Overview

Merger Control (3rd edition)

Austria Small Flag Austria

The main statute regulating merger control in Austria is the Cartel Act 2005 (Kartellgesetz).

The Austrian Supreme Court (in its capacity as Cartel Court of Appeals) describes the objective of merger control as “the preventive support of the general interest in maintaining an ‘Austrian’ market structure […], which ensures effective competition”.

The authorities competent for merger control are the same as those responsible for the (public) enforcement of competition law in general. Notifiable mergers have to be notified to the Federal Competition Authority (Bundeswettbewerbsbehörde – BWB); the BWB informs the Federal Cartel Prosecutor (Bundeskartellanwalt – FCP). These two institutions are commonly referred to as the Official Parties (Amtsparteien). If either of the official parties requests an in-depth examination (in principle, within four weeks of receiving the notification), the Higher Regional Court of Vienna (Oberlandesgericht Wien) sitting as the Cartel Court (Kartellgericht) opens Phase II proceedings. If the official parties do not see competition concerns, the notified merger is cleared upon expiration of the Phase I period or receipt of the official parties’ waivers of their right to request Phase II proceedings. Decisions by the Cartel Court can be appealed against to the Austrian Supreme Court sitting as the Cartel Court of Appeals (Kartellobergericht). The decisions by the Cartel Court of Appeals in Phase III are final.

The Cartel Act defines which transactions qualify as notifiable mergers. Only transactions that are to be regarded as concentrations (Zusammenschlüsse) and exceed certain (essentially, turnover) thresholds have to be notified prior to consumption. If, even though the thresholds are exceeded, there is either no (potential) effect on the Austrian market (effects doctrine) or the thresholds of the EU Merger Regulation (EUMR) are also exceed, Austrian merger control does, in principle, not apply but the transaction may be notifiable elsewhere or, according to the “one stop shop principle”, to the European Commission.

While for a transaction to qualify as concentration, there typically needs to be a change of control (similarly as under the EUMR), the scope of Austrian merger control goes beyond that: Also the acquisition of only a 25% stake in another undertaking qualifies as concentration; further, the bringing about of an identity of at least half of the executive or supervisory board members is regarded a concentration between the concerned undertakings.

In the course of the latest amendment, entering into the force of law on May 1, 2017, a new notification threshold was introduced. This threshold also takes the transaction value and not only the parties’ turnover into consideration. The new threshold applies to any transaction to be implemented as of November 1, 2017.

Chile Small Flag Chile

As of June 1st, 2017, a new merger control regime entered into force in Chile. The main aspects of the new regime, set forth in a new Section IV of the Chilean Competition Act (Decree Law No. 211, “DL 211” or the “Competition Act”), are the following:

(i) a mandatory notification regime prior to the materialization of the envisaged operation with the National Economic Prosecutor’s Office (Fiscalía Nacional Económica, “FNE”) for concentration operations that meet certain turnover thresholds;

(ii) a suspension period until the final decision is rendered;

(iii) a two-stage investigation process: 30 working days for phase I once the notification is declared complete, and an additional 90 working days for phase II. These terms can be suspended upon mutual agreement between the notifying parties and the FNE;

(iv) the possibility to offer remedies in both phase I and phase II;

(v) the possibility, in case of a decision prohibiting the operation envisaged, to appeal such decision before the Competition Tribunal (Tribunal de Defensa de la Libre Competencia, “TDLC”). Such decision is not subject to further judicial review, unless the TDLC approves the operation with conditions –different than the ones previously offered by the notifying parties–. Such decision is open to appeal before the Supreme Court for both the notifying parties and the FNE; and

(vi) a ‘substantial lessening of competition’ test.

The FNE has issued guidelines (available on the FNE’s website: www.fne.cl) which provide guidance related to the FNE’s jurisdiction, the calculation of turnover in relation to the applicable thresholds, the applicable notification forms, and remedies.

Section IV of DL 211 provides moreover that parties can notify voluntarily an operation of concentration that doesn’t meet the thresholds (case in which the procedure and obligations of the mandatory notification system are applicable), and that the FNE is competent to review such operation –if not notified voluntarily– within a year after its materialization.

In addition, DL 211 provides for the obligation to inform the FNE ex-post of the direct or indirect acquisition of a non-controlling interest of 10% or more in a competitor. This obligation applies to companies that meet certain thresholds, indicated in answer number 6 below. This obligation is in force since August 30th, 2016.

