What are the penalties for failure to notify, late notification and breaches of a prohibition on closing?

Merger Control (4th edition)

Austria Small Flag Austria

Concentrations which exceed the above mentioned thresholds have to be notified to the BWB and cleared before being implemented. In case of failure to notify or late notification that is after implementation, the prohibition on closing (also ban on implementation or standstill obligation) is violated.

If the concentration was only cleared by imposing certain restrictions or commitments, the concentration must not be implemented in a way differing from those restrictions or commitments.

Upon application by the official parties, the Cartel Court is to impose fines amounting to up to 10% of the concerned group’s turnover in the preceding business year in so called gun jumping cases (violations of the ban on implementation). The imposition of a fine largely is a discretionary decision. When assessing the fine, the gravity and duration of the infringement, level of fault involved and economic performance of the infringing undertaking(s) is (are) considered.

According to Austrian jurisprudence, violations of the prohibition on closing before clearance are generally regarded as a serious infringement. So far, fines in the range of some thousand Euros (following later notification in the undertakings’ own initiative) to EUR 1.5 million have been imposed.

Other sanctions such as cease orders do not play a significant role in practice. However, it should be noted that the law also foresees a nullity sanction in cases of infringements of the ban on implementations. This does not concern agreements preparing the concentration, but legal acts implementing the concentration or taken after an illegal implementation.

China Small Flag China

Where business operators implement concentration in violation of the requirements of the AML, including failure to notify, late notification and breaches of a prohibition on closing, SAMR may:

  1. require them to discontinue such concentration;
  2. require them to dispose of relevant shares or assets, transfer the business and adopt other necessary measures to return to the state prior to the concentration within a specified time limit; and
  3. impose a fine of not more than CNY 500 thousand.

In determining which of the above penalties shall be imposed, SAMR takes into factors such as the nature, extent and duration of the violation as well as the assessment results on the impact of the concentration on competition.

By the end of August 2019, MOFCOM and SAMR have published 37 cases of failure to notify. In each of these cases, a fine has been imposed, with the highest being CNY 400 thousand and the lowest being CNY 150 thousand. Penalties stipulated in sub-paragraphs (1) and (2) above have been imposed in none of these cases. One of the reasons is that MOFCOM and SAMR concluded that none of these cases had negative impacts that may lead to the elimination or restriction the competition.

Cyprus Small Flag Cyprus

Where a concentration is either partially or fully implemented prior to clearance by the CPC, administrative sanctions may be imposed by the CPC.

An administrative fine of up to ten per cent (10%) of the aggregate turnover achieved by the notifying undertaking during the immediately preceding financial year may be imposed on the notifying undertaking for the aforementioned infringement, which may be followed by additional administrative fines of €8,000 for each day the infringement persists.

The CPC also has the power to order the partial or complete dissolution of a concentration that has been implemented prior to obtaining clearance by the CPC.

Denmark Small Flag Denmark

The parties will be punished with fines if they;

  • fail to notify a merger/implement a merger prior to clearance;
  • fail to submit a full-form notification within ten business days upon request from the DCCA in a situation where the DCCA has first approved a merger under the simplified procedure, but the approval was based on the parties’ submission of incorrect or misleading in-formation;
  • implement a merger despite a prohibition against implementation;
  • fail to comply with a condition imposed or order issued by the DCCA as a precondition for approving the merger; or
  • fail to comply with a requirement to separate undertakings or assets that have been taken over or merged or a requirement of cessation of joint control or any other measure capable of restoring competition when the DCCA has decided to prohibit a merger which has already been implemented.

On 20 June 2018, two Danish energy suppliers were fined DKK 4 million each for failure to notify a joint acquisition of a third undertaking back in 2012. In setting the fine, it was considered a mitigating circumstance that the undertakings informed the DCCA themselves of the breach of the obligation to notify the merger.

Ecuador Small Flag Ecuador

The Antitrust Law stipulates that executing an economic concentration operation that must be notified but has not been authorised by the SCPM is a serious offence. This kind of offence, pursuant to the Law cited above, is sanctioned with a fine of up to 10 per cent of the breaching economic operator’s total turnover in the fiscal year preceding that of the fine.
The sanctions described in this question also apply to foreign-to-foreign economic concentrations that produce effects in Ecuador.

