1 00:00:00,160 --> 00:00:04,760 Speaker 1: Just nine days after European Commission Competition Commission slap Google 2 00:00:04,800 --> 00:00:07,920 Speaker 1: with a record breaking two point seven billion dollar fine, 3 00:00:08,240 --> 00:00:11,760 Speaker 1: the Commission has added again, this time threatening three companies 4 00:00:11,760 --> 00:00:15,319 Speaker 1: with healty penalties for breaking its merger rules. The EU 5 00:00:15,400 --> 00:00:19,599 Speaker 1: has filed complaints against General Electric, Merk and Cannon, accusing 6 00:00:19,600 --> 00:00:23,239 Speaker 1: them of providing misleading or incomplete information in order to 7 00:00:23,239 --> 00:00:28,040 Speaker 1: push through mergers or acquisitions. Competition Commissioner Margareta Vesteyer has 8 00:00:28,080 --> 00:00:32,200 Speaker 1: signaled zero tolerance for companies that break the EUSE rules, 9 00:00:32,320 --> 00:00:35,280 Speaker 1: and for vesta Er, it's all about the rules here, 10 00:00:35,320 --> 00:00:38,879 Speaker 1: she is in an interview with Bloomberg last month. And 11 00:00:39,280 --> 00:00:43,560 Speaker 1: we do not circumvent rules. This is a question about 12 00:00:43,600 --> 00:00:47,519 Speaker 1: how the rules actually work. That, of course, is the 13 00:00:47,560 --> 00:00:50,720 Speaker 1: way that our rules were constructeds uh some years ago 14 00:00:50,760 --> 00:00:54,320 Speaker 1: when they were made. And you can, of course obviously 15 00:00:54,920 --> 00:00:58,000 Speaker 1: discussed the rules. But we work within the rules. This 16 00:00:58,160 --> 00:01:02,080 Speaker 1: is our obligation. The companies deals have already been approved 17 00:01:02,120 --> 00:01:04,920 Speaker 1: by the EU, but GE and Murk risk finds of 18 00:01:05,000 --> 00:01:08,600 Speaker 1: as much as one percent of annual worldwide sales, while 19 00:01:08,720 --> 00:01:13,440 Speaker 1: Cannon's penalty could climb to ten. Joining us are Spencer Waller, 20 00:01:13,440 --> 00:01:17,000 Speaker 1: a professor at Loyola University Chicago Law School and Pin 21 00:01:17,120 --> 00:01:20,440 Speaker 1: r Acman, a professor at the University of Leeds Law School. 22 00:01:21,040 --> 00:01:24,480 Speaker 1: Spencer Cannon jumped the gun on a merger. But let's 23 00:01:24,520 --> 00:01:27,880 Speaker 1: start with Ge and Murk, who are accused of giving 24 00:01:27,959 --> 00:01:35,400 Speaker 1: incomplete or misleading information. Was that information critical? Um, well, 25 00:01:35,720 --> 00:01:38,200 Speaker 1: I'm not sure that. What I've heard from the Commission 26 00:01:38,200 --> 00:01:40,960 Speaker 1: and the public sources is that they don't expect to 27 00:01:41,000 --> 00:01:43,400 Speaker 1: try to revisit the merits of the merger. What they're 28 00:01:43,400 --> 00:01:46,800 Speaker 1: concerned about is that either incomplete or misleading information was 29 00:01:46,840 --> 00:01:48,840 Speaker 1: provided to them in the course of the information the 30 00:01:48,880 --> 00:01:54,880 Speaker 1: investigation of pen or what happens if, in fact, the 31 00:01:54,920 --> 00:01:59,520 Speaker 1: European Commission finds that there was misleading information. The European 32 00:01:59,520 --> 00:02:02,960 Speaker 1: Commission and has the power to impose a fine. In 33 00:02:03,000 --> 00:02:06,640 Speaker 1: the case of misleading or incorrect information. That fine can 34 00:02:06,680 --> 00:02:09,760 Speaker 1: be up to one percent of the company's annual worldwide turnover. 35 00:02:10,320 --> 00:02:13,040 Speaker 1: In the case of jumping the gun, because that's a 36 00:02:13,120 --> 00:02:15,800 Speaker 1: more serious infringement of the procedure rules to find, can 37 00:02:15,840 --> 00:02:19,720 Speaker 1: be up to ten percent of the company's annual worldwide turnover. 