Are there different tests that apply to particular sectors?
There is no obvious difference in MOFCOM’s substantive tests for different sectors during the merger filing process. That said, MOFCOM will typically pay more attention to industries which are of strategic importance to China, such as energy, agriculture, technology, etc.
Another issue that we wish to stress is that, as detailed in Article 31 of the AML, for foreign investors' acquisition of actual control over a domestic enterprise where national security is involved, a national security review shall be conducted in addition to a merger review. This provision mainly applies to sectors relating to national security, such as agriculture, energy and resources, infrastructure, transportation, technology, military industry and businesses in the vicinity of military facilities, etc.
In general, the same substantive test applies to all sectors. However, it should be noted that mergers between providers of telecommunications (which are not, as such, subject to scrutiny under the Danish Competition Act) must be notified to the Danish Business Authority if the parties have a combined turnover in Denmark of at least DKK 900 mil-lion and the merger includes a public telecommunications network. The Danish Busi-ness Authority will consider whether such merger cases should be referred to the DCCA for further assessment. If a merger is referred to the DCCA, the DCCA will apply its usual substantive test applicable to all mergers.
Media mergers are not subject to the turnover-based thresholds set out in the Competition Act and may be assessed on the basis of their impact on the plurality of views in the media. This assessment is conducted by the Minister for Communications in a distinct review process following the CCPC's assessment of the merger from a competition perspective.
A media merger is defined in the Competition Act as:
- A merger of acquisition in which two or more of the undertakings involved carry on a media business in the State; or
- A merger or acquisition in which one or more of the undertakings involved carries on a media business in the State and one or more of the undertakings involved carries on a media business elsewhere.
A media business is defined in the Competition Act as:
- Publishing newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the Internet;
- Transmitting, or re-transmitting or relaying a broadcasting service;
- Providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service; or
- Making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs that is under the editorial control of the undertaking making available such material.
“Carrying on a media business in the State” is defined in the Competition Act as (i) having a physical presence in the State, including a registered office, subsidiary, branch, representative office or agency and making sales to customers located in the State; or (ii) having made sales in the State of at least €2 million in the most recent financial year.
In June 2015, the Department of Communications, Climate Action and Environment (“DCCAE”) adopted guidelines on the assessment of media mergers. In line with information required under the guidelines, the DCCAE has issued a specific notification form on which media mergers must be notified.
The substantive test prescribed by the Israeli Antitrust Law applies to all sectors and there are no other substantive tests for particular sectors. Naturally, the competitive structure and characteristics of each market will affect the competitive assessment.
There are no sector specific substantive tests.
There are no additional sector-specific tests which are applied.
Banking Law No. 5411 (“Banking Law”) provides that the provisions of Articles 7, 10 and 11 of the Competition Law shall not be applicable on the condition that the sectoral share of the total assets of the banks subject to merger or acquisition does not exceed 20 per cent. The Board distinguishes between transactions involving foreign acquiring banks with no operations in Turkey and those foreign acquiring banks already operating in Turkey while applying the exception rule in Banking Law. Therefore, while the Board applies Competition Law to mergers and acquisitions where the foreign acquiring bank does not have any operations in Turkey, it does not apply Competition Law if the foreign acquiring bank already has operations in Turkey under the exception rule in the Banking Law. The competition legislation provides no special regulation applicable to foreign investments. However, some special restrictions exist on foreign investment in other legislations, such as media.
There are no sector specific tests.
The FTC and DOJ take into account the unique characteristics of an industry when applying Section 7 of the Clayton Act and the Horizontal Merger Guidelines, but they do not apply a different legal standard to different industries.
There are no specific tests for certain sectors. Yet, please note that since the threshold for dominance is lower in some sectors (e.g. electric power industry) it may affect the FAS analysis of the potential consequences of the deal.
Sector-specific tests apply in certain 'public interest' cases. Currently, the following constitute relevant 'public interests':
- national and public security (these considerations are typically applied to transactions in the defence sector);
- certain interests linked to the media, including the need for accurate presentation of the news and free expression of opinion, the need for (so far as reasonable and practicable) sufficient plurality of views in newspapers, the need for sufficient plurality of control of the media, the need for a wide variety of high quality broadcasting and the maintenance of broadcasting standards; and
- the maintenance of the stability of the UK financial system.
Further public interest considerations can be introduced by the Secretary of State.
In 'public interest' cases, the Secretary of State has the power to intervene and, if he or she chooses to do so, will then have the final decision as to whether to block a transaction, clear it, or clear it subject to conditions. In particular, the Secretary of State can decide:
- that the transaction gives rise to actual or potential competition concerns but that the relevant public interest nonetheless justifies clearing the merger (this happened in 2008 with the merger between the financial institutions Lloyds and HBOS); or
- that the relevant public interest necessitates the imposition of remedies beyond those (if any) that are required to address the transaction's competition concerns.
In addition, the CMA is required to open a second-phase investigation into any transaction involving certain enterprises operating in the water sector, unless the turnover of either the target water enterprise or any water enterprise already controlled by the purchaser is GBP 10 million or less. Exceptions to this duty exist where (i) the merger is not likely to prejudice the ability of the water regulator (Ofwat) to make comparisons between water enterprises for the purpose of setting appropriate price controls, or where any such prejudice is outweighed by relevant customer benefits; and (ii) the CMA accepts undertakings-in-lieu of a reference for the purpose of remedying or mitigating the prejudicial impact of losing a comparator. If there is a second-phase investigation, the substantive question considered by the CMA is the same, i.e. whether the merger may be expected to prejudice the ability of the water regulator (Ofwat) to make comparisons between different water enterprises.
The Belgian Competition Authority will take into account the need to maintain media pluralism when assessing mergers in the media sector.
None. The Competition Act does have concurrent jurisdiction and has concluded MOUs with certain sector regulators, including:
- The Independent Communications Authority of South Africa;
- The National Electricity Regulator;
- The National and Provincial Gambling Boards;
- The Counsel for Medical Schemes;
- The Ports Regulator
- The Department of Agriculture, Forestry and Fisheries
- The Construction Industry Development Board
The press sector is governed by specific rules. Any acquisition of control of a printed daily general newspaper is prohibited if it results in the acquirer controlling more than 30% of the circulation of this type of newspaper in France (Article 11 of the Act of August 1, 1986). In addition, the FCA may examine the need to preserve media plurality when assessing mergers in the media sector.
Moreover, a company which produces or supplies electricity or gas is prohibited from acquiring control of a company created after September 3, 2009 which manages a transportation network of electricity or gas in France (Article L.111-8 of the French Code of Energy).
Substantive test applicable on merger review procedures will not vary depending on the sector but will vary depending on the complexity of the transaction. However, it is standard practice that local enforcement agencies could rely on specific sector regulators to have a better understanding of the market, impact of the transaction and technical information.
None. In some circumstances (e.g. telecommunications, defence), authorisations from other authorities may be required on non-merger control grounds.
If the parties of a notified transaction are active in the telecom and media sector, the ICA shall inform the Italian Communication Authority for its non-binding mandatory opinion. In addition, in case of transactions regarding the media sector, the Italian Communication Authority may also block or impose conditions to the companies if media pluralism is endangered.
The substantive test under the CCA applies regardless of sector.
Not applicable. While there are sectoral regulatory agencies that have the jurisdiction to review a transaction that is also notifiable to the Bureau, the Bureau does not apply a different substantive test to any sector.