1. Relevant legislation

• Law No 287 of 10 October 1990 (the “Law”) contains the main rules governing merger control in Italy, including the definition of merger, the notion of control, and the substantive test to be applied for the assessment of a concentration and the powers.
• Procedural and enforcement rules are laid down in the Presidential Decree No 217 of 30 April 1998 (“Procedural Regulation”).
• Moreover, in 1996, the IAA provided further clarification on how to notify a concentration, issuing its Merger Notification Instructions (hereafter the “1996 Guidelines”), wherein a new version (further amended in the following years, most recently in 2017) of the form to be used by the notifying parties is provided, as well as specific guidelines which clarify a number of issues, including: the operations that are not considered to be concentrations within the meaning of the Law; how to calculate turnover; how to assess the relevant markets of the concentration and the notification procedures.
• The IAA also provides guidelines related to pre-notification discussions (‘Comunicazione concernente alcuni aspetti procedurali relativi alle operazioni di concentrazione di cui alla Legge 10 ottobre 1990, no 287’), calculation of turnover thresholds, and criteria for determine the filing fee.
• In addition, pursuant to Article 31 of the Law, in the application of fines, the IAA is to refer, where applicable, to the general rules contained in Law No 689 of 24 November 1981 (‘Legge di depenalizzazione’).
• Finally, in order to adapt the national thresholds to the European ones and also to increase the number of notifications to be submitted to the Italian Antitrust Authority, the Italian legislator adopted Law No 124/2017 (the so-called “Legge Concorrenza 2017”).

2. Authority

Autorità Garante della Concorrenza e del Mercato (AGCM) http://www.agcm.it

3. Types of transactions caught

The Law – art. 5 – classifies the following transactions as concentrations:

i) merger between two or more undertakings;

ii) acquisition by one or more persons controlling at least one undertaking or one or more undertakings, of the direct or indirect control of the whole or parts of one or more undertakings, whether through the acquisition of shares or assets, or by contract or by any other means;

iii) creation between two or more undertakings of a joint venture by setting up a new company.

In general, a concentration arises whenever a transaction involves a change in control on a lasting basis.

Article 5 of the Law also indicates some specific operations that do not give rise to a concentration within the meaning of the Law, i.e.:

• the acquisition of shares made by banks or financial entities in companies newly set up or through a capital increase – when that purchase is made only for resale (provided that the shares are resold within a period of 24 months, during which the relevant voting rights are not exercised);
• operations that have as their main object or effect the co-ordination of the behaviour of independent undertakings.

Similarly, the following operations do not give rise to a concentration:

• internal restructurings or reorganisations;
• transactions between undertakings that are part of the same group (except in specific circumstances indicated in paragraph 2 letter c) of the 1996 Guidelines);
• acquisition or incorporation of a company that does not carry out economic activities and does not hold, either directly or indirectly, any other undertaking (however, an operation of this kind qualifies as a concentration when the target company holds – or controls another company that holds – licences, permits, grants or other titles by which a business activity may be carried out).

4. Thresholds

Law No 124/2017 provides that a concentration must be prior notified to the IAA when:

i. the aggregated turnover, achieved at national level by all the companies involved in the operation, is more than EUR 492 million; and

ii. the turnover achieved individually at national level by at least two of the companies involved in the operation is more than EUR 30 million.

It should be noted that on 15 March 2022, the Authority, as every year, modified the relevant thresholds, increasing the first one to EUR 517 million; the second threshold, instead, has been left unchanged at EUR 31 million.

The above-mentioned thresholds are exclusively based on nationwide revenues realized by the parties involved in an operation.

5. Exceptions

Notification of the operations that are classified in Article 5 of the Law and that meet the thresholds laid down in Article 16 of the Law is compulsory and there are no exceptions to this rule.

6. Notifying party(-ies)

In general, all the undertakings acquiring control are responsible for the filing; the filing can be made also by the company that directly or indirectly controls the acquirer.

• In the case of acquisition of control or creation of a joint venture, all the companies acquiring control are responsible.
• For mergers, all merging entities are considered responsible.

In these cases, the filing could be executed jointly by the parties.

• In the case of a public takeover bid, the responsibility is attributed to the bidder.

7. Submission deadline

There are no specific deadlines for notification, provided that it is lodged before the implementation of the transaction, and therefore:

• in the case of a merger, before the signing of the merger deed;
• in the case of the creation of a joint venture through the setting up of a new company, before the articles of association are filed with the Companies Registry;
• in the case of acquisition of control, before the purchaser has acquired the possibility to exercise a decisive influence on the behaviour of the target undertaking.

There is no the stand still obligation.

8. Filing fee

The payment of the filing fee is no longer required as of 1 January 2013 pursuant to Article 5-bis of Law Decree n. 1/2012 (as converted in law, with modifications, by Law n. 27 of 24 March 2012 on “Urgent provisions for competition, infrastructure development and competitiveness”).

9. Proceedings timetable

The review process is divided into two phases that could be anticipated by pre-notification discussions with the IAA (see answer No 10 below).

