On 23 January 2020 the Western High Court upheld a decision on merger notification forms. In a merger of Salling Group A/S and Wupti.com A/S, the competition authorities had decided that a simplified procedure was insufficient. Therefore, the merging parties were required to file a standard notification form and pay the increased notification fee. Shortly after Salling and Wupti filed the standard notification form, the Danish Competition and Consumer Authority (DCCA) approved the merger, with use of little new information. The merging parties appealed the decision to require a standard form in order to recover the fee increase.
In June 2015 Salling submitted a simplified notification under the Section 12c(7) of the Competition Act, as Salling was to acquire sole control of Wupti. The parties did not believe the merger would give rise to competition concerns, as the parties did not have a collective market share of 15% or above in any market, nor did the parties have a combined market share above 10% in markets in which both parties were active.
The DCCA found further information was necessary to determine the market share and market position of the merging parties. Therefore, the DCCA decided that a standard notification form was required based on a need to perform further market investigations; as such, investigation could not be done within the process of evaluating a simplified notification.
Shortly thereafter, Salling filed a standard notification form based on the simplified notification filed and paid the compulsory fee of Dkr1.45 million (approximately €193,340), in addition to the Dkr50,000 (approximately €6,670) already paid with the simplified notification.
The following week, the DCCA announced that it had carried out a minor inquiry among Salling and Wupti's biggest customers and competitors. The inquiry showed that the transaction did not give rise to competition concerns. On 20 July 2015 the DCCA approved the merger.
Following the approval, Salling disputed the need for a standard notification form. It argued that:
- there was little to no new information in the standard notification; and
- the DCCA could have obtained the necessary information under the regulatory frame of a simplified notification.
Therefore, Salling found the decision to demand a standard notification unnecessary and disproportionate as it had increased the fee by Dkr1.45 million (approximately €193,340).
The Western High Court ruled that the DCCA was able to demand a standard notification, with the result of an increased fee.
The court found that the possibility of a simplified notification is an exception to the general requirement of a standard form notification. Further, the court found that the potential merger must be characterised as unproblematic in advance to make use of a simplified notification and ruled that even if a merger meets the requirement for simplified notification, there can be cases where the merger cannot be characterised as unproblematic in advance.
In a simplified merger procedure, the DCCA will assess only whether the requirements for a simplified procedure have been met; it will not perform an actual review of the transaction. The Western High Court found that the DCCA had been prevented from performing further market investigations under the simplified notification regulatory framework, and that such investigation was necessary to perform the appropriate merger control. Therefore, the DCCA was able to demand a standard notification form be submitted, even though the DCCA carried out only minor investigations.
As a result of this ruling, even if a merger meets the criteria for simplified notification, the DCCA can require a standard notification if it cannot determine that no competition concerns will arise based solely on the simplified notification.
