Are there any future developments or planned reforms of the merger control regime in your jurisdiction?
Merger Control (2nd Edition)
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 of the regime. However, as regards the aforementioned binding opinion of the sector media regulator (section 4.2), on the grounds of the freedom and plurality of media considerations, it has been heavily criticized and it is therefore weakened, so this situation may lead to a possible change.
There are no – at least widely known – planned future reforms of the merger control regime in Greece.
The government is expected shortly to announce details of proposals to allow the Secretary of State to intervene in acquisitions of 'critical infrastructure' in the UK, to ensure the protection of the national interest.
In the longer term, the exit of the UK from the European Union (Brexit), in accordance with the results of a referendum in June 2016, will have a significant impact on the UK merger control regime. While it remains unclear what form of Brexit will be negotiated, many of the likely models involve the EU Merger Regulation ceasing to apply under UK law. This would mean that:
- Large mergers involving UK businesses that raise competition concerns would 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 exclusion of UK turnover when calculating whether the thresholds for an EUMR filing are met would 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.
- Finally, the UK government would 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 of 'critical infrastructure', it seems likely that the present government would seek to make use of this greater freedom.
The recent amendment of the jurisdictional thresholds, which will likely lead to an increase of the number of merger notifications, entered into force in August 2017. Such a reform, which was adopted after a public consultation, implied a long legislative process. No additional reforms have been announced for the near future.
The Standard Merger and Acquisition Reviews through Equal Rules (‘SMARTER’) Act of 2017, introduced in the House of Representatives in January 2017, would 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 proposed 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). Although prior versions of the SMARTER Act have passed in the US House of Representatives, this is the first time the bill has been introduced when Republicans have controlled both the legislative and executive branches.
With the recent 9th amendment to the ARC, there are no current plans for reforms of the merger control regime.
As of today, there are no planned reforms in the merger control regime.
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 of joint ventures.
A further amendment of the Austrian competition law (including merger control) is not expected in near future, as the latest amendment came into effect just recently (May 2017).
The Canadian merger review and notification process was substantially reformed in 2009. Further proposed amendments to the Act were introduced on September 28, 2016, but have not yet become law. The effect of these amendments would be a more consistent application of the merger notification rules between corporate and non-corporate entities. Bill C-25 passed First Reading in the Senate on June 21, 2017, and is expected to be reviewed by the Senate after the summer recess. These proposed amendments are technical in nature and less significant than the 2009 changes. They would broaden the scope of the “affiliates” definition in the Act in an effort to close some legislative gaps that currently result in the inconsistent treatment of corporate and non-corporate entities.
Specifically, the proposed amendments (i) introduce a new definition for “entity” which, in addition to a corporation, also includes non-corporate entities such as a partnership, sole proprietorship, trust or other unincorporated organization capable of conducting a business; and (ii) expand the concept of “control” for non-corporate entities in a way that is consistent with the current approach to corporations. These broadened affiliation rules may result in more transactions being subject to the notification provisions (because the assets and revenues of additional entities may be captured by the new rules), while at the same time allowing certain business groups more freedom in relation to inter-affiliate dealings that will no longer be subject to certain provisions of the Act.
As the new the merger control regime only recently entered into force, there are no future developments or reforms planned.
There are no current proposals to change the legislation, although as at this date Cyprus has yet to transpose the Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.
On 23 June 2017, the DCCA proposed a number of amendments to the Competition Act concerning, inter alia, merger control. Among other things, the proposal introduces a “stop the clock” provision, which provides the DCCA an option to suspend the time limits for a merger review if the involved undertakings do not disclose the information requested by the DCCA within the time limit. This amendment corresponds to the EU merger regime.
Further, the proposal brings 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 suggestions, will obtain procedural effects.
In addition, the proposed amendment alters the rules on time limit extensions caused by proposed merger commitments. According to current regulation, the 90-day time limit under Phase II may be extended by up to 20 business days if one of the undertakings involved propose commitments. The time limit may, however, only be extended if less than 20 business days remain until a decision should have been made under Phase II. The proposal will change this rule by providing the DCCA a time limit extension of 20 business days regardless of how many days there are left before the time limit is exceeded.