1. In ‘Phase I’, i.e. the period of 30 calendar days from notification of the transaction, the IAA may adopt different decisions. For public takeover bids and for operations regarding the control of a bank, the term is reduced to 15 calendar days. Firstly, the IAA can decide to:

• declare the inapplicability of the Law (e.g. when the operation has an EU dimension, the transaction does not achieve a concentration or the thresholds are not met);
• clear the transaction if the operation evaluation does not give rise to competition issues. The deal can proceed because it does not give rise to serious doubts about the respect of merger rules;
• open an in-depth investigation when it deems possible that the concentration may lead to a prohibition decision. This last decision opens “Phase II” of the review process.

The time limit of 30 calendar days is not applied when the information notified by the undertakings is seriously inaccurate, incomplete or untrue. In these cases, the time limit applies from the date on which the IAA received the notification complete with all the necessary elements.

It has to be noted that the parties to a transaction that could give rise to competition concerns may propose, during the “first phase” of the merger control proceeding, (not binding) measures deemed appropriate to address the aforesaid competition concerns. In this regard, as such a decision must be taken by the IAA jointly with the parties of the concentration, the IAA must open a proceeding.

Once the IAA has started the ‘second phase’, it may adopt the final decision within 45 calendar days. The IAA can decide for:

a. clearance;

b. clearance with necessary measures to avoid anti-competitive outcomes; or

c. the prohibition of the transaction. If the merging entities do not make available the information or data requested by the Authority, the period for the final decisions may be extended by a further 30 calendar days.

When the IAA proceeds with the second phase of investigation, the overall time for clearance is normally 75 calendar days from the notification of the operation. However, the Authority often extends this period or uses the power to stop the time limit of the first phase or takes advantage of the 30 extra calendar days of Phase II.

During the ‘second phase’ of the merger control proceedings and if the IAA considers that the proposed transaction could be prohibited, the parties may propose binding remedies deemed appropriate to eliminate those elements of the transaction that could distort competition. Such remedies may be imposed also by the IAA itself, whether it considers that the transaction could create or strengthen a dominant position on the domestic market with the effect of eliminating or restricting competition appreciably and on a lasting basis.

The IAA’s decisions approving or prohibiting transactions may be appealed, by the addressees or other interested third parties, before the Regional Administrative Court of Latium (“TAR Lazio”), within 60 calendar days from the notification of the decisions.

The TAR Lazio may annul the IAA’s decision, totally or partially, on points of law, for lack of jurisdiction or competence, violation of laws and abuse of power.

The TAR Lazio’s judgment may be subsequently appealed before the Supreme Administrative Court (“Consiglio di Stato”) within either 30 calendar days from the notification of the TAR Lazio’s judgment, or within 3 months from the publication of this judgment in the TAR Lazio’s registry.

The rulings of Consiglio di Stato can be challenged before the Court of Cassation – but only on jurisdictional grounds – within 60 calendar days from the notification or six months from the publication of the judgment, or be subject to revocation under specific and extraordinary conditions provided in Articles 395 et seq of the Italian Civil Procedural Code.

10. Availability of pre-notification/informal consultation

The pre notification discussion with the IAA consists in a preliminary and informal dialogue, the parties may submit an informal document, which will be treated as strictly confidential, at least 15 calendar days before the date of the formal notification. Such document shall include the following information:

• general data on the merger entities;
• a short description of the operation;
• indications on the affected markets;
• the relevant market shares of the parties; and
• other foreign antitrust authorities involved by notification.

During this pre-notification discussion or during the first phase (see answer No 9 above), the IAA may propose, with regard to transactions that could give rise to competition concerns, certain measures or remedies that are not binding for the parties.

In any case, it has to be noted that a transaction shall be notified prior to its implementation, i.e. before the purchaser has acquired the effective ability to exercise a decisive influence over the behaviour of the target, but after that the parties have agreed on the essential aspects of the transaction.

11. Test for clearance/prohibition

The IAA uses the so-called dominance test, on the basis of which a transaction is prohibited if it creates or strengthens a dominant position on the domestic market with the effect of eliminating or restricting competition appreciably and on a lasting basis. If a transaction neither eliminates nor restricts competition appreciably and on a lasting basis, it is generally approved.

The assessment process is structured as follows.

1. The IAA firstly identifies the relevant product and geographic market(s). Considering that this is an ’ex ante’ evaluation, the IAA will try to provide the competition constraints to which the undertakings concerned would be subject after the implementation of the transaction. In this analysis, the IAA substantially follows the European Commission’s practice.

2. Secondly, the IAA proceeds with the evaluation of the effects of the notified transaction on the previously defined market(s).The IAA takes into account the possibilities of substitution available to suppliers and users, the market position of the parties, the access conditions to supplies or markets, the structure of the relevant markets, the competitive position of the domestic industry, barriers to the entry of competing undertakings and the evolution of supply and demand for the relevant goods or services.

12. Conditional clearance – remedies

The IAA has the power to adopt a prohibition decision if, following the second phase, it ascertains that a transaction creates or strengthens a dominant position on the domestic market with the effect of eliminating or restricting competition appreciably and on a lasting basis.

The Authority may also clear the transaction imposing the measures that it deems necessary to prevent the negative consequences referred to above.

Moreover, the IAA, when opening a Phase II investigation, may also interfere with the transaction by ordering the undertakings concerned to suspend it until the end of that investigation. In addition, when the transaction has already been implemented and the final decision finds it to be prohibited, the IAA has the power to impose all the necessary remedies to restore conditions of effective competition in the market.

Remedies may include both behavioural and structural remedies, both if the IAA imposes measures on the parties to the transaction, as well as in case of parties’ proposal of measures to address anticompetitive concerns.

