Illumina / Grail case.
III. Conditions of Applicability
III.A Concentration without a community dimension
Art. 22(1) EUMR refers to a concentration according to the definition in Art. 3 EUMR. There clearly are difficult cases, in which it can be questionable whether the respective transaction is or is not a concentration. This is, however, not an issue pertaining specifically to Art. 22 EUMR and the analysis would be out of scope of this paper, while it is often very dependent on factual aspects of the case. However, it may be estimated that in most cases, this conditions probably shall not bring significant problems of interpretation.
That being said, an attention should be paid to the fact that the concept of a concentration is not harmonised among the EU member states. Thus, it may happen e.g. that a transaction must be notified to the German Cartel Office, but will not be eligible to Art. 22 EUMR procedure as it is not a concentration within the meaning of Art. 3 EUMR.
Second, the given concentration, at the same time, must not have the so-called community dimension to be eligible for Art. 22 EUMR process. Again, this is rather a straightforward condition based on the turnover thresholds in Art. 1(2) and (3) EUMR. It is also very much logical because if the transaction would be a concentration within the meaning of EUMR and would have the community dimension, it should be notified to the European Commission. Hence, Art. 22 EUMR procedure would be pointless.
III.B Effect on trade between member states
The EU competition law, in general, knows two jurisdictional criteria. First, it is the impact on a substantial part of the common market. Second, it is the effect on trade between member states. Both criteria are used in Art. 102 TFEU, while the first one is related to the dominant position and the second one to the effects of the abuse. The second criterion is also implemented in Art. 101 TFEU.
The main material principle of the Commission’s powers within EUMR is the first jurisdictional criterion used in EU competition law, i.e. the impact on a substantial part of the common market.[] The criterion of effect on trade between member states appears throughout the EUMR exclusively in relation to Art. 22 EUMR. The EUMR text itself, including its preamble, does not explain why this criterion is applied only in Art. 22 EUMR. Moreover, the assessment of a concentration (also the one which will be referred to the Commission pursuant to Art. 22 EUMR) will depend on whether or not it significantly impedes effective competition in the common market or in a substantial part of it.[] Thus, even this jurisdictional criterion will be, in the end, applied.
In theory, the criterion of affecting trade between member states only increases requirements to the Commission’s ability to take over the case, and thus Art. 22 EUMR scope of application is more limited than in another referral procedures pursuant EUMR.[]
However, the question is whether, on a practical level, this “additional” criterion plays any role. The Commission has never refused to take over a case under Art. 22 EUMR on the grounds of not meeting with this criterion. It follows from the case-law and decision-making practice on Art. 101 and 102 TFEU that this jurisdictional criterion is interpreted relatively broadly. It should be sufficient if the concentration alters the normal course of trade between member states, while it does not have to lead to a direct detrimental effect on it.[]At the same time, the application of Art. 22 EUMR is conditional on the threat of significant impediment to competition in the territory of the requesting member state or States (see below). The likelihood that a (substantial) effect on trade between member states would not arise in a situation where there is a risk of significant impediment to competition in the territory of a member state or even larger is practically quite low.
At the same time, this jurisdictional criterion has been assessed together with the second jurisdictional criterion (a substantial part of the internal market) in a kind of comprehensive analysis.[] In practice, situations where the first criterion of jurisdiction would be clearly met and the second was not, or vice versa, will be rather rare. It is correct that in the context of Art. 22 EUMR, the criterion of appreciable effect on trade between member states should determine whether the Commission has a jurisdiction over the case, whereas the criterion of impact in a substantial part of the common market is decisive for the Commission’s assessment of the concentration itself. However, it would be surprising if the Commission ever took over a case only to later declare that the concentration does not affect a substantial part of the common market. In such a case, the Commission would have to approve the concentration, while national competition authorities, which would otherwise have the jurisdiction, could challenge the concentration even if a significant impediment to competition would only occur in a minor part of the internal market (which, however, could still be a significant territory within the member state concerned).
To sum up, the practical relevance of this condition must be seen in connection with the second jurisdictional criterion, and the assessment will likely be similar like in Art. 102 TFEU cases. Therefore, it will be difficult to make a difference between these two criteria in the assessment and contrary results for these two criteria are quite unlikely.
