Merger Control (4th 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.

China Small Flag China

Merger control is called anti-monopoly review of concentration of business operators in China. It is governed by the Anti-Monopoly Law of the People's Republic of China[1] (“AML”) and relevant regulations and rules, including the Provisions of the State Council on the Thresholds for Declaring Concentration of Business Operators.[2]

According to the Decision of the First Session of the 13th National People's Congress on the Institutional Reform Plan of the State Council (effective date: 03/17/2018), the newly established State Administration for Market Regulation (“SAMR”) is responsible for anti-monopoly review of concentration of business operators. Before that, Ministry of Commerce of People’s Republic of China (“MOFCOM”) is the competent authority.

[1] Order No. 68 of the President of the People's Republic of China, adopted on August 30, 2007 and has taken effect as of August 1, 2008.

[2] Decree No. 529 of the State Council, adopted on August 1, 2008 and has taken effect as of August 3, 2008 (afterward amended according to Decree No. 703 of the State Council on September 18, 2018).

Cyprus Small Flag Cyprus

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

Enforcement of the Law rests with the Commission for the Protection of Competition (CPC). The CPC has overall responsibility for implementing the Law and is the competent authority for the control of concentrations. The CPC is empowered under the Law to declare a concentration as compatible or incompatible with the functioning of competition in the market. The investigation and procedural aspects relating to notifications of concentrations are performed by the CPC’s civil service (the Service).

The Law is applicable to concentrations between undertakings resulting in a change of control on a lasting basis. Such concentrations 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 on a lasting basis are caught under the Law.

For the purposes of the Law, a concentration of undertakings is deemed to be of major importance and therefore meet 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, without any additional local effects requirement.

Denmark Small Flag Denmark

The Danish merger control regime is governed by the Danish Competition Act, which to a large extent is based on the principles of EU merger regula-tion. The rules on merger control are administered by the Danish Competi-tion and Consumer Authority (the DCCA) and the Danish Competition Council (the Council). The DCCA is the primary enforcer of the Competi-tion 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 jurisdic-tional 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 prac-tice, 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.

Ecuador Small Flag Ecuador

In October 13th, 2011 the Organic Law for the Regulation and Control of Market Power (Antitrust Law) was enacted regulating the competition regime in the country. The Antitrust Law created the Superintendency of Market Power Control (SCPM) which is the authority in relation to the control regime and the entity in charge of the application of the Antitrust Law, as a separate regulatory body, the SCPM has a Regulation Board in charge of issuing government regulations.

The National Economic Concentrations Investigation and Control Intendancy is the entity in charge of investigating and processing economic concentrations’ control procedures and the First-Instance Resolution Committee is in charge of approving, rejecting or subordinating approval to compliance with behavioral or structural conditions.

According to article 1 of the Antitrust Law, the main objective of the competition regime in the country an the Antitrust Law is to “prevent, correct, eliminate and sanction the abuse of economic operators with market power; the prevention, prohibition and sanction of collusive agreements and other restrictive practices; the control and regulation of economic concentration operations; and the prevention, prohibition and sanction of unfair practices, seeking efficiency in the markets, fair trade and the general welfare of consumers and users, for the establishment of a social, supportive and sustainable economic system.”

Merger Control in Ecuador applies: i) whenever a change or taking of control of one or more undertakings or economic operators occurs within Ecuadorian jurisdiction, despite the acquirer does not carry any economic activities in the local market (economic concentration), and ii) if the proposed transaction meets the market or Ecuadorian turnover thresholds .

EU Small Flag EU

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 five 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. Additionally, in June 2019, the Commission fined Canon EUR 28 million for partially implementing its acquisition of Toshiba Medical before notification and merger control approval by exercising decisive influence over Toshiba Medical while the latter was legally controlled by an independent business. Canon appealed the Commission’s decision at the General Court of the European Union on 9 September 2019. The forthcoming judgement should provide much-awaited clarification on this topic. While gun jumping may have played a subordinated role in mergers in the past, these cases certainly bring the topic into the limelight.