• Structural remedies are generally preferred by the IAA and may include, for instance, divestiture of intellectual property rights, divestiture of assets or activities (e.g. slots in the airline sector), as well as divestiture of shareholdings.
• In spite of the IAA’s preference for structural remedies, it may also accept behavioural remedies, such as, for instance, commitments to reduce presence of the same individuals in the managing bodies of competing banks in the banking sector, or commitments aimed at granting competitors’ access to an essential resource/infrastructure, for instance in the telecommunications sector.

Generally, in the case of horizontal mergers, remedies are intended to reduce the resulting market share through divestments, whilst in vertical mergers, the most frequently used remedies are aimed at limiting foreclosure risks deriving from the operation.

13. Stand-still obligation

There is no standstill obligation under the Italian merger control regime.

14. Failure to notify/obtain clearance

Article 19 of the Law No 287/1990 sets out two kinds of administrative fines in case of implementation of a prohibited transaction (paragraph 1) and of failure to file a relevant transaction (paragraph 2).

1. Sanctions are applied in case of implementation of a prohibited transaction or implementation of a transaction in breach of obligations or measures imposed by the Authority’s decision. In this event, the IAA may i) impose a fine from a minimum of 1% of the turnover of the business(es) involved in the transaction to a maximum of 10% and ii) require the parties to take certain measures in order to return to the status quo ante to re-establish effective competition and remove any anticompetitive effects of the transaction. This is because the remedies accepted by the IAA during the second phase (see answer No 9 above) are binding upon the parties.

2. If the responsible entities fail to notify a concentration that meets the turnover thresholds, the IAA may impose administrative fines to such undertakings, up to 1% of the undertaking’s turnover in the financial year (generally, IAA’s lump-sum fine amount to EUR 5,000 for each transaction).

In both cases, the IAA quantifies the fines taking into account subjective elements of the infringement, such as the wilfulness of the undertakings, the existence of the excusable errors, remedial actions or spontaneous notifications etc., as well as objective elements, such as the competitive impact, the duration of the infringement etc.

1. Relevant legislation

The relevant merger control legislation is Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Unfair Competition, especially part I chapter 6. The Hungarian Competition Act determines both substantive and procedural rules of merger control proceedings. As the Hungarian Competition Authority is a public administrative authority, Act CL of 2016 on the General Administrative Procedural Code may also be applicable. Additionally, relevant guidelines of the Competition Authority shall be noted as well.

2. Authority

The relevant authority is the Hungarian Competition Authority (Gazdasági Versenyhivatal, website: https://www.gvh.hu/en/) and its decision-making body, the Competition Council.

 

3. Types of transactions caught

The Competition Act lists the following cases:

1) acquisitions of sole or joint control over the whole or a part of previously independent undertakings;

2) merger of two or more previously independent undertakings; and

3) creation of full-function joint venture.

4. Thresholds

The total net turnover of the group of undertakings from the previous financial year exceeded HUF 15 billion (approximately EUR 48 million) and at least two undertakings from the groups of undertakings involved had a total net turnover over HUF 1 billion (approximately EUR 3.2 million). The HCA may also examine concentrations below the above thresholds if the combined net turnover of the undertakings concerned exceeds HUF 5 billion and there are concerns that the concentration may significantly reduce competition. In calculating the net turnover of companies, the net turnover generated in the previous business year from goods sold in the territory of Hungary shall be taken into account.

5. Exceptions

1) A special ‘public interest exemption’ – allows the government to qualify a merger as ‘strategic’ at a national level and exempt it from the merger control filing requirement.

2) Temporary acquisition of control or assets by an insurance company, credit institution, financial holding company, mixed-activity holding company, investment firm or property management organization, if such acquisition is made in preparation of resale, and if the company acquiring control does not exercise its rights of control, or if such rights are exercised only to an extent that is absolutely necessary, and if the duration of the acquisition of control or assets does not exceed one year.

3) Where concentration is implemented through an equity scheme set up for that purpose, by way of financing transaction required as a result of COVID-19 coronavirus with the involvement of a venture capital fund or private equity fund under direct or indirect majority State ownership shall not be reported to the Hungarian Competition Authority if the venture capital fund or private equity fund under direct or indirect majority State ownership acquires control rights by self or jointly with other companies for the purpose of investment protection.

4) Concentration of companies where a venture capital fund under direct or indirect State control acquires joint control rights in a company – whose net turnover for the previous year did not reach one billion forints – through an equity investment carried out with State aid that has been declared by the European Commission compatible with the internal market shall not be notified to the Hungarian Competition Authority.

6. Notifying party(-ies)

If the thresholds and other requirements laid down in the Competition Act are met, filing for an authorisation from the Competition Authority is needed. The direct participant shall notify the authority if the concentration is realized by way of merger by formation of a new company or merger by acquisition, or by way of setting up a joint company. The merger shall be notified by the direct participant, or by the party acquiring the business unit or direct control, or the company having direct control thereof in all other cases.

7. Submission deadline

There is no specific deadline for the submission, however the Competition Act stipulates that the notification shall be submitted following the time of publication of the public bid bringing about the concentration, the conclusion of the contract, or the acquisition of the right of control, whichever occurs the earliest.

8. Filing fee

1 million HUF (EUR 3,200).

