The transatlantic dispute over the Inflation Reduction Act has not yet been resolved, and another conflict is already brewing: In the USA, resentment grows over the EU Commission’s decision to give itself more leeway in reviewing planned corporate mergers. The local industry also voices criticism, as you can read in my Feature.
The industry is also sufficiently critical of the Commission’s proposals for the revised CLP Regulation and the new hazard classes for harmful substances to the environment and health. Instead of relieving the burden on small and medium-sized businesses, the new chemicals legislation would mean even more bureaucracy and lead to substance bans and restrictions on use. But the new standards could make the EU a global pioneer, as Leonie Düngefeld reports.
It’s hardly surprising that Green MEP Anna Deparnay-Grunenberg is mindful of natural resources. But the EU parliamentarian is also careful with her own resources and takes time for reflection – therefore, time management in her team also works out well. In today’s Profile, we introduce Anna Deparnay-Grunenberg.
Speaking of time management and reflection, today’s issue marks our Christmas break – on Jan. 2, 2023, you’ll find Europe.Table in your mailbox early in the morning, as usual. The year that is coming to an end has also put an emotional strain on many of us; we haven’t come this close to a war in a long time. So it’s good to unwind for a few days.
On behalf of the entire editorial team, I wish you wonderful holidays and a great start to the New Year!
Criticism of the EU Commission’s decision to extend its merger control powers is growing in the USA and the German business community. In a new position paper, the US Chamber of Commerce and the Federation of German Industries (BDI) accuse the Brussels competition regulators of creating considerable uncertainty for planned takeovers as a result of the change in practice. In the US Congress, several members from both political camps have already warned by letter of “damage to US-EU trade relations” and called on Secretary of Commerce Gina Raimondo to intervene in Brussels.
The bone of contention is the Commission’s decision to block US medical technology company Illumina from acquiring Grail, a young California-based company with a promising early detection test for cancer. The Commissioner for Competition, Margrethe Vestager, justified the move in September, saying Grail’s competitors rely on Illumina’s machines. But with the acquisition, Illumina has the incentive to cut off rivals from access to its technology. The companies appealed, and the case is now before the EU Court of First Instance in Luxembourg.
The decision is attracting a lot of attention because it was the first time the Commission applied its new practice in merger control: It had encouraged the French competition watchdog to refer the case to Brussels, even though Grail did not meet the turnover thresholds in either France or the EU above which the authorities consider a merger.
The Commission based this on a “recalibration” of Article 22 in the EU Merger Regulation, which it itself had previously adopted. According to this, it wants to encourage the national antitrust authorities to refer a takeover in certain cases, even if the national authorities are not actually responsible because the takeover thresholds have not been reached.
In this way, the Commission wants to be able to intervene when companies buy up start-ups with promising technology that still generate little revenue. In the past, the competition authorities had little leverage against killer acquisitions in the tech industry, for example. In the Digital Markets Act, EU lawmakers, therefore, stipulated that digital groups classified as gatekeepers must also notify acquisitions below the notification thresholds.
However, the Commission wants to be able to intervene when the digital giants are not involved. The EU Court of First Instance upheld the new practice in July. But many experts were “surprised that the EU court rubber-stamped the Commission’s somewhat presumptuous new practice,” says Rupprecht Podszun, antitrust law professor at Heinrich Heine University in Düsseldorf. The German Federal Cartel Office has so far not applied the new practice because of the concerns. The European Court of Justice (ECJ) now has the final say.
The US Chamber of Commerce and the BDI warn of the consequences: “The dramatically expanded application of Article 22 causes great uncertainty” for companies planning a merger. Companies would possibly be forced to notify a merger to all 27 member states, instead of only one competent authority, as was previously the case. There would also no longer be clear deadlines for the procedures.
Moreover, the Commission can prohibit mergers that were previously outside its jurisdiction – even those with insufficient links to the EU. Members of Congress also criticize the Commission’s Grail decision as being detrimental to innovation in the US, while the company has no presence at all in Europe. Companies and investors on both sides of the Atlantic are “deeply concerned,” argues John Frank, senior vice president of Illumina. “We’ve all lost the legal certainty that was the hallmark of EU merger regulation.”
