Article 9 of the EU ‘Merger Regulation’ (Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings) that allows EU member states, within 15 days of the notification of a concentration to request the Commission to refer a merger for review by member state authorities under applicable national legislation, even if it does have a “community dimension.” This provision was sought by Germany (hence ‘German Clause.’)
Such a request can be made if the market concerned: (a) is a “distinct market” within the member state that does not form a substantial part of the Common Market (i.e., the EU or EEA economy as a whole); or (b) if the transaction at issue threatens to affect such a distinct market. If the Commission concludes that (a) is the case, it must refer the distinct market aspects of the merger to the national authorities of the requesting government for review (which could be some or all); if it concludes (b) is the case, it may refer the matter to the member state authorities. Finally, the parties to the notified transaction may make a “Reasoned Submission” on Form RS seeking a referral to member state authorities. Although the Commission has in principle broad authority to decide whether it should refer a transaction under the German clause, if it were to bar a deal, a refusal to refer might be one basis for appeal, while opposing parties might also appeal.