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global economy, but also, more importantly, limit potential abuses of Commission power
over economic actors that may have otherwise occurred in absence of clearly defined
rules. With regard to potential abuses, business fears were based on a previous European
Court of Justice (ECJ) decision regarding the Phillip Morris case (1987), which gave the
Commission the authority it was seeking to use the Community’s pre-existing antitrust
laws16 to prohibit certain types of mergers. Phillip Morris worried capital because
specific powers granted to the Commission to deal with supranational merger control
remained unclear, subsequently offering an uncertain regulatory environment for
business. Based on Phillip Morris, and the idea that companies considered it inefficient
and costly to gain the approval of various national competition authorities when merging,
capital felt that a supranational merger regime offered a more simplified and predictable
regulatory environment. This idea verifies Sandholtz and Stone Sweet’s (1998, 15)
hypothesis that, “companies with an interest in cross-national sales or investment will
press for the reduction of national barriers, and for the establishment of regional rules and
standards.”
The private desires that guided them thus united these two sets of actors - the
Commission and representatives of capital - in negotiating the MCR out of public
scrutiny. Over several informal meetings, capital actors, represented by UNICE and the
ERT and the European Commission, led by DG Competition, negotiated over years the
details of the policy (Armstrong and Bulmer 1998, Interview 2002). The negotiations
hinged on three major issues, all of which were major concerns of capital and to a lesser
extent the Commission: the jurisdiction of the MCR and Commission control; the test and
criteria that would be used to analyse merger proposals; and the time limits placed on the
Commission to make a decision.
After three drafts (1984, 86 and 88) the outcome of the negotiations resulted in
the inclusion of a vast majority of capital’s demands. However, there were two issues -
the types of joint ventures to be considered under the MCR and the worldwide turnover
threshold17 - where both the Commission and capital had to compromise with the
Council. In both instances these concessions were deemed necessary to convince the
members of the Council (particularly the UK and Germany) to vote in the affirmative.
The legislation that emerged effectively gave birth to a ‘one-stop-shop’ for all mergers