9. Proceedings timetable

The notification of concentration shall be submitted on a duly completed concentration notification form posted on the website of the Hungarian Competition Authority. The notification of concentration shall contain all the facts and data necessary for processing the notification, and shall be accompanied by the documents specified in the form. After the parties submit the notification, the Competition Authority has a deadline of 8 calendar days to assess the merger. If no complication occurs, i.e. all documents the Competition Authority needs to have are available, a clearance certificate may be simply issued. In cases where the concentration may imply competition issues or the filing is insufficient, the Competition Authority initiates a formal merger control proceeding within 8 calendar days. The filing is sent back within 15 calendar days at request of providing more information by parties within a specific time period.

An appeal against the decision of the Competition Authority may be filed within 30 calendar days from the receipt of the decision with the court of administration (judicial supervision procedure). The court proceedings generally takes 1-1.5 years and the court judgement may also be appealed before the appeal court. 

10. Availability of pre-notification/informal consultation

Initiating a pre-notification procedure is supported by the Hungarian legislation. Prior to the notification of concentration, the companies required to submit such notification may enter into prior negotiations with the Competition Authority for the purpose of clarifying the data and documents required to be enclosed to the notification of a concentration that has already been decided. In case of mergers that do not raise any competition problems, the matter will be examined on substance in the context of prior consultation. In such cases, after the notification, the Competition Authority would provide a certificate within one day during a socalled express procedure.

11. Test for clearance/prohibition

The Competition Authority operates with the significant impediment to effective competition (SIEC) test for its assessment of mergers, and allows transactions that do not result in a SIEC, particularly in consequence of creating or intensifying a dominant position in that market, and if the combined net turnover of all groups of companies involved exceeded five billion forints in the previous financial year together with the net turnover of companies controlled by members of the same group jointly with other companies.

12. Conditional clearance – remedies

Ex ante and ex post conditions or obligations in connection with the concentration of companies can be imposed by the Competition Authority in its decision, which could be based on the undertakings’ voluntary commitment or it could take place even in the absence of the commitment.

13. Stand-still obligation

If a transaction meets the turnover thresholds (HUF 15 billion), a standstill obligation shall be applied, which means that the undertakings must not implement the transaction without an approval by the Competition Authority.

No standstill obligation applies to the transactions if they meet the soft thresholds (HUF 1 billion). This means that the parties are free to implement them without the risk of any fines.

14. Failure to notify/obtain clearance

The Competition Authority may impose fine:

a. for the execution of a merger in spite of the prohibition imposed by the competent competition council by way of a resolution;

b. for non-compliance with the obligation prescribed in the resolution for the concentration, or if the concentration is carried out without compliance with the condition prescribed in the competent competition council’s resolution; and/or

c. for carrying out the concentration in spite of the prohibition, also if the competent competition council declared in its resolution that the concentration does not significantly reduce competition in the relevant market;

d. upon any person who supplied any incorrect or false information that were considered material with respect to ordering the examination of concentration in a manner imputable to him, and in consequence the official instrument has to be withdrawn.

The maximum fine is 10% of the company’s net sales revenue, or the net sales revenue of the group – of which the company penalized is identified in the resolution as a member – for the financial year preceding the year when the resolution was adopted.

The fine shall be determined with regard to all applicable circumstances, in particular, to the gravity and duration of the infringement, the advantage gained by such conduct, the market position of the offenders, the degree of responsibility and any cooperation in the investigation, and repeated occurrence and frequency of the infringement. The gravity of the violation shall be determined, in particular, on the basis of the degree of obstructing competition and the scope and extent of the violation of the interests of final trading parties.

If the transaction is not approved by the Authority after the closing has already taken place, the NCA may apply, under article 31 of the Competition Act, restorative measures – such as divestiture – in order to restore effective competition. The NCA can also impose a fine for failure to submit the notification. In this case, regardless of whether authorisation is granted at a later stage, a penalty of a maximum of HUF 200,000 per day may be imposed.

1. Relevant legislation

Sections 35 to 43 of the Act against Restraints of Competition (ARC) (Gesetz gegen Wettbewerbsbeschränkungen). English translation available at the website of the FCO:

https://www.bundeskartellamt.de/EN/Mergercontrol/

2. Authority

Federal Cartel Office (Bundeskartellamt) https://www.bundeskartellamt.de/EN/Home/home_node.html

3. Types of transactions caught

• The acquisition of all or substantial part of the assets of another undertaking.
• The acquisition of (direct or indirect) control over another undertaking or parts of it by one or several undertakings.
• The acquisition of shares in a company’s capital or voting rights resulting in an overall shareholding reaching or exceeding 25% or 50% respectively.
• Any other combination of undertakings enabling one or several undertakings to directly or indirectly exert a competitively significant influence on another undertaking.

4. Thresholds

A merger notification is required if in the last business year preceding the concentration the combined aggregate worldwide turnover of all the undertakings concerned was more than EUR 500 million, and the turnover of at least one undertaking concerned was more than EUR 50 million in Germany and that of another undertaking concerned was more than EUR 17,5 million in Germany.

A merger notification is also required if in the last business year preceding the concentration the combined aggregate worldwide turnover of all the undertakings concerned was more than EUR 500 million, and the turnover of one undertaking concerned was more than EUR 50 million in Germany and neither the target undertaking nor any other undertaking concerned achieved a turnover of more than EUR 17,5 million in Germany whilst it has substantial operations in Germany, and the consideration for the acquisition exceeds EUR 400 million.

