Are non-competitive factors relevant?

Merger Control

China Small Flag China

MOFCOM will also take non-competition factors into consideration in the substantive assessment.
Article 1 of the AML stipulates that the AML has been formulated to safeguard the interests of consumers and the public interest, and to promote the healthy development of the socialist market economy. Article 27 of the AML requires MOFCOM to consider both competition and non-competition factors in its merger review process, and specifically defines the scope of these non-competition factors to include influence on national economic development, influence on technological progress, as well as influence on consumers and other business operators. Consequently, in some cases, MOFCOM has to consult with industry regulators such as the NDRC, MIIT, or the Ministry of Agriculture during the merger review process.

Denmark Small Flag Denmark

No.

Ireland Small Flag Ireland

All transactions notified to the CCPC are investigated by reference to whether or not a substantial lessening of competition arises. No other factors, such as employment or broader industrial or economic policy, are taken into account by the CCPC in its investigation.

Media mergers are subject to an additional process involving the Minister for Communications, Climate Action and Environment (“Minister for Communications”) (and, if relevant, the Broadcasting Authority of Ireland (“BAI”)). This additional review takes place after the transaction has been cleared by the CCPC. The test applied under this additional process relates to the impact of the transaction on plurality of the media in Ireland. See the next section for further details.

Israel Small Flag Israel

The Antitrust Commissioner is only allowed to consider competition factors. Non-competition factors are irrelevant. Nonetheless, efficiency factors may be relevant and will be considered to the extent they are likely to be transferred to the customers, and offset the expected harm to competition from the merger.

Japan Small Flag Japan

Review by the JFTC under the Antimonopoly Act focuses on competition factors. While the Industrial Competitiveness Enhancement Act allows a government ministry to discuss with the JFTC an applicable pending merger, the Act does not encourage the JFTC to take into account any non-competition factors in its review.

Malta Small Flag Malta

Maltese law and OFC practice do not contemplate any other factors which are considered when the DG is conducting the evaluation.

Turkey Small Flag Turkey

Non-competition issues are not taken into account.

Ukraine Small Flag Ukraine

No, the AMC considers the transaction only from the competition standpoint.

United States Small Flag United States

The FTC and DOJ do not consider factors beyond the competitive effects of a proposed transaction.

Russia Small Flag Russia

The authority might take into the account certain non-competition matters, however, in practice this is not relevant for merger control regime since this is quite standard and technical procedure in Russia. Yet, such practice exist within foreign investments control regime.

United Kingdom Small Flag United Kingdom

Non-competition factors are relevant in certain 'public interest' cases.

In addition, for any type of case, the CMA may take into account the existence of transaction-specific efficiencies and 'relevant customer benefits'. If these outweigh a transaction's negative effects on competition, the CMA may decide to clear the merger. It may also take relevant customer benefits into account when assessing what remedies should be required in order to address any anticompetitive effects of a transaction.

Relevant customer benefits include lower prices, higher quality or greater choice of goods or services, or greater innovation in relation to such goods or services.

Belgium Small Flag Belgium

The Belgian Competition Authority will only take into account factors unrelated to competition in specific sectors.

Austria Small Flag Austria

Special provisions apply to media concentrations, aiming to preserve media diversity. Hence, notifiable mergers are not only subject to the market dominance test but may also be prohibited if it is expected that the media diversity will be impaired.

Under Austrian law, media diversity is the existence of numerous independent media which are not connected and which shall guarantee press coverage reflecting a range of opinions. A concentration is classified as a media concentration if at least two of the undertakings involved in the merger are considered to be a media company; a media service (Mediendienst) or companies providing auxiliary services for media companies (Medienhilfsunternehmen) or other undertakings, which hold at least 25% of the shares of one of these companies. The terms are all legally defined in the Austrian Media Act.

It may also be mentioned that, pursuant to the Cartel Act, the Cartel Court is to clear a concentration even if the dominance test is full-filled in case the concentration is indispensable for maintaining or improving the international competitiveness of the undertakings involved and justified macro-economically. However, in practice, this provision hardly plays a role.

South Africa Small Flag South Africa

In considering all mergers, including pro-competitive mergers, the Commission considers the effect the merger will have on the public interest, with specific reference to its effect on :

  • a particular industrial sector or region;
  • employment;
  • the ability of small and black business to become competitive; and
  • the ability of national industries to compete internationally.

A merger with no anticompetitive effect could in principle be prohibited if, for instance, it will result in substantial job losses or an impact on local procurement. However, to date any public interest concerns have been dealt with by way of remedies.

Public interest issues are often championed by the Minister of Economic Development, who has a statutory right to participate in proceedings from a public interest perspective.

France Small Flag France

The FCA only takes into account factors related to competition in its investigation.

That being said, the Minister of Economy may decide at the end of the in-depth review of a concentration by the FCA to authorize of prohibit a concentration based on non-competition public interest grounds. In particular, the Minister of Economy can base its decision on factors such as the industrial development, the maintaining of employment or the competitiveness of the undertakings in international competition (Article L.430-7-1 of the FCC).

Mexico Small Flag Mexico

Not necessarily given that the authority’s review and task is to focus on the impact certain transaction might have over Mexican markets and consumers from a competition perspective. However, specific circumstances of a particular case like for example a failing firm defence could somehow be taken into consideration but it will not be the authority’s first interest.

Germany Small Flag Germany

No. Those would only become relevant in the rare exception of a subsequent ministerial approval proceeding following a merger prohibition by the FCO through which the parties may request the German Minister of Economic Affairs and Energy to overturn the FCO’s disapproval of the transaction. In such ministerial approval proceedings, the parties would need to establish that the transaction brings about significant benefits for the economy at large or that the implementation of the transaction is justified based on overwhelming interests of the population.

Italy Small Flag Italy

According to Article 25(1) of Law no. 287/90, if relevant national economic interests are involved, the Government can exceptionally authorize concentrations which would be otherwise prohibited. This provision was applied only in the Alitalia – Air One case of 2008. In particular, Law Decree no. 134 of 28 August 2008 converted with amendments by Law no. 166 of 27 October 2008, introduced a provision according to which “concentrations made by large companies operating in the essential public services sector in special administration, shall be exempted from the notification obligation”. Therefore the concentration was notified to the ICA and authorized with commitments.

According to Article 25(2) of Law no. 287 of 10 October 1990, the President of the Council of Ministers has the power to prohibit the acquisition of Italian companies by foreign companies, if the Italian companies located in the buyers’ country are discriminated in their transactions with local companies.

Australia Small Flag Australia

The substantive test is focussed on assessing the impact of the proposed transaction on competition. The ACCC does not typically take into account matters such as efficiencies except to the extent that they may have an impact on competition in the relevant market.

Parties wishing to rely on efficiencies and factors unrelated to competition typically consider whether to seek authorisation from the Tribunal, rather than clearance from the ACCC.

Canada Small Flag Canada

Not applicable.

Updated: February 17, 2017