The Commission disagrees: The practice has been provided for in the Merger Regulation since its adoption in 1989, says a spokeswoman. Mechanisms to capture mergers that fall below the mandatory notification thresholds but are potentially anti-competitive, moreover, also exist in the US or the United Kingdom. The referred cases would still have to meet the criteria of having a significant effect on competition in the respective member state and on cross-border trade.
The spokeswoman also said the Commission “made clear that it does not intend to use the article as a ‘catch-all.’” Rather, she said, the Commission is being given the flexibility to examine mergers that merit it without general notification requirements. In the face of criticism, the agency also recently issued some clarifications.
However, expert Podszun sees growing legal uncertainty – companies willing to merge would have to fear that the Commission would examine a case unexpectedly. “The Commission’s new interpretation means a departure from a long-standing practice,” says Podszun. “It would be cleaner to amend the Merger Regulation in an ordinary legislative procedure for this purpose.”
But the Commission wants to avoid that at all costs, Podszun says: “It fears, not without good reason, that member states would use the opportunity to demand changes motivated by industrial policy.”
While environmental groups welcome the EU Commission’s proposal for a revision of the CLP Regulation and new hazard classes for chemicals, the chemical industry warns against generic risk management, a European go-it-alone approach and the bureaucratic burden on companies.
The EU Commission had proposed a revised Classification, Labeling and Packaging (CLP) Regulation earlier this week (Europe.Table reported). Clearer rules for labeling and for chemicals sold online are intended to facilitate the free movement of substances and mixtures. In a delegated act, it also wants to introduce six new hazard classes for endocrine disruptors and other harmful chemical substances.
Among other things, the Commission proposes two new hazard classes for endocrine disruptors (EDCs): one for the environment and one for humans. EDCs are chemicals that interfere with the natural biochemical action of hormones. Because their chemical structure is similar to that of natural hormones, the substances can bind to hormone receptors and weaken or enhance the effect of hormones.
With serious consequences: According to the German Environment Agency, this can irreversibly damage the development of organisms, promote certain types of cancer in humans and endanger entire wildlife populations. The use of these substances – for example, in furniture, toys or cosmetics – has therefore long been the subject of controversial debate.
“The hazard category for suspected EDCs allows the classification of substances for which there is substantial but not yet sufficient scientific evidence,” praises the civil society alliance EDC-Free Europe, which advocates for a ban on endocrine disrupting chemicals.
“The amendments to the Annexes of the CLP Regulation will ultimately allow better control of these harmful chemicals on the EU market,” says Sandra Jen, campaign coordinator. “However, they still need to be complemented by much-needed adjustments to other key EU legislation to minimize exposure, in particular REACH and legislation on toys, food contact materials or cosmetics, to truly protect health and the environment.”
For both hazard classes of EDC, there will be two categories each, which will be graded according to the burden of proof. These are based on scientifically established criteria of the World Health Organization (WHO). The European Chemicals Agency (ECHA) is coordinating the development of a guideline in cooperation with the authorities in the member states, which companies can then use to assign the chemicals to one of the categories themselves. This is to be published in the near future.
There are also two new hazard classes for chemicals that degrade very slowly in the environment, accumulate in the environment and in organisms, and can be toxic to organisms (PBT and vPvB). These are based on the already existing criteria of the REACH regulation.
Two further new categories relate to substances that are critical for drinking water resources (PMT and vPvM) and were newly developed. The German Environment Agency (UBA) played a key role here: It had led a scientific consultation process since 2009 and submitted the criteria for this category to the EU Commission in 2019. This has now been adopted largely unchanged by the EU Commission and supported by the other member states, explains Michael Neumann, research associate at UBA.
Environmental groups such as the European Environmental Bureau (EEB) welcome the Commission’s plans. “The introduction of new hazard classes represents progress in identifying these truly problematic chemicals that cause widespread and irreversible pollution of the environment and our drinking water,” said Helene Loonen, responsible for chemicals policy at the EEB.
