Does the authority seek or invite the views of third parties?
Merger Control (2nd Edition)
The CMA routinely – indeed, without exception – invites third parties to comment on transactions that it is reviewing. In addition, within a few days of commencing its investigation, the CMA will usually directly contact relevant customers, suppliers and competitors of the parties, based on details supplied by the parties.
The CMA may also, where appropriate, solicit views on merger cases from other governmental departments, sectoral regulators, industry associations and consumer bodies.
In Phase I, any interested parties, including customers and competitors, may submit observations within 5 days from the publication of the notice of notification submission.
If Phase II is opened, within 10 days, third parties may formally intervene by submitting an application, if their interests might be directly harmed by the final decision. If admitted to the procedure, third parties can access the file, submit written comments and documents, request a formal hearing and participate in the final hearing before the ICA.
Additionally, the ICA may contact customers and competitors, on its own initiative, and request information useful to better assess the potential effects of a notified concentration. Market tests are generally carried out in Phase II proceedings.
When investigating a transaction that raises competitive issues, the reviewing agency will conduct interviews with the parties’ competitors, customers, suppliers, and other relevant industry participants. As part of its investigation, the reviewing agency may also issue subpoenas to third party industry participants for documents, data, and even deposition testimony. The reviewing agency uses the information from this outreach effort to gain a better understanding of how the affected markets operate, to assess the facts and arguments advanced by the parties, to gather evidence about the industry and the potential impacts of the transaction, and to identify supportive third-party witnesses for trial.
In German merger control procedure formal and informal participation of third parties in proceedings is possible. Third party participation is not limited to a specific phase or state of the proceedings, as long as they are ongoing.
Informal participation usually means that the FCO contacts selected companies or industry or trade associations, usually by telephone or email, and makes certain inquires. The role of these informal participants is merely passive. Naturally, the FCO will also accept voluntary information offered actively. The FCO decides about informal participation on a case-to-case basis.
Inquiries may also be made formally. When it finds this to be necessary, the FCO will issue a formal request for information (“Auskunftsverlangen”). Formal requests for information may ultimately be enforced by the FCO.
If another company decides to take part formally, it may be formally summoned as an interested party. To be summoned to ongoing proceedings, a formal request is required which should outline the specific interest of the applicant to be part to the proceedings. Interested parties receive more information about the proceedings and may make certain formal requests. In addition, the decisions of the FCO may only be challenged by parties that were formally party to the proceedings. For formal participation, legal representation is usually advisable.
Third parties such as customers and competitors may submit their opinions to the JFTC at any time. Also, the JFTC seeks public comments when it decides to initiate a Phase II review. Any person may to submit their opinions to the JFTC. The JFTC does not have to respond to such third party opinions, but normally takes them into account in its substantive review.
The rights which are granted to third parties are rather limited.
The notification of a concentration is disclosed to the public immediately after the receipt of the application. The BWB essentially publishes the names of the undertakings involved, the nature of the concentration, the affected business branch(es).
Within two weeks as of such publication third parties are allowed to submit statements. The consideration of such statements is at the discretion of the official parties, however. The same applies to any statements by third parties in Phase II proceedings before the Cartel Court. In particular, third parties do not formally become parties to the proceedings and have no standing to lodge an appeal.
It may also be noted in this context that, if considered necessary, the BWB may also upon its own initiative contact market participants for further information; inter alia, they may market test remedies offered.
When reviewing mergers that may raise potential competition issues the Bureau almost always conducts “market tests” to confirm information that has been provided by the parties and ask questions about the parties’ businesses and the relevant industry. This process involves consulting various stakeholders including customers, competitors, trade associations and consumer organizations regarding the proposed transaction. On occasion the Bureau has directly solicited the views of the public (e.g., for a retail merger where customers of the merging firms were individual members of the public), but this is not the standard practice.
The Bureau typically begins making market contacts shortly after commencing its review, but in the past has agreed to hold off on contacting market participants temporarily if a transaction has not yet been announced publicly (or the target’s employees have not been informed). While the authors are aware of a small number of transactions that clearly raised no competition concerns where the Bureau decided not to make market contacts, this is the exception and should not be expected in any given case.
The Competition Act establishes that when the FNE decides to initiate phase II, it shall communicate its decision to the authorities directly concerned and to the economic agents who may have an interest in the operation. Those who receive such communication, as well as any third party interested in the concentration (including suppliers, competitors, customers or consumers), may provide information to the investigation within 20 working days following the publication of the resolution ordering the initiation of phase II.
Anyway, it is common practice that the FNE seeks the view of third parties in phase I as well.
Third parties having a legitimate interest may be invited to comment, but only in the event of a full investigation. Parties having a legitimate interest may on a voluntary basis submit views at any phase of the evaluation of a concentration or they may be asked to supply information by the Service of the CPC. In the case of a full investigation, the Service is required to provide any person having a legitimate interest, but which is not a participant in the concentration, with an appropriate opportunity to submit their views.
During the assessment of the merger, the DCCA will generally invite anyone interested (primarily customers, suppliers and competitors) to comment on the proposed merger. However, when the simplified procedure is applied, the DCCA will usually depend solely on the information submitted by the parties.
Third parties have various possibilities to express their views at every stage of the merger review procedure under the EUMR.