Turkey Small Flag Turkey

The governing legislation on merger control is Law No.4054 on Protection of Competition and Communique No.2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board (as amended by Communique No.2017/2). In particular, Article 7 of the Law No.4054 governs mergers and acquisitions, and authorises the Turkish Competition Board (the “Competition Board” or the “Board”) to regulate, through communiqués, which mergers and acquisitions require notification to the Turkish Competition Authority (“Competition Authority” or “Authority”) to become legally valid.

The national competition authority for enforcing the Law on the Protection of Competition No. 4054 in Turkey is the Competition Authority, a legal entity with administrative and financial autonomy. The Authority consists of the Competition Board, the Presidency and service departments. As the competent decision making body of the Authority, the Competition Board is responsible for, inter alia, reviewing and resolving merger control filings.

Communiqué No.2010/4 defines the scope of the notifiable transactions as follows:

  • a merger of two or more undertakings;
  • the acquisition of or direct or indirect control over all or part of one or more
  • undertakings by one or more undertakings or persons, who currently control at least one undertaking, through: (i) the purchase of assets or a part or all of its shares, (ii) an agreement, or (iii) other instruments.

As explained more fully below, Communique No.2010/4 provides turnover thresholds that a given merger or acquisition must exceed before becoming subject to notification. Within these turnover thresholds, there are also specific methods of turnover calculation for certain sectors. Furthermore, Communique No.2010/4 does not seek the existence of an ‘affected market’ in assessing whether a transaction triggers a notification requirement; foreign-to-foreign
transactions (cases where the relevant undertakings do not any physical presence in Turkey) are also caught if they exceed the turnover thresholds.

The notification process is mandatory. If the turnover thresholds are met and there is a change of control on a lasting basis, the transaction is subject to approval by the Competition Board. For the sake of completeness, if the turnover thresholds are met, foreign-to-foreign transactions would trigger notification requirement so long as the joint venture is a full-function joint venture.

There is no specific deadline for making a notification in Turkey. There is however a mandatory waiting period: a notifiable transaction is invalid unless the Competition Authority approves it.

Denmark Small Flag Denmark

The Danish merger control regime is governed by the Danish Competition Act, which is to a large extent based on the principles of EU merger regulation. The rules on merger control are administered by the Danish Competition and Consumer Authority (the DCCA) and the Danish Competition Council (the Council). The DCCA is the primary enforcer of the Competition Act in Denmark and decides most cases on behalf of the Council, whereas more complex phase II-cases are decided by the Council.

Under Danish merger rules, filing of a merger is mandatory if the jurisdictional thresholds are met. A merger which meets the Danish thresholds and is thus subject to scrutiny may not be implemented prior to clearance by the Danish competition authorities.

Though not mandatory, parties to a potential merger in Denmark are strongly encouraged to contact the DCCA before filing the notification in order to initiate pre-notification discussions on an informal basis. In practice, a pre-notification period may often last at least two to three weeks in simple cases, and four weeks or considerably longer in more complex cases.

However, while the discussions can be quite extensive and may last several months, in particular in complex merger cases, pre-notification discussions significantly increase the likelihood of the merger being cleared in Phase I.

Ireland Small Flag Ireland

Merger control in Ireland is governed by the Competition Act 2002, which has been amended a number of times (the “Competition Act”), most significantly by the Competition and Consumer Protection Act 2014 (“2014 Act”). The 2014 Act substantially reformed the merger process in Ireland, introducing new jurisdictional thresholds, updating the specific regime for media mergers and establishing a new national competition authority, the Competition and Consumer Commission (“CCPC”).

The CCPC amalgamated the functions of and replaced the Competition Authority and the National Consumer Agency from 31 October 2014. In relation to merger control, the CCPC has extensive legal powers and a broad mandate to examine mergers and acquisitions that fall under the Competition Act. The CCPC has maintained a busy workload since its establishment, issuing 68 determinations on transactions it assessed in 2017, according to its most recent Mergers & Acquisitions Report.

Irish merger control practice and procedure follows closely the approach of the European Commission, and the processes laid down in the EU Merger Regulation (“EUMR”) and the Consolidated Jurisdictional Notice (“CJN”). In particular, jurisdiction (other than for media mergers) is established on the basis of turnover-based thresholds. The concepts of control and full-function joint ventures are highly similar under both regimes. Substantive assessments are based on whether or not the relevant merger or acquisition results in a substantial lessening of competition on markets for goods and services in Ireland, which is similar to the test under the EUMR. The review process can run into a second phase where the CCPC is not able to reach a decision during the first phase period of 30 working days. Economic analysis plays an important role in the substantive assessment of cases, while the design and implementation of remedies is largely based on the EU model.