There are some specific rules when it comes to calculating the relevant turnover, but the concept is very similar to the concept applied in EU merger control.

5. Exceptions

• The provisions do not apply to concentrations of public entities and enterprises arising from the territorial reform of municipalities. 
• There are further exemptions for undertakings that are part of certain banking associations.

6. Notifying party(-ies)

In principle, all parties in the proposed concentration are responsible for the notification. There are cases where the seller is not considered a party. In practice it is sufficient if one party submits the notification on behalf of all the parties involved.

7. Submission deadline

There is no deadline for submitting pre-merger notifications to the FCO. A notification can be filed at any time before the completion of the proposed concentration. However, in practice timing should be planned carefully to take into account the proceedings timetable (of below).

8. Filing fee

The fee amount depends on the FCO’s personnel and material expenses and the economic significance of the notified transaction:

• The maximum fee can amount up to EUR 50,000 (EUR 100,000 in exceptional cases). 
• In minor cases the fees usually range between EUR 5,000 and EUR 15,000.

9. Proceedings timetable

• First phase:
  After receipt of the complete notification documents at the FCO the competent Decision Division has one month to examine the proposed concentration. If the proposed concentration proves unproblematic, the Decision Division clears it informally before the expiry of the one month time limit. 
• Second phase:
  If the Decision Division considers further examination necessary, a formal in-depth investigation is initiated, extending the time frame to up to a total of five months of receipt of the complete notification. 
• Appeal
  The FCO’s decision to prohibit a transaction can be appealed at the FCO within one month upon service of the decision. The appeal shall include a statement of reasons to be filed within two months from the service of the decision being appealed.. Competent court is the Higher Regional Court of Düsseldorf

10. Availability of pre-notification/informal consultation

The FCO gives only informal guidance at the parties’ request before the notification. For any pre-notification information the FCO requires a nearly complete draft application.

Also the FCO is not willing to give clear advice in the pre-notification stage because it has no permission to do so.

11. Test for clearance/prohibition

The FCO will prohibit a concentration which is expected to create or strengthen a dominant position unless the participating undertakings prove that the concentration will also lead to improvements of the conditions of competition, and that these improvements will outweigh the disadvantages of dominance (Section 36 (1) ARC).

The main examination proceedings should be initiated if a further examination of the concentration is necessary. In the main examination proceedings the FCO decides by way of a formal decision whether the concentration is prohibited or cleared. Reasons are to be given also if the concentration is cleared; clearance can be granted subject to conditions and obligations.

Unlike EU merger control, the FCO by its publication does not actively solicit views from anonymous third parties, such as customers, competitors and suppliers.

12. Conditional clearance – remedies

The clearance decision can be made subject to conditions or obligations/commitments. These conditions and obligations must not aim at subjecting the conduct of the undertakings concerned to continued control.

There is a right of appeal against prohibition decisions to the Court of Appeals responsible for the district in which the FCO has its seat (the Düsseldorf Court of Appeals).

13. Stand-still obligation

A notifiable concentration must not be put into effect before

• the one-month period under Section 40 (1) sentence 1 of the ARC has expired without the FCO having initiated the main examination proceedings, 
• or the five-month period under Section 40 (2) sentence 2 of the ARC has expired, 
• or the FCO has cleared the concentration.

In some exceptional cases where the parties can provide important reasons for their behaviour, the FCO can refrain from the obligation to suspend the closing of the transaction.

14. Failure to notify/obtain clearance

• A failure to notify is not an infringement on its own. However, in most cases the failure to notify will be accompanied with an implementation of the merger before approval. The violation of the prohibition of putting a concentration into effect constitutes an administrative offence (Section 81 (2) no. 1 of the ARC). The fines can range from up to EUR 1 million for individuals and 10% of the worldwide group turnover, for companies. 
• An incomplete or incorrect notification constitutes an administrative offence. Resulting fines may rise up to EUR 100,000 (in case of intentional violation) or up to EUR 50,000 (in case of negligence). They can be imposed on the relevant company and/or its officers.
• The FCO can also initiate a demerger proceeding in relation to notifiable concentrations that have been closed without the FCO’s prior clearance or based on a notification containing incomplete/incorrect information.

1. Relevant legislation

Articles L.430-1 to L.430-10 and R.430-2 to R.430-10 of the French commercial code (FCC) and FCA’s guidelines regarding merger control which latest version was published on 23 July 2020.

2. Authority

Autorité de la concurrence (French Competition Authority / FCA)

www.autoritedelaconcurrence.fr

The French Minister of Economy also has ancillary powers permitting him to intervene at two stages of the merger control process. First, it may request the Competition Authority to open a Phase II review after a decision of the Competition Authority following a Phase I review. Second, after a decision of the Competition Authority following a Phase II review, the Minister of Economy has the possibility to overrule the decision and either authorise or prohibit the merger for reasons of public interest other than the protection of competition.

3. Types of transactions caught

The FCA interprets the term “concentration” in a manner consistent with the European Commission. Therefore, French merger control rules apply to “concentrations” including:

• mergers;
• acquisitions;
• full function joint ventures;
• changes of control.

4. Thresholds

General thresholds 

• Combined worldwide pre-tax turnover of all parties exceeds EUR 150 million; AND
• French pre-tax turnover of each of at least two of the merging parties is more than EUR 50 million.

