Highlighting Developments Captured on Global Merger Analysis Platform
Argentina: Major reforms in the pipeline?
The Argentine Competition Authority is considering reforms including: the creation of a new decentralised, independent antitrust agency and a National Antitrust Court of Appeals; a new leniency program; and a new pre-merger control regime (with a fast-track filing process, increased notification thresholds and higher fines.) The Authority held a public consultation on these reforms which expired at the end of September. We are monitoring developments closely and we will keep you informed.
Chile: Mandatory and suspensory merger control regime in June 2017
Chile has a new law which brings in a mandatory and suspensory merger control regime. The regime will come into force on 1st June 2017 and transactions meeting both of these thresholds will be notifiable:
- each party has domestic revenue of UF 290,000 (approx. US$ 11.7 million) in the financial year preceding the transaction, and
- parties have combined domestic revenue of UF 1.8 million ( approx. US$ 72 million) in the financial year preceding the transaction.
Transactions which meet the thresholds and have not been completed by 1st June 2017 will be notifiable. Other significant merger-related developments in the new law, which are already in force, include increased fines for anticompetitive conduct and a requirement for parties to inform the competition authority if they acquire more than 10% in a competitor company within 60 days of closing.
Egypt: First infringement decision for failure to notify
The Egyptian Competition Authority adopted its first infringement decision in August 2016, finding that a company had failed to file a notifiable transaction within the 30 day post-closing period required by the law. Although no penalties have been imposed so far, the Egyptian regime is a criminal system and we understand that the infringing company has been referred to the Prosecutor’s Office. If the Prosecutor refers the case to the Economic Court, a fine may be imposed of up to EGP 500,000 (approx. USD 56,000).
France: EUR 80 million gun-jumping fine imposed
In November 2016 the French Competition Authority imposed its first fine for gun-jumping. The parties (two companies in the telecoms sector) are jointly and severally liable for the EUR 80 million fine which is thought to be the largest fine ever imposed by any competition authority in relation to gun-jumping.
The parties appear to have exchanged sensitive information and allowed the acquirer to exercise decisive influence over the target companies in advance of clearance. The decision shows that it is crucial to manage gun-jumping risks when planning how to implement a transaction once clearance has been granted. Read more about the risks of non-compliance in this article.
Germany: Amendments to legislative proposal on size of transaction test
In July, Germany's Ministry of Economics published a draft change to the German merger notification thresholds, including the introduction of a 'size-of-transaction' threshold. More recently, on 21 September 2016, a formal legislative proposal was introduced which builds on the draft. The new proposal still includes the 'size of the transaction' test with two notable amendments: The value threshold has been increased from EUR 350 million to EUR 400 million and the local nexus requirement has been narrowed down substantially. Read more about this in our article.
India: Increase in enforcement
India’s competition authority imposed a record-breaking fine of USD 750,000 (50 million rupees) for failure to notify a transaction within the deadline required by the country’s merger control rules. Our article argues that it is time for these sort of deadlines to be abolished in suspensory regimes.
UAE: Resolution defines market share thresholds
A resolution of the UAE cabinet came into force on 1 August 2016. It defines the notion of ‘economic concentration’ in the context of UAE merger control as well as defining ‘dominant positions’ and ‘weak-impact agreements’. Read more in this client alert from our UAE team.
Ukraine: Simplification of filing process and extension of "Amnesty"
Significant reforms to Ukraine's merger control regime, including new thresholds, were implemented earlier this year (see our last Merger Control Minute covering these changes here). More changes came into force on 19 August 2016 including:
- less documentation/information required in the notification (including removal of the need to list minority shareholdings)
- no requirement to describe all undertakings connected through control relationships (now there is only an obligation to disclose ultimate beneficial ownership)
The Authority has also extended its so-called 'amnesty' for notifiable transactions until 15 March 2017. The Authority had indicated in 2015 that lower fines would be imposed where parties applied to obtain retrospective clearance for notifiable transactions (under certain conditions). This amnesty was due to expire on 15 September 2016.
United States: Increased maximum fines
As of 1 August 2016, the statutory maximum fine for premerger filing notification violations under the HSR Act increased from $16,000/day to $40,000/day. More information in this client alert from our US team.
Baker McKenzie's Merger Control Heatmap shows most complex regimes
Based on our collective global experience, we have ranked merger control jurisdictions according to whether they are more or less likely to be an obstacle to the deal process (in terms of information requirements, delays, unpredictability) even when the transaction does not raise material competition issues.