European Commission to assess the acquisition of Oticon Medical by Cochlear

The European Commission will assess the acquisition of Oticon Medical by Cochlear. Both Oticon Medical and Cochlear are manufacturers of specialist cochlear implants and bone-anchored hearing aids. Several EU countries, including the Netherlands, had requested the European Commission to assess this acquisition in the medical-devices market. The Netherlands Authority for Consumers and Markets (ACM) is concerned that this planned acquisition may have anticompetitive effects, and may lead to higher prices, reduced quality, or less innovation in the Netherlands and in the rest of the European Union.

Martijn Snoep, Chairman of the Board of ACM, explains: ‘Cochlear and Oticon are relatively small companies. However, they are the leading producers of these types of very complex hearing aids. Since the turnovers of these businesses fall below the statutory thresholds for merger assessments, both the European Commission and ACM are not able to assess this acquisition individually. However, this planned acquisition affects competition in several EU countries. That is why ACM, together with other European regulators, requested  the European Commission to assess the acquisition. We are glad that the Commission has announced it will do so.’

Why is this case important?

Several European regulators recognize that the acquisition of Oticon by Cochlear may eliminate a key or future competitor. That may ultimately harm consumers if it becomes easier for the new company to increase prices or reduce quality. It may also harm innovation. New developments will not occur or take place later.

Why will the European Commission investigate this case?

Competition authorities do not need to be notified of each and every merger or acquisition. Only if the merger parties meet certain turnover thresholds are they required to notify the regulator of their merger or acquisition before the transaction can be effectuated. In this specific case, the turnover thresholds used by ACM and the European Commission have not been met. However, if an EU member state does have serious concerns even though there is no European or national notification requirement, EU countries have the opportunity to file a request with the European Commission to launch an investigation anyway. Initiated by the Spanish competition authority, several EU countries have indeed filed such a request. The European Commission has announced it will launch an investigation. The referral to the European Commission also dovetails with ACM’s special interest in the competitive landscape in the market for medical devices.

This acquisition has also attracted attention from outside the EU. For example, Australia and the UK have also announced further investigations into this acquisition.

See also

• 02-12-2022 ACM: anti-competitive risks for some medical devices
• Commission to assess the proposed acquisition of Oticon Medical by Cochlear
• Practical information on implementation of the “Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases”
• Commission Guidance on the application of the referral mechanism set out in Article 22 of the Merger Regulation to certain categories of cases
• The Spanish National Markets and Competition Commission (CNMC): C/1347/22: Cochlear/Oticon Medical (in Spanish)
• The Australian Competition and Consumer Commission (ACCC): Cochlear Limited - Oticon Medical
• The UK Competition and Markets Authority (CMA): Cochlear / Oticon merger inquiry