The German Chemical Industry Association (VCI), on the other hand, speaks of “serious effects” on a number of chemicals laws. “Instead of relieving the burden on companies and especially on small and medium-sized enterprises, the EU is saddling them with even more bureaucracy,” said VCI Managing Director Gerd Romanowski. Generic risk management, which is being created by the inclusion of new hazard classes in the CLP Regulation and is also planned as part of the REACH Regulation, leads to automatic substance bans and restrictions on use, he said.
“We, therefore, fear that numerous chemicals will disappear from the market. They will then be missing for products that are important for implementing the EU chemicals strategy and the goals of the European Green Deal,” Romanowski explained. The association cannot yet name individual substances that would be affected.
Another point of criticism from the VCI is that the EU is distancing itself from uniform UN standards with the new proposed hazard classes. The CLP Regulation implements the internationally valid Globally Harmonised System (GHS) of the United Nations in the EU. Its goal is to create, for the first time, a globally uniform system for the classification and labeling of chemicals. “By imposing its own classification rules and criteria, the EU is jeopardizing international harmonization,” said the VCI spokeswoman.
Helen Loonen of the EEB, on the other hand, speaks of a “global pioneering role of the EU” with regard to the new proposals. The EU Commission announced that it will propose the new hazard classes for the GHS in 2023. As long as this has not been done, the hazard classes will only exist in the EU, says Michael Neumann of the German Environment Agency. “This is not a real problem in my estimation, also because of the extremely long transition periods.”
Anna Deparnay-Grunenberg followed the UN Biodiversity Conference in Montreal from her home office in Stuttgart. She had decided against participating on-site so as not to worsen her carbon footprint. Moreover, she did not expect a strong agreement.
She was all the more pleased that it happened after all: “This is a real ray of hope for the future of life on our planet.” She has been sitting in the European Parliament for the Greens since July 2019, including on the committees for Transport and Tourism (TRAN) and Agriculture and Rural Areas (AGRI).
One focus of the 46-year-old is the expansion of electromobility in train travel. So far, she considers campaigns such as the Connecting Europe Express in the Year of Rail 2021 a success. The train journey through 26 countries has shaken up the industry and the EU Commission to invest more in this type of mobility.
What is particularly exciting about her work, she says, is bringing together different issues in the field of ecological change that often come into conflict with each other. For example, negotiating renewable electricity and biodiversity. Sustainable building with wood instead of concrete, but also preserving forests as carbon sinks. “We can’t think in silos, it’s all interrelated,” she stresses.
This is particularly important, she says, when it comes to the issue she is currently trying to raise awareness about: clear-cutting forests. “We talk about nature conservation and biodiversity, but we still have very old-fashioned permitted forestry in Europe.” There needs to be more European thinking on this. She also criticizes the fact that agriculture and forestry are only mentioned in passing in the objectives of the biodiversity conference.
According to the politician, the protection of forests must be at the center of the agreement. Anna Deparnay-Grunenberg is familiar with natural areas such as forests: She studied forestry and environmental sciences in Freiburg im Breisgau and Canada and then worked as an independent consultant for environmental education.
This was followed by a position as a city councilor and parliamentary group leader for the Green Party in Stuttgart and a job as a transformation designer. This is a very important topic for the mother of three, especially with regard to the climate crisis. She says she is grateful to be helping to shape this change in particular, even though the general situation sometimes frustrates and infuriates her. “I think that is the task of my generation and that of my children, not to be taken in by the frustration,” she says.
For her, the anger and sadness about the crisis come out in actions like those of Last Generation activists. They can be one tool among many to draw attention to the issues, according to the politician. “Rather than criticizing the action itself, we should look at why they are doing it.”
One suggestion of the German-French student for a better understanding of Europe that is close to everyday life is a kind of Erasmus not only during studies or training. So an exchange year also in the later career. “Why shouldn’t that also be possible when I work in a hair salon?” she thinks. For good time management, she takes her cue from nature – which, after all, also has its cycles and seasons. Thus, she attaches importance to a mindful approach to her own resources and always builds in weeks for reflection for herself and her team. “Since I’ve been doing that, time management really works better.” Kim Fischer
The transatlantic dispute over the Inflation Reduction Act has not yet been resolved, and another conflict is already brewing: In the USA, resentment grows over the EU Commission’s decision to give itself more leeway in reviewing planned corporate mergers. The local industry also voices criticism, as you can read in my Feature.