EU Small Flag EU

The Commission has powers to impose fines up to 10% of aggregate worldwide turnover on the parties if they intentionally or negligently fail to notify a merger with an EU dimension, irrespective of whether clearance is ultimately obtained. The EC and national competition authorities have recently increased the prosecution of such breaches. As mentioned above, the Commission fined Canon EUR 28 million in June 2019 for partially implementing its acquisition of Toshiba Medical before notification and merger control approval.

France Small Flag France

The Code provides several sanctions for failure to notify (Article L.430-8-I of the Code) or breaches of the standstill obligation (Article 430-8-II of the Code).

Penalties for failure to notify
If a notifiable concentration is completed or closed without having been notified, the FCA may:

  • compel the parties to notify the transaction, subject to a daily penalty payment of a maximum of 5% of their average daily turnover, unless they return to the situation which existed prior to the concentration; and/or
  • impose on the parties responsible for the notification a fine of up to 5% of their pre-tax turnover achieved in France during the last financial year (increased, where applicable, by the turnover achieved in France by the target during the same period). For natural persons, the fine is up to €1.5 million.

There are various examples of sanctions by the FCA for failure to notify a transaction. As an example, the FCA imposed a fine of €4 million to Castel Group for default of notification (the fine was then reduced by the French supreme administrative court (Conseil d’Etat) in 2016 to €3 million).

Penalties for anticipated implementation (gun-jumping)
The implementation of a concentration, not benefiting from a derogation, prior to its clearance triggers the same sanctions and fines as those incurred in cases of failure to notify (see above).

As an example, in its decision dated 8 November 2016 (case n°16-D-24), the FCA imposed a fine of €80 million on Altice Group for having prematurely completed two transactions under on-going merger control review.

Germany Small Flag Germany

By law, a late notification and failure to notify at all are not treated differently. As explained above, it depends on the situation in the case at hand what consequences may result from breach of an applicable prohibition on closing. A case of closing without valid clearance will be treated similarly to closing with no clearance at all.

Violations of prohibitions that may be enforced separately will result in fines. Undertakings implementing a transaction before clearance or without valid clearance may be fined up to 10% of the group turnover (relevant period is the last fiscal year). The fact that an attempt to acquire valid clearance was made may be taken into consideration when calculating possible fines as well as in court proceedings in civil courts, should such proceedings take place.

In practice, the FCO usually does not impose a fine for a first time violation if there is a negligent disregard of the duty to notify and the parties are not familiar with the German merger control regime.

India Small Flag India

Various types of penalties prescribed under the Competition Act on individuals and companies are as follows:

  1. If the parties fail to notify a notifiable transaction, or implement the transaction without approval (‘gun-jumping’), the CCI can impose a penalty of up to 1% of the total turnover or value of assets of the proposed combination, whichever is higher.

    If the parties fail to pay the above penalty, the Chief Metropolitan Magistrate in Delhi can impose fines of up to INR 250 million (about USD 3.5 million) and/or imprisonment of up to three years.

Ireland Small Flag Ireland

Failure to notify a notifiable merger or acquisition (and failure to supply information required under an RFI within the time period specified by the CCPC) is an offence under the Competition Act. An undertaking, or the person in control of an undertaking, convicted of such an offence may be liable on summary conviction to a fine not exceeding €3,000 or, on conviction on indictment, to a fine not exceeding €250,000.

Furthermore, if the failure continues one or more days after the date of its first occurrence, the undertaking or person concerned is guilty of a separate offence for each day that the breach occurs and may be liable on summary conviction to a fine not exceeding €300 or, on conviction on indictment, to a fine not exceeding €25,000.

For the purposes of these offences, the person in control of the undertaking is:

  • In the case of a body corporate, any officer of the body corporate who knowingly and wilfully authorises or permits the offence to occur;
  • In the case of a partnership, each partner who knowingly and wilfully authorises or permits the offence to occur; and
  • In the case of any other form of undertaking, any individual in control of that undertaking who knowingly and wilfully authorises or permits the offence to occur.