III.C Condition of threat of significant impediment to competition
The analysis of this criterion within Art. 22 EUMR is logically an ex-ante assessment (the concentration has not yet been implemented). Hence, it must be necessarily based on a certain standard of probability. The Commission’s Notice on Case Referral sets out a standard of real risk of a significant negative effect of the concentration on competition.[]
The real risk of significant impediment to competition should arise after a preliminary assessment of the concentration by a member state, which should demonstrate such a risk in its request to the Commission. Although the Commission emphasizes that such a preliminary assessment and the associated evidence should not affect the outcome of the final assessment of the concentration,[] in reality these issues simply must be interlinked. Of course, it cannot be ruled out that, according to the Commission, even if the member state sufficiently demonstrates a real risk of significant impediment to competition and the Commission is entitled to take over the case, the Commission will later conclude that no such impediment exists and approves the concentration. In practice, however, this surely cannot be expected to happen in the so-called Phase I. Simply put, this criterion leads the Commission to take over only those complex mergers, for which a relatively detailed assessment will be required. Given the Commission’s discretion as to whether or not to accept a referral request, the Commission cannot be expected to be willing to take over cases where, as a result, no competition concerns can be expected. Otherwise, the Commission would just take over the administrative burden from the national authorities relating to unproblematic concentrations.
In practice, the assessment of the fulfilment of the criterion of the threat of significant impediment to competition is to some extent intertwined with the Commission’s consideration of whether a referral is appropriate.[] The Notice on Case Referral states that the most appropriate cases to be taken over by the Commission are those where there are serious concerns about cross-border market distortions or distortions on a number of individual markets that are not located in one country.[]
IV. Dutch clause and one-stop-shop principle
Art. 22 The EUMR differs from other EUMR referral options in a way that it does not have to lead to a one-stop-shop notification. This is due to the fact that the suspension of the powers of the national authorities relates only to those who submitted a referral request. In other member states national rules continue to apply. Hence, it could potentially be also necessary to notify the concentration to the competition authorities of such other member states.[] If a referral request is submitted by only one member state, the number of mandatory notifications will not change, only the jurisdiction of such a state is transferred to the Commission.
The issue is even more interesting if the interpretation of the Dutch clause discussed below were adopted, and thus a referral request could also be made by a national authority to which, however, the concentration would not need to be notified. In such a case, the situation would change in a way that, in addition to all the jurisdictions where the concentration were to be notified, the Commission’s jurisdiction was added.
The above means that the activation of Art. 22 EUMR often does not meet the principle of one-stop-shop principle. Whether the Commission will be the only ‘jurisdiction’ in which a concentration will need to be notified depends solely on the discretion of those national competition authorities to which the concentration should otherwise be notified. At the same time, with the Commission’s interpretation of Art. 22 EUMR discussed below, national competition authorities in states where the concentration does not have to be notified would not be prevented from de facto creating an additional obligation of the parties to notify the concentration to the Commission.
Furthermore, the suspension of the powers of only the requesting member state(s) also has an impact on the assessment of the concentration itself. The Commission should not, in theory, examine the impact of the concentration on competition in the territory of those states which did not request the Commission to take over the case and which are investigating the case themselves. Such an approach is not problematic in cases where the affected relevant markets are geographically defined at national or sub-national level. In such cases, the Commission will simply exclude from its review those markets which are in the territory of the member states examining the concentration on their own.[] However, the situation is more complicated in cases where the affected relevant markets are defined at the supranational (EU/EEC or global) level. In such a case, the competition assessment of the impact of the concentration in the referral requesting member states cannot be simply separated from the assessment of the impact on the territories of the non-requesting member states. The Commission therefore assesses competition in the transnational markets and thus interferes to some extent with the competence of the member states.[] This could lead to a different assessment of the same issue, i.e. the impact on competition in the territory of the given state state, by the Commission and the respective member state. [] In a broad sense, this clashes with the ne bis in idem principle.
From a rather practical point of view, however, a problem arises in any situation in which the one-stop-shop is not perceived. Regardless the existence of assessment overlaps, the practical question is what the output of the various proceedings is. Even if the Commission is able to deal with the impact on competition in some of the member states, and the national authorities of the other member states focus on the impact on competition within their territory, what matters is what commitments the authorities will require if the find a threat of significant impediment to competition. More than one jurisdiction assessing the concentration will always represent a risk of contradictory or non-compatible commitments. This is, however, not a specifics of Art. 22 EUMR application.
The issue is, in practice, tackled with the actual implementation of the concentration not being partitioned per jurisdiction, but being postponed altogether until all consents are received.