While the Irish merger control regime follows in many important respects the approach of the European Commission, there are points of divergence:

  • Revised jurisdictional thresholds were introduced on 31 October 2014 consisting of two financial thresholds relating solely to turnover in Ireland (previously one of the thresholds related to global turnover). In addition, the second threshold is triggered when at least two of the undertakings involved generated turnover in Ireland of €3 million or more.
  • Acquisitions of assets that constitute a business to which turnover can be attributed can also fall under the regime if the financial thresholds are met. This concept has been interpreted widely by the CCPC and includes the acquisitions of buildings that generate a rent roll.
  • Media mergers in Ireland, as defined by the Competition Act, are subject to review irrespective of turnover.

The sections that follow set out the key features of the Irish merger control regime, highlighting these points of similarity and difference.

Cyprus Small Flag Cyprus

The Control of Concentrations Between Undertakings, Law 83(I) of 2014 (the Law), is the legislative instrument governing the control of concentrations between undertakings in Cyprus.

Enforcement of the legislation rests with the Commission for the Protection of Competition (CPC). The CPC has overall responsibility for implementing the Law and is the competent independent authority for the control of concentrations. The Commission, after examining the report of the service of the CPC (the Service), declares that a concentration is compatible or incompatible with the functioning of competition in the market. The assessment, investigation and procedural aspects of the notification of concentrations are implemented by the Service.

The Law is applicable to transactions resulting in a permanent change of control. Such transactions include mergers of two previously independent undertakings or parts thereof, and acquisitions by one or more persons already controlling at least one undertaking, or by one or more undertakings, directly or indirectly, whether by purchase of securities or assets, by agreement or otherwise, of control of one or more other undertakings. Joint ventures performing all functions of an autonomous economic entity in a permanent manner are caught under the Law.

For the purposes of the Law, a concentration of undertakings is deemed to be of major importance and therefore meets the jurisdictional thresholds if:

  • the aggregate turnover achieved by at least two of the undertakings concerned exceeds, in relation to each one of them, €3.5 million;
  • at least two of the undertakings concerned achieve a turnover in Cyprus; and
  • at least €3.5 million of the aggregate turnover of all undertakings concerned is achieved in Cyprus.

Foreign-to-foreign mergers are caught under the Law. The test as to whether a foreign-to-foreign merger constitutes a concentration of major importance is satisfied where the jurisdictional thresholds are met, with the local effects dimension being the achievement of a turnover of at least two undertakings concerned in Cyprus and the Cyprus-achieved turnover of all undertakings concerned is at least €3.5 million.

Italy Small Flag Italy

Substantive and procedural rules on Italian merger control are set forth by Law No. 287/1990 (the “Law”). Further procedural rules are established by Presidential Decree No. 217/1998.

The competent enforcement authority is the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato – the “ICA”).

The definition of concentration largely mirrors that adopted by the EU Regulation No. 139/04. Under the domestic turnover thresholds, a concentration needs to be filed with the ICA (provided it has no Community dimension), if: (i) the combined aggregate Italian turnover of all the undertakings concerned is more than EUR 495 million; and (ii) the Italian turnover of each of at least two of the undertakings concerned is more than EUR 30 million.

A concentration that meets the above thresholds shall be filed prior to its execution. However, since the Italian merger control rules do not provide for a standstill obligation, the parties may choose, at their own risk, to close the transaction before the ICA’s final decision.

As a general rule, Phase I has a duration of 30 calendar days (15 calendar days in case of public bids). Phase II has a duration of 45 calendar days (which can be extended by additional 30 calendar days if the parties fail to provide available information). Exceptions apply in case of concentrations involving the banking, insurance, media, telecommunication and broadcasting sectors.

With its final decision, the ICA can: (i) decide not to appraise the transaction (e.g., if it does not meet the Iocal thresholds); (ii) unconditionally clear the transaction; (iii) clear the transaction subject to structural/behavioral remedies; or (iv) prohibit the transaction.

The ICA’s decision is notified to the parties and published in the ICA’s weekly Bulletin and website. It can be appealed before the Regional Administrative Tribunal for Latium within 60 days from its notification/publication. The decision of such Tribunal can be appealed before the Italian Supreme Administrative Court.

Norway Small Flag Norway

Norwegian competition law is based on the Act No. 12 of 5 March 2004 on competition between undertakings and control of concentration (the ‘Competition Act’), and the Act No. 11 of 5 March 2004 concerning implementation and enforcement of the competition rules of the European Economic Area (EEA) Agreement, etc. (the ‘2004 EEA Competition Act’). This legislation is enforced by the Norwegian Competition Authority (the ‘NCA’), the Norwegian Ministry of Trade, Industry and Fisheries, the Competition Appeals Board and the national Courts. The Competition Appeals Board was established in 2017 and is the administrative appellate body for the NCA's decisions with effect from 1 April 2017, including merger cases.

