On 1 January 2020 the Commission for the Protection of Competition (CPC) introduced new merger filing guidelines.
The former guidelines – which applied for over 10 years – did not differentiate between transactions (eg, simple and complex), despite potential competition concerns. This uniform approach was unnecessarily bureaucratic when applied to concentrations with an insignificant market effect (ie, insignificant combined shares of the parties), which required detailed merger filings only if the parties' turnover reached the statutory thresholds.
As the former guidelines were not extensive enough for more complicated transactions (with substantial market shares of the parties), it was not unusual for the CPC to send parties several requests for additional information to assess and clear a concentration. Naturally, this approach led to delays in both simple and more complex transactions.
The new guidelines address this practical problem and provide for two types of filing: a simplified merger filing for mergers that are unlikely to raise competition concerns and a more extensive merger filing for concentrations which are expected to significantly affect the relevant markets.
Another substantial change introduced in the guidelines is the possibility for notifying parties to request remedies with the merger filing notification itself. Previously, remedies could be proposed only during Phase 2 proceedings (ie, in-depth investigations).
For the first time, the CPC has officially granted notifying parties the ability to request a pre-notification meeting to discuss the information and documents that would be required for a merger filing (a practice established unofficially by the CPC in the past two years).
Requests for waivers in individual cases are also provided for. The new guidelines specify that companies can request waivers from the CPC to give certain information. The waivers can be conducted in the merger filing notification itself and should provide justification for why certain categories of information do not apply. Since the guidelines do not provide for a separate form of such requests or the CPC's obligation to issue an explicit decision in that regard, discussing such potential waivers within pre-notification contacts is recommended.
The new guidelines also explicitly provide that only full translations of documents enclosed as evidence will be accepted. This means that all documents supporting a concentration (eg, joint stock companies and memorandums) will need to be translated in full and this rule cannot be waived (a practice followed by the CPC in the last year).
The CPC set thresholds under which concentration cases are eligible for a simplified merger filing up to:
- 15% for markets in which two merging companies compete (horizontal overlap markets); and
- 25% for markets where one of the merging companies sells an input to a market where the other company is active (vertically related markets), such as where an car manufacturer acquires a manufacturer of car parts.
In simplified merger control filings, the notifying party should provide information about the purchaser(s) and the seller(s), describe the transaction, their business activities and provide the turnover figures that the CPC needs to establish jurisdiction. The relevant markets and market shares of the undertakings concerned should also be specified. However, unlike before, there is no need to provide detailed information about the entire relevant markets (eg, barriers to entry, structure of supply and demand, the effects of the concentration on the market, biggest competitors and their market shares and membership in industry-wide associations). Thus, it seems that for simpler transactions, the process of collecting information and documents will be significantly simplified.
Standard merger filing that would apply for markets where the horizontal overlap is equal to or exceeds 15% – or where the vertical related market shares of the parties reach or exceed 25% – will be much lengthier. For these transactions, the new guidelines provide more than 60 questions. In addition, the information in response to such questions should concern the past two or three years and the next two years (under the former guidelines the requested information concerned only the previous financial year). While some of the questions are taken from the former guidelines, the CPC has significantly elaborated the matters that must be covered in a merger filing.
The new guidelines do not provide for short and standard notification forms. Instead, they specify that certain sections are inapplicable where the simplified merger control filing thresholds are met.
In addition, the CPC has not explicitly provided that a concentration that fulfils the criteria for a simplified merger control review would be decided with a short-form decision, while for the other transaction a full decision would be issued.
Likewise, there are no differences regarding the deadline to review simplified and standard transactions (ie, the statutory term of 25 working days would apply in both cases).
Thus, it is yet to be seen in practice whether fast-track proceedings and short-form decisions will be applied to simpler transactions or whether the only relevant change will be to the volume of information and documents required from the notifying parties.