38 00:02:19,840 --> 00:02:23,440 Speaker 1: But the Spencer has mentioned already, the Commission has said 39 00:02:23,440 --> 00:02:28,440 Speaker 1: they're not planning to revisit the substantive analysis in the merger, 40 00:02:28,600 --> 00:02:33,160 Speaker 1: so the decisions will remain effective. Essentially, regarding the approval 41 00:02:33,200 --> 00:02:37,240 Speaker 1: of the three transactions, Spencer tell us a little bit 42 00:02:37,240 --> 00:02:41,120 Speaker 1: about what the European Commission is claiming that g E 43 00:02:41,200 --> 00:02:44,680 Speaker 1: and MERC did not give right. So let me just 44 00:02:44,720 --> 00:02:47,680 Speaker 1: back up for one second. Um, the EU has a 45 00:02:47,760 --> 00:02:51,680 Speaker 1: system of premature notification, so does the United States, but 46 00:02:51,720 --> 00:02:54,359 Speaker 1: the E use thresholds for when you have to file 47 00:02:54,440 --> 00:02:56,600 Speaker 1: are much higher than in the two and a half 48 00:02:56,800 --> 00:03:00,760 Speaker 1: billion to five billion dollar range, So it's smaller number 49 00:03:00,800 --> 00:03:03,720 Speaker 1: of deals are notified, and when you notify, when you 50 00:03:03,760 --> 00:03:07,080 Speaker 1: have to notify, it's the EU only rather than all 51 00:03:07,080 --> 00:03:09,720 Speaker 1: the member states that review, so it's a smaller number 52 00:03:09,960 --> 00:03:13,840 Speaker 1: of larger deals. Where this sort of preempts individual countries 53 00:03:13,880 --> 00:03:16,400 Speaker 1: from looking at this. So it's one stop shopping and 54 00:03:16,480 --> 00:03:22,639 Speaker 1: it's extremely important that the EU get complete information in 55 00:03:22,720 --> 00:03:26,359 Speaker 1: the course. In other words, what are they alleging that 56 00:03:26,560 --> 00:03:30,799 Speaker 1: g E did not give them? What kind of information? Well, 57 00:03:30,840 --> 00:03:33,959 Speaker 1: I'm more familiar with the merk side of it, where um, 58 00:03:34,000 --> 00:03:37,320 Speaker 1: it was a merger of companies that that have to 59 00:03:37,360 --> 00:03:40,880 Speaker 1: do with laboratory testing services and The allegation is that 60 00:03:40,920 --> 00:03:43,920 Speaker 1: they just failed to turn over to the Commission information 61 00:03:44,040 --> 00:03:48,640 Speaker 1: about different innovation projects that would have been important to 62 00:03:48,720 --> 00:03:53,880 Speaker 1: the investigation to determine whether these companies currently competed and 63 00:03:53,960 --> 00:03:58,360 Speaker 1: whether the merger would eliminate competition as to either price, quantity, 64 00:03:58,520 --> 00:04:02,160 Speaker 1: quality or innovation pinart. Is this kind of a new 65 00:04:02,240 --> 00:04:05,120 Speaker 1: thing that the EU is really focusing on or have 66 00:04:05,240 --> 00:04:09,840 Speaker 1: they been very strict about these sort of disclosures and 67 00:04:09,920 --> 00:04:13,080 Speaker 1: information requests the entire time that they've been looking at 68 00:04:13,080 --> 00:04:16,280 Speaker 1: this kind of issue. That's a very interesting question. So 69 00:04:16,360 --> 00:04:20,400 Speaker 1: we haven't had many many of these UM types of 70 00:04:20,440 --> 00:04:23,520 Speaker 1: investigations or find so I had to look at this 71 00:04:23,600 --> 00:04:27,400 Speaker 1: today and if here's that the first such fine UM 72 00:04:27,520 --> 00:04:30,040 Speaker 1: since the new merger regulation came into force in two 73 00:04:30,040 --> 00:04:34,000 Speaker 1: thousand and four was the one important on Facebook actually 74 00:04:34,240 --> 00:04:38,200 Speaker 1: in May two thousand and seventeen. So Facebook was find 75 00:04:38,240 --> 00:04:42,920 Speaker 1: over one hundred million euros for providing misleading information. So 76 00:04:42,960 --> 00:04:47,200 Speaker 1: in the last thirteen years, UM, the Facebook one was 77 00:04:47,320 --> 00:04:49,640 Speaker 1: the first one, and we now have three of them 78 00:04:49,640 --> 00:04:51,800 Speaker 1: all at the same time. If we look at the 79 00:04:51,880 --> 00:04:55,720 Speaker 1: previous merger regulation again, we see that there haven't been 80 00:04:55,760 --> 00:04:58,920 Speaker 1: too many of these. Maybe