Are there any future developments or planned reforms of the merger control regime in your jurisdiction?

Merger Control (4th edition)

Austria Small Flag Austria

One of two proposals in context of merger control was included in the latest amendment, namely the introduction of a new notification threshold which among other things takes into account the value of the consideration. However, the second often discussed proposal was not adopted. This proposal aimed at the extension of the Cartel Court’s decision competence with regard to cooperative effects.

A further amendment of the Austrian competition law (including merger control) is not expected in near future, as the latest amendment came into effect in May 2017.

China Small Flag China

The amendment of the Anti-monopoly Law has been listed in the legislation plan of China’s National People’s Congress. It is reported that a draft amendment of the law had taken shape, and merger control issues including the notification thresholds and the penalties for failure to notify are to be covered in the amendment.

At the regulations level, MOFCOM once published a draft Measures for Review of Concentration of Business Operators for soliciting public comments in 2017, which was aimed to amend the Measure for Notification of Concentration of Business Operators and the Measure for Review of Concentration of Business Operators (both issued by MOFCOM in 2009 and took effect in 2010) and to unify the two into one. The proposed amendment would help to clarify the concept of control, the calculation of turnovers and some other issues. SAMR may proceed with this amendment process.

It is also reported that SAMR may expand its antitrust guidelines to cover merger review.

Cyprus Small Flag Cyprus

No planned reforms are on the horizon.

Denmark Small Flag Denmark

On 1 January 2018, a number of amendments to the Competition Act concerning, inter alia, merger control entered into force. The amendments in-troduced a “stop the clock” provision, under which the DCCA may sus-pend the time limit for a merger review if the participating undertakings fail to disclose information requested by the DCCA within the set time limit. This amendment corresponds to the EU merger regime.

Further, the amendments bring along changes and clarification to the regulation of merger commitments. According to the current wording of the Competition Act, the undertakings involved can propose commitments during the merger review and by doing so affect the time limits for the review. By altering the wording in the relevant provisions, the proposal seeks to ensure that only binding commitments, as opposed to non-committal sug-gestions, will obtain procedural effect.

Ecuador Small Flag Ecuador

No.

EU Small Flag EU

There are currently no planned reforms of the EUMR. As mentioned above, the Commission is reviewing the issues raised by common ownership of minority shareholdings in companies active in the same industry.

France Small Flag France

In October 2017, the FCA launched a reflective process aimed at modernizing and simplifying French merger control law and review proceedings. On 7 June 2018, following a public consultation, the FCA presented its preliminary conclusions[8], including:

  • The introduction of a new targeted case of "ex-post" merger control review is being examined;
  • Simplification of the current notification form and supporting document requirements;
  • Extension of the scope of the simplified procedure and creation of a new "ultra-simplified" online notification procedure; and
  • Announcement of a revision of the Guidelines.

While in its 7 June 2018 press release, the FCA considered implementing part of the contemplated measures by the end of 2018 and the adoption of new Guidelines by mid-2019, the process is still on-going.

[8] See http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=684&id_article=3182&lang=en.

Germany Small Flag Germany

The ministry of economics is currently working on reforms aimed at adapting competition law to the challenges of digitalization. The goal is to speed up procedures and to enhance the ability of competition law to work in a fast moving environment. It is likely that such changes will affect procedures and interim measures available to the FCO and possibly the courts. It is, due to the early stage of the process, unclear how exactly the changes would affect the merger control regime.

India Small Flag India

The Competition Law Review Committee formed in October 2018 with a view to reviewing the Competition Act has passed its report to the MCA which contains multiple recommendations with respect to the antitrust aspect of the Competition Act as well as recommendations with respect to governance and administrative functioning of the CCI and the NCLAT. The notable recommendations in relation to the merger control regime include –

  1. Eligibility of insolvency resolution proceedings under the Insolvency and Bankruptcy Code for the Green Channel regime;
  2. Enabling provisions to prescribe necessary thresholds, inter alia, deal-value threshold for merger notifications.
  3. Power to allow derogation from stand-still obligations – this allows the parties to a combination (in certain circumstances) to operationalize a combination while they are awaiting approval from the CCI. An example is that of a hostile takeover where the acquirer(s) shall be allowed to purchase securities, provided they surrender all beneficial rights (of dividend and voting) attached to such securities until CCI approves the proposed combination.

These recommendations are not binding on the MCA and it cannot be confirmed if these recommendations will be implemented in the Combination Regulations.

Ireland Small Flag Ireland

In June 2019, the CCPC, following a public consultation, announced that it plans to introduce a simplified merger review procedure. It stated that the next step for the CCPC is to draft the simplified procedure guidelines – the draft guidelines will be published to allow for a period of consultation. The CCPC anticipates that this consultation will take place before the end of 2019.