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. Furthermore, in April 2019, the Commission fined General Electric EUR 52 million for providing incorrect information in its acquisition of LM Wind. Merck KGaA’s acquisition of Sigma-Aldrich is still under investigation by the Commission. 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 information requested 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. In addition, the European Parliament, in its Annual Report on Competition Policy of March 2018, called upon the Commission to draw up a report on the effects of common ownership on the European markets. We will see if this will lead to a change of the European merger control regulation.

In July 2019, after the European elections in May 2019, the European Parliament elected Ursula von der Leyen as the new President of the European Commission. Von der Leyen will assume office in November 2019, which will also see the arrival of a new College of Commissioners. The European Commission’s focus on digital giants is set to sharpen further after Margrethe Vestager’s nomination for a second term as Competition Commissioner (assuming she is confirmed by the European Parliament and the Council). Vestager’s portfolio in the new Commission will expand considerably, as she is expected to take on one of the most visible and senior roles in the new Commission, being responsible for coordinating the Commission’s wider digital policy and making Europe fit for the digital age. Digital businesses (and online platforms in particular) can expect regulatory pressure to intensify over the next five years, as the EU is eager to claim global leadership in this sector.

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.

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). This involves political and social considerations which the FCO cannot take into account for its own decision, e.g. impact of the merger on employment. While clearance by the minister is rather rare we lately saw two clearance decisions regarding a merger between grocery retailers (2016) and a joint venture between producers of plain bearings.

India Small Flag India

The Indian merger control regime came into effect on 1 June 2011 with the notification of Sections 5 and 6 of the Competition Act, 2002 (Competition Act). The regime is governed by the Competition Act, notifications issued by the Ministry of Corporate Affairs, Government of India (MCA) and the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations 2011 as amended up to 15 August 2019 (Combination Regulations). Under the Indian merger control regime, a ‘combination’ (i.e., an acquisition, merger or amalgamation) must be notified to and approved by the Indian competition authority, the Competition Commission of India (CCI), if it breaches the prescribed asset and turnover thresholds and does not qualify for any statutory exemptions. The requirement to notify the CCI is mandatory and such combinations are subject to a ‘standstill’ or suspensory obligation, until approved by the CCI within the prescribed timelines.

The CCI must issue a prima facie opinion on whether the transaction is likely to cause an ‘appreciable adverse effect on competition’ (AAEC) within the relevant market in India within 30 working days from the date of notification. If the CCI finds that the transaction is unlikely to cause an AAEC, it will approve the transaction. Where the CCI has not passed any orders within a period of 210 days (i.e. such days as are calculable for the purposes of the Combination Regulations), the combination shall be deemed to be approved.

Where the CCI is of the opinion that a combination causes or is likely to cause an AAEC within the relevant market in India, it has the power to direct that the combination shall not take place. By 1 September 2019, the CCI had cleared approximately 610 combinations, with a vast majority within the 30-working-day Phase I period. To date, the CCI has cleared eight combinations subject to remedies after a detailed Phase II investigation and has not blocked a single combination.

In this chapter, we provide a brief overview of the recent trends in Indian merger control, including key amendments to the Combination Regulations. We then outline the circumstances under which parties to a transaction are required to notify the CCI, and the factors considered by the CCI when determining whether a combination is likely to cause an AAEC.

Ireland Small Flag Ireland

Ireland’s merger control regime has its legal basis in Part 3 of 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, updating the specific regime for media mergers and establishing a new national competition authority, the Competition and Consumer Commission (“CCPC”).

The CCPC is primarily responsible for the enforcement of the Irish merger control regime. The CCPC shares responsibility for the review of media mergers with the Minister for Communications, Climate Action and Environment (“Minister for Communications”). The Irish courts have jurisdiction to adjudicate on any allegation of breaches of the Act and on any appeal against a merger decision.