The primary way for third parties to contribute to the Commission’s investigation is by means of replies to requests for information. For example, when a market test is carried out, the Commission sends out detailed questionnaires to third parties (usually to customers, suppliers, competitors and trade associations) seeking their views on the transaction.
The Commission also welcomes individual submissions other than direct replies to questionnaires, where third parties provide information and comments they consider relevant for the assessment of a given transaction. The Commission may also invite third parties for meetings to discuss and clarify specific issues raised.
Third parties which show a sufficient interest in the investigation (including worker representatives) may also apply to be heard by the Commission, by giving oral or written evidence. They may further be given a non-confidential copy of the statement of objections in Phase II proceedings, enabling them to submit comments to the Commission on its preliminary assessment.
The FCA is entitled to market test the proposed transaction. Competitors, customers and suppliers or even trade associations may receive questionnaires from the FCA to which they are invited to respond. The same goes for remedies submitted by the notifying parties which are subject to market test.
Third parties may also on their own initiative contact the FCA in relation to a specific transaction and submit their comments on their perception of its likely impact.
The Director General shall on notification publish in the Government Gazette and a daily newspaper the fact of the notification, the names of the parties, the nature of the concentration and the economic sectors involved.
Third parties are always invited to express their view on the transaction through the publication on the NCA’s website. Apart from this, a market test may be carried out at the NCA’s discretion, often targeted at customers, competitors and other stakeholders. The NCA may also approach such third-parties in a more informal way during early screening of received notifications. In practice, this occurs relatively frequently, even in less complex transactions.
The Competition Council may require information or documents which are necessary for the analysis of the notified concentration, from other undertakings or associations of undertakings or from public authorities and institutions.
The legislation does not provide for an express exception in this respect for transactions not raising competition issues.
KN: The Competition Commission may consult third parties whenever it deems it necessary or appropriate. Therefore, such contact are done at its sole discretion. Generally, however, the Competition Commission would reach out to third parties in more complex (Phase II) mergers that may significantly affect the local Serbian Market. The third parties would exceptionally be contacted in no-issue (Phase I) filings as the matter of practice.
There are no specific rules or limitations as to who can be invited. In practice, in the document on opening of the Phase II proceedings the Competition Commission will invite all interested stakeholders to come forward with the information they deem relevant for a proposed merger. Such stakeholders normally include the largest customers and suppliers, competitors, trade associations and other state authorities.
As part of the investigation, case handlers generally contact competitors and customers particularly where competition concerns are raised.
Parties to a merger are required to serve a non-confidential version of the merger notification on any registered trade union that represents a substantial number of its employees, or the employees concerned or representatives of such employees, in the absence of a registered trade union. Proof of service on the trade unions and/or employee representatives must be submitted as part of the notification, failing which the notification will not be regarded as complete. The time period for the Commission’s review only commences once the merger notification is complete.
Any person may voluntarily submit information to the Commission in relation to a merger. However, trade unions and / or employee representatives are afforded a more prominent role in the merger review process than other third parties and they are entitled by legislation to participate in merger proceedings. A trade union or employee representative, upon whom a non-confidential version of the merger filing is required to be served, may notify the Commission of its intention to participate in merger proceedings within five (5) business days after receiving notice of the merger.
In addition to the rights of trade unions and employee representatives to intervene, any person who has a material interest in a merger may apply to intervene in Tribunal proceedings by filing a Notice of Motion. The Notice of Motion must include a concise statement of the nature of the person’s interest in the proceedings. An application to intervene must be served on all parties to the proceedings and the Tribunal is required to determine whether or not the person asserting a material interest is permitted to intervene.
Although trade unions and / or employee representatives are afforded a more significant place in the merger review process, the government and other interested parties have intervened in certain significant merger cases.
It should be noted, however, that the authorities have issued a clear warning to potential interveners not be obstructive. For example, in 2008 and 2009, technology firm Altech attempted to intervene in the MTN/Verizon merger hearing. The Tribunal dismissed Altech’s application with costs, stating that it would have ‘considered this an appropriate case to award punitive costs’ against Altech, had its jurisdictional scope allowed for it.
Pursuant to article 15 of Communiqué No. 2010/4, the Competition Board may request information from third parties including the customers, competitors and suppliers of the parties, and other persons related to the merger or acquisition. According to article 11(2) of Communiqué No. 2010/4, if the Competition Authority is required by legislation to ask for another public authority’s opinion, this would cut the review period and restart it anew from day one. Third parties, including the customers and competitors of the parties, and other persons related to the merger or acquisition may participate in a hearing held by the Competition Board during the investigation, provided that they prove their legitimate interest.
Although it is not a common practice; Competition Authority may even invite the views of third parties for a transaction that clearly does not raise competition issues. There is no specific provision that a market testing is carried out in the merger control filing process.
As a matter of practice, the AMC never invites views of third parties, if the transaction does not raise any competition issues.
If the AMC reveals that the proposed transaction may result in the monopolisation or substantial restriction of the competition in any Ukrainian market, during the review period it may communicate with other state bodies, concerned entities (main competitors, supplies and customers of the concentration participants), and engage various experts.
CADE may subpoena third parties to provide clarification, and article 41 of the Brazilian Antitrust Law determines that unjustified absence shall be punishable to a fine of five hundred reais (R$ 500.00) to fifteen thousand reais (R$ 15,000.00) for each omission.