Specific thresholds applying to transactions in the retail sector 

• Combined worldwide pre-tax turnover of all parties exceeds EUR 75 million; AND
• French pre-tax turnover of each of at least two of the merging parties is more than EUR 15 million.
  These rules being stated to apply to a company that operate one or more retail store. The concept of retail sector (commerce de détail) may be interpreted broadly (mixed activities, wholesale and retail, certain services such as hairdressing or dry cleaning).

Specific thresholds applying to transactions in French overseas territories

• Special thresholds apply for concentrations concerning one or more companies with an activity in the overseas departments (i.e French Guiana, Guadeloupe, Martinique, la Réunion and Mayotte) or in the overseas collectivities (Saint-Pierre-et-Miquelon, SaintMartin, Saint-Barthélemy and Wallis-and-Futuna). A concentration must be notified when:
  • Combined worldwide pre-tax turnover of all parties to the concentration exceeds EUR 75 million; AND
  • Two of the parties to the concentration have a pre-tax turnover in one or more of the relevant departments or collectives of more than EUR 15 million OR EUR 5 million in the retail sector; AND
  • The concentration does not have a community dimension.

To determine if the second threshold has been crossed, one must consider the aggregate turnover generated by the firm concerned in each of the overseas departments and overseas local and regional administrations, on an individual basis. For example, if a firm generates a pre-tax aggregate turnover of EUR 8 million on Reunion Island, and a pretax aggregate turnover of EUR 8 million on Mayotte, it will be considered that this firm has not crossed the EUR 15 million threshold. The same reasoning applies with the EUR 5 million thresholds in the retail sector.

• It should be noted that these provisions do not apply to New Caledonia and to French Polynesia, as stipulated in Articles L. 930-1 and L. 940-1 of the FCC; these territories however have their own specific merger control rules.

Article 22 of the EUMR

• NB: the FCA strongly advocated for a change with respect to the referral mechanism under Article 22 of the EUMR. Since the EC has shifted its approach and encouraged referrals from Member States, even where the national filing thresholds are not met, the FCA confirmed that it would scrutinize the merger transactions that are not reportable before its jurisdiction. It is worth mentioning the EC decision to review acquisition of biotech company Grail by Illumina was notably issued following an inquiry submitted by the FCA. In order to detect transactions that could be subject to such referral procedure under Article 22 of the EUMR, the Competition Authority has announced that it will monitor the market.

5. Exceptions

Specific rules concerning the creation of a referencing/purchasing entity in the retail sector

Article L.462-10 of the FCC provides that the FCA must be informed of any agreement between companies operating one or more retail stores of consumer goods or operating in the retail distribution sector as a referencing or purchasing entity, 4 months prior the effectivity of the agreement.

The FCA powers carries out a competitive assessment of the competitive impact of the agreement, on its own initiative or at the request of the Minister for the Economy. For this purpose, the FCA may request the parties to the agreement to submit a report assessing the effect on competition of their agreement.

If the agreement has anti-competitive effects, the parties to the agreement must undertake to take measures to remedy them within a deadline set by the FCA; otherwise, the FCA can pronounce interim measures or injunction or even lodge an investigation. Finally, the FCA can also ask the parties to go back to the previous state or request an amendment to the said agreement.

The FCA shall be informed when:

• the worldwide pre-tax turnover of the parties to such agreement exceeds EUR 10 billion; AND
• the pre-tax turnover on purchase in France in the framework of those agreements exceeds EUR 3 billion (R. 462-5 of the FCC). This threshold shall include all agreements between those companies during a two years period.

6. Notifying party(-ies)

The FCA interprets the term “notifying party(-ies)” in a manner consistent with the European Commission:

• If the concentration is an acquisition, the buyer is responsible for the filing. In case of a joint acquisition, all the parties having joint control are responsible for the filling, included parties that already had a joint control of the company. 
• If the concentration is a merger or the creation of a full-function JV, both parties are responsible for a joint filing.

7. Submission deadline

Prior to completion.

NB:

The formal notification may be filed once a “‘sufficiently advanced project” (“suffisamment abouti”) is in place, which implies that there is an understanding or a commitment on the object, modalities and scope of the transaction. This sufficiently advanced project is typically formalised by the signing of a letter of intent. Filing on the basis of draft SPA/contract (so long as it is sufficiently precise / advanced) prior to signing is possible.

Prior to the formal notification, the parties have the possibility to request the appointment of a case handler in charge of the examination of the file. This request is optional. If made, a name will be communicated to the notifying party within five business days.

Pre-notification is strongly recommended (see below).

8. Filing fee

None.

9. Proceedings timetable

Length of Phase I Review Period

• The official review will only start to run if (and when) the filing application is deemed complete by the FCA. The letter declaring the notification complete or incomplete is usually sent within 10 business days after its submission. 
• 25 business days from receipt of a complete notification; 15 business day extension if the notifying parties propose commitments. However, the review process can be extended for an additional 15 business days at the request of the parties (e.g., for negotiating commitments) or by the FCA (e.g., failure to provide requested information, etc.), with no time-limit. 
• The timetable may sometimes be shorter in the case of straightforward deals (e.g. involving private equity and investment funds). A simplified procedure is available for certain type of transaction and the FCA may issue a decision within 15 business days. However, the FCA is not bound to follow the simplified procedure for transactions that fall within its scope and may still decide, at its sole discretion, to adopt its decision within the standard 25 business days deadline.

