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Results: 4 Answers
Merger Control
4.
Review process
4.1
What is the review process and what is the timetable for that process?
 
Malta
In order to establish whether the concentration will lead to a substantial lessening of competition in Malta, the Office for Competition’s review process will consider the following factors, among others:

  • the need to maintain and develop effective competition in the Maltese market in view of, among other things, the structure of all markets concerned and the actual or potential competition from undertakings located either within or outside Malta;
  • whether the business of a party to the concentration has failed or is likely to fail;
  • the nature and extent of development and innovation in a given market;
  • the market position of the undertakings concerned and their economic and financial power, the alternatives available to suppliers and users, their access to supplies or markets and any legal or other barriers to entry; and
  • supply and demand trends for the relevant goods and services, the interests of the intermediate and ultimate consumers, and the development of technical and

economic progress.

The Control of Concentrations Regulations provide strict time limits for the assessments of concentrations. The office’s procedure is divided into two phases.

During Phase I, a Regulation 6 decision must be taken within six weeks of the date of complete notification or within two months from the date of complete notification where the undertakings concerned offer commitments, as follows:

  • The concentration does not fall within the scope of the regulation (Regulation 6(1)(i));
  • The concentration does not raise serious doubts as to its lawfulness: approval (Regulation 6(1)(ii)); or
  • The concentration raises serious doubts: Phase II (Regulation 6(1)(iii)).

If the office’s investigations in Phase I warrants further in-depth investigations of the market, the concentration will be subject to a Phase II investigation. During Phase II, a Regulation 8 decision must be taken at the latest within four months, as follows:

  • The concentration is lawful: may be approved with conditions and obligations (Regulation 8(2));
  • The concentration is unlawful (Regulation 8(3));
  • The merger is dissolved in case of premature implementation (Regulation 8(4)); or
  • A clearance decision is revoked in case of incorrect information or breach of obligation (Regulation 8(5)).
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.2
Are there any formal or informal ways of accelerating the timetable for review? Can the authority suspend the timetable for review?
 
Malta
Yes, pre-notification meetings between the notifying party and the Office for Competition are encouraged and considered valuable to both the notifying parties and the office. These very often include discussions on deadlines, among other things.

There may also be instances where notifying parties may be authorised to dispense with the obligation to provide certain information, saving them time. For this reason, notifying parties are encouraged to consult with the office regarding what information is required from them through such pre-notification meetings.

Furthermore, a concentration may, in certain instances, be notified in short form, notably where:

  • the acquisition of joint control by two or more undertakings and the turnover of the joint venture and/or the turnover of the contributed activities is less than €698,812.02 in the Maltese territory; and
  • the total value of assets transferred to the joint venture is less than €698,812.02 in the Maltese territory.

With respect to suspension of the review, in the event that the undertakings concerned submit commitments with a view to rendering the concentration lawful following the initiation of proceedings envisaged by a Regulation 6(1)(iii) decision, and by no later than the end of the third month following the initiation of proceedings, they may request that the four-month time limit be suspended for a period of up to one month for proper consideration of such commitments. The director general (DG) may refuse this request only in exceptional circumstances.

Suspension shall also occur where information requested by the DG is not provided or is not provided in full within the timeframe fixed by the DG.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.3
Is there a simplified review process? If so, in what circumstances will it apply?
 
Malta
Yes, the Control of Concentrations Regulations also provide for a simplified procedure in the case of certain concentrations which are listed below. These concentrations are deemed not to raise serious doubts as to their legality. The Office for Competition will base its decision to grant the simplified review procedure on the information provided by the notifying party. It is therefore imperative to provide complete information which substantiates the conclusion that the concentration will lead to no competition problems. If the office considers that the concentration qualifies for a simplified procedure, it shall issue a Regulation 12 short-form decision within four weeks of notification.

The categories of concentrations to which the simplified procedure may be applied are the following:

  • acquisition of joint control by two or more undertakings, where:
    • the turnover of the joint venture and/or the turnover of the contributed activities is less than €698,812.02 in the Maltese territory; and
    • the total value of assets transferred to the joint venture is less than €698,812.02 in the Maltese territory;
  • mergers or acquisitions that do not involve horizontal overlap or vertical links between the parties to the concentration; or
  • mergers or acquisitions that involve horizontal overlaps or vertical links, but where the parties’ combined market share does not exceed 15% or 25% respectively.
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.4
To what extent will the authority cooperate with its counterparts in other jurisdictions during the review process?
 
Malta
The Office for Competition cooperates with the European Commission and other member state national competition authorities within the European Competition Network (ECN).

Since national competition authorities must apply Articles 101 and 102 of the Treaty on the Functioning of the European Union concurrently with national substantive competition law provisions, the ECN provides the means to ensure the effective and consistent application of the EU competition rules. The Office for Competition therefore attends regular meetings organised by the ECN under the auspices of the European Commission.