The industry is also sufficiently critical of the Commission’s proposals for the revised CLP Regulation and the new hazard classes for harmful substances to the environment and health. Instead of relieving the burden on small and medium-sized businesses, the new chemicals legislation would mean even more bureaucracy and lead to substance bans and restrictions on use. But the new standards could make the EU a global pioneer, as Leonie Düngefeld reports.
It’s hardly surprising that Green MEP Anna Deparnay-Grunenberg is mindful of natural resources. But the EU parliamentarian is also careful with her own resources and takes time for reflection – therefore, time management in her team also works out well. In today’s Profile, we introduce Anna Deparnay-Grunenberg.
Speaking of time management and reflection, today’s issue marks our Christmas break – on Jan. 2, 2023, you’ll find Europe.Table in your mailbox early in the morning, as usual. The year that is coming to an end has also put an emotional strain on many of us; we haven’t come this close to a war in a long time. So it’s good to unwind for a few days.
On behalf of the entire editorial team, I wish you wonderful holidays and a great start to the New Year!
Criticism of the EU Commission’s decision to extend its merger control powers is growing in the USA and the German business community. In a new position paper, the US Chamber of Commerce and the Federation of German Industries (BDI) accuse the Brussels competition regulators of creating considerable uncertainty for planned takeovers as a result of the change in practice. In the US Congress, several members from both political camps have already warned by letter of “damage to US-EU trade relations” and called on Secretary of Commerce Gina Raimondo to intervene in Brussels.
The bone of contention is the Commission’s decision to block US medical technology company Illumina from acquiring Grail, a young California-based company with a promising early detection test for cancer. The Commissioner for Competition, Margrethe Vestager, justified the move in September, saying Grail’s competitors rely on Illumina’s machines. But with the acquisition, Illumina has the incentive to cut off rivals from access to its technology. The companies appealed, and the case is now before the EU Court of First Instance in Luxembourg.
The decision is attracting a lot of attention because it was the first time the Commission applied its new practice in merger control: It had encouraged the French competition watchdog to refer the case to Brussels, even though Grail did not meet the turnover thresholds in either France or the EU above which the authorities consider a merger.
The Commission based this on a “recalibration” of Article 22 in the EU Merger Regulation, which it itself had previously adopted. According to this, it wants to encourage the national antitrust authorities to refer a takeover in certain cases, even if the national authorities are not actually responsible because the takeover thresholds have not been reached.
In this way, the Commission wants to be able to intervene when companies buy up start-ups with promising technology that still generate little revenue. In the past, the competition authorities had little leverage against killer acquisitions in the tech industry, for example. In the Digital Markets Act, EU lawmakers, therefore, stipulated that digital groups classified as gatekeepers must also notify acquisitions below the notification thresholds.
However, the Commission wants to be able to intervene when the digital giants are not involved. The EU Court of First Instance upheld the new practice in July. But many experts were “surprised that the EU court rubber-stamped the Commission’s somewhat presumptuous new practice,” says Rupprecht Podszun, antitrust law professor at Heinrich Heine University in Düsseldorf. The German Federal Cartel Office has so far not applied the new practice because of the concerns. The European Court of Justice (ECJ) now has the final say.
The US Chamber of Commerce and the BDI warn of the consequences: “The dramatically expanded application of Article 22 causes great uncertainty” for companies planning a merger. Companies would possibly be forced to notify a merger to all 27 member states, instead of only one competent authority, as was previously the case. There would also no longer be clear deadlines for the procedures.
Moreover, the Commission can prohibit mergers that were previously outside its jurisdiction – even those with insufficient links to the EU. Members of Congress also criticize the Commission’s Grail decision as being detrimental to innovation in the US, while the company has no presence at all in Europe. Companies and investors on both sides of the Atlantic are “deeply concerned,” argues John Frank, senior vice president of Illumina. “We’ve all lost the legal certainty that was the hallmark of EU merger regulation.”