Once a transaction is notified to the CCPC, there are no criminal sanctions for closing prior to receipt of clearance from the CCPC. However, if a transaction is put into effect prior to clearance it is void as a matter of Irish law, meaning it is legally unenforceable and ineffectual.

While closing prior to clearance does not attract criminal sanction, any person who fails to observe a determination of the CCPC or commitment decision (or any person who aids, abets or assists another person, or conspires with another person to contravene such determination or commitment decision) is guilty of an offence and may be liable:

  • On summary conviction, to a fine not exceeding €3,000 or to a term of imprisonment not exceeding 6 months, or both; and
  • On conviction on indictment, to a fine not exceeding €10,000 or to imprisonment for a term not exceeding 2 years, or both.

If the breach continues for one or more days after the date of its first occurrence, the person is guilty of a separate offence and may be liable on summary conviction to a fine not exceeding €300 and, on conviction on indictment, to a fine not exceeding €25,000.

The CCPC’s predecessor, the Competition Authority, published a notice on “gun jumping”, i.e. failing to notify a notifiable transaction and implementing the transaction prior to clearance, in which it outlined the issues concerning “gun jumping” and stated that it took these cases very seriously.

The CCPC has investigated a number of “gun-jumping” cases in recent years. In those cases, the parties agreed to notify the transaction in question and, in those circumstances, the CCPC did not pursue the imposition of fines for failure to notify. The CCPC will typically publish a press release when it becomes aware of a “gun jumping” incident. Recently, the CCPC investigated suspected gun-jumping in respect of the acquisition by Armalou Holdings Limited (through its wholly-owned subsidiary, Spirit Ford Limited) of Lillis O'Donnell Motor Company Limited in December 2015. While the transaction was subsequently notified and cleared by the CCPC, in April 2018, Armalou Holdings Limited pleaded guilty in Dublin Metropolitan District Court in Ireland’s first criminal prosecution involving “gun-jumping” in a merger. In May 2019, the second guilty plea followed from Airfield Villas Limited - The vendor of Lillis-O’Donnell Motor Company at the time was Lillis-O’Donnell Holdings Limited, which subsequently changed its name to Airfield Villas Limited.

Israel Small Flag Israel

Administrative fines are considered the "primary enforcement measure" for failure to notify of the execution of a non-horizontal merger. The maximum fine set by the Israeli Competition Law is 8% of a company's total sales turnover in the year prior to the violation, up to NIS 100,000,000. For individuals and companies that had a sales turnover of less than NIS 10,000,000 in the year prior to the violation, the maximum fine is NIS 1,035,730.

The Commissioner may also issue an Administrative Declaration of Breach. This Declaration serves as prima facie evidence in any legal proceedings, and may be used for civil lawsuits (including class actions), against the merging companies.

Failing to file a merger notification, or taking action that is tantamount to a full or partial merger contrary to the Israeli Competition Law, is a criminal offence. The maximum penalty is a three-year jail sentence, in addition to fines. In practice, criminal sanctions for mergers are rare.

The Israeli Competition Authority may approach the Competition Tribunal requesting (i) a consent decree that provides, inter alia, for a specified sum of money to be paid by the parties to the state treasury in lieu of administrative fines, criminal procedures or an administrative declaration. The consent decree may include operative measures, such as the disgorgement of acquired assets. The consent decree may include a provision which provides that the parties do not admit that the "merger of companies" is considered a notifiable merger. The Israeli Competition Authority may also approach the Tribunal to request (ii) unconsented divestiture of the merged companies. This is a rare practice: to the best of our knowledge, the Competition tribunal has considered the separation of merged companies in only two cases in Israel, both cases referring to local companies.

Last but not least, illegal agreements, including merger agreements, are generally unenforceable (this is also relevant to restraints ancillary to the merger which have not been cleared under the Israeli Competition Law). In addition, the consummation of an illegal merger is a civil tort and is subject, even without administrative declaration, to civil law suits, including class actions.

South Korea Small Flag South Korea

The MRFTA imposes an administrative fine of up to KRW 100 million for failure to make a timely and correct notification and, in the case of pre-merger notification, for breach of a prohibition on closing. The KFTC’s “Guidelines for imposing fines for violation of merger reporting regulations” details the criteria for calculating fines.