there were three or four 81 00:04:58,960 --> 00:05:02,280 Speaker 1: of them, but it had been a UM procedure that 82 00:05:02,400 --> 00:05:05,440 Speaker 1: the Commission has used in very many cases. But it 83 00:05:05,480 --> 00:05:12,400 Speaker 1: appears that the Commission is increasingly pursuing this line of investigation. Spencer, 84 00:05:12,440 --> 00:05:16,080 Speaker 1: the companies can seek a hearing to present their cases, 85 00:05:16,120 --> 00:05:17,919 Speaker 1: and they have until the end of the summer to 86 00:05:17,960 --> 00:05:23,120 Speaker 1: request that. Is it hearing a good idea? Uh? It 87 00:05:24,400 --> 00:05:27,880 Speaker 1: really depends if if the fines are of a manageable 88 00:05:28,080 --> 00:05:30,760 Speaker 1: nature UM, and the deal isn't going to be you know, 89 00:05:30,800 --> 00:05:34,800 Speaker 1: revisited on the merits UM. It's oftentimes the companies, at 90 00:05:34,839 --> 00:05:37,000 Speaker 1: least in the US does simply pay, pay the fine 91 00:05:37,000 --> 00:05:40,640 Speaker 1: and move on, particularly if it's an inadvertent violation UM. 92 00:05:40,680 --> 00:05:43,440 Speaker 1: I think Facebook in particular, even though the fine was 93 00:05:43,520 --> 00:05:45,200 Speaker 1: very high, I think the last thing they want to 94 00:05:45,200 --> 00:05:48,800 Speaker 1: do is go back into contentious negotiations and proceedings with 95 00:05:48,839 --> 00:05:51,560 Speaker 1: the EU on and I trust grounds, so even they 96 00:05:51,600 --> 00:05:54,360 Speaker 1: have some incentive to just pay this UM and and 97 00:05:54,440 --> 00:05:57,400 Speaker 1: move on. But I completely agree with Penar that the 98 00:05:57,440 --> 00:06:02,000 Speaker 1: gun jumping allegations, which is merging the company's operations before 99 00:06:02,040 --> 00:06:06,240 Speaker 1: they have permission, is by far the most important of 100 00:06:06,400 --> 00:06:10,240 Speaker 1: these allegations, and there's at least one precedent in the EU, 101 00:06:10,360 --> 00:06:13,599 Speaker 1: where France in November of last year imposed an eighty 102 00:06:13,839 --> 00:06:18,400 Speaker 1: million euro fine on a mobile mobile telephone company for 103 00:06:18,440 --> 00:06:21,120 Speaker 1: gun jumping prior to getting permission to go ahead with 104 00:06:21,160 --> 00:06:24,440 Speaker 1: the merger. We're talking with Spencer Waller, professor at Loyola 105 00:06:24,520 --> 00:06:27,760 Speaker 1: University Chicago Law School, and Pinart Ackman, a professor at 106 00:06:27,760 --> 00:06:30,920 Speaker 1: the University of Leeds Law School, about the EU filing 107 00:06:30,960 --> 00:06:35,120 Speaker 1: complaints against General Electric, Merk and Cannon, accusing them of 108 00:06:35,160 --> 00:06:39,160 Speaker 1: providing misleading or incomplete information in order to push through 109 00:06:39,240 --> 00:06:44,200 Speaker 1: mergers or acquisitions. Pinar with the stayer, it seems to 110 00:06:44,200 --> 00:06:47,080 Speaker 1: be all about the rules, and in their responses from 111 00:06:47,160 --> 00:06:50,320 Speaker 1: GE and Merk, it was all about having acted in 112 00:06:50,440 --> 00:06:53,640 Speaker 1: good faith. Is that going to make a difference to 113 00:06:53,720 --> 00:06:58,440 Speaker 1: the EU? It certainly will so. For the European Commissions 114 00:06:58,480 --> 00:07:02,000 Speaker 1: imposive fine for miss leading on or incorrect information, it 115 00:07:02,080 --> 00:07:05,320 Speaker 1: has to be the case that the companies in question 116 00:07:05,480 --> 00:07:10,600 Speaker 1: have provided this information intentionally or negligently. So if the 117 00:07:10,640 --> 00:07:14,400 Speaker 1: companies can prove that they were neither intentional nor negligence 118 00:07:14,600 --> 00:07:18,800 Speaker 1: in their information provision to the Commission, it is possible 119 00:07:18,840 --> 00:07:22,240 Speaker 1: that they could escape as fine. Spencer a lot of 120 00:07:22,240 --> 00:07:25,840 Speaker 1: the time. When we're talking about the EU VERSUS, you know, 121 00:07:26,280 --> 00:07:28,480 Speaker 1: American companies, we're talking about the fact that they have 122 00:07:28,480 --> 00:07:31,320 Speaker 1: different standards. It's a lot tougher on some of the 123 00:07:31,320 --> 00:07:33,960 Speaker 1: anti competitive stuff than than here in the US. Is 124 00:07:34,000 --> 00:07:36,480 Speaker 1: this what we're looking at in these cases or is 125 00:07:36,520 --> 00:07:39,920 Speaker 1: this just bad corporate behavior? UM, I don't think it would. 