Israel Small Flag Israel

The Israeli Competition Authority announced its intention to revise the Restrictive Trade Practices Regulations (Registry, Publication and Transaction Notification), 2004. Including:

  • An increase of the minimum individual filing threshold required for each of at least two parties from NIS 10 million to NIS 20 million;
  • A broader definition of “control” that will bring more companies into the fold of the filing threshold, thereby tampering the effect of the threshold increase;
  • A revision of the merger notification forms, including more information requirements from the parties to nearly all mergers, and the possible abolishment of the abbreviated forms.

PLEASE NOTE THAT THE ANSWERS TO THE ABOVE QUESTIONS ARE LIMITED TO A REVIEW OF MERGER CONTROL IN ISRAEL, AS REGULATED BY THE ISRAELI COMPETITON AUTHORITY

In 2013, the Israeli Parliament enacted the Law for Promotion of Competition and Reduction of Concentration 2013 (the “Concentration Law”). As the name of the Law indicates, the Concentration Law was aimed at increasing competition in the marketplace. One of the main provisions of the Law prevents the same entity controlling a significant financial entity and a significant non-financial (real) entity. The Concentration Law also requires Israeli regulators to have regard to overall market concentration issues when privatizing state-owned companies, granting licenses and so on.

The provisions of the Concentration Law may affect the viability of a potential merger transaction, quite apart from the provisions of the Israeli Competition Law. A detailed analysis of the rules set out in the Concentration Law is beyond the scope of the questions in this Comparative Guide.

South Korea Small Flag South Korea

The KFTC proposed an amendment to the MRFTA in late 2018. The proposed amendment is currently being reviewed by the National Assembly. The proposed amendment recommends:

  1. abolishing criminal penalties for anticompetitive business combinations; and
  2. imposing a notification obligation when a specific transaction amount (acquisition amount) is met, regardless of the current thresholds for total assets and annual turnover, in order to remedy the issue regarding big data companies, which entail important value in the Korean market regardless of their small size, being possibly excluded from review.

However, there is uncertainty whether the above proposed amendment will be passed by the National Assembly.

Mexico Small Flag Mexico

An important development in the Mexican merger control regime is that it will become mandatory for concentrations requiring clearance to be filed electronically or using digital processes. No hard copy or written documents will be able to be filed with the Commission. This is an important change that will speed up processes.

Norway Small Flag Norway

No major changes are expected for the time being.

Philippines Small Flag Philippines

Yes, the PCC is taking a proactive role in ensuring competition policies are upheld in the Philippines. The PCC recently invited stakeholders to submit comments in a current pending merger review. The PCC has also published its comments to the Philippine Government’s Terms of Reference for the selection of a private entity that will serve as the Third Telecommunications Company in the Philippines. These measures are not yet institutional and time will tell if the PCC will decide to formalize these measures as part of its rules of procedure.

Likewise, the PCC has executed various Memoranda of Agreement with several government agencies in relation to the possible exemption from filing of notification requirements for isolated transactions.[12]

[12] PCC Memorandum Circular 19-001, Process for Exemption from Compulsory Notification in Solicited Public-Private Partnership (PPP) Projects.

Portugal Small Flag Portugal

With regards to merger control rules, and the Competition Act as a whole, there are no current proposals or discussions being held for a possible revision to the regime. However, the aforementioned binding opinion of the sector media regulator, on the grounds of the freedom and plurality of media considerations, has been heavily criticized and is therefore weakened, so this situation may lead to a possible change.

Finally, it is worth mentioning that work for the review of the PCA’s guidelines on remedies are expected at any time In addition, a new notification form, amending and simplifying the present one, is projected within the PCA’s Work Program for 2019.

Lastly, it is also expected that in the course of 2020 the PCA will begin work on the preparation of guidelines on the assessment of vertical mergers.

Russia Small Flag Russia

FAS is pursuing the so-called “fifth antimonopoly package” which provides for certain amendments to the merger control regime. In particular, it is envisaged that a new eco-nomic threshold will be established as a requirement for merger control clearance –transaction value of RUB 7 billion.

In addition, the draft law introduces the procedure of mandatory issuance by FAS of the statement of factual circumstances prior to the rejection of approval to the transaction in order to give to application the possibility to discuss any remedies aiming to protect com-petition.

FAS has been discussing the draft law with the Russian Government since 2017, but they have not reached an agreement yet; therefore, the draft law has not been submitted to the Russian Parliament yet.

Sweden Small Flag Sweden

There are no planned reforms of the Competition Act in regards to merger control provisions.

Switzerland Small Flag Switzerland

Since the barriers to intervention for the review of mergers are high in Switzerland, there is a debate about introducing the SIEC test, which is the dominant merger control test in the EU. In the SIEC test, "simple market dominance" is sufficient, according to which a merger leads to the creation or strengthening of a dominant position. In contrast, Swiss merger control today requires the existence of "qualified market dominance" in order to be able to prohibit a merger. This means, that it is neces-sary that not only market dominance exists, but that it is also suitable for eliminating effective compe-tition.