The Competition Act applies to terms, agreements, and actions/transactions which have an impact in Norway. Thus, the NCA may intervene in cartel agreements concluded outside Norway and/or transactions between foreign entities insofar as they affect markets in Norway. Norwegian competition law is, to a large extent, harmonized with EU competition law. In the field of merger control, the Competition Act was further harmonized with the Merger Regulation 139/2004 ('ECMR') in 2016, when the substantive test under the Norwegian merger control regime was changed from a SLC test (Substantial Lessening of Competition) to a SIEC test (Significant Impediment of Effective Competition).

Philippines Small Flag Philippines

Enacted on 21 July 2015, Republic Act No. 10667 or the Philippine Competition Act of 2015 (“PCA”) is the primary law that promotes fair market competition. It provides the guidelines on mergers and acquisitions which are competition-related activities. Its Implementing Rules and Regulations (“PCA IRR”) were released in June 2016.

The PCA prohibits anti-competitive agreements and abuses of dominant position. More importantly, it requires parties to a merger or acquisition, including the formation of a joint venture, that meet the Size of Party and Size of Transaction Thresholds (i.e. PhP5 billion and PhP2 billion, respectively) to formally notify the Philippine Competition Commission (“PCC”) within thirty (30) days from singing of the definitive agreement and to obtain the approval of the PCC prior to the consummation of the transaction.

The PCC’s Mergers and Acquisitions Office (“MAO”) is responsible for the review of voluntary notifications and motu proprio investigations of mergers and acquisitions that could substantially prevent, restrict or lessen competition in the relevant market.

Russia Small Flag Russia

The Russian merger control rules are set forth in the Russian federal law "On the Protection of Competition" (the "Competition Law"). Since its coming into force in 2006, the Competition Law has been amended repeatedly. The latest significant amendments of the Competition Law in the area of merger control were enacted in 2016 (the so-called "fourth antimonopoly package"), introducing mandatory filings for the approval of joint venture agreements between competitors. The Competition Law provides for basic merger control rules that apply to any industry or market and to various types of transactions involving Russian entities or assets or foreign entities that conduct business in or with Russia.

The relevant enforcement agency is the Federal Antimonopoly Service ("FAS") with a central office in Moscow and territorial offices throughout the Russian regions. There are certain internal rules at FAS regulating the allocation of tasks and merger control applications between the central and the territorial offices. The FAS is internally subdivided into a number of specialised divisions, whereby each division covers a particular industry or economic sector.

The FAS is also the competent authority for handling filings under Russian laws on foreign investments. While the foreign investment laws are a set of regulations separate from the merger control rules, they can have a procedural impact on merger clearance and should always be considered in case of a foreign, or foreign-held, entity involved in the transaction.

France Small Flag France

Transactions which meet the applicable turnover thresholds in France, while remaining below the thresholds triggering the European Commission's jurisdiction, are subject to mandatory notification and cannot be closed until clearance is granted.

The independent administrative authority in charge of merger control in France is the Competition Authority ("FCA"). It has jurisdiction to receive and review the notifications and then to issue a decision in order to clear (with or without remedies) or prohibit the proposed concentration.

However, the French Minister of Economy holds residual powers in specific circumstances to overturn the decisions rendered by the FCA.

South Africa Small Flag South Africa

The relevant legislation is the Competition Act, 89 of 1998 as amended (Act) and the regulations promulgated thereunder. The enforcement agencies are the Competition Commission (Commission), the Competition Tribunal (Tribunal) and the Competition Appeal Court (CAC).

The merger provisions of the Act stipulate that when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of a business of another firm (e.g. through the purchase or lease of shares, or through the amalgamation or other combination of the entities), that transaction will constitute a merger.

Where there is a merger, the notification thresholds are met (see below), and the transaction constitutes economic activity within, or having an effect within South Africa, the merging parties are required to notify the merger to the competition authorities. Parties to a notifiable merger may not implement the merger before obtaining the requisite approval from the competition authorities.

Notably, the Act specifically provides for public interest considerations to be taken into account, in addition to the business and economic efficiency criteria which are used to assess the effect that a merger will have on competition (see further below).