V. Dutch clause and mergers not subject to notification in the member states
Art. 22 EUMR does not explicitly require that a concentration for which a national competition authority file a referral request meets its national notification criteria. Indeed, Art. 22(1) EUMR merely requires that a concentration affect trade between member states and threaten to significantly impede competition in the territory of that member state (see above). Art. 22 EUMR even explicitly anticipates that no notification is required at national level.[]
Nevertheless, it is at least questionable whether Art. 22 EUMR can be activated by a national competition authority in a situation where the concentration is not subject to mandatory notification in any member state. In other words, the question is whether Art. 22 EUMR is intended only to transfer the power to examine the concentration or whether it can also be used to establish it. This issue is particularly timely given that the Commission published new Guidelines on Art. 22 EUMR in March 2021[] and shortly thereafter, in April 2021, accepted a request from six national competition authorities to review the Illumina / GRAIL merger, although the concentration did not meet notification thresholds in any of these member states and, in fact, in any member state.[] Regardless the acceptance of the referral request by the Commission, Illumina decided to close the transaction before the Commission could issue a decision. The Commission is currently conducting infringement proceedings with Illumina while it imposed interim measures.[] Illumina is in turn suing the Commission before the General Court for annulment of the decision to accept the requests from the national competition authorities.[]
There is no doubt that the historical purpose of the Dutch clause was to allow a review of concentrations which could have affected competition in member states which (at the time) did not have their own merger control regime.[] However, with the development of national legislations, this purpose has practically lost its meaning, as the Luxembourg remains the only member state without a merger control regime.
Prior to the Illumina / GRAIL merger, there has never been a situation where the power to review a merger using Art. 22 EUMR should be directly established. Previous use of the Dutch clause was limited to situations where at least one of the requesting member states otherwise would have had the jurisdiction to examine the concentration (either under a mandatory or voluntary notification regime, as was the case in the United Kingdom’s requests). In practice, there were also situations where a member state submitted or joined a request from another member state, while one of the states would not have had jurisdiction because the notification criteria were not met.[] There was, in essence, no discussion of the legitimacy of such a procedure. Its justification sometimes included a reference to Art. 22(2) EUMR, according to which any other member state may join the original request.[] In practice, however, the Commission did not support such requests.[]Although some authors have pointed out that even this approach (accepting requests also from the states without the jurisdiction, which were however linked to a request of at least one member state with the jurisdiction) gives the Commission additional powers which have not existed and it should be against the meaning of EUMR,[] such an argument is not as strong, given first, the long-standing tacit acceptance of such a practice, and second, the following.
The quality of the Commission’s powers, if delegated to it (whether Art. 22 EUMR or Art. 4(5) EUMR), changes with the referral and the Commission proceeds to examine the concentration under EU law, which fundamentally leads to an examination of the impact of the concentration on competition within the EU.[] Similarly, in the reverse guard, when a case is referred from the Commission to a national competition authority, the national competition authority acts in accordance with its national laws and examines the effects on competition within its jurisdiction. In other words, the Commission does not just become an alternative national authority by applying Art. 22 EUMR (or Art. 4(5) EUMR), and conversely the national competition authority will not be an ‘alternative’ Commission under the reverse referral situations. In practice, there are no major problems with this issue, as the purpose of the transfer of the jurisdiction is to determine the so-called better placed authority.[]
In the other referral systems than Art. 22 EUMR, it makes perfect sense. The conditions in Art. 4 and 9 EUMR should preclude the delegation of the jurisdiction to a national competition authority in a situation where harmful effects of a concentration may arise outside its jurisdiction, and conversely the ‘3+ states with jurisdiction’ regime in Art. 4(5) EUMR logically leads to the conclusion that the concentration is likely to be of cross-border significance, so it is logical to examine it comprehensively, not just strictly in the regime of national jurisdictions.
Art. 22 EUMR establishes an exception to the above rule. If some states which have the jurisdiction do not request the Commission to take over (while others do), that jurisdiction remains to them. In order not to infringe the ne bis in idem principle, the Commission should not, in theory, examine the effects of a concentration on the territory of those states (but see above in part IV.). This, however, does not preclude the Commission to investigate impacts on competition, if any, also in the other member states, which do not have the jurisdiction. Hence, if a request from one member state is accompanied by a request of a state that would not otherwise have the jurisdiction, this will not change (at least in theory) the quality of the Commission’s jurisdiction. The Commission would examine a concentration from a community perspective involving such a state, even without its request. Moreover, from a more practical point of view, this does not affect the number of parallel proceedings in which the concentration is examined.