The Commission disagrees: The practice has been provided for in the Merger Regulation since its adoption in 1989, says a spokeswoman. Mechanisms to capture mergers that fall below the mandatory notification thresholds but are potentially anti-competitive, moreover, also exist in the US or the United Kingdom. The referred cases would still have to meet the criteria of having a significant effect on competition in the respective member state and on cross-border trade.
The spokeswoman also said the Commission “made clear that it does not intend to use the article as a ‘catch-all.’” Rather, she said, the Commission is being given the flexibility to examine mergers that merit it without general notification requirements. In the face of criticism, the agency also recently issued some clarifications.
However, expert Podszun sees growing legal uncertainty – companies willing to merge would have to fear that the Commission would examine a case unexpectedly. “The Commission’s new interpretation means a departure from a long-standing practice,” says Podszun. “It would be cleaner to amend the Merger Regulation in an ordinary legislative procedure for this purpose.”
But the Commission wants to avoid that at all costs, Podszun says: “It fears, not without good reason, that member states would use the opportunity to demand changes motivated by industrial policy.”
While environmental groups welcome the EU Commission’s proposal for a revision of the CLP Regulation and new hazard classes for chemicals, the chemical industry warns against generic risk management, a European go-it-alone approach and the bureaucratic burden on companies.
The EU Commission had proposed a revised Classification, Labeling and Packaging (CLP) Regulation earlier this week (Europe.Table reported). Clearer rules for labeling and for chemicals sold online are intended to facilitate the free movement of substances and mixtures. In a delegated act, it also wants to introduce six new hazard classes for endocrine disruptors and other harmful chemical substances.
Among other things, the Commission proposes two new hazard classes for endocrine disruptors (EDCs): one for the environment and one for humans. EDCs are chemicals that interfere with the natural biochemical action of hormones. Because their chemical structure is similar to that of natural hormones, the substances can bind to hormone receptors and weaken or enhance the effect of hormones.
With serious consequences: According to the German Environment Agency, this can irreversibly damage the development of organisms, promote certain types of cancer in humans and endanger entire wildlife populations. The use of these substances – for example, in furniture, toys or cosmetics – has therefore long been the subject of controversial debate.
“The hazard category for suspected EDCs allows the classification of substances for which there is substantial but not yet sufficient scientific evidence,” praises the civil society alliance EDC-Free Europe, which advocates for a ban on endocrine disrupting chemicals.
“The amendments to the Annexes of the CLP Regulation will ultimately allow better control of these harmful chemicals on the EU market,” says Sandra Jen, campaign coordinator. “However, they still need to be complemented by much-needed adjustments to other key EU legislation to minimize exposure, in particular REACH and legislation on toys, food contact materials or cosmetics, to truly protect health and the environment.”
For both hazard classes of EDC, there will be two categories each, which will be graded according to the burden of proof. These are based on scientifically established criteria of the World Health Organization (WHO). The European Chemicals Agency (ECHA) is coordinating the development of a guideline in cooperation with the authorities in the member states, which companies can then use to assign the chemicals to one of the categories themselves. This is to be published in the near future.
There are also two new hazard classes for chemicals that degrade very slowly in the environment, accumulate in the environment and in organisms, and can be toxic to organisms (PBT and vPvB). These are based on the already existing criteria of the REACH regulation.
Two further new categories relate to substances that are critical for drinking water resources (PMT and vPvM) and were newly developed. The German Environment Agency (UBA) played a key role here: It had led a scientific consultation process since 2009 and submitted the criteria for this category to the EU Commission in 2019. This has now been adopted largely unchanged by the EU Commission and supported by the other member states, explains Michael Neumann, research associate at UBA.
Environmental groups such as the European Environmental Bureau (EEB) welcome the Commission’s plans. “The introduction of new hazard classes represents progress in identifying these truly problematic chemicals that cause widespread and irreversible pollution of the environment and our drinking water,” said Helene Loonen, responsible for chemicals policy at the EEB.