Mexico Small Flag Mexico

The penalty for failing to notify a concentration or late notification is of up to 5% of the entity’s income. As notified concentrations can only take effect once the clearance has been granted, no prohibition on closing is applicable.

Norway Small Flag Norway

Administrative fines. The range depends on the specific circumstances

Philippines Small Flag Philippines

PCC Memorandum Circular No. 17-001 provides for guidelines in the determination of fines for failure to comply with Merger Notification Requirements and Waiting Periods. The basic amount of the fine (“basic fine”) shall be 3% of the value of the transaction.

If the thresholds for compulsory notification are satisfied and the parties implement closing before clearance from the PCC is obtained, the transaction shall be considered void, and the parties shall be subject to an administrative fine of 1% to 5% of the transaction value.

In the case of In Re: Udenna Corporation, PCC Case No. M-2017-001, the PCC voided a Philippine conglomerate’s acquisition of shares in a foreign corporation which has Philippine subsidiaries that hold substantial assets for non-compliance with the compulsory notification requirement under the PCA. The PCC also imposed a fine of around Twenty Million Pesos (PhP20,000,000.00). The PCC held for the purposes of the Value of the Transaction Test that the Target Corporation’s shares in “entities it controls are excluded” but the “assets of the controlled corporations are still included in the valuation”.

Portugal Small Flag Portugal

Breach of merger control rules may pose serious negative consequences.

The PCA may initiate infringement proceedings and impose fines on the notifying party(ies) of up to 10% of its group turnover in the previous financial year. The Competition Act is not clear as to whether the turnover concerned is national or worldwide, leaving this decision at the discretion of the PCA according to the features of the case at stake.

So far, there have been no infringement procedures, or fines applied, as in relation to foreign-to-foreign transactions, but at the national level there has been a significant increase in ex officio investigations for the aforementioned breach of the Competition Act. In 2017, the PCA fined Group Vallis €38,500 for a failure to notify, and currently there are unprecedented infringing proceedings investigating breaches of the market share threshold. The PCA may initiate such proceedings for infringements that took place within the previous five years.

Without the relevant clearance from the PCA, the implementation of the transaction will also lack legal effects, which may have relevant contractual consequences. This effect may be declared as such, and at any time, by a court and, when necessary, the PCA may revoke the concentration and/or order divestment where the transaction has already been closed.

The PCA may also apply a periodic penalty payment, of up to a maximum of 5% of the average turnover in the preceding year, upon the notifying party(ies) until filing occurs.

Furthermore, there may be personal liability for persons holding managing, senior or supervision positions in the notifying party(ies), in particular if there is evidence that they had, or should have had, knowledge of the infringement. Therefore e.g. board members, directors or managers may also be held liable for the aforementioned infringements, and fines up to 10% of their annual income may apply.

Private enforcement is also a possible tool available to third parties to claim damages arising from the aforementioned infringements.

Please also note that the initiation of infringement procedures, and the imposition of fines, are published on the PCA's website, and usually followed by notes in the general and specialized written press, and media.

Russia Small Flag Russia

The following negative consequences are provided for failure to notify, late notification and breaches of a prohibition on closing:

  • fine imposed on the company which is responsible for the filing in the amount of up to RUB 500,000;
  • fine imposed on the general director (CEO) in the amount of up to RUB 20,000;
  • potential challenge of the transaction by FAS in court if the transaction could lead to the restriction of competition.

Sweden Small Flag Sweden

There is no penalty for failure to notify. If an unnotified concentration would come to the SCA’s attention, the SCA may however order the parties to notify the concentration coupled with a penalty clause. In such a case, the SCA also has the right to bring an action before the Patent and Market Court to divest the concentration.

Switzerland Small Flag Switzerland

The penalties for an undertaking that implements a notifiable concentration without filing a notification, fails to comply with a temporary prohibition on its execution, violates a condition imposed with the approval or implements a prohibited concentration can amount to up to one million Swiss francs.

If an undertaking repeatedly violates a condition imposed with the approval, a penalty of up to 10 percent of the total turnover in Switzerland achieved by all the undertakings concerned may be im-posed.