If adopted by the Danish Parliament, the amendment will enter into force on 1 January 2018.
The Commission has assessed the functioning of EU merger control on several occasions, the most recent being in 2014 with the adoption of the White Paper “Towards More Effective EU Merger Control”. This paper stated that the EU merger control system overall works well, but it proposed to improve and simplify certain aspects of this system. In that regard, the Commission launched a public consultation in 2016 which builds upon these proposals and addresses some new issues which have since emerged. In particular, the Commission is considering reform in the following areas:
- the turnover-based thresholds. The Commission considers that such certain high-value acquisitions may not be captured by the current turnover-based thresholds and considers the possibility of introducing complementary thresholds, such as deal size thresholds which are based on the value of the transaction. This may be particularly relevant in certain sectors, such as the digital and pharmaceutical industries, where the target company, while having generated little turnover as yet, may play an important competitive role, hold commercially valuable data or have a considerable market potential for other reasons.
- the further simplification of the notification procedure for non-problematic cases. The Commission is assessing the effectiveness of the Simplification Package it had adopted in December 2013 and examines the possibility of further simplifying the notification procedure by, for example, exempting certain cases from the notification requirement; introducing lighter information requirements and introducing a self-assessment system, which would allow merging parties to decide whether to notify the transaction or not (subject to the Commission’s right to investigate on its own initiative or following a complaint).
- the case referral system. The Commission is considering the abolition of the current two-step procedure which requires that the parties first file a “reasoned submission” (Form RS) and then the notification form (Form CO). It further considers to amend the current post-notification referral system.
Finally, in October 2016 the Commission published a study assessing the impact of a possible extension of the scope of the EUMR to capture also minority shareholdings. This idea was floated by the Commission in its 2014 White Paper, but many respondents had raised concerns about the additional administrative burden that such amendment to the EUMR would create.
No reform is announced.
No reforms to the regime are envisaged.
No, the Norwegian merger control regime has undergone some significant changes over the past three years and we are not aware of any planned developments to the regime, nor do we expect any changes in the near future.
Currently, there are no planned reforms of the merger control regime in Romania.
KN: The Competition Law is expected to be amended in the upcoming period (e.g. most probably during the course of 2018). The working groups of interested stake holders are currently being formed and the planned amendments of the law are still at a rather early stage. The expected amendments will possibly cover merger control rules as well.
In particular, the expected changes may arguably relate to the introduction of local nexus to the merger control thresholds or extension/abolishment of the filing deadline etc. However, there have still not been any specific changes defined or draft documents produced by the Commission or other interested stake holders, therefore, the possible amendments are, although certain, still in early stages of consideration.
Finally, greater enforcement is expected in future as the Competition Commission has continuously stressed out in various public announcements and statements the importance of compliance with the Competition Law.
The Competition Amendment Act, 1 of 2009 (the Amendment Act) was passed into law in 2009 but has not come into effect with the exception of Section 6, relating to market inquiries, and certain parts of Section 12 and Section 13, relating to the criminalisation of cartel conduct. The latter relate to the criminalisation of cartel conduct for individuals involved in such conduct. The new provisions allow for directors and managers to be held criminally liable for causing a company to engage in, or “knowingly acquiescing” to, a company's involvement in cartels. Individuals may face personal penalties of up to ZAR500,000 and/or 10 years’ imprisonment. The Commission anticipates that the provisions in the Amendment Act relating to complex monopolies and concurrent jurisdiction will be implemented by 2020.
Amendments to filing fees (discussed above) in respect of intermediate and large mergers as well as the amendments to the intermediate merger notification thresholds come into effect as at 1 October 2017.
Concerns continue to be raised by the Minister of Economic Development and others regarding the levels of economic concentration and ownership profiles in some markets in South Africa. Proposed amendments to the Act are expected to be published in 2017 aimed at addressing the concerns.