The office also attends meetings organised by the Competition Division of the Organisation for Economic Co-operation and Development and the International Competition Network, and seminars organised by other national competition authorities, to keep abreast with the latest developments in competition policy.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.5
What information-gathering powers does the authority have during the review process?
 
Malta
Pursuant to Article 10 of the Control of Concentrations Regulations, the DG may obtain all necessary information from undertakings and persons controlling such undertakings and associations of undertakings.

When sending a request for information to a person, an undertaking or an association of undertakings, the DG shall state in the request the legal basis and the purpose for the request, as well as the penalties for supplying incorrect information, as detailed in question 7.1.

Furthermore, in carrying out the duties assigned to him or her by the regulations, the DG may undertake all necessary investigations into undertakings and associations of undertakings and to this end shall have all the powers conferred on him or her by Article 12 of the Competition Act, including the power to:

  • examine the books and other business records;
  • take or demand copies of or extracts from the books and business records;
  • request oral explanations on the spot; and
  • enter any premises, land and means of transport of undertakings.
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.6
Is there an opportunity for third parties to participate in the review process?
 
Malta
Yes, where the DG deems it necessary, he or she may also hear other persons or undertakings showing a sufficient interest. In such instances the third parties must apply to the DG in writing to be heard; the DG will inform them in writing of the nature and subject matter of the procedure, and set a time limit within which they may make known their views in writing. The DG may also give third parties the opportunity to develop their arguments orally, if they so request in their written submissions.

Third parties and other persons may also request a separate and individual meeting with the DG. Furthermore, the DG may, on his or her own initiative, and as he or she considers appropriate, invite third parties and other persons who have submitted written observations to a meeting at which they may develop their arguments and make counter-submissions in each other’s presence and reply to questions posed by the DG, with due regard being given to the protection of business secrets and other confidential information

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.7
In cross-border transactions, is a local carve-out possible to avoid delaying closing while the review is ongoing?
 
Malta
The merger control regime does not specifically regulate the possibility of a local carve-out.

In principle, a concentration - even if it involves cross-border transactions - shall not be put into effect either before its notification or until it has been declared lawful. However, the Competition Act provides that the DG may grant a derogation from this rule, upon a reasoned request before notification or after the transaction, after taking into account the effects of the suspension on one or more undertakings concerned by a concentration or on a third party and the threat to competition posed by the concentration, among other things.

Such derogation may be made subject to conditions and obligations in order to ensure conditions of effective competition.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.8
What substantive test will the authority apply in reviewing the transaction? Does this test vary depending on sector?
 
Malta
The Office for Competition applies the substantial lessening of competition test to any given merger or acquisition.

In determining whether a concentration is deemed to be legal, the DG must take into account, among other things:

  • the need to maintain and develop effective competition in the Maltese market;
  • the geographical (with respect to the Maltese market, when distinct from the EU market, it is generally considered as one single geographical area) and product markets (conditions of competition, prices and cross-prices); and
  • potential competition from other undertakings.
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.9
Does a different substantive test apply to joint ventures?
 
Malta
No, the same test applies where the joint venture falls within the scope of the Control of Concentrations Regulations.

However, in case of a joint venture, the director general will also consider factors such as:

  • whether two or more parent companies retain significant activities in the same market as the joint venture or in a market which is neighbouring, downstream or upstream from that of the joint venture; and
  • whether the coordination resulting from the joint venture affords the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products or services in question.
For more information about this answer please contact: Andrew Zammit from GVZH Advocates
4.10
What theories of harm will the authority consider when reviewing the transaction? Will the authority consider any non-competition related issues (eg, labour or social issues)?
 
Malta
Generally, the Office for Competition will assess whether there has been any harm to the interests of consumers.

Other factors taken into account in the assessment of a notified concentration may include:

  • whether the business or part of the business of a party to the concentration has failed or is likely to fail;
  • the market position of the undertakings concerned and their economic and financial power;
  • the alternatives available to suppliers and users and their access to supplies or markets;
  • any legal or other barriers to entry;
  • supply and demand trends for the relevant goods and services;
  • the interests of intermediate and ultimate consumers;
  • the development of technical and economic progress if it is to consumers’ advantage and does not form an obstacle to competition; and
  • the nature and extent of development and innovation in a relevant market.

The office will also consider whether the benefits derived from the merger outweigh the effects on competition in Malta. However, the company must prove that these efficiency gains cannot otherwise be attained, are verifiable and are likely to be passed on to consumers in the form of lower prices or greater innovation, choice or quality of products or services.

Furthermore, undertakings entrusted with the operation of services of a general economic interest or with the character of a revenue-producing monopoly shall not be subject to the Maltese Competition Act insofar as the application of such rules obstructs the performance, in law or in fact, of the particular tasks assigned to them.

The Maltese authorities generally adopt an approach which is similar to that adopted by the European Commission and the European courts.

For more information about this answer please contact: Andrew Zammit from GVZH Advocates