In addition to undertakings, a natural person who implements a concentration subject to notification without notification or violates dispositions in connection with concentrations can also be fined up to 20'000.- Swiss francs.

Peru Small Flag Peru

Law N° 26876 sanctions with a fine of up to 500 UIT (approx. USD 636 000) for failure to notify. There is also a fine of up to 10% of the sales or gross income of the previous year when a concentration operation is carried out without notifying INDECOPI, when it has not been approved, or without adopting the proposed remedies.

According to the Bill, failure to submit an application for authorization qualifies as a minor offense and is penalized with a fine of up to 500 UIT (approx. USD 636 000). Executing the concentration operation before submitting it to the control procedure or issuing the corresponding resolution is considered a serious infraction and is sanctioned with a fine of up to 1000 UIT (approx. USD 1.2 million).

Turkey Small Flag Turkey

Monetary fines for failure to notify or close before the Board’s approval

In the event that the parties to a merger or an acquisition which requires the approval of the Board realise the transaction without the approval of the Board, a turnover-based monetary fine of 0.1 per cent of the turnover generated in the financial year preceding the date of the fining decision would be imposed on the incumbent firms, regardless of the outcome of the Board’s review of the transaction.

In December 2018, the minimum amount of the monetary fine to be imposed as a result of a violation of a suspension requirement for the year 2019 has been amended. In the case of the violation of the suspension requirement, a turnover-based monetary fine (based on the local turnover generated in the financial year preceding the date of the fining decision at a rate of 0.1%) will be imposed on the incumbent firms (acquirer(s) in the case of an acquisition; both merging parties in the case of a merger). A monetary fine imposed as a result of a violation of suspension requirement shall in any event not be less than TL 26.027 – approximately EUR 4,582 or USD 5,388 - (rather than the former minimum amount of 21.036 - approximately EUR 5,118 or USD 5,779) as amended by the Communiqué No: 2018/1 on the Increase of the Lower Threshold for Administrative Fines Specified in Paragraph 1, Article 16 of the Law No 4054 on the Protection of Competition, to be Valid until December 31, 2019. It should also be noted that the wording of Article 16 of Law No. 4054 does not give the Board discretion on whether to impose a monetary fine in case of a violation of suspension requirement (i.e. once the violation of the suspension requirement is detected, the monetary fine will be imposed automatically). On a side note, the legal consequences of the violation of a suspension requirement are also applicable for foreign-to-foreign transactions since there is no exemption for foreign-to-foreign transactions.

Invalidity of the transaction

A notifiable merger or acquisition which is not notified to (and approved by) the Board would be deemed as legally invalid with all of its legal consequences.

Termination of infringement and interim measures

Pursuant to Article 9(1) of the Law No.4054, should the Board find any infringement of Article 7, it shall order the parties concerned, by a resolution, to take the necessary actions to restore the same status as before the completion of the transaction, and thereby restore the pre-transaction level of competition. Similarly, the Law No.4054 authorises the Board to take interim measures until the final resolution on the matter in cases where there is a possibility for serious and irreparable damages to occur.

Termination of the transaction and turnover-based monetary fines

If, at the end of its review of a notifiable transaction that was not notified, the Board decides that the transaction falls within the prohibition of Article 7, the undertakings could be subject to fines of up to 10 per cent of their turnover generated in the financial year preceding the date of the fining decision. Employees and managers (of the undertakings concerned) that had a determining effect on the creation of the violation may also be fined up to five per cent of the fine imposed on the undertakings as a result of implementing a problematic transaction without the Board’s approval.

In addition to the monetary sanction, the Board is authorised to take all necessary measures to terminate the transaction, remove all de facto legal consequences of every action that has been taken unlawfully, return all shares and assets (if possible) to the places or persons where or who owned these shares or assets before the transaction or, if such measure is not possible, assign these to third parties; and meanwhile to forbid participation in control of these undertakings until this assignment takes place and to take all other necessary measures. Under Turkish merger control regime there is no criminal liability and/or imprisonment for failure to notify and implementation ahead of Board’s approval decision.

