CPC introduces pre-notification contact in merger proceedings

From 1 January 2021, the Commission for the Protection of Competition (CPC) will be available for pre-notification discussions. To this end, the CPC has published rules for such contact (adopted by CPC Decision 1005/10 December 2020).

Pre-notification contact should preferably be initiated at least two weeks before the expected date of notification. The CPC recommends that during the pre-notification contact, parties provide:

• background information about the transaction;
• a brief description of the relevant sectors and markets involved; and
• the likely impact of the transaction on competition in general.

The rules also allow parties to submit a draft notification as a basis for further discussions with the CPC.

CPC case handlers will review the transactions, which is an important improvement. At present, discussions with case handlers are informal and possible only during the formal review process. Moreover, as a CPC standard policy, case handlers are reluctant to provide information on the progress of the filing and potential concerns. At present, parties learn about the CPC's standpoint only through requests for information, which delay merger control reviews by at least five to 10 business days.

The rules will provide notifying parties with the opportunity to discuss proposed remedies in the notification phase. Thus far, remedies could be proposed only during an in-depth investigation in Phase II of the merger control proceedings.

The rules also allow notifying parties to discuss waiving some of the CPC's mandatory questions that must be answered with the merger filing. This may result in significant bureaucratic relief for transactions involving notifying parties with larger market shares acquiring targets with insignificant market shares. At present, for all transactions that involve a 15% (horizontal overlaps) or a 25% (vertical overlaps) combined market share, the parties must submit the standard (long-form) merger filing, which is burdensome. Such detailed filing seems unnecessary for transactions involving small targets (with less than a 5% market share), especially when the acquirer reaches the 15% to 25% market share by itself and the transaction has no potential to affect product markets in Bulgaria.

The pre-notification discussions will be held in the CPC's office, but the rules also allow for online meetings (in case of urgency or in the current times of social distancing).

In conclusion, the CPC's rules on pre-notification contact are a step in the right direction in implementing best European practices on merger control. Nonetheless, it remains to be seen:

• how practical they will be for the notifying parties;
• whether they will lead to a shorter review period once the official proceeding is opened and smoother and more effective communication with case handlers; and
• whether they could facilitate filings which formally meet the criteria for the standard (long-form) filing despite having an insignificant market effect.

For further information on this topic please contact Galina Petkova at Advokatsko Druzhestvo Stoyanov & Tsekova in cooperation with Schönherr by telephone (+359 2 933 1072) or email (g.petkova@schoenherr.bg). The Advokatsko Druzhestvo Stoyanov & Tsekova website can be accessed at www.schoenherr.eu.