United States Small Flag United States

In the United States, the Federal Trade Commission (FTC) and the Antitrust Division of the US Department of Justice (DOJ) review transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), and the implementing regulations contained in 16 C.F.R. parts 801-803 (HSR Rules). Premerger notification under the HSR Act is mandatory for transactions that meet certain filing thresholds if no exemption applies. A transaction is potentially reportable under the HSR Act if either party to the transaction is engaged in commerce or in any activity affecting commerce, and the ‘size-of-person test’ and the ‘size-of-transaction test’ are satisfied. Both the ‘size-of-person test’ and the ‘size-of-transaction test’ are based on certain monetary thresholds and are adjusted annually to reflect changes in US GDP. The HSR Act contains exemptions from filing for certain types of acquisitions, including acquisitions that do not have a sufficient nexus to US commerce.

For most transactions requiring a filing, each acquiring person and acquired person must submit a premerger notification form, containing a short description of the transaction and basic information about the filing party. The parties are also required to submit certain documents that analyse the transaction with respect to competition-related topics and expected synergies or efficiencies.

The HSR Act imposes reporting and waiting period obligations of 30 calendar days (or 15 calendar days for a cash tender offer or certain bankruptcy transactions). During the waiting period, the enforcement agencies assess the likely effect on competition of the proposed transaction. The parties to a transaction may not close until the statutory waiting period has expired, or the government has granted early termination of the waiting period. The reviewing agencies will only grant early termination if they have determined that the transaction is not likely to lessen competition.

If, after the initial waiting period, the government requires further information to determine whether the transaction would result in anticompetitive effects, the waiting period is extended through the issuance a ‘Request for Additional Information and Documentary Material’ which consists of a lengthy set of document, data, and interrogatory requests (known as a ‘Second Request’). The Second Request extends the waiting period until 30 calendar days after both parties have substantially complied with the Second Request (10 days for cash tender offers and certain bankruptcies).

At the end of this second waiting period, the reviewing agency must decide whether to close the investigation and allow the transaction to proceed, enter into a negotiated settlement with the parties, or block the transaction in federal district court. In practice, these considerations are underway throughout the Second Request process.

Switzerland Small Flag Switzerland

Merger control is regulated in the Federal Act on Cartels and other Restraints of Competition (Cartel Act, Kartellgesetz) and the Ordinance on the Control of Concentrations of Undertakings (Merger Control Ordinance “MCO”, Verordnung über die Kontrolle von Unternehmenszusammenschlüssen).

The main enforcement authority is the Swiss Competition Commission (ComCo, Wettbewerbskommission). The ComCo takes the decisions while its full-time Secretariat conducts the investigations. Parties have to submit notifications as well as pre-notifications to the Secretariat of the ComCo.

According to the Cartel Act, planned concentrations of undertakings must be notified to the ComCo before their implementation if certain statutory turnover thresholds are reached.

The notification triggers a two-step assessment process:

  • In a first phase (phase I, initial review), the ComCo decides within one month after receipt of the notification whether an investigation is to be carried out and informs the undertakings involved of its decision. An extended review (phase II) must be carried out if there are indications that the merger creates or strengthens a dominant position.
  • During the second phase (phase II, extended review), the ComCo will have to verify within four months, whether the concentration creates or strengthens a dominant position liable to eliminate effective competition and does not improve the conditions of competition in another market such that the harmful effects of the dominant position can be outweighed. If this is the case, the ComCo prohibits the merger or allows it under certain conditions.

A specific feature is that a transaction may – irrespective of the turnover thresholds – be caught by Swiss Merger Control if one of the undertakings concerned has in proceedings under the Cartel Act in a final and non-appealable decision been held to be dominant in a market in Switzerland, and if the concentration concerns either that market or an adjacent market or a market upstream or downstream thereof.

Germany Small Flag Germany

The provisions relevant for German merger control are contained in the Act Against the Restraint of Competition (ARC) (Gesetz gegen Wettbewerbsbeschränkungen – GWB). The main enforcement authority is the Federal Cartel Office (FCO) (Bundeskartellamt). In addition to the FCO, every federal state has its own competition authority. However, merger control is centralized at the FCO.

Mergers and acquisitions require mandatory approval before completion, if certain conditions are met. The assessment comprises a check against turnover-thresholds, the likelihood of the creation or strengthening of a dominant position in the relevant market and a check for possible exceptions. In addition to the check based on group turnover, the recent (9th June 2017) 9th amendment to the ARC introduced a transaction-value threshold (at EUR 400 Mio). Both tests will be explained in further detail below.

A transaction may also be caught by German merger control in cases where a Joint Venture (JV) or the target has no current or planned future business activities in Germany, but the parent companies have significant turnover there. German merger control operates with a fictional partial merger of the parent companies (Fiktion der Teilfusion der Mütter). In all cases caught by the obligation to notify, closing is prohibited prior to clearance by the FCO.

