Are factors unrelated to competition relevant?

Merger Control (3rd edition)

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 fulfilled 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.

Chile Small Flag Chile


Turkey Small Flag Turkey

Non-competition issues are not taken into account.

Denmark Small Flag Denmark


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.

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 or 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. Four media mergers were notified to the CCPC in 2017.

Cyprus Small Flag Cyprus

The CPC only takes competition issues into account when considering the Service’s report and issuing its decision.

However, the Minister of Energy, Commerce, Industry and Tourism can, by issuing a justified order, declare a concentration as being of major public interest with regard to the effects it might have on public security, pluralism of the mass media and the principles of sound administration.

Italy Small Flag Italy

Pursuant to Art. 25(1) of the Law, the ICA can exceptionally authorize a concentration that would be otherwise prohibited, if relevant national economic interests are involved, provided that the concentration does not eliminate competition on the market or impose restrictions going beyond the national economic interests at stake. The Government sets forth the criteria based on which the ICA clears the transaction. The latter can anyway impose measures necessary to restore competition within a certain period.

Pursuant to Art. 25(2) of the Law, even if the clearance decision has been adopted by the ICA, the Italian Prime Minister may prohibit, for reasons of national economy, an acquisition of an Italian company by a foreign company. This may happen when, in the country of origin of such foreign company, Italian undertakings are discriminated, especially in connection with their ability to acquire local companies (sort of rule of reciprocity).

Finally, pursuant to Art. 20(5-bis) of the Law, upon request by the Bank of Italy, the ICA may clear a concentration involving banks, which creates or strengthens a dominant position, to protect the economic stability of one or more of the parties.

Norway Small Flag Norway


Philippines Small Flag Philippines

Public interest issues are very much relevant and material in the review process. The public policies behind competition law include the prevention of monopolies, improvement of industrial efficiencies, and promotion of consumer welfare. These are all overriding considerations which will have a great impact in the decision-making process.

Recently, the PCC assumed jurisdiction to review the sale of business by a potential third telecommunications player to two (2) of the largest and only telecommunications companies in the Philippines despite an official issuance that certain mergers submitted within a certain deadline were ‘deemed approved’. The PCC’s decision to assert its jurisdiction is spurred by public clamor for an improvement in the quality of service currently provided by existing telecommunications companies which enjoy a virtual duopoly in the Philippines. The issue is currently pending litigation before the Philippine Supreme Court.

Russia Small Flag Russia

In parallel with ordinary merger control filing requirements provided for by the Competition Law there are also filing requirements for foreign investments as set forth in the Federal Law No. 57-FZ "On the Procedure for Making Foreign Investments in Business Entities of Strategic Importance for National Defence and State Security" dated 29 April 2008 (the "Strategic Investment Law") and the Federal Law No. 160 "On Foreign Investments in the Russian Federation" dated 9 July 1999 (the "Foreign Investment Law"). These filings can be made in parallel with the merger control filing.

The transaction will not be cleared by the FAS if that transaction also requires approval under the Strategic Investment Law and such approval has not been obtained.

France Small Flag France

In principle, factors unrelated to competition are not relevant to the FCA's merger control assessment.

This being said, following a Phase II (in depth-review) decision of the FCA, the Ministry of Economy has a right of higher authority to review the case and issue a decision on the contemplated transaction in consideration of reasons of general interest other than protecting competition, which as the case may be can offset the anticompetitive effects resulting from the transaction (e.g safeguarding employment in France, supporting industrial development or strategic interests, supporting or safeguarding competitiveness of a business in a context of international competition).

In the Financière Cofigeo/groupe Agripole 2018 case previously mentioned, the Minister of Economy used its review power for the first time and overturned the decision initially rendered by the FCA (clearance subject to divestment commitments) by clearing the transaction without any commitment.

South Africa Small Flag South Africa

The Commission must also consider whether the merger can be justified on substantial public interest grounds, particularly the effect of the merger on employment; the ability of small businesses or firms controlled by historically disadvantaged persons to become competitive; and the ability of national industries to compete in international markets.