The major development expected in the Turkish competition law regime is the adoption of the draft law amending Law 4054 on the Protection of Competition. To that end, the draft law was officially submitted to the presidency of the Turkish Parliament on January 23, 2014 and was reviewed by a parliamentary sub-committee. However, the parliamentary sub-committee could not conclude its work on the necessary changes within the relevant parliamentary legislative year. Therefore, at present the draft law is statute barred. In order to re-initiate the parliamentary process, the draft law must again be proposed and submitted to the presidency of the Turkish Parliament. Although it is impossible to say when this will happen, it is likely that a draft reform law will remain on the competition law agenda.
The draft law aims to achieve further compliance with the EU competition regime, on which it is closely modelled. It adds several new dimensions and changes which should result in a procedure that is more efficient in terms of time and resource allocation. The draft law proposes several significant changes in terms of merger control:
- The substantive test for concentrations will be changed. The EU significant impediment of effective competition test will replace the existing dominance test.
- In accordance with EU competition law, the draft law will adopt the term ‘concentration’ as an umbrella term for mergers and acquisitions.
- The draft law will eliminate the exemption for acquisition by inheritance.
- The draft law will abandon the Phase II procedure (which was similar to the investigation procedure) and provide a four-month extension for cases requiring in-depth assessments. During in-depth assessments, parties can deliver written opinions to the Competition Board, which will be akin to written defences.
- The draft law will extend the appraisal period for concentrations from the existing period of 30 calendar days to 30 business days, which equates to approximately 40 days in total. As a result, the period in which to obtain a decision on a preliminary review is expected to be extended.
Further, the draft law proposes to abandon the fixed turnover rates for certain procedural violations, including failing to notify a concentration and hindering onsite inspections; and to cap the monetary fines imposed for these violations. This new arrangement gives the board discretion to set fines by conducting case-by-case assessments.
Another significant anticipated development is the Draft Regulation on Administrative Monetary Fines for the Infringement of Law on the Protection of Competition, which will replace the Regulation on Monetary Fines for Restrictive Agreements, Concerted Practices, Decisions and Abuse of Dominance.
The draft regulation is heavily inspired by the European Commission’s guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation 1/2003. Thus, the introduction of the draft regulation clearly demonstrates the authority’s intention to bring the secondary legislation into line with EU competition law during the harmonisation process.
The draft regulation was sent to the Turkish Parliament on January 17 2014, but as yet no enactment date has been announced.
We expect the merger control regime to be further made more business-friendly. In particular, the primary milestones in the future are (1) to develop the guidelines on the calculation of fines for violations of competition law, which will have a legal binding nature; (2) to adopt the ‘effects doctrine’; and (3) to adopt the mechanism under which the merger control clearance will cover non-competition agreements within the framework of the notified transaction.
The regime is very recent, so the law will most likely not change in a near future. On the other hand, CADE is working on issuing informative material so that parties can be more informed, and a remedies guide should be released soon to the public, raising legal security in this field.
As part of its response to the Final Report of the Competition Policy Review, released in March 2015 (the most recent comprehensive review of Australia's competition laws and policy), the government introduced the Competition and Consumer Amendment (Competition Policy Review) Bill 2017 and the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 to Federal Parliament. The latter Bill was passed in August 2017 and will become effective once the former Bill, which at time of writing is currently being debated in the Senate, is passed.
This legislation, which is largely in line with the draft exposure legislation released in September 2016, proposes to repeal the existing formal clearance and authorisation processes and introduce a new authorisation process. Under the proposed regime, assessment of merger authorisation will be undertaken by the ACCC, with review by the Tribunal of the ACCC's determination available on a limited basis. It is proposed that the ACCC must not grant merger authorisation unless it is satisfied in all the circumstances that the merger either would not have the effect or likely effect of substantially lessening competition, or the conduct would result or be likely to result in public benefit which would outweigh the public detriment that would result or be likely to result from the conduct.