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 95 determinations on transactions it assessed in 2018, 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 (45 working days where commitments are involved). 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 EUMR, there are points of divergence:

  • Revised jurisdictional thresholds were introduced on 1 January 2019 consisting of two financial thresholds relating solely to turnover in Ireland. A transaction requires notification to the CCPC if the following turnover thresholds are met in the most recent financial year: (i) the undertakings involved had a combined turnover in the Republic of Ireland of at least €60m; and (ii) at least two undertakings involved had individual turnover in the Republic of Ireland of at least €10m. Media merges (as defined) must be notified to the CCPC and the Minister for Communications.
  • 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.

Israel Small Flag Israel

The government authorities in charge of merger control in Israel are the Israeli Competition Commissioner (the “Commissioner”) and the Israeli Competition Authority. The Commissioner must consult with the Advisory Committee for Mergers and Exemptions before approving, rejecting or stipulating conditions for a merger.

To fall within the boundaries of the merger control regime, a transaction must meet the definition of a "merger of companies", as well as the relevant filing thresholds.

The definition of a "merger" is relatively broad and, in the Israeli Competition Authority's view, includes any transaction that grants one company a structural foothold in the management of another company's business. As detailed below, any acquisition of the main assets of a business, or acquisition of over 25% of certain rights in a company is considered a "merger".

"Merger of companies" only exists if at least two "companies" are involved therein. The definition of a "company" includes cooperatives and partnerships, and includes a test of nexus to Israel.

Filing thresholds are assessed by reference to turnover and to market share of both the merging parties. Filing is mandatory in the event parties cross a threshold of 50% market-share as a result of the transaction or one of the parties already has over 50% in any market. Turnovers and market shares refer only to Israel, but they refer to the entire group of companies under the same control. Thus, if two groups of companies which meet the thresholds perform a transaction outside Israel, they may still have to file in Israel. The thresholds do not contain or include any reference to transaction size or asset size.
A merger transaction which falls below the thresholds is legal per se, and cannot be challenged in court. Ancillary restraints, such as non-compete clauses, require specific clearance, unless they meet the standards for a specific statutory exemption or block exemption.

If a transaction is deemed a "merger transaction" and meets the relevant filing thresholds, filing is mandatory. The Commissioner will oppose a merger if there is "reasonable concern of significant harm" to competition or the public.

The merger transaction cannot be consummated without approval from the Commissioner. The commissioner must grant her decision within 30 days of the filing.. The 30-day period may be extended by the Commissioner for two additional 30-day periods, and then, after consulting with the Exemptions and Mergers Advisory Committee, 60 more days, up to a total of 120 days beyond the initial 30-day period. Further extensions may only be granted for special reasons by the specialist Competition Tribunal in Jerusalem. Illegally-consummated mergers are subject to administrative fines, and possibly even criminal charges. In addition, the Commissioner may approach the Competition Tribunal and request divestiture. Illegal mergers are also subject to civil actions, including class actions.

South Korea Small Flag South Korea

The Monopoly Regulation and Fair Trade Act (“MRFTA”) is the relevant legislation that controls and regulates business combinations in South Korea. Article 7(1) of the MRFTA prohibits “business combinations” that substantially restrict competition in the relevant market. Article 12(1) of the MRFTA imposes a merger reporting obligation for business combinations that meet certain thresholds to the Korea Fair Trade Commission (“KFTC”).

The main enforcement authority in Korea is the KFTC. The KFTC has established and currently enforces several guidelines and standards, including the “Guidelines for M&A Review”, “Guidelines for M&A Notification” and “Guidelines for M&A Remedies”, etc.

In Korea, if a merger satisfies the thresholds, notification to the KFTC is mandatory. Business combinations are classified as either being subject to pre-merger notification or post-merger notification depending on the total assets or annual turnover of the parties involved in the business combination. In the case of a business combination subject to pre-merger notification, the KFTC must finish the review within 30 days from the notification. However, this 30-day period may be extended, if necessary, at the discretion of the KFTC. The merging parties may request a preliminary review from the KFTC in advance, prior to the designated time period for notification. In such case, the merging parties still need to file a formal notification with the KFTC upon the arrival of the mandatory reporting period.