Parties involved in a transaction are in any case the acquirer and the target. If the seller continues to control the target or keeps a shareholding of at least 25 percent post-transaction, the seller will be considered a company involved in the merger and its turnover will be included when calculation if the thresholds are met. All parties involved in the merger are responsible to notify the transaction to the FCO, including the seller in cases where assets or shares are sold.

One special aspect of German merger regulation is that the minister of economy may clear a merger even after the FCO has denied clearance (Ministererlaubnis). In practice, such exemptions are extremely rare and usually involve political and social considerations, the involvement of unions, competitors, experts and a broader assessment of the influence of the merger on suppliers, customers and the economy as a whole especially on social aspects like unemployment or structural effects.

Greece Small Flag Greece

In Greece, the merger control regime is included in Law 3959/2011,as currently applying (hereinafter: “the Greek Competition Act”), and enforced by the Hellenic Competition Commission (hereinafter: “HCC”), an independent administrative authority. By and large, the Greek merger control regime is aligned with the EU respective regime, in terms of mandatory filings, the prohibition of closing (consummation) prior to clearance, the test of substantive assessment of concentrations, etc. A feature differentiating the Greek regime is the sequence of filing steps. Unlike in the EU, a notification before the HCC does not require a stage of consultation with the case handler. By contrast, is a common practice for the HCC to request for the provision of additional data/documentation before the lapse of the seven days deadline contemplated in the Competition Act, within which the HCC is empowered to exercise this discretion. It is also frequent that the HCC places numerous requests for additional information, which suspend the progress of the procedure for a significant period, and therefore ultimately delay clearance.

Peru Small Flag Peru

In Peru, the Defense of Free Competition has as its main normative base Legislative Decree 1034 - Law of Repression of Anticompetitive Behaviors (hereinafter, LRCA), which establishes an ex post control of anticompetitive conducts, such as abuse of dominant position and horizontal and vertical collusive practices, in order to promote economic efficiency in markets for the welfare of consumers. The National Institute for the Defense of Competition and Protection of Intellectual Property – INDECOPI applies the LRCA in all sectors of the economy, except in the public telecommunications services sector where the Supervisory Body of Private Investment in Telecommunications – OSIPTEL is the entity competent to apply the LRCA.

Likewise, in terms of defense of competition, in the case of the electricity sector, Peru has ex ante (prior) control of business concentration operations, regulated by Law 26876 – Electricity Sector Anti-monopoly and Anti-Oligopolistic Law – and by the norms that regulate this Law (Supreme Decrees 017-98-ITINCI and 087-2002-EF). However, to date, Peru does not have a general corporate merger control system applicable to all sectors of the economy that allows control of structures in the market.

In this context, INDECOPI is the agency in charge of the general application of competition policies in the country, including the application of Law No. 26876 – Electricity Sector Anti-monopoly and Anti-Oligopolistic Law (hereinafter, Law No. 26876), through its Commission for the Defense of Free Competition in first instance; and, through the Special Court for the Defense of Competition of the INDECOPI Tribunal, in the second instance of review.

Currently, eleven (11) bills aimed at establishing ex ante control of business concentrations in all sectors of the economy are under discussion in the Congress of the Republic. These bills have been presented by representatives of almost all parliamentary groups, so there is some consensus on their possible approval. The referred bills are the following:

- Bill 3279/2018-CR, presented on August 27, 2018.
- Bill 2660/2017-CR, presented on April 5, 2018.
- Bill 2654/2017-CR, presented on April 5, 2018.
- Bill 2634/2017-CR, presented on March 28, 2018.
- Bill 2604/2017-CR, presented on March 21, 2018.
- Bill 2569/2017-CR, presented on March 15, 2018.
- Bill 2567/2017-CR, presented on March 15, 2018.
- Bill 2558/2017-CR, presented on March 15, 2018.
- Bill 2398/2017-CR, presented on February 7, 2018.
- Bill 0367/2016-CR, presented on October 11, 2016.
- Bill 0353/2016-CR, presented on October 3, 2016.

From now on, we will analyze Law 26876 and its respective regulations, as well as the three bills aimed at establishing ex ante control of business concentrations in all sectors of the economy that have had the greatest media and academic importance: 2654/2017-CR , 2634/2017-CR and 2604/2017-CR (hereinafter, Bill No. 2654, 2634 and 2604, respectively, and "the Bills", when we refer to them jointly).

Portugal Small Flag Portugal

Competition law in Portugal is ruled mainly by the Competition Act (approved by Law 19/2012, of 8 May) and is enforced by the Autoridade da Concorrência (the Portuguese Competition Authority – PCA).

