While the Grand Duchy already enforces regulations against price fixing, unfair competition, and dominant market positions, it has been the only EU member state lacking specific rules to control company concentration.
However, this is about to change, as Minister of the Economy Franz Fayot unveiled a legislative project aimed at addressing this issue during a press briefing on Tuesday morning.
Fayot stressed that the objective is not to hinder mergers, as they often play a vital role in fostering economic growth. Rather, the focus lies on preventing adverse effects on the Luxembourg market.
To ensure a comprehensive assessment, the competition authority will evaluate the impact of such operations on a case-by-case basis. Fayot illustrated the approach by drawing a parallel between “the local bread market” and an “industrial bakery operating across the Greater Region or Europe.”
Under the proposed legislation, the competition authority will have a maximum of 25 working days to approve, reject, or impose conditions on mergers, acquisitions, or certain joint ventures involving companies with turnovers exceeding €15 million in Luxembourg.
In cases where all the companies involved have turnovers surpassing €60 million, the same rules apply.
Fayot clarified that punitive measures are not part of this process, as it purely involves an analysis of the impact on market competition.
For more intricate cases, the evaluation period may extend to 90 days, although such instances are expected to be rare.
Companies involved in the operations have the right to appeal the competition authority’s decision, and the government can also intervene in cases of general interest.
Such interventions could occur when a merger contributes to industrial, economic, or financial development, or if it reinforces a company’s international standing, or preserves and generates jobs.
The draft bill on company concentration control is currently progressing through the legislative process. However, it is anticipated that it will not be put to a vote in the Chamber of Deputies until after the legislative elections on 8 October.