As explained below. the French Minister of the Economy has the power to ask the FCA to conduct a Phase II investigation (no precedent), no matter the content of the FCA’s decision at Phase I (e.g. clearance decision with / without commitments).

Length of Phase II Review Period

• 65 business days from date of Phase II referral. 20 business day deadline if the notifying parties propose commitments less than 20 business days before the expiry of the 65 business day period. The review process can also be extended for an additional 20 business days at the request of the parties (e.g., for negotiating commitments) or by the FCA (e.g., failure to provide requested information, etc.), with no time-limit. 
• The FCA’s decision will in theory be final, with one exception: the French Minister of the Economy has the power to reverse a decision of the FCA on grounds of general interest (that include industrial development, the international standing of French companies, and the creation or conservation of employment: one precedent in 2018).

Appeal procedure

Appeal against FCA merger decision is opened before Conseil d’Etat (French supreme administrative court) for notifying parties as well as third parties having an interest in bringing such action. Action can be brought within two months following notification of the FCA decision for notifying parties/ vs publication (website) for third parties.

An interlocutory proceeding may also be introduced asking for the decision to be suspended.

10. Availability of pre-notification/informal consultation

The optional but strongly recommended pre-notification phase (especially in order to confirm that the notification is complete before filing) is launched at the initiative of the notifying parties who wish to consult with the FCA’s mergers unit when uncertainties arise as to the operation involves control or, for complex operations, when the parties plan to file ad hoc economic studies, or when they wish to get an initial idea as to the acceptability of their project, so as to anticipate possible future modifications.

The whole pre-notification phase is strictly confidential: it does not result in any publication on the Website of the FCA, nor in any contact with third parties. Nevertheless, subject to the prior written approval of the notifying parties, a market consultation may be initiated as of this phase such as to gather more precise information without waiting for the official notification.

11. Test for clearance/prohibition

The test applied by the FCA is to analyse if a merger is likely to harm competition by creating or strengthening a dominant position or by creating or strengthening purchasing power which places suppliers in a situation of economic dependence.

The FCA first examines the combined market shares of the merging parties and the degree of market concentration, then it performs a prospective assessment of the competitive risks of the merger, based on the available data and plausible economic scenario.

When a merger is likely to harm competition, parties must present remedies (see below).

If no corrective measure appears to be satisfactory, the FCA prohibits the operation.

12. Conditional clearance – remedies

When a merger is likely to harm competition, commitments can be made by the merging parties during the Phase I or Phase II to receive clearance.

These correctives measures can be structural (ex: disinvestments of assets) or behavioural (ex: termination of exclusive contracts or the obligation to grant access to certain infrastructures).

More rarely, the FCA can also impose injunctions or requirements to merging parties.

13. Stand-still obligation

Yes: no completion permitted prior to clearance.

However, derogation from suspension is possible under two cases:

• for listed securities (suspension of the voting rights only); and 
• if the parties apply for a derogation and justify their demand.

14. Failure to notify/obtain clearance

• Fine up to 5% of pre-tax turnover in France for corporate entities (and EUR 1.5 million for an individual).
• Order the parties to notify the transaction, coupled with a daily penalty payment of a maximum of 5% of their average daily turnover, unless they revert to the situation which existed prior to the operation.

Failure to notify was until a few years ago sanctioned by fines below EUR 1 million (ex: Colruyt case, decision n° 12-D-12, €392,000, or Réunica and Arpège case, decision n°13-D-01, EUR 400,000); however, the FCA has clearly become more severe since 2013 with the Castel case (decision n° 13-D-22). In this case, the fine was set to EUR 4 million, then reduced to EUR 3 million by the Conseil d’Etat (French supreme administrative court).

A case of gun jumping has also been fined by the FCA in 2016 (decision n° 16-D-24). In this case, Altice Luxembourg and SFR Group reached a settlement with the FCA to set the fine at EUR 80 million. On April 2022, the FCA fined Cofepp for acquiring control of MBWS without prior notification of the transaction and without waiting for its decision: Cofepp exercised a decisive influence on MBWS, in particular by appointing its new CEO, negotiating with its suppliers in place of MBWS’s managers, directly participating in the establishment of MBWS’s commercial and budgetary policy and intervening in several operational management decisions. Cofepp, which did not contest the practices, benefitted from a settlement procedure. The FCA handed down a EUR 7 million fine (decision n° 22D-10). 

1. Relevant legislation

Mergers and acquisitions are subject to merger control under the provisions set out in Chapter 4 of the Finnish Competition Act (948/2011, as amended) (the Competition Act).

2. Authority

The Finnish Competition and Consumer Authority (the FCCA).

The FCCA’s website: https://www.kkv.fi/en/

3. Types of transactions caught

The merger control provisions set out in the Competition Act apply to all concentrations that meet the turnover criteria (see section Thresholds below). A concentration is defined as: 

• the acquisition of control of an undertaking, 
• the acquisition of the whole or part of the business operations of an undertaking, 
• a merger, 
• the setting up of a full-function joint venture.

4. Thresholds

A concentration is subject to control where: 

• the combined worldwide turnover of the parties to the concentration exceeds EUR 350 million; and 
• the turnover generated in Finland of each of at least two parties to the concentration exceeds EUR 20 million.