A majority of the business combinations reported to the KFTC have been determined as having no anticompetitive concerns, and only a minority of business combinations have been issued with remedial orders. When imposing a remedial order, the KFTC generally imposes structural remedies, and only imposes behavioral remedies in exceptional cases.

Mexico Small Flag Mexico

Mexican competition laws were enacted in 1993 and significantly amended in 2014. Since then, the Mexican Competition Commission (Comisión Federal de Competencia Económica) and the Telecommunications Institute (Instituto Federal de Telecomunicaciones), were created as autonomous governmental agencies with broader authorities and full Independence to enforce the corresponding competition laws. The Telecommunications Institute is responsible for enforcing the law within the telecommunications and broadcasting sectors. For the purposes of this document, references to either the Commission or the Institute are indistinctly referred as the authority or the agency.

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. PhP5.6 billion and PhP2.2 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.

Portugal Small Flag Portugal

Competition law in Portugal is governed 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 the Portuguese territory or that may have an effect thereon. 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 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 for guidelines on the protection of confidential information (general for the PCA, i.e. not specific for merger control), 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; and 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, results in several types of severe legal and factual consequences.

Russia Small Flag Russia

The Russian merger control rules are set forth in the Russian federal law "On the Protec-tion of Competition" (the "Competition Law"). Since its coming into force in 2006, the Competition Law has been amended repeatedly. The last significant amendments of the Competition Law in the area of merger control were enacted in 2016-17 (the so-called "fourth antimonopoly package"), introducing inter alia 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 cen-tral office in Moscow and territorial offices throughout the Russian regions. There are cer-tain 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 eco-nomic 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 transac-tion.

Sweden Small Flag Sweden

The provisions governing Swedish merger control are included in the Swedish Competition Act (2008:579) (the Competition Act). On substance, the Swedish merger control rules correspond in large to the European merger control regulation (EUMR), save for national rules regarding turnover thresholds.

The independent administrative authority in charge of merger control in Sweden is the Swedish Competition Authority (SCA). As of January 2018 the SCA has been granted the power to block notified mergers and its decision-making powers are therefore more similar to those of the European Commission. A prohibition has immediate effect, unless otherwise decided by the authority. The authority’s decision can be appealed to the Patent and Market Court with further appeal to the Patent and Market Court of Appeal. Under the previous regime, the SCA was required to raise an action before the Patent and Market Court to request and argue for a prohibition of a notified concentration.

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 Con-trol Ordinance “MCO”, Verordnung über die Kontrolle von Unternehmenszusammenschlüssen).

The main enforcement authority is the Swiss Competition Commission (ComCo, Wettbewerbskom-mission). 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.

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 N° 26876 – Electricity Sector Anti-monopoly and Anti-Oligopolistic Law (hereinafter, Law N° 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, in the Congress of the Republic one (1) legislative proposal (hereinafter, the Bill) is under debate to regulate ex ante control of business concentrations in all sectors of the economy, which consensually includes different bills presented by representatives of almost all parliamentary groups, as well as the Government itself. Thus, there are probabilities that the Bill could be approve.

From now on, we will analyze Law 26876 and its respective regulations, as well as the Bill (in case of approval it would be in force in one year since the date of publish).

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.

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.

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.

Ukraine Small Flag Ukraine

The Ukrainian antimonopoly law, while not fully in line with the best international standards, is currently going through important stages of development, and some serious efforts are made in order to modernize it, which is mainly related to the terms and conditions of the signed EU-Ukraine Association Agreement. There are some expectations that following harmonization of the Ukrainian antimonopoly legislation, in particular of the regulatory aspects of M&A transaction control, with the EU rules, along with the ongoing reforms in the economic sector, Ukraine will experience significant increase in the amount of M&A transactions, as well as general business activity.

The main legal acts in the sphere of merger control:

  • The Law on Protection of Economic Competition as of 2001, known as the Competition Law, with the amendments.
  • The Law on the Antimonopoly Committee of Ukraine as of 1993
  • Regulation of the Antimonopoly Committee of Ukraine on Concentration as of 2002

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 of 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.