However, if Art. 22 EUMR is intended to result not only in a change in the quality of the jurisdiction, but also to its establishment, the situation is significantly different. In such a situation, the parties legitimately expect that the concentration will not require an approval of any competition authority. From a practical point of view, this can have a significant impact on the structure of the contractual documentation and the timing. The application of the Dutch clause in this way also means that the existence or non‑existence of the jurisdiction depends on the discretion of the national competition authorities and the Commission. Although this seems to run counter to the principles of predictability and legal certainty, it must be borne in mind that the same has been true historically. States without a merger control regime could historically establish the Commission’s power.[] Thus, Regulation No 4064/89 practically conferred on those states a power, which they did not previously have, i.e. to have the concentration examined (although by the Commission), conditional on the consent of the Commission. However, the current situation is different as, with the exception of Luxembourg, this interpretation degrades the already existing level of predictability in all member states as to whether the concentration will be examined, based on national rules and the EUMR. The informative value of notification criteria in national legal systems vanishes and notification criteria de facto lose their meaning.
This is even more evident in countries where, in some cases, the legal system establishes, in addition to mandatory notifications, the power of the national authority to examine, in its discretion, certain clearly defined concentrations not meeting the criteria for obligatory notifications (e.g. on the basis of market share).[] Thus, there is a national rule which states that the national competition authority may examine specifically defined concentrations even if they do not meet the (primary) jurisdictional criteria (for obligatory notifications). Most of the addressees of these rules would certainly be surprised that this is completely inconclusive as a result, as all other concentrations can also be examined by the Commission at the request of the national competition authority.
In addition to reducing predictability, the interpretation of Art. 22 EUMR allowing for the establishment of the jurisdiction is also controversial in the perspective of the whole EUMR’s aim and the systems of referrals. [] The EUMR’s recital 11 describes it quite aptly: “The rules governing the referral of concentrations from the Commission to Member States and from Member States to the Commission should operate as an effective corrective mechanism in the light of the principle of subsidiarity; these rules protect the competition interests of the Member States in an adequate manner and take due account of legal certainty and the “one-stop shop” principle.” It is thus clear that the primary aim of the referrals is procedural correction of inaccuracies arising from the fact that the notification criteria are based mostly only on turnover, while the actual impact on competition may differ. The purpose of a referral should therefore be that the concentration is examined by the most appropriate authority. The EUMR itself also refers to legal certainty and the one-stop-shop principle.
The interpretation that allows Art. 22 EUMR to establish the jurisdiction that would not otherwise be examined by either the Commission or any national competition authority has little to do with this main purpose of referrals. It is not a mere procedural corrective of the division of powers between the Commission and the national competition authorities, but it is of substantive importance. It creates the Commission’s jurisdiction not only in cases where it is best placed to examine a concentration, but also in all other cases. Although a national competition authority is likely to be the most appropriate to review a concentration not even meeting its national thresholds, it still is the Commission that shall examine the concentration instead, if Art. 22 EUMR is applied. One can probably imagine a cumbersome procedure consisting in requesting the Commission to review the concentration and the subsequent referral from the Commission to the national competition authority, but this is a procedure not within the meaning, but largely around the sense Art. 22 EUMR. This interpretation of Art. 22 EUMR does not help legal certainty or the one-stop-shop principle, quite the contrary.
On the other hand, Art. 22 EUMR is an exception among the referral options in more aspects. First, the regimes under Art. 4(4), Art. 9 and Art. 4(5) EUMR all maintain the one-stop‑shop principle. Art. 22 EUMR does not. Second, as regards the direction from the Commission to the member states, there is, in principle, a discretion for the Commission to decide on a referral. In the opposite direction (Art. 4(5) EUMR; the so-called 3+ system), there is an obligation for the Commission to take over the cases. Art. 22 EUMR, contrary to the above logic, gives the Commission a discretion. Third, Art. 22 EUMR is the only provision where (ultimately) the competent authority may not be given the entire extent of the jurisdiction given by the applicable law (i.e. by national laws for national authorities and by EUMR for the Commission). In some cases, the Commission will have to limit its powers to account for member states which have the jurisdiction and not filed a referral request.