Where the acquisition of a business or a part of a business comprises two or more transactions, the turnover of the business being acquired is considered to include the turnovers of any businesses or functions acquired from the same undertaking or foundation or from undertakings belonging to the same group of undertakings within a period of two years prior to the acquisition.

NB: The FCCA has made an initiative to lower the thresholds and the Government will possibly introduce a bill on this matter in Autumn 2022.

5. Exceptions

The merger control provisions do not apply to internal arrangements within a group of companies. In addition, the merger control provisions do not apply if the concentration falls within the scope of Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings.

6. Notifying party(-ies)

The following parties have an obligation to notify: 

• the acquirer of control, 
• the acquirer of the whole or part of a business operation, 
• the merging parties, 
• the founders of a full-function joint venture.

7. Submission deadline

The notification must be submitted to the FCCA after entering into a binding acquisition agreement, acquiring control of an undertaking or announcing a public bid, and before the implementation of the concentration.

8. Filing fee

There is no filing fee.

9. Proceedings timetable

The FCCA must immediately examine a notification received. During an initial investigation period of 23 business days, which starts to run from the submission of a complete notification (a substantially incomplete notification does not trigger the investigation period), the FCCA may:

• decide that the concentration does not fall within the scope of the Competition Act, 
• clear the concentration unconditionally or conditionally, or 
• decide that further proceedings are required.

If the FCCA does not decide to start further proceedings within the above-mentioned time limit (and makes no other decision), the concentration is deemed approved. Usually, the FCCA issues a written decision before the end of the initial investigation period of 23 business days.

If the FCCA decides to start further proceedings (Phase 2) it must, within 69 business days, either:

• clear the concentration unconditionally or conditionally, or
• request the Market Court to prohibit the concentration (which the FCCA cannot do).

If the FCCA makes no decision, it is deemed to have approved the concentration. The Market Court can extend the period of 69 business days with a maximum of 46 business days. Furthermore, where information requested by the FCCA has not been submitted in time or the information provided is inadequate, the FCCA may decide to extend the above processing time limits with any amount of days corresponding to the delay in submitting the adequate information.

If the FCCA asks the Market Court to prohibit the concentration, the Market Court must issue its decision within 69 business days of the FCCA’s request. The Market Court may: 

• approve the concentration conditionally or unconditionally, 
• prohibit the concentration or order the concentration to be dissolved, or
• refer the concentration back to the FCCA.

If the Market Court makes no decision, it is deemed to have approved the concentration.

The FCCA’s decisions can be generally appealed to the Market Court within 30 calendar days from receiving the decision. The following decisions are, however, not subject to appeal: 

• decisions determining whether further proceedings (Phase II) are required. 
• decisions to conduct inspections at the undertaking’s premises. 
• interim injunctions or temporary obligations.

In addition, decisions on extending processing time limits may not be appealed separately but only in connection with the appeal against the principal decision (the actual merger control issue). Moreover, the FCCA’s decision ordering conditions, proposed by the notifying parties, may not be appealed.

The Market Court’s decisions can (subject to certain exceptions) be appealed to the Supreme Administrative Court of Finland (in Finnish: korkein hallinto-oikeus) within 30 calendar days from receiving the decision.

10. Availability of pre-notification/informal consultation

The notifying party is entitled to receive information and guidance from the FCCA in relation to a contemplated concentration before submitting the notification.

Pre-notification negotiations with the FCCA are advisable, as they usually help in completing the notification and contribute to the prompt processing of the notification by the FCCA.

11. Test for clearance/prohibition

The relevant test is the significant impediment of effective competition (SIEC) test. This means that a concentration may be prohibited if it significantly impedes effective competition in the Finnish market, or a substantial part of the Finnish market, particularly as a result of the creation or strengthening of a dominant market position.

12. Conditional clearance – remedies

The FCCA and the Market Court can impose both behavioural and structural remedies. To be accepted, the proposed remedies must be capable of removing the identified competition concerns.

The parties can offer, and the FCCA can accept, remedies both during the initial investigation period of 23 business days (Phase I) and the further investigation period of 69 business days (Phase II). There are no statutory deadlines for proposing remedies but the parties should propose them early enough to enable the FCCA to consider the proposed remedies in its determination of the matter.

In cases that lead to competition concerns, it is generally advisable to start negotiating remedies with the FCCA as early as possible. The parties can start discussing remedies with the FCCA in pre-notification negotiations. The FCCA can only impose remedies that are accepted by the notifying parties.

13. Stand-still obligation

The parties cannot generally implement the concentration before its approval. The obligation to suspend does not prevent, in certain cases, the implementation of a public bid or the redemption of shares. The parties can also apply to the FCCA to allow them to take actions to implement the concentration.

If the FCCA has proposed the prohibition of a concentration, the obligation to suspend lapses within 23 business days from the proposal, unless the Market Court orders otherwise.

14. Failure to notify/obtain clearance

An undertaking that fails to comply with the obligation to notify can receive an administrative fine of up to 10% of its total annual turnover. The Market Court imposes the fine on the proposal of the FCCA.

If the parties submit incorrect or misleading information that has had a material effect on the decision, the Market Court may, on the proposal of the FCCA:

• prohibit the concentration,
• order the concentration to be dissolved,
• impose conditions on the concentration.