Italy Small Flag Italy

Under Italian law, the Italian Competition Authority (Autorità della Concorrenza e del Mercato – the “ICA”), is in charge of reviewing concentrations that do not have Community dimensions (i.e., that do not meet the jurisdictional thresholds for mandatory notification to the European Commission (“Commission”), under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings).

Italian rules on the control of concentrations are set out in:

- Law No. 287 of 10 October 1990 (the Law);
- Presidential Decree No. 217 of 30 April 1998, setting forth the rules of procedure of the ICA in antitrust matters including merger control cases (the Regulation);
- A number of notices and guidelines issued by the ICA on issues such as the calculation of parties’ turnover in specific circumstances or providing guidance on how to fill in the notification forms.

In addition, Section 1 of the Law specifies that Italian substantive antitrust and merger control rules shall be interpreted in accordance with the principles of EU competition law. Therefore, the ICA largely relies on the EU courts case-law and Commission’s decisions and guidelines, including for merger control purposes, the Commission’s Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (“Commission Consolidated Jurisdictional Notice”).

As a consequence, the definition of concentration under Italian merger control rules largely reflects the one under EU merger control rules. However, differently from EU rules, under Italian merger control rules, there is no standstill obligation. Therefore, when the jurisdictional thresholds specified in Section 6 below are met, concentrations are subject to prior notification to the ICA, but there is no statutory requirement to obtain the clearance of the ICA before closing. Nevertheless, the parties often agree to condition the completion of the transaction to obtaining the authorization of the ICA in order to avoid the risk of having to comply with divestment orders by ICA.

Within 30 calendar days from notification (15 calendar days in case of public bids), the ICA must decide whether to clear the transaction or start an in-depth investigation. The duration of such in-depth investigation is of 45 calendar days (which can be extended by additional 30 calendar days).

In the final decision, the ICA can (i) find that the transaction does not fall within Italian merger control rules (e.g., because it does not qualify as a concentration or the jurisdictional thresholds are not met); (ii) unconditionally clear the transaction; or (iii) clear the transaction with remedies; (iv) prohibit the transaction. Such decisions can be challenged within 60 calendar days from notification before the Rome Administrative Court (TAR Lazio – Roma). The judgment of the Rome Administrative Court can be further appealed before the Italian Supreme Administrative Court (Consiglio di Stato).

Greece Small Flag Greece

The control of concentrations between undertakings in Greece (”Merger Control Legislation”) is regulated by Law 3959/2011 (in principle Articles 5-10) on “The Protection of Free Competition” (“Greek Competition Law”), as amended and currently in force. A significant amendment of the Merger Control Legislation, which is aligned with the EU Competition regime, was the abolishment of the post-merger notification that was required under the previous regime. Pursuant to Merger Control Legislation, a concentration, may require prior notification, if certain conditions are met. In cases when, the Concentration has a community dimension in the sense of Regulation (EC) 139/2004 (the “EU Merger Regulation”), clearance is sought from the European Commission.

The Hellenic Competition Commission (“HCC”) is the independent, administrative authority responsible in principle for the enforcement of Greek Competition Law, including the Merger Control Legislation. With regard to telecommunications, the competent authority to enforce competition law is the National Telecommunications & Posts Commission (“NTPC”). The HCC has published numerous decisions that provide further guidance on the procedural aspects of Merger Control Legislation, such as Decision 558/VII/2013 (the “Notification Form Guidelines”), which specifies the required content of pre-merger notifications pursuant to Articles 5–10 of the Merger Control Legislation.

Regarding the definition of a “concentration”, the manner of calculation of the relevant thresholds, the information requested by the undertakings concerned, the prohibition of gun-jumping as well as the substantive assessment of the concentration, the HCC generally applies the principles and guidance adopted at EU level, including, in particular, the Commission Consolidated Jurisdictional Notice under Council Reg. 139/2004 on the control of concentrations between undertakings and the EU Form CO (long+short form, as the case may be), and interprets the relevant provisions of the Merger Control Legislation accordingly.

Updated: November 11, 2019