Reminder that Chile will implement new regime in June
As reported previously, a new mandatory and suspensory merger control regime will enter into force in Chile on 1st June 2017. Any ongoing transactions which have not been completed by this date will be notifiable and subject to the suspension requirement if they meet the thresholds.
Colombia: 40 percent drop in thresholds
In an attempt to capture more local transactions, the Colombian competition authority decreased its filing thresholds by 40% in December. Qualifying transactions are now subject to prior authorisation when the value of the combined worldwide assets or turnover of parties involved exceed approximately EUR 14 million / USD 15 million.
Hungary: new dawn raid power and fast track procedure in merger control overhaul
In January 2017, a new power to conduct dawn raids in the merger context as well as a fast-track approval procedure was introduced in Hungary.
- A dawn raid is possible if the transaction is implemented without notification or if misleading information is provided as part of the notification.
- A fast-track procedure allows clearance within eight days if the transaction is not expected to impact competition.
- The introduction of a new rule means that transactions in which the combined domestic turnover exceeds HUF 5 billion are now subject to mandatory, non-suspensory notification if there is a potential impact on competition. If not notified, those transactions can be investigated by the authority within 6 months post-closing.
- The second limb of the notification thresholds also increased, meaning they are now as follows:
(1) combined turnover exceeds HUF 15 billion (unchanged); and (2) turnover of each of at least two parties exceeds HUF 1 billion (up from 500 million).
- As a general guide, transactions will not be expected to impact competition if the undertakings are competitors and their combined market share is 20% or less; or if the market share in the respective markets is 30% or less when the undertakings concerned are in (1) a vertical relationship; or (2) complementary markets.
India: Revised Target Exemption now in force
The de minimis target exemption in India was renewed last year, allowing for parties to avoid notification if the target's domestic asset value was less than INR 3.5 billion OR if the target’s domestic turnover was less than INR 10 billion (approximately EUR 143 million / USD 156 million). This exemption was amended in March and the new Revised Target Exemption applies to all transactions, including mergers, acquisitions and amalgamations. The thresholds for the exemption are unchanged but now only the value of assets and turnover attributable to the portion of business being transferred are to be counted for the target. Previously the entire assets or turnover of the selling entity were counted. These changes are welcome since they will significantly reduce the number of notifiable transactions.
Italy: further changes to come?
As part of an annual adjustment, Italy increased the first limb of its notification thresholds from EUR 495 million to EUR 499 million in March. The second limb of the thresholds (domestic turnover of the target exceeding EUR 50 million) remains unchanged. More significant changes to thresholds are currently being debated by the senate, including changing the focus of the second threshold from “the target” to “at least two interested parties."
Myanmar: merger control regime awaited
The competition law in Myanmar came into force on the 24th February 2017. As there are no implementing rules yet, there is no active merger control regime. Our Myanmar team continues to monitor developments.
Turkey: 2 deals in 3 years to be treated as same deal
Changes to the turnover calculation rules in Turkey mean that two or more transactions between the same parties, or by the same undertaking, in the same market, within a period of three years, will be now considered as a single transaction. This replaces the two year period which previously applied. In a similar fine-tuning exercise, a minor exemption to the suspension requirement in Turkey's regime has been introduced. The exemption will allow certain transactions where control is acquired from multiple sellers through a series of stock exchange transactions to be notified after implementation.
Trend in Europe: new transaction value thresholds to capture low revenue targets
As reported previously, a transaction value threshold was proposed in Germany last year. Following approval by the Bundesrat in March, the threshold is expected to come into force in May 2017. Austria's value of transaction threshold is due to enter into force on 1st November. The European Commission has also sought comments on introducing a size of transaction threshold, stating that such a threshold may be particularly significant for transactions involving low revenue targets in the pharmaceutical and digital markets. A particular issue in the digital market was raised by Sweden's competition authority in its March 2017 report which examined the increase in online sharing services, commenting that such companies often have low turnovers and may not be caught by current Swedish merger rules, despite their potential impact on competition.
Trend in Europe: misleading or incomplete information investigations
In November, the Belgian competition authority conducted several dawn raids, citing 'bizarre' answers received from parties during merger review as a basis for the suspicion of anti-competitive conduct. In December 2016, the European Commission sent a Statement of Objections to an acquirer of a social media company for allegedly providing misleading information. January 2017 saw the Slovakian authority impose a fine on a party for submitting incomplete information. In March, Hungary’s competition authority imposed a fine on an investment firm, in addition to revoking the approval of the company's deal, after it found that misleading information had been filed. In April, a Danish court imposed a fine on a wholesaler for failing to share accurate information. Competition Commissioner Margrethe Vestager also warned that the Commission suspects more companies may have submitted misleading information in cleared merger cases and that the Commission will decide whether to launch new probes before the European summer break.