If the parties to a notifiable transaction violate the suspension requirement, the statute of limitation regarding the sanctions for infringements is eight years pursuant to Article 20(3) of Law on Misdemeanours No. 5326.

As explained above in detail, foreign-to-foreign mergers are covered by Law 4054 on Protection of Competition to the extent that they affect the relevant markets within the territory of Turkey. Regardless of the parties’ physical presence in Turkey, sales in Turkey may trigger the notification requirement to the extent that the turnover thresholds are met. To that end, penalties for failure to notify, late notification and breaches of a prohibition on closing do not differ in terms of foreign-to-foreign mergers.

The foreign-to-foreign nature of the transaction does not prevent imposition of any administrative monetary fine (either for suspension requirement or for violation of article 7) in and of itself. In case of violation of suspension requirement (i.e. closing before clearance or not notifying the transaction at all), foreign-to-foreign mergers are caught under Law No. 4054 so long as one of the alternate thresholds is exceeded (which is the case for our transaction at hand.)

There have been many cases where companies have been fined for failing to file a notifiable transaction (Tex Holding/Labelon Group 16-42/693-311, 06.12.2016; Tekno İnşaat, 12-08/224-55, 23.02.2012; Zhejiang/Kiri, 11-33/723-226, 02.06.2011; Ajans Press Medya Takip A.Ş.-İnterpress Medya Hizmetleri Ticaret A.Ş./Mustafa Emrah Fandaklı/ Ziya Açıkça, 10-66/1402-523, 21.10.2010, etc). In a very few of these cases, the notifiable transaction also raised substantive competition law concerns as it was viewed as being problematic under the dominance test applicable in Turkey (Ro-Ro, 05-69/959-260, 19.10.2005 – the seller incurred a fine of 5% of its annual Turkish turnover.).

For the sake of completeness, in the Simsmetal/Fairless decision (09-42/1057-269, 16.09.2009), where both parties were only exporters into Turkey, the Board imposed an administrative monetary fine on Simsmetal East LLC (i.e., the acquirer) subsequent to first paragraph of article 16 of Law No. 4054, totalling 0.1 per cent of Simsmetal East LLC’s gross revenue generated in the fiscal year 2009, because of closing the transaction before obtaining the approval of the Competition Board. Similarly, the Competition Board’s Longsheng (11-33/723- 226, 02.06.2011), Flir Systems Holding/Raymarine PLC (10-44/762-246, 17.06.2010) and CVRD Canada Inc. (10-49/949-332, 08.07.2010, ) decisions are examples whereby the Board imposed a turnover based monetary fine based on the violation of the suspension requirement in a foreign-to-foreign transaction.

Irrespective of the national scope of transaction (whether foreign-to-foreign, Turkish to Turkish or foreign to Turkish – vice versa), pursuant to Article 16 of Law No. 4054, if the parties to a notifiable transaction violate the suspension requirement (i.e., close a notifiable transaction without the approval of the Board or do not notify the notifiable transaction at all), a turnover based monetary fine (based on the local turnover generated in the financial year preceding the date of the fining decision at a rate of 0.1 per cent) will be imposed on the acquirer in straight forward acquisitions. The wording of Article 16 of Law No. 4054 does not give the Board discretion on whether to impose a monetary fine in case of a violation of suspension requirement. In other words, once the violation of the suspension requirement is detected, the monetary fine will be imposed automatically.

United Kingdom Small Flag United Kingdom

Regarding failure to notify and late notification, no such penalties apply, as there is no obligation to notify and no notification deadline. There is no prohibition on closing unless the CMA has either issued an order to that effect (in which case failure to comply with the order would give rise to penalties of up to 10% of the worldwide group turnover of the party in breach), or has initiated a second phase investigation (in which case a breach of the automatic prohibition on share dealing may result in injunctions and damages claims).

Ukraine Small Flag Ukraine

In case of failure to notify the transaction, sanction in the form of fines for the violation may reach up to 5% of income from the entity turnover for the last fiscal year; if the entity had no income in the last financial year or if it failed to provide information regarding its financial performance at the AMCU request, the fine will be imposed in the amount of up to UAH 340,000 (approximately EUR 11,330).