Peru Small Flag Peru

As indicated above, there is currently a bill that has already been approved by the Congress of the Republic, which seeks to establish a procedure for prior authorization of concentration operations for all economic sectors. Currently, a specific aspect of this Bill is pending for final debate in Congress. The most important aspects of this Bill have been reviewed in the previous answers.

Turkey Small Flag Turkey

With respect to the legislative reforms, the Draft Competition Law, which was issued by the Authority in 2013 and officially submitted to the Presidency of the Turkish Parliament on January 23 2014, is now null and void following the beginning of the new legislative year of the Turkish parliament. In order to re-initiate the parliamentary process, the draft law must again be proposed and submitted to the presidency of the Turkish Parliament. At this stage, it remains unknown whether the Turkish Parliament or the government will renew the draft law.

United Kingdom Small Flag United Kingdom

In 2018, the Government published proposals to allow the Government to intervene in a wide range of transactions on national security grounds, even if they do not meet the thresholds for review under the UK merger control regime. The national security screening regime would be standalone, with decisions taken by a senior Government minister and no formal role for the CMA.

While the regime will remain voluntary, the Government would have jurisdiction to "call-in" for review a very wide range of transactions in any sector, with no minimum size of transaction. Any transaction called in for review by the Government would become subject to an automatic prohibition on closing (unless already closed) and potential interim measures. The Government expects around 200 transactions per year will be notified, with around 100 becoming subject to review on national security grounds, compared to only one or two at present. It is not yet clear if and when legislation will be introduced to implement the proposed reforms. Consequently, if they are implemented they are is unlikely to come into force until late 2020 at the earliest.

The exit of the UK from the European Union (Brexit) will also have a significant impact on the UK merger control regime. After the date of Brexit and the end of any applicable transitional period within which EU law will continue to apply in the UK, the EU Merger Regulation will, in all likelihood cease to apply under UK law. This will mean that:

  • Large mergers involving UK businesses that raise competition concerns will face having two, parallel, reviews by each of the EU and UK authorities, instead of the present 'one-stop-shop' review by the European Commission. The CMA has estimates that it will review around 30 to 50 more cases per year, compared with around 60 in its most recent financial year.
  • The exclusion of UK turnover when calculating whether the thresholds for an EUMR filing are met will push some transactions below those thresholds, and would likely mean fewer filings are required for joint ventures – including acquisitions of joint control over businesses – with activities in the UK, but not the EEA region.
  • The UK government will have greater freedom to block or impose conditions on mergers on grounds that are unrelated to competition, such as the impact on employment, or a desire to limit foreign ownership of UK businesses. At present, the EU Merger Regulation restricts the circumstances in which the UK government can prohibit or impose remedies on mergers that are notifiable to the European Commission. Given the recent announcement of proposals for greater political scrutiny of acquisitions on national security grounds, it seems likely that the present government would seek to make use of this greater freedom.

Finally, 2019 the CMA published various proposals for reforms of UK competition laws in February 2019, which included a call for the government to change the UK merger control regime so that large mergers that are typically reviewed my multiple international competition authorities become subject to mandatory filing and standstill obligations. The CMA also proposed that filing fees should be increased so that more (or all) of the CMA's costs of merger control reviews are borne by merging parties. A Government White Paper is expected shortly, which is expected to indicate whether the Government is minded to proceed with the reforms suggested by the CMA.

Ukraine Small Flag Ukraine

One of the expected amendments to the merger control legislation in 2019 is the proposed definition of "state aid" as a criterion for the impact of trade between Ukraine’s and the EU’s enterprises, especially in case of setting up of the government powered enterprises in the energy sector. Such a change will allow to have the definition of state aid in line with the Association Agreement and which defines examples of state aid measures, whose influence is limited to the local level, and herewith do not requires the Committee's notification.

Another proposal is the introduction of a new concept of a "business entity", which will be determined depending on the activities it conducts. In the EU, unlike in Ukraine, an entity is determined by the principle of the division of activities into economic and non-economic ones. That is, a business entity in the understanding of the law is only one who carries out the economic activity, which consists in the sale of goods in the market. Accordingly, the state support for non-economic activities will not fall under the rules on state aid control, since the Law applies exclusively to state aid to economic entities.