The PCA was created in 2003 as an independent administrative authority, enjoying substantial autonomy from the Government and other state bodies. In 2014, new Statutes of the PCA (Decree-Law 125/2014, of 18 August) were approved. The PCA’s powers over competition span all sectors of the economy, including those subject to sectoral regulation.

The Competition Act applies to concentrations that occur in Portuguese territory or that may have an effect on it. Concentrations in markets subject to sector-specific regulation may involve additional assessment by the relevant regulatory authorities.

Merger control is also governed by: the Statutes of the PCA; Regulation 60/2013, regarding notification forms; Regulation 1/E/2003, on the filing fees for merger control; and by Regulation 823/2016, on the payment of fees for other services provided.

Several pieces of guidance applicable to merger control have been issued by the PCA, namely: guidelines on the simplified procedure; guidelines on remedies; guidelines on the method of setting fines; guidelines on pre-notification; and guidelines on the economic appraisal of horizontal mergers. A project of guidelines on the protection of confidential information, was disclosed on 4 May 2017, and subject to public consultation, however it has not yet been formally adopted.

The following legislation is applicable on a subsidiary basis: the Administrative Procedure Code, applicable to merger control procedures conducted by the PCA; the Administrative Court Procedure Code, applicable to the judicial review of the PCA’s decisions adopted during review proceedings; and the Misdemeanours Act, pertinent to procedures involving the application of penalties and their judicial review.

Furthermore, the PCA tends to follow the European Commission’s decisional practice and its respective approach stated in its guidelines on merger control.

The main features of the merger control regime in Portugal are as follows:

a) A concentration between undertakings is deemed to exist when a lasting change of control over the whole or part of an undertaking occurs.

b) The definition of “control” closely follows that of the EU Merger Regulation.

c) The Competition Act applies to concentrations that meet the relevant jurisdictional threshold, in which cases the notification is compulsory.

d) The Competition Act sets out three alternative jurisdictional thresholds, related respectively to: i) turnover in Portugal; ii) market share; iii) market share combined with turnover.

e) Concentrations that meet the jurisdictional threshold must not be implemented before the issuance of a non-opposition decision or a decision of clearance subject to conditions, or before obtaining a tacit clearance decision.

f) Failing to notify a concentration (as well as implementation before clearance), subject to prior notification, leads to several types of severe legal and factual consequences.

Japan Small Flag Japan

In Japan, the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade (Antimonopoly Act) is the legislation that provides the general merger control regime. The Antimonopoly Act requires transactions that meet the thresholds to be notified prior to the closing and prohibits transactions that will substantially restrain competition in any relevant market. The Japan Fair Trade Commission (JFTC) has the sole jurisdiction over the enforcement of merger control under the Antimonopoly Act.

Pre-closing notification is mandatory for any transaction that meets the thresholds. A transaction that is subject to the mandatory prior notification cannot be implemented during the 30-day waiting period (Phase I), though the period may be shortened. The JFTC clears most transactions at Phase I. If the JFTC decides that it will need to review further, the transaction goes to Phase II. The JFTC must reach the final conclusion within either (i) 120 calendar days from the initial notification or (ii) 90 calendar days from the date when the JFTC receives from the parties all the information requested at the beginning of Phase II, whichever is longer.

Although it is not mandatory, it is a common practice that parties seek pre-notification consultation with the JFTC before formal filing to clarify the contents of the notification (e.g., definition of relevant market). Also, the pre-notification consultation is often used to learn the JFTC’s preliminary view on the case. While the parties can quit the pre-notification consultation at any time, it usually takes a few weeks. If the parties spend a longer period for pre-notification consultation, such as several months, it may reduce the possibility of going into Phase II.

India Small Flag India

Sections 5 and 6 of the Competition Act, 2002, as amended (“Competition Act”) deal with the substantive provisions regarding notifying “combinations” to the Competition Commission of India (“CCI”). A combination is a merger, acquisition, or amalgamation which qualifies the notifiability based asset and turnover thresholds provided under Section 5 of the Competition Act.

The CCI promulgated the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (“Combination Regulations”) on 11 May 2011, setting in place the framework for review of pre-merger notifications by the CCI. The Combination Regulations came into effect from 1 June 2011.

United Kingdom Small Flag United Kingdom

The UK merger control regime – which is contained in the Enterprise Act 2002 – is one of the few voluntary, non-suspensory filing regimes in the world. If a transaction meets the relevant jurisdictional thresholds, the UK competition authority – the Competition and Markets Authority (CMA) – will have jurisdiction to review the transaction and to impose remedies to address any substantial lessening of competition to which it considers the transaction may give rise. However, merging parties have no obligation to notify the CMA of a relevant transaction and are free to complete it unless and until the CMA decides to open a second-phase investigation, or imposes an ad-hoc prohibition on closing during first-phase (it has never done the latter, to date).