The AMCU also has a power to calculate a fine, taking into account financial indicators of the group and not based only on the financial indicators of a business entity, which is a direct participant of the concentration.

According to the Competition Law, the AMCU has the authority to take more extreme measures, including the mandatory demerger or reorganization of the monopolistic business entities.

This sanction is not directly related to the concentration and/or its implementation without obtaining an authorization. Moreover, the Competition Law makes this sanction contingent upon the business entity explicitly taking advantage of its monopolistic market status.

United States Small Flag United States

Penalties for a failure to file a premerger notification, filing an incomplete premerger notification, or closing a reported transaction prior to expiration of the waiting period may result in civil penalties of up to $42,530 each day the person is in violation of the HSR Act. In practice, the agencies typically do not seek penalties for the first offense if parties inadvertently fail to file, but will seek penalties for a second mistake or for other types of violations. While $42,530 is the maximum daily civil penalty, the actual penalty will depend on the fact-specific circumstances of the case.

Failure to provide required item 4(c) and 4(d) documents as part of an HSR filing is taken very seriously by the FTC and DOJ. Substantial fines have been assessed for parties failing to provide these responsive documents. In some instances, if the omissions impacted the reviewing agency’s investigation, the parties have had their filings ‘bounced’ and have been forced to restart the HSR waiting period.

Parties may not begin to consummate a transaction until the waiting period expires or is terminated by the agencies. If an acquiring person begins to exercise control over the operations or assets to be acquired before the expiration of the waiting period (referred to as gun-jumping) that person may face a civil penalty of up to $42,530 per day for a violation of the HSR Act. The FTC and DOJ have initiated several multi-million dollar civil penalty actions for gun-jumping violations.

Italy Small Flag Italy

If an undertaking fails to notify a concentration, the ICA can impose a fine up to 1% of the undertaking’s turnover achieved in the previous financial year.

In principle, the same sanction applies in case of late notification. However, the ICA usually imposes symbolic fines (generally between EUR 5,000 and EUR 20,000) if the concentration did not raise any competition concerns and the late notification was submitted on a voluntary basis.

A concentration implemented in breach of a prohibition on closing, results in a sanction between 1% and 10% of the turnover of the business activities which are part of the concentration (i.e., in case of acquisition of an undertaking, of the target’s turnover).

Greece Small Flag Greece

If the undertakings breach their obligation to notify timely a concentration which meets the turnover thresholds, the HCC may impose fines of at least EUR thirty thousand (€ 30,000) and up to ten (10%) percent of the aggregate turnover of the undertakings concerned on a group basis. The HCC, in calculating the fine, takes into account the financial power of the undertakings concerned, the number of the affected markets and the level of competition therein. It is noted that the penalties imposed by the HCC are not exceptionally high, since the Commission considers the effect of the infringement on the Greek market.

In case of an implementation of a notifiable transaction prior to receiving clearance from the HCC, the HCC may impose fines of at least EUR thirty thousand (€ 30,000) and up to ten (10%) percent of the aggregate turnover of the undertakings concerned. Moreover, the HCC may order, by virtue of a decision, the separation of the undertakings concerned, in particular through the dissolution of the merger or the sale of the shares or assets acquired, with a view to restore the conditions existing prior to the implementation of the concentration or take any other appropriate measure so as to ensure the dissolution of the concentration. If the parties fail to comply with the abovementioned decision of the HCC, they may be subject to a daily penalty of EUR ten thousand (€10,000) for each day of non-compliance.

Recently, the HCC fined Dimera Media Investments L.T.D. €50,000 for failing to notify the transaction and € 30,000 for implementing the acquisition of control over Pigasos Ekdotiki S.A. prior to receiving clearance (HCC 655/2018), whereas in 2014 the HCC ultimately decided not to impose a fine on Marinopoulos SA for the prior implementation of its acquisition of exclusive control over OK Anytime Market, as it was not proved that the failure of suspending the transaction was willful (HCC 586/2014).

Finally, in terms of criminal sanctions, the undertaking’s executives may be subject to a fine between EUR fifteen thousand (€ 15,000) and EUR one hundred fifty thousand (€ 150,000) for violation of the Merger Control Legislation.

Updated: November 11, 2019