In general, it is a common ground that the historical purpose of Art. 22 EUMR was (also) to establish the Commission’s jurisdiction where a merger review would not otherwise take place. In this context, there is an argument in favour of the interpretation allowing the establishment of jurisdiction by ‘closing the loopholes’ in the merger control regimes.[] The Commission’s current practice, as set out in the new Guidelines on Art. 22 EUMR, is apparently an attempt to cover such loopholes stemming from shortcomings of the regime with respect to acquisitions of low-turnover start-ups, especially in the digital economy and pharmaceuticals sectors.[]
Although the referral provisions are, at first sight, relatively clear in the EUMR, on a closer analysis they are not free from certain difficulties of interpretation. By far the most problematic is the regime set in Art. 22 EUMR, the so-called Dutch clause. The discussion on this provision is extremely relevant, as the Commission decided in 2021 to change its previous long-standing practice and to extend the range of cases in which Art. 22 EUMR may be activated in practice.
The current situation suggests that the Commission will firmly support its interpretation of the Dutch clause and will also examine concentrations that do not need to be notified in any member state. However, this will require the cooperation of the member states. It appears from the Illumina / GRAIL case that some countries will provide this support to the Commission – France, Belgium, Greece, Iceland, the Netherlands and Norway have submitted a referral request. On the contrary, resistance to this interpretation can be traced to other member states – e.g. the German Cartel Office has made it relatively clear that it intends to refrain from referral requests unless it has the jurisdiction to examine the concentration.[]
The application of the Dutch clause by the Commission in the way it is enforced is an unorthodox solution to the problem of the timeliness of enforcement in digital markets, and the Commission certainly cannot be denied some legal ingenuity in this regard. However, it can only solve the problems in which a concentration took place. At the same time, it must not be forgotten that, in particular, Art. 102 TFEU, which allows for ex post intervention, still exists. If a sub-threshold concentration actually leads to a distortion of competition, it shall be an abuse of a dominant position. A more economic approach to Art. 102 TFEU should thus ensure that such a negative effect is not without detection.
[]See Case M.8677, Siemens / Alstom. Commission documents on this matter are available at: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_8677 .
[]Which is already applied, for example, in Austria and Germany – see Guidance on Transaction Value Thresholds for Mandatory Pre-merger Notification (Section 35(1a) GWB and Section 9(4) KartG). July 2018. Bundeskartellamt [online], https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Leitfaden/Leitfaden_Transaktionsschwelle.pdf?__blob=publicationFile&v=2 .
[]As one case for all see a fine of approximately EUR 6.5 billion imposed by the Polish onpetition authority Gazprom – see Craig, E. Poland issues record-breaking antitrust fine to Gazprom. 7. 10. 2020. GCR [online], https://globalcompetitionreview.com/gun-jumping/poland-issues-record-breaking-antitrust-fine-gazprom .
[]Although this conclusion may have been discussed in the past – see Linsmeier, P., Buckenleib, I. The increasing importance of referrals under Art. 22 EC Merger Regulation. Antitrust, 2012, No. 1, pp. 25-26), at present there are no major disputes.
[]See Art. 22(1) EUMR, second sentence: Such a request shall be made at most within 15 working days of the date on which the concentration was notified, or if no notification is required, otherwise made known to the Member State concerned..
[]Communication from the Commission – Guidelines on the application of the case referral mechanism provided for in Art. 22 of the Merger Regulation to certain categories of cases. OJ C 113/1, 31.3.2021 (“Guidelines on Art. 22 EUMR”).
[]See Case M.10188, Illumina / GRAIL. Information is available from: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_10188.
[]See ibid. and a press release – Commission. Mergers: Commission starts investigation for possible breach of the standstill obligation in Illumina / GRAIL transaction. European Commission [online], 20 August 2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_4322. See also a press release – Commission. Mergers: Commission adopts interim measures to prevent harm to competition following Illumina’s early acquisition of GRAIL. European Commission [online], 29 October 2021, https://ec.europa.eu/commission/presscorner/detail/en/IP_21_5661.
[] See Case M.553, RTL / Veronica / Endemol and related SPS judgment in Case T-221/95, Endemol,  ECR II-1299, Case M.784, Kesko / Tuko, and related SPS judgment in Case T-22/97, Kesko, ECR  II -3775, or Case M.890, Blokker / Toys’R’Us .
[] See a press release ‘Bundeskartellamt examines whether Facebook / Custom merger is subject to notification.’ Bundeskartellamt [online], 23. 7. 2021, https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2021/23_07_2021_Facebook_Kustomer.html.