The German Chemical Industry Association (VCI), on the other hand, speaks of “serious effects” on a number of chemicals laws. “Instead of relieving the burden on companies and especially on small and medium-sized enterprises, the EU is saddling them with even more bureaucracy,” said VCI Managing Director Gerd Romanowski. Generic risk management, which is being created by the inclusion of new hazard classes in the CLP Regulation and is also planned as part of the REACH Regulation, leads to automatic substance bans and restrictions on use, he said.
“We, therefore, fear that numerous chemicals will disappear from the market. They will then be missing for products that are important for implementing the EU chemicals strategy and the goals of the European Green Deal,” Romanowski explained. The association cannot yet name individual substances that would be affected.
Another point of criticism from the VCI is that the EU is distancing itself from uniform UN standards with the new proposed hazard classes. The CLP Regulation implements the internationally valid Globally Harmonised System (GHS) of the United Nations in the EU. Its goal is to create, for the first time, a globally uniform system for the classification and labeling of chemicals. “By imposing its own classification rules and criteria, the EU is jeopardizing international harmonization,” said the VCI spokeswoman.
Helen Loonen of the EEB, on the other hand, speaks of a “global pioneering role of the EU” with regard to the new proposals. The EU Commission announced that it will propose the new hazard classes for the GHS in 2023. As long as this has not been done, the hazard classes will only exist in the EU, says Michael Neumann of the German Environment Agency. “This is not a real problem in my estimation, also because of the extremely long transition periods.”
Anna Deparnay-Grunenberg followed the UN Biodiversity Conference in Montreal from her home office in Stuttgart. She had decided against participating on-site so as not to worsen her carbon footprint. Moreover, she did not expect a strong agreement.
She was all the more pleased that it happened after all: “This is a real ray of hope for the future of life on our planet.” She has been sitting in the European Parliament for the Greens since July 2019, including on the committees for Transport and Tourism (TRAN) and Agriculture and Rural Areas (AGRI).
One focus of the 46-year-old is the expansion of electromobility in train travel. So far, she considers campaigns such as the Connecting Europe Express in the Year of Rail 2021 a success. The train journey through 26 countries has shaken up the industry and the EU Commission to invest more in this type of mobility.
What is particularly exciting about her work, she says, is bringing together different issues in the field of ecological change that often come into conflict with each other. For example, negotiating renewable electricity and biodiversity. Sustainable building with wood instead of concrete, but also preserving forests as carbon sinks. “We can’t think in silos, it’s all interrelated,” she stresses.
This is particularly important, she says, when it comes to the issue she is currently trying to raise awareness about: clear-cutting forests. “We talk about nature conservation and biodiversity, but we still have very old-fashioned permitted forestry in Europe.” There needs to be more European thinking on this. She also criticizes the fact that agriculture and forestry are only mentioned in passing in the objectives of the biodiversity conference.
According to the politician, the protection of forests must be at the center of the agreement. Anna Deparnay-Grunenberg is familiar with natural areas such as forests: She studied forestry and environmental sciences in Freiburg im Breisgau and Canada and then worked as an independent consultant for environmental education.
This was followed by a position as a city councilor and parliamentary group leader for the Green Party in Stuttgart and a job as a transformation designer. This is a very important topic for the mother of three, especially with regard to the climate crisis. She says she is grateful to be helping to shape this change in particular, even though the general situation sometimes frustrates and infuriates her. “I think that is the task of my generation and that of my children, not to be taken in by the frustration,” she says.
For her, the anger and sadness about the crisis come out in actions like those of Last Generation activists. They can be one tool among many to draw attention to the issues, according to the politician. “Rather than criticizing the action itself, we should look at why they are doing it.”
One suggestion of the German-French student for a better understanding of Europe that is close to everyday life is a kind of Erasmus not only during studies or training. So an exchange year also in the later career. “Why shouldn’t that also be possible when I work in a hair salon?” she thinks. For good time management, she takes her cue from nature – which, after all, also has its cycles and seasons. Thus, she attaches importance to a mindful approach to her own resources and always builds in weeks for reflection for herself and her team. “Since I’ve been doing that, time management really works better.” Kim Fischer
