1. Trustees: who, why and what? GCLC lunch talk - Andrew Renshaw 31 May 2005

2. Statistics

3. Legal basis for appointment  No express legal basis for appointment  “The Commission may attach to its decision conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered into vis à vis the Commission with a view to rendering the concentration compatible with the common market” (Article 6(2) and 8(2) of Regulation 139/2004)  Conditions: specify the positive measures required to restore competition  Obligations: specify the implementing steps required to fulfil the conditions  Appointment of a trustee is an obligation imposed on notifying party

4. Legal basis for appointment (cont.)  Sanctions for failing to appoint a Trustee:  clearance decision not automatically void but can be revoked  parties may be subject to:  fines (up to 10% of worldwide turnover)  periodic penalty payments (up to 5% of average daily turnover)  Commission’s power to impose obligations is not limitless but is broad

5. Why are Trustees appointed?  Authorities need to ensure implementation and effective enforcement of the remedy. This requires monitoring  Commission needs to be proactive. Cannot always rely on market participants. But Commission lacks resources and expertise  Trustees can assist in:  monitoring implementation of divestment  ongoing monitoring of behavioural commitments  implementing divestment  ensure that “hold separate” conditions are met so divestiture package does not deteriorate  remedies interpretation: resolution of disputes  Trustees are almost always appointed in merger cases involving commitments

6. What requirements do Trustees need to meet?  Appropriate qualifications for the task  Independent of merging firms  Not be subject to conflicts of interest  Trustees appointed and remunerated by merging firms  Appointment contract (mandate) is subject to Commission’s prior approval  Trustee follows instructions of the Commission - not those of merging parties  Trustee cannot be dismissed by merging parties without Commission approval