The Commission has shown concern for issues such as employment with regard to both mergers and complaints of prohibited practices. In some recent merger decisions, the Commission has been unwilling to accept merger-related job losses. Further, the Commission has recently indicated that certainty from merging parties is required as to whether job losses will occur as a result of a merger or not. Notwithstanding the above, in the vast majority of cases, competition arguments are the Commission’s main focus and the basis on which decisions are made. However, public interest considerations remain significant. An illustration of the significance of public interest considerations is the large merger between the US corporation, Wal-Mart Inc. (Wal-Mart), and South African wholesaler and retailer, Massmart Holdings Ltd (Massmart). Wal-Mart had no presence in South Africa and the Commission recommended unconditional approval of its proposed acquisition of a 51% stake in Massmart. Public interest concerns were raised by trade unions and industry bodies in relation to Wal-Mart’s record on labour rights and the effect of its procurement practices on local manufacturers and suppliers. Three government departments made submissions to the Tribunal that the acquisition would lead to thousands of job losses, worsening labour conditions and the squeezing out of local suppliers. The Tribunal approved the merger subject to conditions including a moratorium on retrenchments for two years and an obligation to give preference to 503 employees previously retrenched, once employment opportunities become available within the merged entity. The merged entity was also required to establish a programme for the development of local suppliers and contribute ZAR 100 million to the programme, to be expended within three years. In 2012, following the Tribunal’s decision, the CAC upheld, in part, an appeal by a trade union against the Tribunal’s order. However, the CAC approved the merger subject to conditions and held that there was insufficient evidence to conclude that the public interest concerns (in particular, the effect of mergers on employment and on small and medium-sized businesses) should result in the prohibition of the merger. Notably, the CAC accepted that there were legitimate concerns about the effect of the merger on small producers and therefore consequent effects on employment and recognised that the provisions of the Act required measures to be taken to safeguard the public interest concerns, in particular, those regarding small producers.

United States Small Flag United States

Section 7 of the Clayton Act was designed to protect competition, not competitors. When reviewing a transaction, the FTC and DOJ focus on the transaction’s impact on competition, not other factors.

Switzerland Small Flag Switzerland

Not applicable.

Germany Small Flag Germany

No, non-competition factors are not relevant for the decision of the FCO.

Greece Small Flag Greece

In assessing concentrations, the HCC focuses on competition factors, adjusted to the needs of each sector involved in the concentration. However, as a rule (with the possible exception of Media Law 3592/2007, safeguarding the plurality of media) no sector-specific tests are explicitly prescribed in the law. Besides, consideration as the preservation of employment positions, the protection of the environment and the safeguarding of businesses against the crisis play only an ancillary role in the HCC analyses, and are certainly not decisive for the substantive assessment set out in its decisions.

Peru Small Flag Peru


Portugal Small Flag Portugal

The PCA does not consider non-competition factors while assessing concentrations between undertakings. There are, however, two situations in which non-competition factors are taken into consideration. Firstly, in respect to media sector transactions, the PCA is forced to adopt a prohibition decision, even if the concentration does not raise competition concerns, whenever the media regulator issues a negative (binding) opinion on the grounds of the freedom and plurality of media considerations. Secondly, a prohibition decision adopted by the PCA can be reversed by a decision of the Council of Ministers, following an extraordinary appeal, when “fundamental strategic interests of the national economy” are at stake.

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.

India Small Flag India

While assessing a combination, the CCI may consider non-competition related factors such as the financial health of the target enterprise, whether the acquisition or merger is triggered on account of corporate restructuring, whether any state undertaking is involved, etc., on a case to case basis.

United Kingdom Small Flag United Kingdom

Non-competition factors are relevant 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.

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.

EU Small Flag EU

The EUMR does not stipulate that factors unrelated to competition be considered.

Israel Small Flag Israel

The 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 that the efficiencies are likely to be transferred to the customers, and offset the expected harm to competition from the merger.

Some merger transactions will also require a sector-specific approval by a sectoral regulator, e.g. in the field of telecommunications.

China Small Flag China

The substantive test described in the relevant laws and regulations do not allow for non-competition factors to be taken into account.

Mexico Small Flag Mexico

In general terms, only factors related to competition are relevant.

Updated: March 18, 2019