126 00:07:40,040 --> 00:07:43,080 Speaker 1: I don't think these allegations would play out very differently. 127 00:07:43,120 --> 00:07:46,600 Speaker 1: In the US. We have similar rules about when transactions 128 00:07:46,640 --> 00:07:50,800 Speaker 1: have to be notified for review in advance, and if 129 00:07:50,960 --> 00:07:52,920 Speaker 1: if you're above a certain level, which is around three 130 00:07:53,000 --> 00:07:56,680 Speaker 1: hundred million dollars right now, you have to notify and 131 00:07:56,760 --> 00:07:59,480 Speaker 1: you can't close your transaction. You can't jump the gun 132 00:07:59,560 --> 00:08:02,360 Speaker 1: and begin and cooperating with the company you're still competing with. 133 00:08:02,720 --> 00:08:05,480 Speaker 1: You have to provide certain information with your filing in 134 00:08:05,520 --> 00:08:08,320 Speaker 1: the US, and you have to provide certain additional information 135 00:08:08,360 --> 00:08:11,559 Speaker 1: and testimony upon request. And you know if you don't, 136 00:08:11,800 --> 00:08:15,320 Speaker 1: if you don't provide complete, accurate information or you jump 137 00:08:15,400 --> 00:08:18,640 Speaker 1: the gun, there are penalties. Frankly, they're not as high 138 00:08:18,680 --> 00:08:21,920 Speaker 1: as in Europe. But the companies shouldn't be surprised that 139 00:08:22,000 --> 00:08:25,080 Speaker 1: the U S and the EU need complete information uh, 140 00:08:25,120 --> 00:08:27,440 Speaker 1: and you have to keep your transactions on hold while 141 00:08:27,480 --> 00:08:32,040 Speaker 1: they investigate penar Do you agree? Because the EU has 142 00:08:32,120 --> 00:08:36,440 Speaker 1: been accused of taking a much more aggressive antitrust stance 143 00:08:37,080 --> 00:08:40,120 Speaker 1: than the US, and you don't hear about these kind 144 00:08:40,160 --> 00:08:45,559 Speaker 1: of penalties in the US. I think it's probably fair 145 00:08:45,600 --> 00:08:49,000 Speaker 1: to say there might be a different perspective of what 146 00:08:49,200 --> 00:08:53,400 Speaker 1: competition law should achieve and what's the ultimate purpose in 147 00:08:53,480 --> 00:08:56,480 Speaker 1: the EU in comparison to that in the U. S UM. 148 00:08:56,520 --> 00:08:59,880 Speaker 1: But I don't think these companies, or even in other 149 00:09:00,080 --> 00:09:03,960 Speaker 1: cases where the companies involve our technology American technology companies, 150 00:09:04,000 --> 00:09:08,160 Speaker 1: I don't think the companies have been targeted because they're Americans. 151 00:09:08,200 --> 00:09:10,800 Speaker 1: I think in your competition was applied, it is strictly 152 00:09:10,840 --> 00:09:15,000 Speaker 1: against the European companies as it is against American companies. 153 00:09:15,360 --> 00:09:17,960 Speaker 1: But this is a debate that's been held and as 154 00:09:18,120 --> 00:09:21,079 Speaker 1: an ongoing debate that's been held by commentators on both 155 00:09:21,080 --> 00:09:24,560 Speaker 1: sides of the Atlantic as well. In that we I 156 00:09:24,600 --> 00:09:27,880 Speaker 1: suppose in Europe might be coming from a different um 157 00:09:28,040 --> 00:09:31,400 Speaker 1: starting point in the way the European competitions were adopted 158 00:09:31,400 --> 00:09:33,720 Speaker 1: after the Second World War to open up the markets 159 00:09:33,760 --> 00:09:36,360 Speaker 1: and so on, And there's a so called single market 160 00:09:36,400 --> 00:09:40,040 Speaker 1: imperative in the EU, where the European is trying to 161 00:09:40,080 --> 00:09:42,760 Speaker 1: turn the European market into one single market. So there 162 00:09:42,760 --> 00:09:45,760 Speaker 1: are some concerns in Europe that don't exist in the US, 163 00:09:45,840 --> 00:09:49,120 Speaker 1: and perhaps some of these lead to different approaches to 164 00:09:49,240 --> 00:09:52,640 Speaker 1: the same cases on both sides of the Atlantic. Spencer 165 00:09:52,760 --> 00:09:55,520 Speaker 1: one thing that sometimes appears to you you hear so much 166 00:09:55,559 --> 00:09:59,920 Speaker 1: more about the EU taking these kinds of actions do come, 167 00:10:00,040 --> 00:10:03,680 Speaker 1: but he's try to get around the EU more in 168 00:10:03,760 --> 00:10:06,240 Speaker 1: the in their anti in their anti competition rules than 169 00:10:06,280 --> 00:10:09,400 Speaker 1: they do in the US. Is there a compliance difference 170 00:10:09,760 --> 00:10:13,560 Speaker 1: between the two arenas well, There's a big compliance difference, 171 00:10:13,720 --> 00:10:16,400 Speaker 1: um and and and PENR is completely right. The EU 172 00:10:16,760 --> 00:10:20,200 Speaker 1: is simply has rules that reach farther than the US 173 00:10:20,360 --> 00:10:23,959 Speaker 1: and also is interested in applying it to areas that 174 00:10:24,200 --> 00:10:26,920 Speaker 1: the US hasn't emphasized. That this is more on the 175 00:10:27,080 --> 00:10:30,280 Speaker 1: on the monopoly side, on the abusive dominant position um 176 00:10:30,360 --> 00:10:34,760 Speaker 1: and in mercery laws. Uh, they're pretty similar. Um But 177 00:10:37,080 --> 00:10:39,320 Speaker 1: I agree with PENR that I don't think it's about 178 00:10:39,640 --> 00:10:43,040 Speaker 1: discrimination as much as the EU having a more expansive 179 00:10:43,360 --> 00:10:45,720 Speaker 1: set of rules, although I do note there are people 180 00:10:45,760 --> 00:10:48,920 Speaker 1: in the current administration in the US who are looking 181 00:10:49,040 --> 00:10:51,440 Speaker 1: very carefully at the question of whether there's targeting of 182 00:10:51,520 --> 00:10:55,160 Speaker 1: US companies. Pinar in about thirty seconds, do you think 183 00:10:55,200 --> 00:11:00,280 Speaker 1: these companies will be able to beat the fines? I 184 00:11:00,280 --> 00:11:03,160 Speaker 1: think if they cooperate with the Commission, that would be 185 00:11:03,200 --> 00:11:05,840 Speaker 1: a good start for them at least to have a 186 00:11:05,880 --> 00:11:09,360 Speaker 1: reduction and a potential fine, because cooperation is something that 187 00:11:09,400 --> 00:11:12,960 Speaker 1: the Commission takes into account as a mitigating circumstance to 188 00:11:13,080 --> 00:11:18,360 Speaker 1: reduce the potential fine. And uh, Spencer fifteen seconds, do 189 00:11:18,360 --> 00:11:22,240 Speaker 1: you agree? Um, yeah, I do. I think there's a 190 00:11:22,320 --> 00:11:24,599 Speaker 1: chance they can walk away with no fine, but I 191 00:11:24,640 --> 00:11:27,120 Speaker 1: think the most likely outcome is to do their best 192 00:11:27,160 --> 00:11:29,520 Speaker 1: to persuade that this is all inadvertent and pay as 193 00:11:29,559 --> 00:11:32,080 Speaker 1: little as possible. All right, thank you both for being 194 00:11:32,120 --> 00:11:36,080 Speaker 1: on Bloomberg Law. That Spencer Waller, professor at Loyola University 195 00:11:36,200 --> 00:11:39,640 Speaker 1: Chicago Law School, and pin R. Actment, a professor at 196 00:11:39,679 --> 00:11:43,800 Speaker 1: the University of Leeds Law School. Coming up on Bloomberg Law, 197 00:11:43,920 --> 00:11:47,040 Speaker 1: New York's top cop told the judge that an investigation 198 00:11:47,080 --> 00:11:51,719 Speaker 1: into exce on mobiles public statements about climate change uncovered 199 00:11:51,880 --> 00:11:55,680 Speaker 1: significant evidence the oil giant may have misled investors with 200 00:11:55,840 --> 00:11:59,320 Speaker 1: two sets of numbers, one public and one secret.