United States Small Flag United States

Standard Merger and Acquisition Reviews through Equal Rules (SMARTER) Act

In May 2018, the Standard Merger and Acquisition Reviews through Equal Rules (SMARTER) Act passed the House of Representatives and the Senate introduced its own version of the bill. The SMARTER Act sought to amend the Clayton Act and Federal Trade Commission Act to standardise the FTC and DOJ’s review of proposed transactions. Currently, both the FTC and DOJ are notified about a proposed transaction, with certain industries generally assigned for review to the FTC and others to the DOJ. At the FTC, merger challenges are reviewed under the FTC Act and can be adjudicated administratively, whereas at the DOJ, challenges are only adjudicated in federal court under the Clayton Act. Under the SMARTER Act, the FTC would be required to litigate in federal court, eliminating the option for a challenge in the FTC’s administrative court. The SMARTER Act would also create the same preliminary injunction standards – currently, the DOJ must make a showing of a substantial likelihood that the transaction violates Section 7 of the Clayton Act and the FTC must meet the injunction standard of Section 13(b) of the FTC Act (arguably a lower standard). The bill will have to be re-introduced for future consideration by Congress.

Foreign Investment Risk Review Modernization Act (FIRRMA)

Although not competition-related, the Committee on Foreign Investment in the United States (CFIUS), a US governmental interagency committee, has jurisdiction to conduct national security reviews of mergers, acquisitions, or investments that could result in foreign control over a US business as well as certain other non-passive foreign investments in US businesses meeting specific criteria. In August 2018, President Trump signed into law the Foreign Investment Risk Review Modernization Act (FIRRMA), which enacts significant changes to the CFIUS review process. Notably, the new law expands CFIUS’s jurisdiction to cover certain additional types of transactions, including non-controlling (but non-passive) investments in certain sensitive US businesses by foreign persons, as well as certain real estate transactions (including leases) in close proximity to sensitive US government installations. FIRRMA also mandates filings for certain types of transactions, whereas historically the CFIUS process was an ostensibly voluntary process (though CFIUS could request or initiate reviews of non-notified transactions). The major changes under the new law will not take effect until implementing regulations are promulgated, which are expected to be released in draft form in autumn 2019. While the new regulations are pending, CFIUS has established a pilot program that implements certain portions of FIRRMA and mandates at least short-form filings for certain transactions (including non-controlling, non-passive investments) concerning US businesses involved with critical technologies in relation to specified industries.

Since implementation of FIRRMA, CFIUS has pursued active compliance with its regulations. In April 2019, CFIUS imposed the first penalty of $1 million dollars for noncompliance.

Reforms to the Merger Review Process

In an effort to address concerns about the increased duration and scope of DOJ merger investigations, the DOJ announced a series of reforms to the merger review process. These reforms, announced in September 2018 and updated in November 2018, are intended to shorten and increase efficiency of the merger review process. The FTC is also assessing options to make the merger review process more efficient and less burdensome. However, based on available statistics regarding merger reviews that took place in 2018, the length of review has continued to increase.

FTC Technology Task Force

On February 26, 2019, the FTC established a task force to monitor competition in U.S. technology markets. The Technology Task Force is focused on investigating anticompetitive conduct, including consummated mergers, in the technology sector. The Task Force is looking at competition in digital technology, including online platforms, digital advertising, social networking, software, operating systems, and streaming services.

Future Competition in Merger Review

The US antitrust agencies are focusing on potential violations of Section 2 of the Sherman Act (i.e., monopolization) in merger review. The general theory of harm is that the acquisition by an incumbent firm of a nascent or future rival could be anticompetitive and violate the antitrust laws. The FTC, for example, recently filed to block a merger based on harm to current and future competition in digital technology platforms, and the parties abandoned the transaction.

Italy Small Flag Italy

On 10 July 2019, the ICA, the Italian Communications Authority and the Italian Data Privacy Authority published the guidelines and policy recommendations for Big Data. In light of a perceived concern about so-called "killer acquisitions", which are believed to be made by large players in the digital sector towards smaller, innovative start-up entities, the agencies recommend a revisiting of the Law. Accordingly, the guidelines suggest that modifications to Article 6 of the Law, changing the standard through which concentrations are evaluated, should be enacted. In particular, it is suggested that a new approach to merger control ought to be adopted into law, allowing the authority to focus on the substantial impediment to effective competition test (SIEC). Such an approach would enable the review of transactions, which may have the effect of restricting potential competition. Moreover, the Guidelines suggest the possibility of including an additional value-based threshold which would allow the authority to review smaller transactions which occur in the digital sector and which are not captured by the current thresholds. This concept is not entirely new. Indeed such "value" thresholds have already been implemented by the German and the Austrian competition authorities, and are being considered by the Commission as well.

Greece Small Flag Greece

Currently, the HCC has provided for public consultation draft guidelines setting out the methodology and criteria for the prioritization of the assessment of cases before it. These relate to the General Competition provisions of Articles 1 and 2 of the Greek Competition Law (101 &102 TFEU), and not to the Merger Control Legislation.

Updated: November 11, 2019