If a transaction is completed without the parties having first sought a clearance from the CMA by making a voluntary filing, then the purchaser of the relevant target business effectively assumes all antitrust risk in the transaction, including: (i) the risk that the CMA subsequently opens an investigation, concludes that the transaction is likely to lessen competition substantially and imposes remedies (which could include a requirement to divest the entire target business at no minimum price); and (ii) the financial cost of complying with strict hold-separate obligations that are invariably imposed by the CMA on both the target business and the purchaser's business for the entire duration of its investigation, through to implementation of any remedies that are required.

Up until the date on which the UK exits the European Union and (if applicable) the end of any transitional period within which EU law will continue to apply in the UK, transactions exceeding certain thresholds are notifiable to the European Commission (see the European Union chapter of this publication) and cannot be reviewed by the CMA on competition grounds. In accordance with the referral system under the EU Merger Regulation, a transaction that is notifiable to the European Commission may, if certain criteria are met, be referred – in whole or in part – for review by the CMA and a transaction may also be referred for review by the European Commission even if the parties do not meet the jurisdictional thresholds for review under the EU Merger Regulation or the UK merger control regime.

Following the date of Brexit or (if applicable) the end of the transition period, the CMA will have jurisdiction to review transactions that meet the thresholds for notification under the EU Merger Regulation. Consequently, such transactions may be subject to two, parallel reviews by the European Commission and the CMA where at present they would be notifiable only to the European Commission.

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Commissioner Margrethe Vestager has left her mark on European merger control enforcement. Her guiding principle of “fairness” is also reflected in how the European Commission has applied merger control rules over the last three years.

On substance, a novel theory of harm in relation to effects of horizontal mergers on innovation has emerged and will be remembered as one of the important policy changes championed by Commissioner Vestager. In Dow/DuPont and Bayer/Monsanto, the Commission did not focus on specific product overlaps (even if only pipeline-to-pipeline), but instead considered the impact on innovation “more broadly”: the Commission found that a merged Dow/DuPont entity would likely reduce its combined R&D budget, which would inevitably lead to a smaller number of innovative products brought to market. To remedy the Commission’s concerns, DuPont’s relevant R&D organization had to be divested. While the Commission’s approach has since been heavily criticised, it is there to stay, and companies in R&D-heavy industries should be prepared to address innovation-related concerns.

Another novelty is the enforcement of procedural rules in relation to gun jumping and the provision of misleading information during the notification process. In 2014, the Commission fined Marine Harvest EUR 20 million for acquiring a 48% shareholding without notifying the Commission; the Commission found that the large minority shareholding already conferred de facto control at the shareholders’ meeting of the target. In April 2018, the Commission fined Altice EUR 125 million for taking charge of the target company before receiving merger control clearance. An investigation into the way Canon acquired Toshiba Medical is still pending; the Commission seems concerned that Canon already exercised decisive influence over Toshiba Medical while the latter was legally controlled by independent businessmen. While gun jumping may have played a subordinated role in mergers in the past, these cases certainly bring the topic into the prime light of legal advice.

In May 2017, the Commission fined Facebook EUR 110 million for providing incorrect information during the merger control process of its acquisition of WhatsApp; at the time, Facebook stated that it would be unable to establish reliable automated matching between Facebook users’ accounts and WhatsApp users’ accounts, although it did exactly that two years later. The Commission argued that the technical possibility of matching accounts already existed at the time of the notification, which Facebook acknowledged. Two more cases are still under investigation by the Commission: Merck KGaA’s acquisition of Sigma-Aldrich and GE’s acquisition of LM Wind. These cases show that the provision of accurate information during the notification process will be watched carefully by the Commission. While this is not objectionable as such, the Commission should bear in mind that the sheer amount of requested information is becoming increasingly unmanageable for notifying parties: on top of the notification form (which can be several hundred pages long, with thousands of annexed documents and market data), the Commission has copied the US-style 2nd request approach in Phase II cases, resulting in the production of millions of internal documents.

Looking into the future, the topic of “common ownership” – whereby investors hold minority stakes in multiple companies active within the same industry – has attracted the Commission’s interest. Under the current European merger control rules, only the acquisition of (joint or sole) control may trigger a notification requirement. In February 2018, Commissioner Vestager said that the Commission is carefully looking into the matter and has begun investigating whether common ownership causes problems or not. We will see if this will lead to a change of the European merger control regulation.

Updated: October 9, 2018